Ethereum’s falling price splits the crypto community

Hello And Welcome Back To The Latest Edition Of All The Cryptos Are Getting Rekt Right Now.

Crypto bloodbaths have become fairly common in 2018 — mainly because of the insane growth in 2017 — but we’ve not covered them all because they are so numerous and often include so-called ‘flash crashes’ or small drops, but the fall happening today is worth noting for several wider reasons.

Primarily that’s because this is a major test for Ether — the token associated with the Ethereum Foundation that is the second largest cryptocurrency by volume — has been on a downward spiral with little sign of change.

Ether, which is the preferred platform of choice for most developers building on the blockchain, is down nearly 17 percent over the past day. That’s erased billions of dollars in paper (crypto) value as the bear market for cryptocurrencies continues to pull markets south.

The drop also marks the first time ever that the price of an Ether has fallen below its valuation over one year: one Ether is worth $266 right now at the time of writing, versus $304 on August 14 2017. The token has been steadily falling since early May, when its peak value was $808, and as the lynchpin for many ICO project tokens, its demise has sent the value of most other tokens down, too.

Just looking at Coinmarketcap.com this morning, all but two of the top 100 tokens are down over the last 24 hours with many losing 10-25 percent of their value over the past day. Bitcoin, too, has dropped below $6,000, having topped $8,000 for a time last month.

Ether’s plummet below $300 has sparked a mixed debate among those in the crypto community. The token had been held as visionary, an improvement on Bitcoin that gives developers a platform to build on — whether it be decentralized apps, decentralized systems or more — but that hasn’t been reflected in in this months-long price retreat.

Certainly, two founders who spoke TechCrunch and have held ICOs expressed a belief that Ether “needs to find some price stability” to allow the focus to become about product and not just ‘get rich’ speculation. Of course, it helps that the two founders and many of those who held token sales have long since sold the Ether or Bitcoin they raised in exchange for fiat currency. Indeed, if their token sale was last year, the chances are they got a lot more real-world cash than they initially bargained for or would get now.

But still, the idea of consistency is shared by others who are in crypto professionally. That includes investors like Kenrick Drijkoningen, who is in the midst of raising a $10 million fund for LuneX, a spinout of Singapore-based VC firm Golden Gate Ventures.

In an interview last week, Drijkoningen told TechCrunch that raising a fund and doing deals in a ‘low tide’ market like now beats attempting to do the same amid a frothy period with hype and peak valuations — one Ether was worth nearly $1,400 in January, for example. A number of others VCs have long said that, ultimately, stability is good for the ecosystem.

Vitalik Buterin is the creator of Ethereum

But, on the other side, there are more pessimistic voices.

Among some investors canvassed by TechCrunch, the sense is that with the downturn of the ICO funding boom that fueled much of Ethereum’s rise, there may be less incentive to hold as the broader market’s interest in the cryptocurrency wanes.

For one Bitcoin bull, the intrinsic value of Bitcoin as an immutable, decentralized ledger acts as a more powerful draw than the perceived mutability and centralization that the Ethereum platform offers.

“People are also beginning to understand the unique value of an immutable, decentralized ledger, and recognize that Ethereum is not that,” the investor wrote in an email.

Another long-term problem that Ethereum faces, according to this investor, is that the promise of decentralized apps backed by the token is yet to be released. Crypto Kitties, a smash hit earlier this year, has faded and now there’s competition as Bitcoin’s Lightning Network is adding nodes and apps — referred to as LApps — which can operate in a similar but leverage the Bitcoin ledger.

It’s still early days, of course, and markets will always rise and fall, but this is the first big test for Ether and Ethereum. Beyond the sport of price speculation, it’ll be worth watching to see where this heads next.

Note: One of the authors of this post — Jon Russell — owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Turkish Bitcoin Volume Soars as Traders Flee the Lira

Turkish Bitcoin Volume Soars as Traders Flee the Lira

Trading volume on Turkish cryptocurrency exchanges has soared over the last 24 hours as citizens have sought refuge from the weakened lira. Turkey’s national currency has faced a torrid time on a day when President Recep Tayyip Erdogan accused the US of trying to “stab it in the back”. Trade volume on domestic exchange Btcturk is up 350% in the last 24 hours, with BTC capturing 38% of the action.

Also read: Crypto Cafe and Coworking Space ‘Hash House’ Established in Xi’an, China

Turks Seek a Haven from the Crumbling Lira

The Turkish lira (TRY) plunged to record lows against the US dollar today as tensions between the stricken nation and western counterparts ramped up. The embattled President Erdogan sees Turkey’s financial straits as a US-led plot to cripple the country, as opposed to the consequences of an imprudent economic policy that’s lead to rising inflation and spiraling debt accrued in foreign currency, exacerbated by borrowing to fund a construction boom.

Turkish Bitcoin Volume Soars as Traders Flee the Lira
The Turkish lira hit new lows against the US dollar today

While Turkey’s interior ministry has been threatening to take legal action against almost 350 social media accounts deemed to have made “provocative” comments against the lira, cryptocurrency holders have been busy exchanging their TRY for BTC, XRP, and ETH. After bitcoin core and the dollar-pegged tether (USDT), ripple and ether formed the leading trading pairs at Btcturk over the last 24 hours; the site also offers LTC.

Turkish Lira is the Third Worst Performing Fiat Currency This Year

Only the Venezuelan bolivar and Sudanese pound have performed worse than the Turkish lira, which is down 45% this year. While BTC has lost close to 54% this year, it’s looked a veritable fortress of strength against TRY of late, and with limited options for swapping their lira into a more stable currency, Turkish citizens have flocked to bitcoin. In addition to Btcturk, which has exchanged close to $14 million of BTC in the last 24 hours, regional exchanges Paribu, Koinim, and Koineks have witnessed a major increase in volume this week, as has Localbitcoins.com.

Turkish Bitcoin Volume Soars as Traders Flee the Lira
Trade volume (in USD) on Btcturk this week

Amidst rumors of Turkish banks ending support for customer accounts holding USD, and President Erdogan desperate to quell the flight to the currency whose issuing nation he blames for the lira’s plight, citizens are left with few places to turn. (Tether is the closest most Turkish traders can get to the US dollar right now.) While predictions of ‘hyperbitcoinization’ in Turkey may be premature, it is evident that cryptocurrencies such as BTC are proving a lifeline in nations whose fiat currency is devaluing by the day.

Do you think the Turkish lira can recover or will the flight to cryptocurrency increase? Let us know in the comments section below.


Images courtesy of Shutterstock, Xe.com, and Coingecko.


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Crypto exchange Binance buys Trust Wallet in first acquisition deal

Binance, the world’s largest crypto exchange based on volume, has made its first acquisition after it snapped up mobile wallet company Trust Wallet.

The deal is undisclosed, but Binance confirmed to TechCrunch that the compensation is a mixture of cash, Binance stock and a portion of its BNB token. U.S.-based Trust Wallet will remain independent following the deal, but Binance, which is headquartered in Malta these days, will assist running the admin side of the business and in non-technical areas like marketing.

“The Trust Wallet team shares the same values as us and the products are very complementary,” Binance CEO Changpeng “CZ” Zhao told TechCrunch in an interview. “For users who like to withdraw funds into a wallet now we have a product they can use.

“We plan to keep the app as independent as possible. There will be more features going into it but not so much from a Binance demand perspective. We are like the addition of a godfather for the baby… there’ll be some cooperation,” he added.

Trust Wallet may not be as well known as wallets such as Imtoken, Delta, or Blockfolio, but Zhao called the company a “diamond in the dirt” with “strong technical skills.”

“They haven’t done much marketing which is where we can help. They are strong technically but don’t like doing marketing, HR etc… now merging with us they don’t have to worry about money,” he added.

Money is, indeed, not a huge issue for Binance these days. The company made a profit in the region of $450-$500 million (dependent on token prices) from its first year of operations. That’s according to figures from the company, which uses 20 percent of its quarterly profits to buy back and ‘burn’ its BNB token.

(Left to right) Binance CEO Changpeng Zhao and Trust Wallet founder Viktor Radchenko

Indeed, Trust Wallet did hold an ICO to raise capital but last month it decided to cancel the sale and return money to its investors.

Trust Wallet founder Viktor Radchenko, who is based in Mountain View, told TechCrunch that the decision was about getting back to developing the app and technology.

“I’m a product person and developer. I spend my time thinking about solving problems for the end-user. I never liked dealing with investors and money people, it is so much hassle,” he said. “Having resources will help us grow quicker and so I can focus on adaption for the users that don’t even have wallets.”

