Category Archives: Cryptocurrency
Boston Fed Bank explores cryptocurrency with MIT – Boston Herald
The Boston Fed is toying with a digital dollar.
The Hubs Federal Reserve Bank is teaming up with the Massachusetts Institute of Technology to study the blockchain technology that enables cryptocurrency to be traded. And, based on the latest figures, the currency is red hot.
Were not building this for tomorrow, were building this for future years, said Jim Cunha, senior vice president at the Boston Fed.
Boston Fed Assistant Vice President Robert Bench is working for Cunha to rip apart what makes cryptocurrency sold as Bitcoin, Ethereum, Litecoin and more be so successful.
The idea, both explained, is to leverage the cutting-edge technology and determine if government-backed currency can be dollars, cents and Bitcoin.
Were really trying to understand what the technology can offer and if its a path wed like to go down, Cunha told the Herald. I liken it to the early days of the internet when opinions varied on the longevity of the medium.
We know how that story played out.
Now cryptocurrency is on the upswing as some questions about the dollar bill spread with fears of the coronavirus. As of Friday evening, one Bitcoin was selling for $11,785 up 27.51% over the past month, according to the Coinbase app.
But dont toss your paper money just yet, Bench said.
When youre dealing with something as high stakes as the U.S. dollar, you cant break it, Bench said. Part of the great success of the U.S. technology sector has been its ability to move fast and break things, ideally at fairly low stakes. Within something as important as the U.S. dollar, we need to move fast, but deliberately, because this is the highest possible stakes.
China and Sweden are also investigating cryptocurrency. Facebooks Libra project is also generating a lot of buzz.
Cunha and Bench say the positives compel them to look deeper into the technology. For starters, nobody has hacked Bitcoin, its very simple to use and shows the power of technology. Plus, both see a future where currency and cryptocurrency can co-exist.
We need to think of a futuristic goal, said Cunha, who added Boston is leading the way.
Other benefits, Bench said, would be transferring money overseas would be cheaper, and it could also speed government transfers of money to individuals and prevent private sector monopolies on digital currencies.
Boston Fed Bank President Eric Rosengren is also backing the research.
Other members of the team include capital markets expert Tyler Frederick, Anders Brownworth, who taught MITs first blockchain course, and James Lovejoy, a blockchain engineer from MITs Digital Currency Initiative.
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Boston Fed Bank explores cryptocurrency with MIT - Boston Herald
Cryptocurrency And Wills – Today’s Wills & Probate
It is thought that we are slowly transitioning into a cashless society. Weve had the introduction of contactless payments, and Apple and Android pay. So why, wouldnt we consider leaving some of our cash in digital form too.
Previously we explored what cryptocurrency is and where it came from and whether it should be included in a Will.
Now we want to show you how you can advise a client who has cryptocurrency about adding its provision in their Will.
Cryptocurrency isnt like physical cash, it will be stored in a clients digital wallet. If a client has cryptocurrency that they want to include in their will, they will also need to add the following information:
Although the digital currency has been around for over a decade, it still isnt a widely used thing. However, experts are predicting that the currency will continue to take off and thrive as we continue down the transition journey of a cashless society.
When a client informs you, they have cryptocurrency that they wish to include in their Will, you may include wording similar to the below:
I leave all my cryptocurrency investments, crypto-coins, tokens, any other form of digital cash, or anything found in or on my cryptocurrency wallets to [insert name of beneficiary].
My cryptocurrency might be stored on digital wallets, paper wallets, online exchanges, or a combination of wallets and exchanges. The following items or devices might contain a cryptocurrency wallet: [insert names of computers, phones, tablets etc]. These items should not be distributed to any person until such time as the cryptocurrency, digital cash, or any information related to the access of my cryptocurrency is transferred to [beneficiary named above].
I have created a separate writing from this Will that explains how to access my cryptocurrency wallets and online cryptocurrency accounts. This document needs to be kept private as it contains the passwords, PINs, and private keys needed to access my cryptocurrency. This document will likely be stored with my other estate planning documents or [insert specific location].
Cryptocurrency isnt for everyone. Some people would much rather have the physical cash in their hands, others would just want to have the currency in their traditional bank account. This can be achieved.
The client needs to ensure that their executor has knowledge of how to use cryptocurrency and how to exchange it for physical cash.
