Bitcoin Not Dead, Again: Washington Post Gets Schooled

Castle Island Ventures partner and cofounder of Coinmetrics.io, Nic Carter, has had quite enough. Made crazy by mainstream media misunderstanding, ignorance, and downright falsehoods regarding cryptocurrencies, he took to Medium, making the case for why Bitcoin is not dead, again.

Also read: Report: 15,000 Twitter Crypto Scam Giveaway Bots

“Bitcoin is Still a Total Disaster”

“I’m fed up with journalists who are either ignorant or unwilling to learn about cryptocurrency,” Mr. Carter began, “holding forth on its perceived weaknesses. However, there isn’t enough time in the day to rebut all of their nonsense, so I have to be selective.”

Nic Carter, partner at Castle Island Ventures, and cofounder of Coinmetrics.io, is obviously tired of journalists and their respective employers failing to understand cryptocurrency basics. The last straw, bringing his anger to a public boil, was a recent article written for The Washington Post’s Wonkblog Perspective, “Bitcoin is still a total disaster,” by Matt O’Brien. It attempts to make the case Bitcoin doesn’t work on any level, to any practical effect.

As Mr. Carter explains, Mr. O’Brien’s Wonkblog piece “relies on mistaken assumptions to paint a misleading picture of the world.” He takes the rant apart, claim by claim, beginning with whether or not bitcoin is a currency. This is a bone of contention within the community itself, so it should be noted Mr. Carter is referencing bitcoin core (BTC) and not bitcoin cash (BCH) in his arguments against the rant by Mr. O’Brien (though BTC and BCH carry similarities).

Mr. O’Brien’s first claim, first sentence really, is BTC’s lack of price stability, and thus this fact discounts it as a currency. Interestingly, and for reasons cited just above, Mr. Carter almost concedes the point, “This assumes that Bitcoin is a currency, and that the definition of currency is normative (‘x should do y’) as opposed to descriptive (‘things of type x have the qualities y and z’). I’d classify Bitcoin the protocol as a complete monetary system, and bitcoin the unit of value as a commodity money, which has the potential to become a gold-like reserve currency. Commodities fluctuate — that’s what they do.” Maybe BTC is more than one thing, seems to be Mr. Carter’s nuanced stance.

Journalists Do Not Understand Decentralization

Another assertion in the Washington Post rant had to do with volatility being baked-in to Bitcoin. Mr. Carter describes that accusation as “an odd rewrite of history, or more charitably, a very strange interpretation of bitcoin’s purpose. The impossible trinity tells that it’s impossible to have free capital flow, sovereign monetary policy, and a fixed exchange rate all at the same time. Bitcoin was designed with sovereign monetary policy and a free flow of capital. No one underwrites or backs Bitcoin, so it cannot be pegged to a real-world basket of goods. That’s the same with gold. Both have emergent monetary premia. This can’t be planned for — it just so happened that way. Needless to say, Satoshi didn’t design Bitcoin to be unstable, he wanted to solve the problem of double spends with digital cash such that it didn’t rely on a single validator. Its volatility is an emergent property, not a design objective.”

Mr. O’Brien also attempts to use BTC being decentralized as a bug rather than a feature. He writes in the Washington Post that “the only way to [validate transactions in such a scheme] would be for every member of that network to keep a record of every bitcoin transaction there had ever been — that way they knew who had bitcoin to spend — which would require a lot of computing power,” emphasis his.

“This is a common misconception,”  Mr. Carter answers, bent on correction. “PoW and mining ensures that the network deterministically converges to a shared history, without any subjectivity or off-chain coordination. The fact that the minted units have value means that miners are incentivized to behave appropriately in the short and medium term. And the fact that those units are worth $x means that miners will pay anything up to $x to obtain them. This is the source of the large quantities of computing power allocated to the network — the combination of efficient mining hardware and large amounts of value at stake.” Furthermore, the Post journalist confuses running nodes with mining, and with miners. Maintaining the ledger, as it were, is a bandwidth issue, a storage issue, and has nothing to do with mining.