Radchenko said he is now setting his sights on growing the team from five developers right now to 10. The app is currently focused on Ethereum and Ethereum-based tokens, but the plan is to add support for other blockchains including Bitcoin, EOS, NEO.

Trust Wallet will also be one of a number default wallets supported by Binance’s upcoming decentralized exchange, which will remove the shackles of a decentralized exchange and allow users to trade directly with one another. Zhao said the highly-anticipated project is in “active development” although he was hesitant to put a date on when it will be ready.

This Trust Wallet deal is likely the first of many strategic acquisitions for Binance. The company announced plans for a $1 billion fund this summer, and Zhao said that the intention is to make 10-20 investments per year but also augment that with three to four strategic.

“We’re looking for strong tech teams,” he explained. “Acquisition will be a very key component to continuing to grow and contributing to this industry.”

Zhao said that Binance had considered buying companies to accelerate the development of its decentralized exchange, but it wasn’t able to identify the right match.

“Our requirements are very specific, we are looking for speed, there’s no need for fancy smart contracts,” he explained. “We didn’t find the right match for an acquisition [but are] still very open to someone who makes an ultra-fast blockchain.”

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Bolivar ‘Anchored’ to the Petro to Be Issued in August, Maduro Says

Bolivar ‘Anchored’ to the Petro to Be Issued in August, Maduro Says

A new Venezuelan fiat currency, ‘anchored’ to the nation’s crypto, the Petro, is expected to start circulating in the second half of August. The news was announced by president Maduro himself, along with other measures intended to improve the economic situation in the country. The ‘Sovereign Bolivar’ will have less zeros than the inflated ‘Strong Bolivar’.

Also read: Vietnamese Regulator Tells Firms and Funds to Stay Away From Crypto

Pegged to the Petro? Bolívar Soberano Said to Bring Hope to Venezuela

Bolivar ‘Anchored’ to the Petro to Be Issued in August, Maduro SaysBolívar Soberano (Sovereign Bolivar), the new Venezuelan currency claimed to be anchored to the national cryptocurrency, the Petro, will start circulating on August 20, president Maduro announced on state TV. The Sovereign Bolivar will have five zeros less than the current, highly inflated “Strong Bolivar”, or Bolívar Fuerte (VEF), which replaced the original Venezuelan bolívar (VEB) about a decade ago. As for the oil-backed El Petro, Nicolás Maduro promised that the state-issued crypto “will end up being consolidated technologically and financially” to “permeate all the national and international economic activity.”

“The economic reconversion will start on August 20, definitively, with the circulation and issuance of the new Sovereign Bolivar, the new monetary cone that is going to have a new method of anchoring the Petro,” said the Venezuelan head of state, as quoted by the Telesur television network. The measure, president Maduro added, will serve “to stabilize and change the monetary and financial life of the country in a radical manner.”

Maduro went on to emphasize that a “productive, diversified and sustainable economic model must definitely be born” in the South American country, which has experienced hyperinflation and struggled with deep economic woes for years. The socialist leader stressed that the reconversion and the anchoring to the Petro represent “a great hope.” No details have been revealed on the exact mechanism of the link to the Venezuelan cryptocurrency.

Building New, Post-Oil Economic Model

“I ask for your confidence, I ask for your support, beyond ideologies and political positions, because Venezuela needs this change, the mafias are over!” said the leftist Venezuelan president, who also announced other measures aimed at improving the country’s suffering economy. Among them, a new decree assigning the Ayacucho 2 Block (over 29 billion barrels of oil) to Venezuela’s central bank to bolster its reserves, and legal amendments concerning crimes related to foreign exchange. “We have the correct vision of what the economic future in Venezuela should be, above all, we will achieve it,” Maduro stated.

According to the Bolivarian leader, his nation’s economy has been hurt by two major factors. “Venezuela has been trapped during these years by two fundamental variables: the exhaustion of the oil model […] and the establishment of a mechanism of economic warfare, as part of a political strategy,” he explained. The president believes that the “oil-dependent model has come to an end and it will not return,” and Venezuela has to continue its efforts to build a new economic model. This one, Maduro stressed, should be “diversified, productive, relevant, [and] advanced.”

Bolivar ‘Anchored’ to the Petro to Be Issued in August, Maduro Says

The Venezuelan bolivar is one of the most inflated national currencies in the world. For example, the new 100,000-bolivar note was reportedly exchanged for less than $2.50 when it was issued last November. Inflation is now expected to reach 1 million percent by the end of 2018, according to the IMF, quoted by Bloomberg. The exact price of the bolivar is hard to determine as the restricted access to foreign convertible currencies in the country has created a sizeable black market with its own rates that differ considerably from the official one.

In March, Nicolás Maduro announced he “decided to remove three zeros from the current money and replace these bills with new ones.” The denomination of the bolivar was meant to “guarantee the country’s economic stability,” as he put it. The Venezuelan president showed specimen banknotes that were supposed to enter into circulation this past June but the launch was later delayed until August 4. The release of the newly announced Sovereign Bolivar, expected on the 20th of August, is supposed to fulfil that promise.

Do you think Venezuela will be able to overcome the hyperinflation with its new fiat anchored to the Petro cryptocurrency? Share your expectations in the comments section below.


Images courtesy of Shutterstock, Michael Novogratz (Twitter).


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Malta paves the way for a decentralized stock exchange

Malta AKA “Blockchain Island” has been making waves lately in the world of cryptocurrency and governance. Their latest move involves the crypto exchange Binance and the ICO builders at Neufund.

The plan is simple: Neufund will help MSX, the Malta Stock Exchange’s skunkworks, create tokenized securities. Binance has agreed to carry these securities on its own exchange, essentially creating a straight path to regulated tokens via the already regulated Malta Stock Exchange. In short, this enables Malta to become the first country to be able to offer tokens alongside traditional equities as well as an easy way to go public in multiple ways including via ICO.

The plan is still in the pilot stage. This year they will begin “the public offering of tokenized equity on Neufund’s primary market which may later be tradable on Binance and other crypto exchanges pending regulatory and listing approvals” said Neufund CEO Zoe Adamovicz.

“We are thrilled to announce the partnerships with Malta Stock Exchange and Binance, that will ensure high liquidity to equity tokens issued on Neufund. It is the first time in history, that security tokens can be offered and traded in a legally binding way. The upcoming pilot project will allow us to test the market’s reaction and realize the overall project idea in an environment with minimized risk.” said Adamovicz.

“We are delighted to welcome Neufund as our key partner in building a Blockchain-based exchange that is fully integrated with established financial markets. With the upcoming pilot project we become a worldwide pioneer in digital finance,” said Joseph Portelli, chairman of the Malta Stock Exchange.

This move is interesting in that it offers a parallel track to companies wishing to go public via token sales. While even the terminology isn’t completely hashed out in regards to the future of these systems, having a spot like Malta lead in the matter of token sales selling alongside equities is a solid decision. Malta is increasingly becoming the testbed for these sorts of experiments and, even if this is not yet a real project, it could create a turnkey solution for ICO launches on the island.

Wendy McElroy: Does Your Money Serve the State or You?

Does Your Money Serve the State or You?

The Satoshi Revolution: A Revolution of Rising Expectations
Section 4: State Versus Society
Chapter 9, Part 4
Does Your Money Serve the State or You?

The State, in short, subjects people, whereas Society associates them voluntarily.

– Felix Morley

Two simple litmus tests determine whether money serves the state (organized force) or whether it serves society (voluntary exchanges).

  • Who issues it? State money is issued either by the state or by an authority controlled by it, who claims a monopoly.
  • Can people choose to use it or not? State money is established by requiring people to accept it as legal tender.

Cryptocurrency is privately issued, and no one is forced to use or to accept it. Crypto is a pure money of society—a public money, not one that serves rulers and elites. Indeed, many people use it to escape the corrupt central banking system and its domination of the global economy through fiat money. Control of the economy is the basis of social control.

The state lives or dies through its ability to regulate the flow of wealth within society. This makes cryptocurrency, even in its infancy, a threat to established power that the state addresses by dominating crypto through regulation, through its own monopoly issuance, or through banning it. Each step requires law. And, except for dictatorships, law requires public justification. Even with dictatorships, public justification is usually offered in order to avoid public resistance. The state needs law to destroy crypto, which means it needs justification. If there is not a real need, then a false one must be created.