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Cryptocurrency And Wills - Today's Wills & Probate
Cryptocurrency gaining traction in mainstream – Jim Duffy comment – The Scotsman
BusinessBanks are an important element of how we live.
Wednesday, 19th August 2020, 7:30 am
For the last 50 years, they have dominated our high streets. They have been the linchpins in local communities ensuring we can bank our money, save, take loans or sort out financial issues. We have to trust banks to keep our money safe, to stay solvent and to offer services that help us.
Banking has had tough times as there have been a few bad actors and some financial crashes that have left them in tatters. But, they remain, for now, intact. Because we still trust them.
Part of that trust is the fiat currency they trade in. These currencies comprising for example, a 10 note or a $100 bill, are exactly what money is all about. We can buy groceries, a newspaper, petrol and even a three-piece suite if we have the cash.
You, the buyer, have cash in hand, while the newsagent, the vendor, accepts that your cash is worth something and it can be banked. Its all about trust. So, while this is all working, we as a society can function.
But, what happens when that trust is eroded to the point of breaking? What happens when we view cash as having little or no value? Many of you who read these pages will know I am an advocate of cryptocurrencies. I invest in things like Bitcoin, Cardano, Reserve and VeChain. Along with many my age and with the younger crowd, working with cryptocurrencies no longer feels alien or weird.
I would use the analogy of the cash machine. When ATMs were first introduced to Scotland, that was ground-breaking technology. Punching a code into a machine that recognised you, trusted you and provided you with your cash quickly and with a receipt was pioneering within banking.
Cryptocurrency is the next iteration of this old bank technology. But, hey, it will never catch on, right? Businesses will never want to deal in such hocus pocus. Right up until now
Wall Street in New York City is all about banking, cash, money, investments, and wealth. Stock market updates swirl around neon banners on the corners of big buildings. The Dow, The Nasdaq, commodities all matter in this city. Banking and trading is at the core of this global financial district. The US dollar is king and as the global reserve currency it knows it.
Big banks like JP Morgan Chase and Bank of America dominate. Yes, it has been safe to say that cash is king here. Well, that may not be strictly true as a tremor rocked the Big Apple last week. A Nasdaq-quoted business analytics company decided it wanted to change how it banked. In short, it swapped its $250 million cash reserves from US dollars into Bitcoin.
What this signalled is that the trust in the US Dollar, banking or fiat currency is under threat. MicroStrategy is the largest independent publicly traded business intelligence company in the USA. Three months of strategising on gold, silver or Bitcoin resulted in this pioneering company buying 21,454 Bitcoins or 0.1 per cent of all available Bitcoin.
There will only ever be 21 million bitcoin minted. And this helped this Goliath decide to repurpose its corporate treasury programme from cash on its balance sheet to cryptocurrency. This is huge in the crypto and traditional banking world. Not least for the investors in MicroStrategy. It trusted Bitcoin over cash as macroeconomic factors such as the Feds money printing and banking uncertainties were taken into account.
This will not be the last big corporation to consider and execute a cryptocurrency move. I predict major announcements in coming months as confidence in the trust we place in banks and cash dwindles. Historically for bankers, cryptocurrency was the devil.
But consider this. JP Morgan is now providing banking for the one of the largest cryptocurrency changes in the world Coinbase. So, while our banks still look after our cash, there is a sea change taking place in some spaces in corporate America. Cryptocurrency and Bitcoin just got a big leg-up. Perhaps Scotland should now have a real good think about where it wants to be positioned in the next 25 years.
Jim Duffy MBE, Create Special
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Cryptocurrency gaining traction in mainstream - Jim Duffy comment - The Scotsman
Cryptocurrency Mining Profitability in 2020: Is It Possible? – Cointelegraph
Miner profitability metrics are based on a handful of factors regulating difficulty and emission, which are hard-coded into the blockchains attributes, making it predictable to work with. While predictability does not always immediately translate into profitability, it gives a blockchain certain parameters to rely on when predicting when mining cryptocurrency will become profitable, at which price level, and at which difficulty level during the emission cycle.
Some cryptocurrencies, such as Bitcoin (BTC), go through emission cycles with events such as the halving. In Bitcoins case, halvings occur once every 210,000 blocks roughly every four years until the maximum supply of 21 million Bitcoin has been mined.