The remainder of Nic Carter’s takedown of the Post reads similarly, and is worth a look. He tackles the issue of price manipulation by castigating, “Plain old manipulation? You really mean to tell me you think a $100b network was manipulated into existence?” As for its falling prey to the wealth effect, Mr. Carter counters with empirical data leading to how Bitcoin “is unique among monetary assets because it offers properties not instantiated by gold or the USD. There’s a reason people choose Bitcoin.” He also isn’t afraid to get financially technical, but ultimately finds, “The problem with this article is that the pundit in question has settled on a narrative — Bitcoin is a poor economic system — and then searched for various data points that confirm his view. Bitcoin is volatile, yes. It is an emerging commodity-money that is becoming financialized and growing from a small tribe of enthusiasts to a global user base. Of course it’s volatile. Growth is not linear. Only ‘fragilistas’ demand it to be so.”

Does Bitcoin need defending to the popular press? Let us know in the comments section below. 


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PR: Nexty Platform – a Breakthrough for E-Commerce and Retails

Nexty Platform - a Breakthrough for E-Commerce and Retails

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

The emergence of cryptocurrency has opened new vistas for the fintech industry. However, issues of high transaction fees, delays in completing coin transfers, as well as wild price swings continue to plague the emerging cryptocurrency landscape. Nexty is a blockchain platform that promises instant transfers at zero fees and smart staking & smart holding program to hedge against the volatility of cryptocurrencies.

Although blockchain and cryptocurrency has been regarded as one of the future revolutions, there still exist certain issues namely significantly high transaction fees as well as long waiting time for the completion of transactions.

While these fee values do not necessarily represent a major issue for transfers involving larger amounts, they are a major limitation for daily commerce and payments. Transfers of such nature typically do not go beyond a few dollars at a time.

Nexty, a blockchain startup, believes it now has the solution to this and other problems faced by digital currencies currently on the market. It boasts zero transaction fees, which immediately makes it the superior choice for daily use. Furthermore, Nexty transfers can be completed and confirmed within a few seconds. The Bitcoin network, on the other hand, can take as long as an hour to verify that a payment has indeed been made.

Nexty also addresses the issue of price fluctuation with a feature named Smart Staking that automatically regulates supply and demand to maintain a stable price. The platform will effectively incentivize its users to either sell, buy or hold Nexty tokens (NTY) depending on current market conditions. Nexty has set aside a total pool of 5.4 billions NTY to be used for this purpose alone.

When the pool is eventually depleted, Nexty plans to introduce a feature called Smart Holding in order to reward holders of NTY tokens. The program is open to anyone holding at least 1,000,000 NTY tokens in a single wallet and is willing to lock in their balance over a three month period. Individuals that decide to participate will be rewarded with a range of benefits, including the ability to vote, receive discounts and gain access to certain luxury services. They will also receive airdrop tokens from ICOs hosted on the Nexty platform over a period of 12 months. The development team believes these benefits will encourage users to stay within the ecosystem.

NTY tokens can currently be purchased on IDAX and Coinbene cryptocurrency exchange. Nexty has also released initial versions of its mobile wallets for Android and iOS.

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Further details about the platform are available here: Website | Telegram

Contact Email Address
support@nexty.io

Supporting Link
http://nexty.io

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Markets Update: Crypto Prices Take a Weekend Beating

Markets Update: Crypto Prices Take a Weekend Beating

Cryptocurrency markets are suffering from deep losses today, on June 10, 2018, as most digital assets are seeing 24-hour declines between 9 and 25 percent. The number one position, held by Bitcoin Core (BTC), dropped more than a $1,000 just a few hours ago, from $7,600 to $6,600, but prices have rebounded back to $6,787 per BTC. The fourth highest valued market, held by Bitcoin Cash (BCH), dropped around $225 in value after hovering around $1,150 for a while. The currency is now averaging $933 per BCH. It’s safe to say market participants are shaken and many are curious about why the market keeps sliding.