The appeal to law reveals another and more fundamental difference between state money and that of society. Namely, what is the purpose of law regarding each one?


What is the Purpose of State Law Regarding Crypto?

The alleged illegality of crypto and of those who use it is, again, divided by the state into two clear categories.

First and foremost to the state are violations of its own self-declared jurisdiction. Given that the state produces no wealth, its claimed jurisdiction amounts to the rules by which wealth is confiscated and redistributed. Crypto violates these rules. Some uses do so directly. For example, it is sometimes used for tax evasion, money laundering, black-market activities, and other functions that compromise the state.

Of course, people who use fiat also commit such ‘crimes.’ In those cases, however, there is a remarkable difference in how the law approaches the offenses. Namely, objectionable individuals are demonized, often in a high-profile manner that intimidates those in the shadows. But the money itself is accused of no crime, and bears no liability. With cryptocurrency, both individuals and the money are demonized. The money is the true target, with individuals being the means by which to attack its legitimacy. Prosecutions springboard quickly into calls for monetary control.

Crypto also violates rules of the state in a more profound manner. It renders trusted third parties irrelevant, and there is no more massive third party than the state. The state created the central banking system as an omnipresent regulator of money and as a choke point for information. It wove an iron web of laws to monitor money and require its ounce of flesh from every transaction. If no one needs central banks, if they can easily avoid the strangling laws, then the power of the state dramatically diminishes. Some crypto zealots argue that the power is or will be destroyed. In either case, crypto constitutes a threat as muscular as any other revolution. Perhaps more so. No wonder, the loudest cry of “there ought to be a law” revolves around the preservation of state privileges.

The second round of the state’s cry for law is the claim that crypto violates the person and property of individuals. The line of attack is secondary, by far, and often sounds like an afterthought. But it is also the most dangerous claim to the continued freedom of crypto users because the accusation is valid, and it resonates with decent people. Most people hate taxes, and many would avoid them if it were safe to do so. But the same people hate fraud, theft, and violence.


Fraud, Theft, and Violence

Some uses of cryptocurrency are fraudulent. A March 2018 article in bitcoin.com opened,

“In the time it takes you to read this sentence, $850 will have been lost to cryptocurrency scams. In the time it takes to complete this article, that figure will have risen to $17,000. Phishing; fraud; theft; hacking; it’s all rife. In the first two months of 2018, there were 22 separate scams involving thefts of $400,000 or more. Put it all together and that equates to an average of $9.1 million a day. Oh, and that doesn’t include 2018’s outliers – Coincheck, Bitconnect, and Bitgrail. Otherwise, the total would actually stand at $23 million a day.”

There are thieves who prey upon the crypto community. An April 2018 article in bitcoin.com explained,

“Hardware wallets are regarded as one of the safest means of storing bitcoin and other cryptocurrencies. Each device grants the holder possession of their private keys and adds a PIN code plus other tamer-proof [sic] tech for enhanced security. Hardware wallets are not impregnable, however, as one British man found to his peril after purchasing the device on Ebay. Redditor moodyrocket is coming to terms with having his “life savings” wiped out this week, after $34,000 of crypto was stolen from his newly acquired Nano Ledger hardware wallet. The device was compromised, not due to any flaws in its design, but thanks to a man in the middle attack that saw the reseller insert their own recovery seed.”

Crypto allegedly cloaks acts of violence. This is the shakiest claim, because it is based on reports from state officials, or experts who are often in their pay. The “10 of the Biggest Lies Told About Bitcoin” (December 2017) addressed the claim that crypto is the finance of choice for terrorists.

“If you want to blame a currency, try the U.S. dollar which has been used to fund more wars, proxy wars, bombings, hijackings, and insurgencies than any other. Europol found no evidence that terrorists were using cryptocurrencies to fund their activities. That’s not to say it hasn’t happened and won’t happen. It’s telling however that the only people linking bitcoin with terrorism are governments seeking to crackdown on digital currencies.”

For the sake of argument, assume every accusation leveled at cryptocurrency is true. But it is also true of fiat. Fraud, theft, and violence has been associated with every means of exchange that has ever existed. Again, only crypto is discredited. Not barter. Not gold. Not fiat, against which no one shakes their fist due to fraud. It is telling that cryptocurrency is blamed for the actions of individuals, in much the same manner that guns are blamed for crimes.

Law will be imposed upon crypto. The state needs to reassert control. The free market needs to do what it does best: provide a solution to a need. State versus society. It will play out before our eyes.  I have a good idea of what it will look like, on both sides.

[To be continued next week.]

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

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TrustToken opens its dollar-backed cryptocurrency to accredited investors

Pitching a dollar-pegged token that offers cryptocurrency speculators a way to move their investments across volatile exchanges, TrustToken (the first public investment from a16z crypto) is now looking for public investments from accredited investors on CoinList.

The company’s first token is TrueUSD, a stablecoin that is redeemable one-to-one for U.S. dollars. In its first four months of trading, the speculative investors that are looking for some sort of island of security have boosted the coin’s market price to more than $85 million.

There’s a $61 million hard cap on the token allocated over three tranches at $0.12, $0.14 and $0.16 per trust token.

Other investors in TrustToken’s initial $20 million pre-sale include BlockTower Capital, Danhua Capital, GGV Capital, Jump Capital and other undisclosed investors.

As it expands its investor base to include accredited investors, the TrueUSD currency is also expanding its reach, with an agreement between the company and HitBTC to list the stablecoin as a quote currency. The TrueUSD coin can be used as a stalking horse to secure investments in Ethereum, Bitcoin, Tether, Bitcoin Cash, Litecoin, Monero, 0x and NEO, according to a statement from the company.

Every TrueUSD token is redeemable one-for-one with U.S. dollars, which the company’s founders think should open the door for more institutional investment (or speculation depending on your point of view) into the market.

Using TrueUSD’s system, dollars are held in the escrow accounts of multiple trust companies rather than in a bank account. Those accounts are verified by an independent third party that issues monthly reports on the amount of dollars held in collateral.

A buyer of TrueUSD needs to pass a know your customer and AML check and then can send dollars to one of TrueUSD’s trust company partners. Once that transaction is verified, the TrueUSD smart contract issues tokens on a one-to-one ratio before sending the tokens to a buyer. The company uses Prime Trust, a Las Vegas-based company for its financial services.

Once tokens are delivered to a wallet, those tokens can be transferred or used as payment to buy other cryptocurrencies.

“The users of this space are really the traders,” says TrustToken co-founder and chief executive Danny An. “They want a native crypto asset that’s stable. They want to be able to hedge against volatility.”

An said the company does have a broader vision than just helping traders secure speculative assets so they can come up with even more arcane financial instruments. “For the entire crypto-economy to work, a lot of people believe that a stablecoin or multiple stablecoins need to be created,” An said.

TrustToken makes money whenever its coins are minted or burned, An says. “Whenever USD is involved we take a small cut,” which is 10 basis points per transaction, he said.

Ultimately, TrustToken (like other alt-coins) wants to tokenize all real-world assets. And one of the most attractive markets for An and his co-founders is real estate. “There is $200 trillion dollars of real estate that is offline,” said An. Tokenizing those assets would create more wealth in the world overall, he said. “Assets that are not liquid are not as valuable as assets that are liquid,” An said.

It’s a far cry from the work that An and his co-founders Rafael Cosman and Stephen Kade were doing at Kernel — a company that was developing technologies to create neural interfaces between humans and machines.

“The problem with Kernel or Google Brain [where the team also spent time] was that the timelines were very long,” An said. 

New malware highjacks your Windows clipboard to change crypto addresses

In what amounts to be an amazingly nefarious bit of malware, hackers have created an exploit that watches 2.3 million high-value crypto wallets and replaces the addresses in the Windows clipboard with an address associated with the hackers. In other words, you could paste your own wallet address – 3BYpmdzASG7S6WrpmrnzJCX3y8kduF6Kmc, for example – and the malware would subtly (or unsubtly) change it to its own private wallet. Because it happens in the clipboard most people wouldn’t notice the change between copying and pasting.

Security researchers at BleepingComputer have found similar hijackers in the wild but this latest version is actively watching valuable wallets and trying grab bitcoin as they enter the accounts. Below is an example of the malware at work.

The malware runs a massive, 83MB DLL file that masquerades as a Direct X service. Inside the DLL is a 2.5 million line text file full of bitcoin addresses. In the above test when cutting and pasting from an HTML page into WordPad you’ll notice that the accounts are subtly modified in each case while leaving the beginning of the address unchanged.