This feature, self-adjusting difficulty, provides an incentive for an individual miner to join or leave the network depending on the current Bitcoin price level. Together, these incentives create a logarithmic price regression curve, which represents a probable Bitcoin exchange rate and, therefore, predictability of profitability in the current emission cycle. If Bitcoins price falls under this regression curve where the bottom line is roughly around the 200-week moving average in this emission cycle, nearly all of the miners should be at a net loss. If the price stays above this figure, at least some of the miners should be at a net profit.
Bitcoin mining difficulty is currently at an all-time high between 110 and 120 million terahashes per second, indicating that a lot of new mining capacity has been added to the network, but since the price hasnt fully recovered from the dip caused by the emergence of COVID-19, we should expect most of the miners being temporarily at a loss. However, should Bitcoins price rise back up again into the current emission cycle and go into a bull run, the economic risk miners would have taken at that point should be greatly rewarded.
Ethereum mining has been, for a while, among the most profitable in the altcoin space primarily because of the high average price of its token. However, Ethereum as a network has a primary focus on building a blockchain with a slightly different purpose compared to Bitcoin. Ethereum is a smart contract platform. While mining has previously supported the network in the phase where it isnt widely used for transactions, in the future, the network will be compelled to take on staking nodes as validators in order to provide sufficient transaction capacity. In the long run, this may have a positive effect on mining if we assume that mining will be phased out gradually. A substantial amount of coins are predicted to be locked in staking, which is going to drive up the price.
Staking is a mechanism that allows users to deposit some of their coins into a staking address owned by a validator node and locks them for a period of time. The validator node then secures the network by producing blocks relative to the number of coins deposited in it. The blocks are produced according to a hard-coded voting mechanism that calculates the staking reward from the total amount of coins staked in the network for each node.
Related: ETH Miners Will Have Little Choice Once Ethereum 2.0 Launches With PoS
The price of electricity is a defining factor in miner profitability. Currently, most industrial miners reside in countries with cheap electricity on power purchasing agreements with electricity producers ranging from hydropower to solar. However, most retail miners mostly depend on retail price fluctuations and have to calculate this factor into their investments. Moreover, the price of electricity isnt a factor when mining profitable altcoins with GPU rigs.
Equipment prices tend to fluctuate according to price cycles. At the bottom of each cycle, buying equipment is relatively affordable, but toward each cycle peak, equipment may not be affordable but also unavailable. At this point, it would likely be profitable to take a moderate risk in mining, especially in GPU mining. Regarding profitability alone, mining Bitcoin would probably require an investment beyond the reach of most retail miners on the initial cost to be remarkable at the peak of this emission cycle.
Apart from only turning a profit, mining is a way to produce coins with no prior history. For users who care about their privacy, mining represents economic freedom, making a means of payment with no ties to a specific entity accessible. This unique feature is only present in proof-of-work cryptocurrencies and connects many people on the fringes of society with often legitimate use cases to the wider world, acting as a guarantor of human and social rights.
For some organizations, maintaining a blockchain at a nominal loss can act as an investment either by supporting profitable services or by maintaining infrastructure to run services for public use. In legacy systems, this type of arrangement is comparable to public service, or a utility.
While utility provision can be an advantage for a network of entities running on a permissioned blockchain or a PoW blockchain intended for a well-defined use, on open public blockchains, in the long run, miners can be assumed to operate on a profit motive. With difficulty adjustments and profitability in public blockchains with significant utility value such as Bitcoin, mining can be seen as a profitable business in the foreseeable future.
The only credible factor that may upset the status quo in mining PoW cryptocurrencies at the moment seems to be the theoretical introduction of widespread quantum computing with enough accessible tools to create an incentive to attack public blockchains. However, this kind of risk can be exaggerated because quantum computing proof algorithms exist and are likely to be developed precisely to mitigate a risk arising from this quite predictable factor.
In this light, mining will probably not become profitable in the upcoming bull market, but more relevant in ways that are not only economically.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Iskander Khasanov is a crypto miner and trader. He established himself first as a real estate entrepreneur and then became involved in the cryptocurrency business in 2016. Iskander is the director at Crypto Accelerator community and shares ideas of mass adoption of cryptocurrency.
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Cryptocurrency Mining Profitability in 2020: Is It Possible? - Cointelegraph
Flaws Could Have Exposed Cryptocurrency Exchanges to Hackers – WIRED
Most people use either an app, an online platform, or a small hardware device as a wallet to store their cryptocurrency safely. The exchanges through which cryptocurrency changes hands, though, and other high stakes operations need something more like a massive digital bank vault. At the Black Hat security conference on Thursday, researchers detailed potential weaknesses in these specially secured wallet schemes, including some that affected real exchanges that have now been fixed.