Also Read: CFTC Subpoenas Leading Exchanges for Trading Data

Crypto Markets Take a Jab to the Gut This Weekend

Markets Update: Crypto Prices Take a Weekend BeatingA dump took place today that hit markets below the belt, as most cryptocurrencies lost significant values. Last week, towards the beginning of the weekend, markets were pretty stable and consolidating tightly into a triangular formation. Then, on Saturday, the United States Commodity Futures Trading Commission (CFTC) and the U.S. Justice Department revealed they had subpoenaed four major exchanges while looking into their cryptocurrency price manipulation investigation. Just before that moment on June 9, just like last time when U.S. regulators initially announced the manipulation probe, markets slid about 1-hour before the announcement. Today’s drop was harder to put the blame on as it could have been an after effect from yesterday’s announcement, the fact that market volumes are extremely thin, or some blamed it on the small exchange from South Korea Coinrail being hacked this weekend for $40Mn worth of ICO tokens.

BTC Market Action

On Sunday, June 10, Bitcoin Core (BTC) markets are down 9.8 percent and over the past seven days, BTC markets are under by 11 percent. This means most of the losses have taken place this weekend as BTC volatility was fairly nonexistent at the beginning of the week. Right now BTC’s overall market capitalization is around $115Bn with a dominance level of around 38 percent. Trade volume is super weak and this is why a lot of traders are skeptical these days because 24-hour volumes today were around $4Bn, but since the last drop volumes jumped to $5.5Bn over the past hour. The top exchanges today swapping the most BTC are Bitfinex, Binance, Okex, Huobi, and GDAX. The Japanese yen is dominating BTC currency pairs big time commanding more than 60 percent of BTC trades at the time of publication. This is followed by the USD (19.2%) tether (USDT 13.5%), EUR (2.7%), and the KRW (2.2%). Of course, there was a significant drop in South Korean won-BTC pair action today.

Markets Update: Crypto Prices Take a Weekend Beating

BTC/USD Technical Indicators

Looking at the charts shows BTC bulls had mustered up some strength to push above the $6800 zone but the fight was a real struggle. 4-hour charts show the two Simple Moving Averages (SMA) have a good sized gap between them with the 200 SMA well above the 100 SMA trendline. This means bearish sentiment may continue during the short term and markets are very close to a triple bottom. After the last push the MACd is heading downwards and RSI levels are very low too (15.78) indicating oversold conditions. Daily Bollinger Bands (B-bands) are seeing a significant coil and buyers below the current vantage point are itching for lower prices. Looking at order books shows bears will see pit stops around $6,400 and the triple bottom $5,900 region. If bulls can heal right now, after that intense beating, then they need to overcome big walls around $7,300 and 7,800 to at least catch some fresh air from the onslaught.

Markets Update: Crypto Prices Take a Weekend Beating

BCH Market Action

After a few solid weeks of BTC being the dominant pair with Bitcoin Cash (BCH), today tether USDT has taken the lead at 31.77 percent. This is followed by BTC (31.5%), USD (21.9%), KRW (9.1%), and the EUR (1.9%). Bitcoin Cash has lost around 16.4 percent over the last 24-hours and 19 percent over the last seven days. This Sunday, the total market capitalization for BCH is around $15.9Bn with about $693Mn in 24-hour trade volume. The top trading platforms exchanging the most Bitcoin Cash today include Okex, Binance, Huobi, Bitfinex, and Lbank. The losses in BCH values have been very much correlated with BTC market tumbles but prices have still remained around 0.14 BTC per BCH.