Multiple anti-virus engines are now tagging this DLL as dangerous and you should be safe as long as you keep your virus protection up to date. But, as BleepingComputer notes, the only way to be sure your BTC is safe is to meticulously check each address you paste. They write:

As malware like this runs in the background with no indication that it is even running, is it not easy to spot that you are infected. Therefore it is important to always have a updated antivirus solution installed to protect you from these types of threats.

It is also very important that all cryptocurrency users to double-check any addresses that they are sending cryptocoins to before they actually send them. This way you can spot whether an address has been replaced with a different one than is intended.

TMGcore is running high-efficiency crypto mines in Texas

Out on the plains of East Texas, not far from Dallas, a company called TMGcore is mining crypto. The company, funded to the tune of $70 million, will be mining multiple cryptocurrencies and is using some unique technology to ensure that it doesn’t eat up an entire city’s worth of energy.

“TMGcore will be one of the first companies to utilize 3M’s Novec fluorochemical coolant at the heart of an enterprise scale cryptocurrency mining apparatus,” said CEO JD Enright. “The company’s intelligent mining system uses a Two Phase Liquid Cooling Immersion technology to dramatically decrease cooling costs by up to 90% and lets the company conduct mining operations from anywhere, including the middle of hot and muggy Texas. TMGcore also employs dynamically intelligent mining software that automatically mines the most profitable coin based on realtime market value and difficulty of access for the most profitable deployment of resources in realtime. Our technology is first-to-market and delivers a transformative approach to crypto mining that stands to fundamentally disrupt the market.”

The goal is to create mining infrastructure in the US and to prevent overseas control of the various currencies.

“Giving America a seat at the table is our #1 goal here at TMgcore. Our cooling technology and efficient mining rigs open up more regions of this country to house this type of operation,” said Enright.

The mine is housed in Plano, Texas inside a 150,000 square foot facility and is capable of a “100 megawatt live power load.” Further, the company is running custom ASIC chips increase board density and reduce mining costs significantly. In short, it will be one of the highest tech mining facilities in the world.

From the release:

The company has developed a unique use case with a fluorochemical coolant that delivers smart, safe and sustainable cooling for industrial technology operations. TMGcore will be one of the first companies to utilize this compound at the heart of an enterprise scale cryptocurrency mining apparatus. The company’s intelligent mining technology uses a Two-Phase Liquid Cooling Immersion technology to dramatically decrease cooling costs by up to 90%. The system also dynamically adapts its mining efforts toward the most profitable token at any given time, factoring in real-time market price, the difficulty of access and hash rate. TMGcore has also developed custom-made ASIC mining boards that result in a 20% increase in token output.

“Leveraging the magic of this coolant and groundbreaking mining circuitry, we saw a massive opportunity to capitalize on the nascent and highly lucrative mining industry in a physical, tangible and industrial fashion,” said Enright. “TMGcore seeks to deconstruct the mining monopoly in other countries with an American-made, U.S. driven approach that not only pushes the blockchain ecosystem forward but also creates job opportunities for Texas’ fast-growing technology community. We understand the importance of the research and development that creates not only innovations but the efficiencies that support the blockchain industry on a global scale.”

“Texas, more so than many other states in this country, has an abundant supply of energy available on their grid with available real estate to house such a project,” said Enright. “Cryptocurrency mining has not really been able to take advantage of Texas’ energy supply to date because the state is too hot. By utilizing Novec in this Two Phase Liquid Cooling Immersion technology, we have unlocked Texas’ potential to mine for the first time.”

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Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikely

Yukio Noguchi, a famous economist in Japan and an advisor to Waseda University’s Business and Finance Research Center argues we can’t expect Bitcoin’s prices to rapidly surge again. In his books and in recent articles, Noguchi makes his case eloquently. He wrote a recent article in Diamond Weekly clarifying his position but has been making his case since January of this year and published a book last December.

Also read: The Daily: Analysts Predict Bitcoin Will Rebound, Enthusiasm for State Coins Lost

“Because It’s Now Possible to Trade on Bitcoin Futures You’ll Never See a Rapid Surge Again”

Noguchi points out that the price of BTC is now almost a third of what it was in December of last year. He believes that because it’s now possible to trade on Bitcoin futures people will never see a rapid surge again.

On one hand, he says that because the price of bitcoin has gone down, the costs of sending bitcoin are now back to a level that makes it cheaper than doing bank transactions and this is welcome.

Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikely
Bitcoin won’t surge, Japanese economist says

He argues that the introduction of the futures market has driven down the price considerably. This year in January he persuasively argued that the cause of Bitcoin price collapse was the start of the selling of bitcoin futures. “Bitcoin prices were a bubble, to begin with, and now we’re seeing a return to normal values. The San Francisco Federal Bank, in a report, also suggested that the introduction of Bitcoin futures trading caused a price drop.

Additionally, the market is heading towards a situation in which it will be possible to short-sell bitcoin futures and that will also contribute to keeping the prices down.

Noguchi points to a paper published on May 7 by the Federal Reserve Bank of San Francisco, “How Futures Trading Changed Bitcoin Prices“, authored by Galina Hale, Arvind Krishnamurthy, Marianna Kudlyak, and Patrick Shultz. Here is the key passage:

“From Bitcoin’s inception in 2009 through mid-2017, its price remained under US$4,000. In the second half of 2017, it climbed dramatically to nearly US $20,000, but descended rapidly starting in mid-December. The peak price coincided with the introduction of bitcoin futures trading on the Chicago Mercantile Exchange. The rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence. Rather, it is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset.”

Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikely
Waseda University, Japan

Noguchi insists that actually, the majority of investors are predicting that prices of bitcoin will continue to fall, especially when some are able to make money from short-selling the cryptocurrency.

He also feels that allowing cryptocurrency to branch off, it makes people feel like they can get new cryptocurrency for free and that also drives down price.

Does he see that as resulting in a decline in the popularity of Bitcoin?

Surprisingly, Noguchi believes it’s a good thing. As the price of bitcoin drops, it becomes a more attractive means of sending money. He calculated that at current prices, if you had to use Mitsubishi UFJ Bank to send money, it costs you 432 yen for any amount above 30,000 yen. But with the current value of Bitcoin, it’s cheaper to send via a regular bank transfer than BTC, unless the value of BTC falls to 675,000 yen. When BTC returns to that level, it will finally be trading at what should be a normal value.

On December 20th last year, Noguchi’s book, “An Introduction To Bitcoin And Blockchain” was published and received rave reviews.

What do you think of Prof. Noguchi’s analysis on Bitcoin surge? Let us know in the comments section below.


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Chat app Line to launch crypto exchange in July but it won’t cover US or Japan

Messaging app firm Line has confirmed it will launch a cryptocurrency exchange called BitBox next month.

The company said back in January that it planned to enter the crypto space with an exchange, but today it said that the BitBox service won’t be available for users in the U.S. and Japan — that’s presumably down to regulatory uncertainty.

What it will include, however, is support for trading 30 tokens — Line is only revealing big names like Bitcoin, Ethereum, Bitcoin Cash, and Litecoin so far — and a 0.1 percent trading fee. Line said it has picked the tokens following “an extensive screening process” which saw an internal commitment asses what on the market represents “the most reliable and safest trading [options] for users.”

Bitbox will be available worldwide and in 15 languages. It isn’t yet clear whether it will include an option to buy or sell tokens using fiat — a key ramp to getting new money into crypto — or whether this will just be token-to-token trading.

Line has around 200 million monthly active users and it has expanded into adjacent services such as taxis on-demand, music streaming, mobile payment and more, so this foray could represent a step towards accepting crypto for its other services in the future. But the exclusion of U.S. and Japan-based users is a major caveat.

Japan is Line’s largest market for revenue and users, so by excluding the country, it is severely limiting the potential impact that Bitbox can have.

Nonetheless, the company is need of something fresh to revitalize its business in the wake of increasing competition from Facebook, which operates WhatsApp and Messenger, the world’s most popular messaging apps with over one billion monthly users each.

Prior its $1.1 billion U.S.-Japan IPO in 2016, Line had targeted a global audience via its messaging service — which pioneered the concept of stickers — and a connected games business. Its international expansion didn’t go according to plan, however, and the company refocused efforts on its four core markets of Japan, Thailand, Taiwan and Indonesia, which account for 168 million of its active users.

In those markets, it offers a range of localized services that include video streamingmanga cartoonsshoppingride-hailing and other on-demand services. Last year, it began to sell smart hardware and AI to offer its own cartoony alternative to Amazon’s Echo range and Google Home devices. In some markets, it also offers a Line-branded mobile phone/data service.