The attacks aren't the digital equivalent of jackhammering a weak point on a safe or blowing up a lock. They're more like opening an old-timey bank vault with six keys that all have to turn at the same time. Breaking cryptocurrency private keys into smaller chunks similarly means an attacker has to cobble them together first to steal funds. But unlike distributing physical keys, the cryptographic mechanisms that underly multiparty key management are complex and difficult to implement correctly. Mistakes could be costly.
"These organizations are managing a lot of money, so they have quite high privacy and security requirements," says Jean-Philippe Aumasson, cofounder of the cryptocurrency exchange technology firm Taurus Group and vice president at Kudelski Security. "They need a way to split the cryptocurrency private keys into different components, different shares, so no party ever knows the full key and there isn't a single point of failure. But we found some flaws in how these schemes are set up that are not just theoretical. They could really have been carried out by a malicious party."
For the work, Aumasson, a cryptographer, validated and refined vulnerability discoveries made by Omer Shlomovits, cofounder of the mobile wallet maker ZenGo. The findings break down into three categories of attacks.
The first would require an insider at a cryptocurrency exchange or other financial institution exploiting a vulnerability in an open-source library produced by a prominent cryptocurrency exchange that the researchers declined to name. The attack takes advantage of a flaw in the library's mechanism for refreshing, or rotating, keys. In distributed key schemes, you don't want the secret key or its components to stay the same forever, because over time an attacker could slowly compromise each part and eventually reassemble it. But in the vulnerable library, the refresh mechanism allowed one of the key holders to initiate a refresh and then manipulate the process so some components of the key actually changed and others stayed the same. While you couldn't merge chunks of an old and new key, an attacker could essentially cause a denial of service, permanently locking the exchange out of its own funds.
Most distributed key schemes are set up so only a predetermined majority of the chunks of a key need to be present to authorize transactions. That way the key isn't lost entirely if one portion is accidentally eliminated or destroyed. The researchers point out that an attacker could use this fact to extort money from a target, letting enough portions of the key refreshincluding the one they controlthat they can contribute their portion and restore access only if the victim pays a price.
The researchers disclosed the flaw to the library developer a week after the code went live, so it's unlikely that any exchanges had time to incorporate the library into their systems. But because it was in an open-source library, it could have found its way into numerous financial institutions.
In the second scenario, an attacker would focus on the relationship between an exchange and its customers. Another flaw in the key rotation process, in which it fails to validate all of the statements the two parties make to each other, could allow an exchange with malicious motivations to slowly extract the private keys of its users over multiple key refreshes. From there a rogue exchange could initiate transactions to steal cryptocurrency from its customers. This could also be carried out quietly by an attacker who first compromises an exchange. The flaw is another open-source library, this time from an unnamed key management firm. The firm does not use the library in its own offerings, but the vulnerability could have been incorporated elsewhere.
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Flaws Could Have Exposed Cryptocurrency Exchanges to Hackers - WIRED
Cryptocurrency Cards: An Unnecessary Solution That Should Be Stopped – Cointelegraph
Crypto cards have become a must-have for many crypto services. Hoping to reduce the risk of blocking transactions, companies have been looking again and again for reason why their customers should use plastic. But a crypto card is a placebo that does not solve the problems of either users or fintech companies its only goal is to bring profit to payment systems and intermediaries.
Crypto cards are not needed in the same way that special financial instruments are not needed to buy gold, oil, precious metals or any other resource. The word cryptocurrency like dollar or euro indicates only the currency for transactions with which the card can be used and does not make the banking product any more innovative. However, until banks and payment systems recognize this, we will be forced to eliminate the consequences of cooperation with Wirecard, WaveCrest and other processors that arent the most conscientious, wanting to make money by taking risks but without being able to manage them.
Bank card technologies have gone through a rapid evolutionary path in a very short period of time. They are the fundamental and connecting element for all retail trade relationships. According to Nilson Report, there are currently more than 22 billion payment cards in circulation around the world debit, credit and prepaid. Taking into account that 1.7 billion people do not use banking services at all, for each of the remaining 6 billion people, there are on average 3.6 cards.