Markets Update: Crypto Prices Take a Weekend Beating

BCH/USD Technical Indicators

Looking at BCH charts on Bitfinex shows similar indicators, as the two Simple Moving Averages have a decent gap like BTC with the 100 SMA below the long-term 200 SMA. Again, this indicates the path of least resistance will be towards the downside. RSI levels show oversold conditions (30) and the MACd is sliding southbound as well at the time of writing. Daily B-bands are also extremely tight, showing a massive consolidation period taking place. Looking at order books indicates that bears will have a hard fight until 910 and then another pit stop at $860. If things go lower than that, markets are going to look ugly all around. BCH bulls need to recharge and bust past $985 but buyers will also be deterred around $1,020, as sell orders are piling up around that region.

Markets Update: Crypto Prices Take a Weekend Beating

The Top Cryptocurrency Markets

Overall, the top cryptocurrencies are down, except for ‘stablecoins’ like tether and the various others allegedly pegged to the USD. The second largest market valuation today belongs to Ethereum (ETH) but its markets are down 13.9 percent. One ETH is trading for $517 and the currency is the most swapped coin on Shapeshift today, but traded for BTC. The third largest market, Ripple (XRP), is down 13.8 percent and one XRP is trading for $0.57 cents per token. Lastly, the fifth highest valued market commanded by EOS is down significantly at 21 percent this Sunday. At the moment, EOS is trading around $11.25 per coin and holds the fourth largest trade volume over the last 24-hours.

Markets Update: Crypto Prices Take a Weekend Beating

The Verdict: Skepticism and the Search for That Confounded Bottom

You can probably guess what our market verdict is today without reading the sub-title above, as things are looking bearish and everyone knows this fact. Because markets keep sliding, then recovering, then sliding downwards, even more, has caused enthusiasts and traders to be skeptical of any bullish signals. Most traders are looking curiously for ‘the bottom’ and when that time will be, so right now many are just playing musical chairs looking for the right positions.

Where do you see the price of BCH, BTC, and other coins headed from here? Let us know in the comments below.

Disclaimer: Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”


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South Korea Mulls Over How to Cash Out State-Owned Cryptocurrency

South Korea Mulls Over How to Cash Out State-Owned Cryptocurrency

The South Korean government is mulling over how to cash out the cryptocurrency it recently confiscated. While the most likely option is to auction the coins off using the government-owned auction platform, various concerns have been raised.

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

Cashing Out BTC

South Korea Mulls Over How to Cash Out State-Owned CryptocurrencyThe South Korean government is contemplating how to best cash out its recently-acquired cryptocurrency. As part of a criminal case, the government has seized 191.32333418 BTC belonging to “Ahn,” the convicted operator of a porn site. The country’s Supreme Court recently judged that cryptocurrency is a property that the government can confiscate.

“The prosecutor is facing a decision of how to dispose of the BTC and give the proceeds to the treasury,” Yonhap reported, elaborating:

The most likely option would be auctioning off through the asset disposal system of the Korea Asset Management Corporation (KAMCO), ‘Onbid’.

KAMCO is South Korea’s government-owned asset management company that manages Onbid, a system which facilitates the online trading of property owned by public-sector entities. The platform has been used to sell other items confiscated by the government such as securities. “Securities auctions have been actively conducted on Onbid,” Etoday noted.

BTC’s Price Fluctuation Is a Problem

According to Yonhap, “the prosecutor’s biggest concern is the price fluctuation of bitcoin.” The price of BTC reached over 25 million won on January 7 but has now dropped to 8.3 million won, according to data from Bithumb, one of the largest crypto exchanges in the country.

South Korea Mulls Over How to Cash Out State-Owned Cryptocurrency

“Onbid sets the date of public announcement, the date of public sale, and the lowest price. However, because of price volatility, the [price of] bitcoin may be larger between the announcement date and the bid date,” the news outlet described. “For example, if prosecutors set a minimum price of 8.3 million won on the 8th and receive a bid on the 13th, if the price of 1 bitcoin surges to 10 million won on the 13th, it becomes a ‘lottery auction’.”