There’s plenty of pressure, however. Facebook’s global popularity makes Messenger an option for most internet users on the planet while the company is busy in other areas. WhatsApp recently moved into business solutions that allow companies to correspond with users via its service, and it is tipped to add payments soon. CEO Mark Zuckerberg pledged to look into whether Facebook can make use of blockchain technology and earlier this year he set up a dedicated division that is headed by David Marcus, the ex-lead for Messenger and former CEO of PayPal.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Bitcoin price falls but doesn’t flatline

Those not looking at the Bitcoin markets lately will either gasp or smile. Bitcoin, down from its all time high of around $19,000, is now floating at $6,785 as of this writing. To many this means that either the Bitcoin experiment is over or, to many more, that it has just begun.

There are plenty of folks who will have been hurt by this crash. I was speaking with a Romanian entrepreneur about his friend who bought BTC on a credit card only to find that he is wildly underwater. The volatility is also frightening to folks who might have gotten in on the last run up only to find themselves back at the start. I pity the poor waiter who a friend saw making Bitcoin trades at $18,000 during his shift. I hope he sold.

But there are no signs that the cryptocurrency train is stopping. Startups around the world are all examining – and doing – ICOs. Plenty of early crypto miners and buyers still have enough cash to play around in all sorts of ways. Bitcoin naysayers like R3 are figuring out that bankers didn’t want to hear “blockchain, not bitcoin” after all once they realized that bitcoin, like their beloved equities and commodities, was just another place for them to play.

And people are still active in the market. That’s important. As this Coindesk analysis notes, the markets will be deeply volatile during this stretch and could remain so as risk-taking buyers snap up coin on the downswing.

Don’t believe me? This is the seven day trading volume for almost all of the exchanges.

Ultimately these moves make up one of the most interesting forms of intergenerational and international wealth transfer we’ve ever seen. Whereas this wealth transfer once came in the form of inheritances and joint ventures, cryptocurrencies enable an almost instantaneous partners ship between the old and young and the near and far. It’s a fascinating economic time and I doubt it will let up any time soon.

Sometimes the price goes up, sometimes it goes down. That’s the best advice any smart person can give anyone in any market. However, the signs point less to a flatline and more to a gut-wrenching EKG full of ups and downs. The patient, however, is not dead yet.

Cryptocurrencies Not a Risk to Stability, Russian Study Concludes

Cryptocurrencies Not a Risk to Stability, Russian Study Concludes

A study has found that despite their volatility, cryptocurrencies do not endanger the financial system and the economy of Russia, as the risks are offset by the highly concentrated ownership of digital assets. Crypto fluctuations are not believed to affect consumption either. Russian residents have controlled cryptocurrency worth between $7.5 and $14 billion in the first quarter of this year, according to estimates published in the report.

Also read: Russian Railways Eyes Crypto for Tickets, Blockchain for Cargo

Coins Compared to Commodities, Less Volatile than Some

Cryptocurrencies Not a Risk to Stability, Russian Study ConcludesThe volatility of cryptocurrency rates is comparable to the price dynamics of foods, considered some of the most volatile commodities. Prices of products like meat, milk, and sugar can actually be much more volatile, according to a new study quoted by Russian media. It concludes that cryptocurrencies are not a threat to Russia’s financial stability.

Crypto volatility can affect the Russian economy much like the depreciation of the ruble, which leads to revaluation of the debt denominated in foreign currency, increased cost of borrowing, inflation expectations, and counterparty risks. The authors have calculated that crypto market fluctuations can increase the interest rate on domestic borrowings by about 1%, but that’s only if the share of virtual currencies in the structure of corporate debt reaches 4 trillion rubles, or at least 6% of the total.

According to the Russian Analytical Credit Rating Agency (ACRA), the high volatility of cryptocurrencies can potentially create risks for the country’s financial stability, but these are balanced by the high concentration of ownership of the digital assets. ACRA estimates that the market value of the cryptocurrency attributable to the Russian economy or controlled by Russian residents has been between $7.5 and 14 billion in the first quarter of 2018. That’s only 1-2% of the M2 money supply in Russia. The global ratio is even lower at 0.5%.

Cryptocurrencies Not a Risk to Stability, Russian Study Concludes

The study is based on statistics measuring the Russian share of the global economy and money supply, as well as data about the structure of the turnover registered on crypto exchanges. The researchers note that it is still quite difficult to accurately estimate the share of cryptocurrencies against the money supply in the country, as the assessment is limited by the opacity of the cryptocurrency markets, the anonymity of crypto users and the use of cryptocurrency in cross-border settlements.

The authors point out that a number of factors can influence the volume of cryptocurrency owned by the residents of a given country. These include the level of development of financial markets and venture investing, the central bank’s policies, the stability of the national fiat currency, the inflation dynamics, and the rigidity of government regulations. They believe that the increase of market capitalization of cryptocurrencies, their acceptance as unit of account, the introduction of liberal regulations for ICOs and crypto payments can stimulate growth in the sector.

Consumption Not Affected by Crypto Fluctuations

The experts at ACRA see very little chance of crypto volatility affecting consumption in Russia. They claim consumption will decrease only by about 1% if cryptocurrency price shocks cause a 6% drop in the volume of liquid savings. In current prices, this corresponds to approximately 1.5 trillion rubles. “However, due to the huge distortion in the distribution of crypto assets, their volatility is not reflected in consumer spending,” notes the report, quoted by Kommersant.

Cryptocurrencies Not a Risk to Stability, Russian Study Concludes

The analysts also say that if the use of cryptocurrency increases in Russia, the Central Bank can employ the same monetary policy instruments it currently applies in regards to foreign currencies. In case crypto markets remain opaque, digital currencies can be treated like foreign cash, and if the bank is successful in tracing crypto transactions, digital coins can be regarded as electronic foreign currency funds.

The Central Bank of Russia has previously opposed the legalization of cryptocurrencies as legal tender and unit of account. The legislation currently under review in Russia’s parliament can change that to a certain extent. It has been reported that some texts allow the use of tokens and coins in settlements, although, unlike the ruble, cryptos will not be considered a mandatory means of payment in the country.

Of the three drafts approved on first reading by the State Duma, the bill “On Digital Rights” deals with crypto payments. The other two, “On Digital Financial Assets” and “On Attracting Investments Using Investment Platforms”, aim to regulate initial coin offerings (ICOs), crypto mining and taxation. The proposed legislation describes cryptocurrencies and tokens as electronic property created with cryptographic tools.

Do you think price volatility hampers the wider adoption of cryptocurrencies? Tell us in the comments section below.


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Monetizing computing resources on the blockchain

A while back, a blockchain startup approached me with their pitch, a decentralized social media application in which users can earn money by simply doing what they already do on other platforms, such posting updates, photos and videos.

I would have been intrigued had they sent me the message a couple of years ago. But not so much after observing the space for more several years.

Several blockchain applications profess to enable users to monetize various resources, whether it’s their unused storage and CPU power, or the tons of data they generate every day.

Regardless of whether they will succeed to deliver on their promises or not, these projects highlight one of the problems that haunts the centralized internet. Users are seldom rewarded for the great value they bring to platforms such as Facebook, Google and Amazon .

Blockchain applications suggest that decentralized alternatives to current services will give users the chance to collect their fair share of the revenue they generate with their participation in online ecosystems. It’s an enticing proposition since it doesn’t require users to do much more than what they’re already doing: send emails, browse websites, watch ads, keep the computer on…

But what exactly do you earn from monetizing your resources on the internet, and how accessible and reliable are your earning? Here’s what you need to know.

What can you sell?

A handful of blockchain platforms enable you to rent your unused storage, idle CPU cycles, and internet bandwidth with those who are in need. The premise is simple: You list your resources along with your payment terms on the application and get paid in the proprietary crypto-token of the application when others use them. Purchases are arranged, performed and paid peer-to-peer through smart contracts, bits of code that run on blockchain without the need for a centralized application server.

Examples include Golem and iExec, two decentralized marketplaces for computing power. Users can earn the platforms’ proprietary cryptocurrencies, GNT and RLC tokens respectively, by renting their CPU cycles to developers and users who want to run applications on the network. Golem and iExec aim to replace centralized cloud providers such as Amazon and Google, in which the service provider sets the rates and rakes in all the profits.