All cards are serviced by payment systems that create a closed consumption ecosystem. Heres what happens:
Banks and processor companies pay Visa, Mastercard, UnionPay, American Express and other international payment systems for the possibility of issuing cards.
Cardholders pay banks an annual fee or transaction fees.
Sellers transfer to banks on average 1%4% of the transaction amount for acquiring servicing.
Various intermediaries, aggregators, API providers, etc. also collect a commission.
The main thing is that in each commission payment between all participants, a share of Visa, Mastercard or another payment system is included. If we are talking about cryptocurrency transactions, then the commission of payment systems will be higher, since the traditional financial industry regards these transactions as high-risk.
And yet, bank cards are almost indispensable for transactions worth up to $5,000. This is the fastest and most convenient way to buy crypto from numerous wallets and/or exchanges. Therefore, it would be naive to think that fintech companies could quickly get rid of the intermediation of payment systems and stop paying them for every transaction.
Nevertheless, Visa and Mastercard can do a lot to make their native cards much friendlier to crypto and become a part of the solution, not part of the problem, which Wirecard has been trying to get around, making this kind of change seem inevitable.
Today, when the volume of non-cash payments in many countries has surpassed cash payments, any company wanting to issue bank cards under its own brand, in theory, has three options.
1. Become a principal (direct) participant in the international system. To do this, you need to meet a number of mandatory criteria: have the necessary technological platform and qualified personnel, meet information security requirements, provide security funds, etc.
For example, last year, a principal Visa participant had to have capital of at least $56 million directly with the Visa payment system. Therefore, you need to have an account in United States dollars in the U.S. or in euro in the European Union. The licensing procedure itself can cost about $1 million, excluding the funds required for the security deposit and direct royalties. This is not a realistic option for small and medium fintech companies.
2. Become an associated member of the payment system through the sponsoring bank. In this case, it is the bank that takes care of the compliance with the payment system requirements. The license fee is $200,000$300,000, plus a deposit of several million dollars.
However, even under such conditions, financial organizations do not want to directly cooperate with crypto companies since transactions with cryptocurrency are classified by payment systems as high-risk due to the lack of a unified approach to regulating this area. This results in higher fees and chargebacks for transactions that have been challenged by the cardholder.
3. Contact a processing company. Unlike banks, processors are responsible for issuing payment cards. Among such processors, crypto services usually find partners with a high-risk appetite that are willing to cooperate. Such companies are ready to use various tricks so that payments passing through them are not blocked by the payment system. For example:
Conceal or falsify before the payment system the main activity of the company for which the issue occurs.
Use incorrect Merchant Category Codes.
Issue crypto cards on their own Bank Identification Number, while according to the rules of payment systems, a separate BIN must be allocated for each individual product.
Issue co-branded cryptocurrency cards, which are, in fact, bank cards with an individual design and are then sold through a crypto service.
Expand the limits of card transactions, regardless of the requirements of payment systems and/or the regulator, etc.
All of these are often unjustified risks that processors like Wirecard take on, increasing the cost of issuing and maintaining crypto cards for both crypto services and end-users. Meanwhile, the value of these crypto cards continues to depreciate.
Until recently, people were forced to buy a fourth or even fifth payment card, only for the sake of the crypto prefix in order to save their money from being blocked during operations with cryptocurrency. However, regulated crypto services have already learned to tackle this problem differently by acting strictly within the framework of compliance requirements and forging links with traditional financial institutions.
High-risk processors like Wirecard or Wavecrest can be compared to microfinance institutions, or MFIs, that lend out at huge interest rates. Usually, people turn to MFIs after numerous and not always objective refusals by banks to issue a loan. Sometimes, the money is needed urgently, and the consideration of the application in the bank is delayed; sometimes the banks scoring system does not like the place of work, marital status or the gender of a person. There may be many reasons, but the result is the same: The bank does not want to take risks and people go to less discerning financial intermediaries. Crypto services are forced to do this, too.
A cryptocurrency card is a ridiculous, temporary and forced necessity because banks and payment systems do not want to manage risks on their own. All the risks that Wirecard once assumed when working with crypto companies are now easily eliminated.
Licensing of activities in the field of cryptocurrencies, the implementation of KYC/AML procedures, obtaining a compliance certificate of the payment card industry data security standards and other measures allow crypto services to successfully work with the traditional financial system.