An official of the legal department was quoted by the Seoul Newspaper as saying:

Unlike artwork, bitcoin has a daily market price…and the auction price can be changed in seconds.

Citing that “if the prosecution seizes foreign currencies, it will sell them to a foreign exchange bank…as if it were paid in the national currency,” therefore, the seized BTC could be similarly sold “directly to the market instead of an auction.” The prosecutor is now studying how to process the confiscated BTC.

Potential Conflict With Crypto Regulations

South Korea Mulls Over How to Cash Out State-Owned CryptocurrencyIn addition, “It is also pointed out that it is not appropriate for the prosecutor to sell [BTC] to the market without the government’s position on virtual currencies being fixed.” Since the ruling of the Supreme Court, the country’s top financial regulator, the Financial Services Agency (FSC), has confirmed that its view on cryptocurrency remains unchanged, crypto is not a financial asset, and there is no change in the regulations.

A KAMCO official commented that “Even if the bidding is conducted…there is no problem with the regulation,” the news outlet elaborated and quoted an official at the prosecution, emphasizing:

The first case is important, because [more] virtual currencies will be forfeited in the future.

What do you think the Korean government should do with the seized coins? Let us know in the comments section below.


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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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Trust Token Blames Bots for Volatility of Trueusd Stablecoin

Trust Token Blames Bots for Volatility of Trueusd Stablecoin

On Wednesday Trueusd, a stablecoin designed to be pegged to the US dollar, experienced a sudden bump in price after Binance announced support. The news caused Trueusd (TUSD) to rise by an unprecedented 40% before eventually subsiding. Trust Token, the coin’s developers, have now explained to news.Bitcoin.com how this sequence of events came to be.

Also read: “Stablecoin” Trueusd Pumps After Binance Listing

Trueusd and the Moon Mission That Wasn’t Meant to Be

As reported on Thursday, TUSD pumped to $1.39 off the back of news that Binance would be listing the supposed stablecoin. Binance has since postponed its listing of the token, pushing the event back by a few days “to prepare for sufficient liquidity”. Trust Token, for its part, has responded to the incident in a blogpost, writing:

TrueUSD saw a large, sudden increase in demand after Binance first announced that they are listing TUSD. We believe that bots (and some misinformed traders) purchased TrueUSD as soon as the announcement was made.

The post continues: “Generally, our policy is that “redeemability leads to stability.” The value of a TrueUSD token is that it can be redeemed for one US dollar. There will only be as many tokens in circulation as there are dollars in the escrow account to collateralize the tokens. In the long run, this feature precedes price stability, since the price will return to $1.00 (as it did today) as long as the token continues to be redeemable.”

Trust Is Earned

Bittrex Adds Tether Competitor TrueUSD as Regulation Rumors PersistAs a piece of parting advice, Trust Token advises traders not to pay any more than $1.05 per token, otherwise “you may lose money.” Trust Token’s co-founder and CTO Rafael Cosman spoke to news.Bitcoin.com to clarify some of the issues raised in the blog post, and pointed out that when TUSD was listed on Bittrex in March, traders were issued with the same advice – not to pay more than $1.05 per token.

Assuaging concerns that TUSD could dip discernibly below $1, Rafael Cosman said:

Price stability is maintained by market-making incentives. Today, market-makers buy TrueUSD for $1.00 directly from the bank, anticipating that if the price hits even $1.01 they can arbitrage some profit. The opportunity for redemption incentivizes market-makers to keep at $1.00 and not below: if the price was to dip to $0.99, then market-makers could buy it and redeem it for $1.00. Market-makers would quickly scoop in and buy all the “sell” orders for below $1.00 until none were left and the price returned to $1.00.

Bot or Not?