Storj and Filecoin are two distributed storage networks where users can earn cryptotokens for sharing their free hard drive space with the network. Both platforms are designed to provide infrastructure for various applications such as web hosting and streaming services. Gladius, a decentralized content delivery network (CDN) and DDoS mitigation solution, enables users to monetize their internet bandwidth to serve content from websites and services running on the network.

These applications provide a good opportunity to turn the hours that your computer sits idly in the home or office into a side income.

Other blockchain platforms enable you to monetize your data. An example is Datum, a decentralized marketplace for user data. Datum enables users to earn DAT tokens by choosing to share it with other organizations. Other players in the domain include Streamr, a real-time data-sharing platform geared toward the Internet of Things (IoT). With Streamr, users can earn DATAcoin tokens by sharing the data their connected devices generate with other devices that need it to carry out their functions and companies that use them for analytics and research.

Data is a huge market that is currently dominated by a few big players such as Google and Facebook. These companies hoard user data in their walled-garden silos and use them to make huge profits. Blockchain platforms give users the choice and power to claim their share of that market by giving them back the ownership of their data.

Matchpool is a decentralized social network that enables users to monetize their groups and online communities. Matchpool provides the decentralized equivalent of Facebook groups and provides tools for administrators to earn GUP tokens by setting fees on membership and access to content. And there’s Brave, the blockchain-based browser developed by the former CEO of Mozilla. Brave removes ads from websites and instead gives users the choice to earn Basic Attention Tokens (BAT) by opting to view ads.

How much do you earn?

It’s difficult to measure earnings on blockchain applications because most of them either haven’t launched yet or are in their early stages. Few of the companies I reached out to could provide stable numbers or average figures.

Also, the value of the resource you share on these platforms is often subject to supply-and-demand dynamics. For instance, iExec leaves it to the users to determine the price of their computational resources and doesn’t take any cut from their earnings. If there’s a large demand for decentralized CPU power, you’ll earn more from participating in the network.

Storj, the decentralized storage network, had the most accurate information to share. The platform provides a formula to calculate the monthly earnings of “farmers,” the users who share their free storage space with the network. Storj charges $0.015 per gigabyte of data stored and $0.05 per gigabyte downloaded, 60 percent of which goes to the farmers.

Several factors affect the final earnings, including whether the farmer nodes store primary or mirror copies of data, how long they participate in the network, and how well they perform in terms of up-time, bandwidth and response times. “If someone stored 1TB of data for the entire month, and that entire TB of data was downloaded once that month, they could potentially make $39,” said Philip Hutchins, CTO at Storj Labs. But the current average monthly payment for a Storj farmer node is around $2, according to the network data the company shared.

Storj has also launched partnerships with FileZilla, Microsoft and other companies to build decentralized apps on top of its network, which could increase demand for Storj space.

On Datum, the decentralized data market, users earn between $0.50 and $5 in DAT tokens for each promotional email they opt to open, according to Roger Haenni, the company’s CEO, though he did not share the details of how earnings are calculated. Currently the network supports monetizing email inboxes, but in the future, the company plans to provide users with the option to get paid for sharing various categories of data, such as the location data their phone collects, apps, services and websites they use, data that their smart gadgets collect and others.

That last bit sounds a bit invasive on user privacy. “This [data] is currently widely tracked by cookies from various ad networks,” explains Haenni. “However, the user is not asked to explicitly opt in to share this data nor does he get paid when this data is monetized.” Datum will give the chance to claim the money that’s already being made from their data.

The Datum network currently has 80,000 users, and since the launch of the Datum App in late December, users have collected 1.5 million DAT tokens, amounting to around $75,000.

Gladius, the decentralized CDN, doles out $0.03 in GLA tokens per gigabyte of bandwidth of data streamed through a node (however, the company’s website states that this is an estimate based on favorable market conditions). An internet connection with a 30 mbps upload speed shared with the network for eight hours a day could earn its owner around $49 per month.

What are the costs and risks?

In most cases, you’ve already paid for the resources you’ll be sharing on the blockchain, whether it’s your hard drive space, your CPU or your bandwidth (unless you’re on a metered connection, in which case sharing it would be unwise). However, you’ll have to factor in electricity costs of keeping your computer on, which varied depending on the region you live in.

Social and data-sharing platforms won’t have any extra costs, but you’ll be responsible for keeping the balance between sharing your data and preserving your privacy.

One of the real risks of earning cryptotokens is the constant price fluctuations. The value of what you earn today could double overnight—or drop by half in the same manner. This means you’ll have to choose between holding your tokens or cashing out. 

And there are always the risks of scams and failed projects that will absorb users’ funds and resources only to disappear and leave them out in the cold.

“Resource-sharing projects on top of the blockchain that allow users to control and profit from their own data will be the most profitable and successful projects in the future,” says Jared Tate, blockchain expert and the founder of DigiByte. However, Tate also notes that many of the current resource sharing platforms are PR projects that will never scale. 

“The majority of projects out there won’t be around in 5 years. Most of the projects don’t even have working software, just a white paper and some fancy graphics on a website,” Tate says. Some users evaluate projects by examining the market cap alone, which Tate believes is the absolute worst way to gauge a projects long term viability. “So many market caps are artificially inflated by developer pre-mines or deceptive coin counts,” he warns.

 

How do you deal with the liquidity problem?

 Another challenge users will have to overcome is what to do with the tokens they earn from monetizing their resources. For instance, if you earn Storj tokens from renting your free hard disk space, the only thing you can do with your earnings is, well, rent storage from other users, which doesn’t make sense since you already had an excess of it to begin with. 

Some platforms have multi-faceted economies that enable users to use their earned tokens for various purposes. For instance, in Flixxo, a decentralized streaming service, users can earn FLIXX tokens by sharing their free disk space and bandwidth to host content on the network. They can then use their earned tokens to consume videos published on the platform. But that is still a limited use case and might not be the problem they want to solve with their earnings.

Digital currencies and tokens have a liquidity problem. There are very few retailers and online services that accept Bitcoin as a method of payment, and even fewer that accept other cryptocurrencies. Users often must find some online exchange which matches buyers and sellers of various digital and fiat currencies. The process is slow and complicated and involves fees at different levels. 

An alternative is Bancor, a decentralized liquidity network built on top of the Ethereum blockchain. Supported by its own token, BNT, Bancor enables users to convert between tokens supported on its network without the need to find a buyer or seller. So, for instance, if you’ve earned an amount of RLC tokens from renting your idle CPU time on iExec, you can instantly trade it on Bancor for, say, MANA, the token that will let you purchase VR experiences on Decentraland. 

Bancor already lists several dozen tokens on its network and plans to add more in the future.

“The aim of this mathematic liquidity solution is to allow the long tail of tokens to emerge, by allowing any user generated currency to be viable on day one without needing to achieve massive trade volume in order to be listed and thus become liquid,” says Galia Benartzi, the co-founder of Bancor. “Great tokens will still rise, bad ones will fail, but all will have a chance to try.”

With at least $1.3 billion invested globally in 2018, VC funding for blockchain blows past 2017 totals

Although bitcoin and blockchain technology may not take up quite as much mental bandwidth for the general public as it did just a few months ago, companies in the space continue to rake in capital from investors.

One of the latest to do so is Circle, which recently announced a $110 million Series E round led by bitcoin mining hardware manufacturer Bitmain. Other participating investors include Tusk VenturesPantera CapitalIDG Capital PartnersGeneral CatalystAccel PartnersDigital Currency GroupBlockchain Capital and Breyer Capital.

This round vaults Circle into an exclusive club of crypto companies that are valued, in U.S. dollars, at $1 billion or more in their most recent venture capital round. According to Crunchbase data, Circle was valued at $2.9 billion pre-money, up from a $420 million pre-money valuation in its Series D round, which closed in May 2016. According to Crunchbase data, only Coinbase and Robinhood — a mobile-first stock-trading platform which recently made a big push into cryptocurrency trading — were in the crypto-unicorn club, which Circle has now joined.

But that’s not the only milestone for the world of venture-backed cryptocurrency and blockchain startups.

Back in February, Crunchbase News predicted that the amount of money raised in old-school venture capital rounds by blockchain and blockchain-adjacent startups in 2018 would surpass the amount raised in 2017. Well, it’s only May, and it looks like the prediction panned out.

In the chart below, you’ll find worldwide venture deal and dollar volume for blockchain and blockchain-adjacent companies. We purposely excluded ICOs, including those that had traditional VCs participate, and instead focused on venture deals: angel, seed, convertible notes, Series A, Series B and so on. The data displayed below is based on reported data in Crunchbase, which may be subject to reporting delays, and is, in some cases, incomplete.