Banks should have the courage to start making money by partnering with regulated crypto services. And for this, above all else, it is necessary to develop internal expertise in the field of compliance. As bank employees have had little motivation to deal with the peculiarities of high-risk transactions, it is easier for them to refuse service to potential clients and/or stop transactions.
However, if a banks compliance service monitors and skips high-risk transactions on a regular and systematic basis, this will create additional cash flow, from which banks could also receive commissions. I am sure that cryptocurrency users right to dispose of honestly received assets should be ensured in an absolutely transparent, legal way, and not by gray schemes. Any card can be crypto, and this is the reality we should all be living in sooner rather than later.
The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Alex Axelrod is the founder and CEO of Aximetria and Pay Reverse. He is also a serial entrepreneur with over a decade of experience in leading world-class technological roles within a large, number-one national mobile operator and leading financial organizations. Prior to these roles, he was the director of big data at the research and development center of JSFC AFK Systems.
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Cryptocurrency Cards: An Unnecessary Solution That Should Be Stopped - Cointelegraph
Wall Street Revealed To Be Edging Out Bitcoin Traders With $1 Million+ Transactions – Forbes
Bitcoin and cryptocurrencies have attracted the attention of Wall Street in recent years, with some of the biggest bitcoin and crypto asset managers reporting massive inflows.
The bitcoin price, after struggling through a prolonged so-called "crypto winter" in 2018, has found relative stability around the $10,000 level over the last 12 months.
Now, research from bitcoin, cryptocurrency and blockchain data company Chainalysis has revealed institutional investors on Wall Street are increasingly moving even larger transfers of bitcoin and cryptocurrencywith the trend "only just beginning."
Institutional investors in the U.S. are moving even larger transfers of cryptocurrency than ... [+] professional traders, bitcoin and blockchain data company Chainalysis has revealed.
"As of June, approximately 90% of North America's cryptocurrency transfer volume came from professional-sized transfers, which we categorize as those above $10,000 worth of cryptocurrency," the Chainalysis team wrote in a blog post detailing the findings of its 2020 geography of cryptocurrency report.
"However, over the last two years in North America, were seeing the impact of a growing class of institutional investors whose transfers account for the growing dominance of professionals in the North American market since December 2019."
Bitcoin and cryptocurrency transfers in North America above $1 million rose from 46% of the total value transferred in late 2019 to a high of 57% in May 2020, Chainalysis found.
The overall market share of professional-sized bitcoin and crypto transfers in North America rose from 87% to 92% over the same period.
"In other words, the increasing dominance of North Americas professional market since December 2019 appears to be almost entirely driven by transfers of $1 million or more worth of cryptocurrency, many of which we believe are coming from institutional investors," the researchers wrote.
Bitcoin and cryptocurrency transactions worth over $1 million have soared over the last year, ... [+] climbing as bitcoin and crypto transactions worth between $100,000 and $1 million have fallen.
Meanwhile, despite the likes of multi-billion dollar bitcoin and crypto-asset manager Grayscale declaring institutional investors "have now arrived" in the crypto market, the trend could be just getting started.
"Institutional money is only just beginning to enter the cryptocurrency ecosystem, and so the market is still relatively immature and fragmented," Kim Grauer, Chainalysis' Senior Economist, said via email, pointing to exchanges listing different prices and exchanges being able to handle different amounts of liquidity for big buyers resulting in "liquidity constraints contributing to a higher potential for price volatility and market manipulation."
However, Wall Street's increasing involvement in the bitcoin and cryptocurrency market "will help cryptocurrency mature in terms of greater transparency and price stability," according to Grauer.
"We anticipate arbitrage opportunities closing up, better solutions for combining liquidity across exchanges, and greater price stability and price discovery," Grauer said, adding: "We expect that as regulators and financial institutions better understand the benefits of cryptocurrencys transparency, they will start to trust the space more."
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Wall Street Revealed To Be Edging Out Bitcoin Traders With $1 Million+ Transactions - Forbes
Cryptocurrency This Week: India Could Ban Virtual Currencies & More – Inc42 Media
The Indian government is reportedly having inter-ministerial consultations on a proposed bill to ban all types of cryptocurrencies
Ripple CEO says there is an erosion of trust in global financial markets
Chinas central bank is planning to use its digital currency to challenge the dominance of Alipay and WeChat pay
Trouble may be looming on the horizon for cryptocurrency trading platforms in India, with the government reportedly moving into advanced deliberations over a bill from last year which seeks a complete ban on virtual currencies.