Trust Token Blames Bots for Volatility of Trueusd StablecoinFollowing up on claims that bots were to blame for TUSD’s sudden price spike this week, Rafael Cosman added: “It’s fairly common knowledge in the crypto industry that there are bots that “listen” for announcements of coins listing on exchanges and buy any coin as soon as it is listed on a new exchange. This is usually profitable, since more buyers for a token can mean a higher price. However, in the case of Trueusd, any person who knows that the token is redeemable for $1.00 knows they will lose money if they buy it for more, and so market-makers holding Trueusd happily sold it to bots for above $1.00 until there was no more demand.”

Stablecoins are still highly experimental at this stage, and while some “stable bears” believe perfect dollar parity will never be reached, others are confident that anomalies such as that which befell TUSD will be ironed out in time. As Trust Token acknowledged, even “the most stable of stablecoins will occasionally experience variance.”

Do you think occasional volatility is inevitable with stablecoins? Let us know in the comments section below.


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Federal Reserve Pres: People Want Dollar, Not Volatile Crypto

Federal Reserve Pres: People Want Dollar, Not Volatile Crypto

St. Louis Federal Reserve President, James Bullard, was recently interviewed at this year’s Consensus conference in New York City. That a top US economic policy maker was in attendance is victory enough; however, he was asked his opinions on cryptocurrency going forward by CNBC Global Markets Reporter Seema Mody. He explained he found the phenomenon “interesting,” and how more cryptos being issued all time necessitates keeping an “eye” on them. Mr. Bullard also compared the use case for cryptocurrencies with that of the dollar, and whether the former posed a threat to the latter.  

Also read: Bitpay Enables Bitcoin Cash (BCH) and Bitcoin Core (BTC) for Tax Payments

Federal Reserve President Attends Crypto Conference

Federal Reserve President, James Bullard, gave a presentation at this year’s giant Consensus conference in New York City. Reread that sentence. A sitting Fed policy maker thought it important enough to attend a crypto soiree. That’s news enough. But more importantly, President Bullard gave a presentation on the government’s current thinking about cryptocurrency.

In his talk, he acknowledged crypto is facilitating trade that might otherwise not occur. He couldn’t help himself by mentioning illegal activity (and we all know fiat currencies are never used in illegal activity), but he did describe decentralized money’s lean toward frictionless transactions (especially with regard to costs/fees) as being an advancement.

Federal Reserve Pres: People Want Dollar, Not Volatile Crypto
Mr. Bullard and Ms. Mody

The Fed policy maker reserved the bulk of his comments, both in the presentation and during a post-game interview with CNBC, to talk about the problems in crypto as he sees them. One issue is simply the number of currencies being offered. The 12th St. Louis Fed President feels this over complicates matters, especially with regard to exchange rates and volatility.

Asked if cryptocurrencies pose a threat to the dollar, Mr. Bullard, 56, answered he didn’t think so. Global Markets Reporter Seema Mody, who is covering Consensus for CNBC this year, quickly followed up with a “but it could be?” The Fed President was noncommittal, choosing instead to shrug and give the pat answer about no one really knowing what the future holds. He emphasized how since its creation the US dollar has vanquished nearly all currency competition due to its being backed by the world’s strongest economy. It’s abundantly clear, Mr. Bullard suggested, people want the dollar and not crypto … at least at the moment.

Fed Coin on the Horizon?

Ms. Mody pressed Mr. Bullard about his presence at the conference, asking if this was a hint of things to come with regard to a future coin birthed by the Fed, a Fed Coin? Interestingly he didn’t dismiss the idea outwardly, and instead said they’d for sure look at the possibility, as the Fed does with many different types of financial innovations. He also assured there wasn’t any plan being hatched at the moment, no imminent Fed Coin coming. Mr. Bullard also wondered aloud what the gains would be by creating such a coin. He smiled subtly, assuring he’s keeping an “open mind.”