A little more than five months into 2018, reported dollar volume invested in VC rounds raised by blockchain companies surpassed 2017’s totals. Not just that, the nearly $1.3 billion in global dollar volume is greater than the reported funding totals for the 18 months between July 1, 2016 and New Year’s Eve in 2017.

And although Circle’s Series E round certainly helped to bump up funding totals year-to-date, there were many other large funding rounds throughout 2018:

There were, of course, many other large rounds over the past five months. After all, we had to get to $1.3 billion somehow.

All of this is to say that investor interest in the blockchain space shows no immediate signs of slowing down, even as the price of bitcoin, ethereum and other cryptocurrencies hover at less than half of their all-time highs. Considering that regulators are still figuring out how to treat most crypto assets, massive price volatility and dubious real-world utility of the technology, it may surprise some that investors at the riskiest end of the risk capital pool invest as much as they do in blockchain.

Notes on methodology

Like in our February analysis, we first created a list of companies in Crunchbase’s bitcoin, ethereum, blockchaincryptocurrency and virtual currency categories. We added to this list any companies that use those keywords, as well as “digital currency,” “utility token” and “security token” that weren’t previously included in the above categories. After de-duplicating this list, we merged this set of companies with funding rounds data in Crunchbase.

Please note that for some entries in Crunchbase’s round data, the amount of capital raised isn’t known. And, as previously noted, Crunchbase’s data is subject to reporting delays, especially for seed-stage companies. Accordingly, actual funding totals are likely higher than reported here.

BRD crowdraises $32 million to build financial services into a mobile crypto wallet

Crypto wallets can’t remain crypto wallets for long. There is so much competition and so many scammers that value-added features like financial services are de rigueur. BRD knows this quite well and is putting $32 million behind the platform to grow out the features and cryptocurrencies supported on their popular app.

Founded by Aaron Voisine, Adam Traidman, and Aaron Lasher, the company started out as a side product called Bread Wallet. BRD, say the founders, was the first iOS bitcoin wallet in the App Store.

The team has 1.1 million users in 170 countries and 76% of those are iOS. They’ve received 71% of their customers in the past year, a fact that attests to the recent popularity of cryptocurrencies. They have $6 billion of crypto assets under protection.

The team has also partnered with Changelly to help transfer more tokens than Bitcoin and Ethereum – including their own BRD token.

How did they raise the money? By token sale, of course. They ran a $12 million presale and a $20 million crowd sale, resulting in a combine Seed and A round that would make most fintech orgs blush.

The team is most proud of their focus on decentralization.

“We’ve made our name around security, first and foremost. That’s what most the miners and dev crowd know us for, as the most secure way to hold and protect all their cryptoassets,” said Voisine. “The assets themselves are not stored in any centralized system within BRD. A transaction on BRD connects directly to the blockchain and are synced in real-time. There is literally nothing to steal from BRD, since we’re not holding a single asset ourselves… even though we have over $6B USD under protection.”

Further, they are offering BRD Rewards that will let BRD users get discounts and other benefits. This is an effort to “bring a much better balance between fees and utilization.”

“We want to be the service for first-time buyers of crypto. We want to be the most popular onramp for consumers into the crypto economy,” he said.

Lasher feels that his mission is far more interesting than just making an iOS wallet. He sees this as a philosophical change that will bring new understanding of the importance of crypto.

“If sending money globally as easily as an email doesn’t impress you, how about the ability to store your life savings in your head, then walking your family across a war-torn border to safety?” he said.

Ripple is going after startups to build an ecosystem around its XRP cryptocurrency

It’s finally happening. Ripple is making a push to expand the use of the XRP cryptocurrency it created into new verticals and segments beyond the payment and banking space where the company is focused.

XRP is the world’s third-largest cryptocurrency behind only bitcoin, the original breakout artist, and Ethereum, the platform that most developers pomp for. XRP has a total ‘coin market cap’ of $28.7 billion today, according to Coinmarketcap.com, and yet it is barely used beyond a handful of pilot customer deployments that Ripple has announced.

That might change soon, however, after Ripple announced a new initiative called Xpring — pronounced ‘Spring’ — which is aimed at bringing entrepreneurs and their businesses over to XRP, both the cryptocurrency and the smart ledger, to build an ecosystem. The project will use a mixture of investment, grants, and incubation to lure companies and expand the use of XRP whilst allowing Ripple to continue to focus on its financial services business.

That’s essential, and even in the short space of six months the need for variety has been clear.

The value of XRP shot up in December and January during a crypto surge which saw bitcoin reach an all-time high of nearly $20,000 per coin. The collective value of XRP was worth more than $128 billion at peak before a market crash in January walked those prices back significantly. Ripple has come under fire for a perceived lack of use for XRP, which has been marketed as a tool for banks but has attracted only cross-border payment services as customers.

Going beyond Ripple

Ripple has hired Ethan Beard, formerly director of Facebook’s developer network and an ex-EIR at Greylock Partners, to lead Xpring and more broadly Ripple’s developer program.

“The goal is to support businesses that we believe would see benefit from building upon the XRP ledger,” Eric van Miltenburg, Ripple SVP of business operations, told TechCrunch in an interview. “Support will come in a variety of ways: investment, incubation, and the potential of acquisition or grants. We’re focused on proven entrepreneurs who can use the ledger and XRP to really address their customers’ problems.”

Van Miltenburg said Ripple has been approached by entrepreneurs and companies wanting to work with XRP “for years,” but nothing came of discussions because Ripple is focused on financial services.

“There’s been enough interaction to say there’s something here [and] now is the time,” he added. “Over the last four to six months [the idea of Xpring] has really crystallized.”

Ethan Beard speaking at LeWeb in 2010 (via Adam Tinworth/Flickr)

If you’ve been keeping an eye on Ripple this year, the launch of the program won’t be a huge surprise.

Aside from the fact that many in the crypto space are pulling together their own funds — whether it be informally as a company, or more broadly across industries like the Ethereum Community Fund — Ripple has quietly upped its investment focus.

Initially, two Ripple executives took part in a $25 million investment in January for Bay Area-based startup Omni then in March CEO Brad Garlinghouse told TechCrunch that Ripple would “certainly partner with companies that are looking to use XRP in lots of different ways” whilst maintaining its focus as a business.

Xpring is that project.

Enter the Bieber… kinda

Van Miltenburg and Beard told TechCrunch that the kind of segments where they see the most potential for XRP are trade finance, gaming, virtual goods, identity, real estate, media and micro-payments.

When I put it to them that XRP is looking for reasons to justify its $28 billion market cap, van Miltenburg claimed that XRP is far less speculative than other cryptocurrencies.

“There’s a use case we have established for it: Ripple is one of the only enterprise solutions on the blockchain that’s out in production. We believe the XRP ledger and the asset has a performance profile that lends it to others,” he said.

He added that Ripple has seen interest from projects that “started on a blockchain that isn’t living up to their needs,” and that Xpring could focus on rehousing would-be blockchain migrants. However, it won’t be investing in ICOs, buying other tokens or hosting ICOs on the XRP blockchain, van Miltenburg said.

Aside from Omni — which said it will “soon” add XRP as currency in its marketplace service — Xpring has pulled in a couple of early names. Scooter Braun, the man best known for managing Justin Bieber, is “pursuing several endeavors that will use XRP to improve artists’ ability to monetize and manage their content.”

Neither van Miltenburg nor Beard could be specific on exactly what Braun is working on — there are already a number of blockchain-based digital rights and music streaming projects in development — but they said he isn’t one to jump on a bandwagon.

Braun said in a canned statement that he is “excited our team is among the first in the entertainment industry to lean into the blockchain movement.”

“This is only the beginning as we will continue to build out more use cases for XRP,” he added.

Other early partners being announced today include Ripple CTO Stefan Thomas who is transitioning out of his role to build micro-payment services using XRP via a new venture called Coil. In addition, Xpring has backed VC firm Blockchain Capital while Michael Arrington, the founder of TechCrunch, raised his latest fund entirely in XRP.

Ripple CEO Brad Garlinghouse previously spoke of plans to partner with companies on XRP (via Christopher Michel/Flickr)

Building an ecosystem

Generally, the plan for exactly how Xpring will work seems fluid at this point.

Beard spoke of the next wave of innovation coming from the blockchain, much like Facebook’s Timeline and social graph helped scale companies like Spotify, Zynga and BuzzFeed from startups into major tech names. He believes that, in turn, Xpring and XRP can help “build new businesses and change how industries function.”