Federal Reserve Pres: People Want Dollar, Not Volatile Crypto

His comments seem to be less strident than statements issued by the St. Louis Fed on the very subject not even one month ago. “The St. Louis Federal Reserve has published an essay critically evaluating the notion of cryptocurrencies that are issued by central banks,” we detailed. “The article is highly dismissive in presenting what it describes as ‘the non-case for central bank cryptocurrencies,’ concluding that ‘a central bank will not issue cryptocurrencies in the sense of a truly decentralized and permissionless asset that allows users to remain anonymous.’”

A rather curious fact about the St. Louis Fed, one of twelve jurisdictions in the Federal Reserve system (the 8th district serves Indiana, Kentucky, Missouri, Illinois, Tennessee, Louisiana, Mississippi, Arkansas), is how it has recently become very chatty about crypto. As these pages reported back at the beginning of this year, “Aleksander Berentsen and Fabian Schär of the Federal Reserve Bank of St. Louis have recently published an article that emphasizes many of the benefits of cryptocurrencies. The article states that ‘cryptoassets are well suited to become an important asset class,’ in addition to offering praise regarding a number of the major applications associated with cryptocurrencies.”

Do you think a Fed president attending a crypto conference is meaningful? Let us know your thoughts in the comments below.


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Circle Raises $110Mn With Plans to Launch USD-Backed Coin

Circle Raises $110Mn With Plans to Launch USD-Backed Coin

The cryptocurrency based firm Circle announced it has raised $110Mn USD in a Series E fundraising round led by the Chinese firm Bitmain Technologies. Circle now joins Coinbase as one of the most well-funded cryptocurrency companies in the U.S., and the Boston-based firm has announced plans to issue a dollar-backed cryptocurrency called USD-C.

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

Circle Raises $110Mn Plans to Launch Stablecoin

Circle Raises $110Mn With Plans to Launch USD-Backed CoinCircle has big plans ahead for its latest mobile project called ‘Centre’ while also revealing its plans to create a stable coin much like the currency Tether (USDT). Furthermore, the firm has raised $110Mn in a Series E funding round that included investors such as Bitmain Technologies, Blockchain Capital, Pantera, Digital Currency Group and other venture firms. In addition to the injection of capital, Circle says it is planning to launch a new cryptocurrency that is backed by the price and reserves of USD.

The company’s new token will be called ‘USD-C’ and based off of the Ethereum network. According to the Circle, the firm’s subsidiary ‘Centre’ project will manage the USD-C protocol. Circle feels a cryptocurrency that is tied to a fiat currency can add more value to the blockchain ecosystem.

“It is difficult to use something like bitcoin if the volatility is so high,” Circle’s founder and CEO Jeremy Allaire explains. “Something like this makes it more possible.”  

A Partnership With Bitmain

Circle Raises $110Mn With Plans to Launch USD-Backed CoinCircle also detailed that Bitmain will also be helping with the Centre project and the USD-C launch. “Bitmain will help Centre introduce multiple fiat stablecoins in a variety of geo-currency zones,” the company explains. Moreover, the company takes a jab at other ‘stablecoins’ utilized in the markets right now that lack transparency as the firm states:   

Existing fiat-backed approaches have lacked financial and operational transparency, have operated in unregulated jurisdictions with unknown banking and audit partners, and have been built as closed-loop ecosystems and closed proprietary technologies.

Circle says despite celebrating their fifth anniversary this fall they feel like they are just getting started. In addition to Centre and the new USD-C token that will launch this summer, Circle says it also has plans for Circle Invest, Circle Trade, Circle Pay, and the newly acquired Poloniex exchange.

“We see the future of the global economy as open, shared, inclusive, distributed, and powerful — not only for a few chosen gatekeepers, but for all who will connect,” Circle adds.

What do you think about Circle raising $110Mn in a funding round led by Bitmain? What do you think about this new USD-C idea they have? Let us know your thoughts on this subject in the comments below.


Images via Shutterstock, Bitmain, and Circle. 


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Meet the Stablecoins Taking on Tether

Meet the Stablecoins Trying to Take on Tether

Stablecoins aren’t exciting. They don’t pump, moon, or 10x. And yet they have the potential to make traders more money than any other cryptocurrency. These stabilized tokens – usually pegged to the US dollar – scarcely move in price, and yet they’re pivotal in anchoring the crypto markets. Here’s everything you should know about the new class of stablecoins.

Also read: Bitmex Research: We Doubt Ethereum’s Ability to Reduce Reliance on PoW

The Price of Stability

Bitmex Research: New Data Supports Noble Being Tether’s Primary Reserve BankTether, the best known stablecoin, is often the second most traded crypto asset after bitcoin. Traders routinely trade in and out of it as they attempt to outmaneuver bitcoin’s price swings. When the markets are down, some will remain in the safety of tether for weeks, venturing back into “proper” crypto only when there are signs of recovery.

Tether is a highly controversial stablecoin, not because of how it works, but due to questions over whether it’s actually dollar-backed with fiat reserves, but that’s a debate for another time. What’s undisputed is that over-reliance on a centralized coin that accounts for $4 billion of daily trade volume is a bad thing. Competition for tether is to be encouraged, and was welcomed by Ethfinex no less – whose parent exchange Bitfinex effectively owns Tether.

Last week, Ethfinex introduced dai, a decentralized tether alternative. Here’s how it, and the rest of the current crop of stablecoins, work:

A Brief Guide to Stablecoins

Meet the Stablecoins Trying to Take on Tether
Dai by MakerDAO

Dai: A decentralized dollar-pegged stable coin from Maker DAO that operates as an ethereum token. The buyer places ethereum in the Maker core smart contract and receives a dollar equivalent of dai in return. It’s tradable on the likes of Bibox, Ethfinex, IDEX, and Bancor Network. It will also soon be available on Omisego’s DEX.

TrueUSD: A collateralized stablecoin backed by USD held in escrow accounts. It’s basically a more transparent tether and is available on Upbit and Bittrex – where it’s even tradable against tether.

Stably: Another USD reserve-backed stablecoin that will work on multiple blockchains when it launches including ethereum and stellar. Stably just raised $500,000 in a seed round.

Bitshares: Usable on the Bitshares exchange only, Bit USD is another dollar-pegged coin, implemented using “smartcoins” to collateralize the currency held against it, typically Bitshares.

Havven: A payment network which also has its own stablecoin. e USD is the first of these, which can be exchanged for ether, though nomins (n USD), the official Havven stablecoin, will launch soon to replace e USD.

New Stablecoins Are Incoming

Several other stablecoins are on their way including kowala, basecoin, augmint, and carbon. Each of these coins has their own means of achieving – or at least attempting – stability. Kowala’s k USD for example is an “anonymously stabilized cryptocurrency” whatever that means, and carbon uses “algorithmically adjusted coin supply based on demand” to ensure it closely matches the USD. VC firm General Catalyst has just led a $2 million round to invest in carbon and basecoin raised $125 million via a SAFT. Stablecoins are big business.

Meet the Stablecoins Trying to Take on Tether

Not everyone is impressed with stablecoins, and specifically their ability to maintain relative stability. Perennial bitcoin bear Preston Byrne has made it his duty to rail against them, and recently highlighted nubits, a lesser known stablecoin, whose value has been anything but stable.

Meet the Stablecoins Trying to Take on Tether
Nubits: the not-so-stablecoin

Creating a coin that can stubbornly cling to the US dollar through thick and thin is a lot harder than it sounds; even tether’s prone to wobbling. But for as long as demand for a hedge against crypto volatility persists, stablecoins will perform an essential job. And with so many new entrants poised to launch, the battle for stablecoin supremacy has only just begun.

Do you think other stablecoins can overtake tether, and if so which? Let us know in the comments section below.


Images courtesy of Shutterstock, and Coinmarketcap.


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