Van Miltenburg was non-committal in terms of goals.

“Our motivation is to ensure that the XRP ledger and digital asset reaches its full potential. We want to see an extremely healthy and robust XRP ecosystem; that benefits Ripple and all others,” he explained.

Ripple is known to incentive its partners with XRP bonuses for signing, but it isn’t talking numbers this time, either the specific incentives that it is giving to high-profile names like Braun, or the overall budget that it has put behind Xpring.

“For the right opportunities, we can be aggressive. There’s no hesitation or reluctance to make big bets with opportunities that require investment,” is all van Miltenburg would say.

You can bet a large chunk of capital (XRP) is supporting Xpring. The current system with hundreds of cryptocurrencies isn’t sustainable, those that make it through will be the ones that offer the most value, and ecosystems could well be a measure of that. XRP, as the third-largest cryptocurrency, has considerable expectations on it which, as the crash earlier this year showed, can wipe out money faster than it made crypto wealth.

You can bet that Xpring, while outside of Ripple’s core financial services focus, will be a very key focus for building a community and ultimately usage for XRP. The question is how the startup community will reach to a different kind of investment option.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

The UK and USA need to extend their “special relationship” to technology development

The UK and the USA have always had an enduring bond, with diplomatic, cultural and economic ties that have remained firm for centuries.

We live in an era of profound change, and are living with technologies set to change things ever faster. If Britain and America work together to develop these technologies for the good of mankind, in a way that is open and free, yet also safe and good for our citizens, we can maintain the global lead our nations have enjoyed in the fields of innovation.

Over past months we have seen some very significant strides forward in this business relationship. All of the biggest US companies have made decisions to invest in the UK. Apple is developing a new HQ in the iconic Battersea Power Station, close to the new US embassy, while Google is building a billion dollar new HQ in the increasingly fashionable King’s Cross. Facebook, Amazon, IBM and Microsoft are all extending their operations, and a multitude of smaller US firms are basing their international headquarters in London.

They are all coming here because as we prepare to leave the EU we are building a forward looking Britain that is open to the wider world, and tech is at the heart of this.

Similarly, there have been major expansions or new investment from British firms into the US. Jaguar Land Rover, the UK’s largest automotive manufacturer, supports more than 9,000 jobs in the USA and have recently opened their new multimillion-dollar corporate North America HQ in New Jersey.  iProov, a leading British provider of biometric facial verification technology, became the first international company to be awarded a contract from the US Department of Homeland Security Science & Technology Directorate’s Silicon Valley Innovation Program last month.

We want to work with our global partners – to share expertise, and encourage investment – as we harness technology for the wider good. And that of course includes our old friend and closest ally, the USA.

We have a great deal to offer.

The UK was recently ranked the most AI ready nation among all the OECD countries. In the past three years, new AI start-ups have been created in the UK on an almost weekly basis.

Recently, UK government and industry together committed over $1 billion to support our AI sector, much of which will go towards entrepreneurs. Funding has been set aside to create a nationwide network of tech incubators, that we’re calling “Tech Nation”, which will support new AI businesses as they get off the ground.

We are also excited by — and I am a firm advocate for — the development of blockchain and similar technologies. The UK is leading the way in many areas where blockchain has the potential to be used, such as Fintech. There are now more people working in UK Fintech than in New York or in Singapore, Hong Kong and Australia combined.

And we are eminent in the development of immersive technologies, like Augmented and Virtual Reality, which look set to radically improve many areas of life in coming years, with applications as varied as flight simulation and surgical training techniques.

There is so much to be gained from close collaboration between our two countries on these new technologies and from sharing our expertise.

Together, we can reap the economic benefits of stealing an early lead in their development. We estimate that AI, for example, if widely adopted, could add $33 billion to the UK economy. But, perhaps most importantly, we can also work together to build a strong regulatory and ethical frameworks for their wider application.

It is the role of governments across the world, the UK and US included, to set frameworks for these decentralised, cross border systems so we can manage their use in a safe and effective way.

Our aim should be to harness the power and capability of technology but always for the benefit of, and in service to the populace.

We in the UK are avowedly pro-tech, always seeking to put its power in the hands of our citizens.

We have all learned valuable lessons from the recent scandals regarding data use, most recently around Facebook’s use of data.

We want to build a system that protects and cherishes the freedom of the Internet while protecting the rights of individuals, and their property, including intellectual property.

We want to see freedom in a framework; where our tech entrepreneurs have the space to innovate, knowing they do so with full public trust. Trust underpins a strong economy, and trust in data underpins a strong digital economy.

So in the UK we are developing a Digital Charter, to agree norms and rules for the online world and put them into practice. Our starting point is that what is unacceptable offline should not be tolerated in the online world. That includes how tech companies treat private citizens and use their data, as well as how people treat each other online.

Important changes like these cannot be agreed by one country alone. It is more important than ever that we work together and find common ground so we can make sure that tech continues to change the world for the better. Based on our mutual love of freedom and individual rights Britain and America have through history risen to challenges together. I firmly believe working together we can build that brighter future.

Ukraine’s Securities Commission Chief Seeks Legalization of Cryptocurrencies as Financial Instruments

Ukraine’s Securities Commission Chief Seeks Legalization of Cryptocurrencies as Financial Instruments

The Chairman of the National Securities and Stock Market Commission of Ukraine has indicated the regulator favors a decision to recognize cryptocurrencies as financial instruments. Timur Khromayev thinks it’s time to take the matter to the country’s Financial Stability Council. The point of no return has been passed, he says.  

Also read: Ukraine to Legalize Crypto Mining as Economic Activity

Beyond the Point of No Return

Ukraine’s securities regulator is expected to raise the question about the status of cryptocurrencies during the next meeting of the Financial Stability Council in Kiev. The chairman of the National Securities and Stock Market Commission of Ukraine, Timur Khromayev, thinks that they should be recognized as financial instruments. A decision to do that would effectively legalize digital coins in the country, although not in all of their possible functions.

Ukraine’s Securities Commission Chief Seeks Legalization of Cryptocurrencies as Financial Instruments“I think it is very timely to consider the recognizing of some crypto units as financial instruments during the upcoming meeting of the Financial Stability Council,” Khromayev wrote on his Facebook page. He also insisted that the body should lay out approaches to regulating crypto-related activities and initiate corresponding legislative procedures.

Timur Khromayev noted the active development of the crypto industry in Ukraine, which, in his words, has already established certain standards and rules for conducting business. He also stressed:

The point of no return is already in the past. The crypto industry is becoming an integral part of economic and financial relations.

Therefore, Khromayev thinks, some adaptation and legal recognition by financial regulators is necessary in order to solve the existing issues. The chairman of the NSSMC proposes to consider crypto assets and operations within the framework of the existing regulations, “based on principle and substance, not form.” He also called for formulating new rules in response to the dynamic development of the industry.

Khromayev thinks that the international community is far from adopting common standards. That’s why he believes that regulations will be determined by national legislations.

No Real Progress towards Regulation Yet

Three pieces of legislation have been introduced in Ukraine’s parliament since last October – the draft law “On the Circulation of Cryptocurrency in Ukraine”, the bill “On Stimulating the Market of Cryptocurrencies and Their Derivatives”, and a supplementary draft amending the Ukrainian tax code to regulate taxation of crypto incomes and profits and introduce some exemptions. No real progress towards adopting the long-awaited legislation has been reported so far.

The point of no return is already in the past. The crypto industry is becoming an integral part of economic and financial relations.

In November 2017, the NSSMC said that the use of the term “cryptocurrency” in the new legislation was “unjustified”. According to the regulator, digital coins are the result of financial engendering and are not currencies. “Therefore, it is more expedient to use the term ‘crypto unit’,” the Commission said.

At the time, NSSMC proposed to legally define digital currencies as either financial instruments, investments assets, or goods. Its representatives noted that under the current Ukrainian legislation, cryptocurrencies could not be accepted as electronic money, foreign currencies, securities, or money surrogates.

In March this year, the executive branch of power in Kiev took steps to legalize crypto mining as an economic activity. Ukraine’s Minister of Economy ordered several ministries, agencies, and the National Bank to prepare the necessary documents to include mining in the state register of economic activities.

Do you think the recognizing of cryptocurrencies as financial instruments could be the first step towards full legalization? Tell us in the comments section below.


Images courtesy of Shutterstock, Yarcube, Wikipedia.


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