The bill, entitled, Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019, was drafted by an inter-ministerial committee headed by former Finance and Department of Economic Affairs (DEA) Secretary Subhash Chandra Garg. Lawyer Mohammed Danish, the co-founder of Crypto Kanoon, a crypto regulatory media platform, had filed an RTI application with the Department of Economic Affairs to establish whether media reports suggesting that the government had begun consultations on the bill were accurate.
In his RTI, Danish had inquired, Has any cabinet note been sent for IMC (inter-ministerial consultation) on the legal framework of cryptocurrencies/virtual currencies? and, Does this cabinet note seek inter-ministerial consultation on Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019? If not, what is the purpose of this cabinet note?
In its reply to Danishs RTI, the Department of Economic Affairs wrote, The government had set up an inter-ministerial committee (IMC) for examining the issue of cryptocurrencies. The report of the IMC on VCs (virtual currencies) has since been submitted by its members but is awaiting approval of the government. The report and bill will now be examined by the government through inter-ministerial consultation by moving a cabinet note in due course.
The proposed bill calls for a complete ban on all cryptocurrencies and related activities such as mining, holding, advertising, promoting, buying, selling and providing exchange services, among other things. Indian institutions have long been hostile towards cryptocurrencies as it is believed that such currencies are used for anti-social purposes such as funding terrorist activities, a fact backed through evidence collected by the Financial Action Task Force (FATF), an inter-governmental organisation to combat money laundering. These supposed ramifications are believed to be a consequence of cryptocurrencies being outside the purview of any countrys central bank, the lack of any underlying fiat, episodes of excessive volatility in their value, and their anonymous nature which goes against global money-laundering rules.
In March this year, the Supreme Court quashed a Reserve Bank of India (RBI) circular from 2018 which had ordered a banking ban on cryptocurrencies in India. Since the SC order, there has been a spurt in cryptocurrency-related activities in India, with some crypto exchange platforms reporting a 400% spike in trading activity. It remains to be seen if the positive outlook for cryptocurrency exchange platforms in India will hit a roadblock with the coming of a blanket ban on virtual currencies possibly in the upcoming monsoon session of the Indian Parliament, the dates for which are yet to be notified
In other news, Bitcoin is trading at $11,135 at the time of writing, reporting a marginal increase of 1.69% from last week, when the price of a Bitcoin was $10,949. Bitcoins market cap is $205.46 Bn.
Ethereum is trading at $391.52, reporting an increase of around 24% from last week, when the price of Ethereum was $316.6. Ethereums market cap is $43.86 Bn.
Brad Garlinghouse, CEO of global payments system Ripple, has said that in an uncertain world where the global economy is witnessing a downturn due to the financial disruption caused by the Covid-19 pandemic, governments were seriously considering the blockchain technology. Garlinghouse, in a series of tweets, while commenting on a Bloomberg article which detailed the pros and cons of potential alternatives to the dollar such as gold, yuan and crypto, said that with the erosion of trust in the global financial system, people will inevitably gravitate towards cryptocurrencies. It addresses frictions (settlement, transparency, among others) that were assumed VERY hard to solve before. Crypto is up 80% while USD is down 3% YTD, Garlinghouse wrote in a tweet.
Garlinghouse admitted that the US dollars dominance as the backbone of the global financial infrastructure wasnt going to be lost anytime soon to other assets such as gold, the yuan or crypto, among others, anytime soon. But is it weaker today? he asked. Evidently, as the dollar index, which measures the greenback against a host of leading currencies, had its worst month in a decade in July, as it lost more than 4%. It is down 10% from its peak in March.
Chinas central bank, the Peoples Bank of China (PBoC), is reportedly planning to use its digital currency electronics system to counter the dominance of Chinese tech giants Alibaba and Tencent in the countrys digital payments sector. The report comes only a few days after it was reported that PBoC had promoted an antitrust investigation against both companies digital payments platforms, Alipay and WeChat Pay for suppressing competition in the sector. PBoC will use the DCEP to provide banks equal opportunities in the field of digital payments as it earlier did to technology giants.
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Cryptocurrency This Week: India Could Ban Virtual Currencies & More - Inc42 Media
US Congressmen Want IRS to Balance Taxation and Innovation in the Cryptocurrency Space | Taxes – Bitcoin News
A bipartisan quartet of US congressmen wants the IRS taxation policy not to dissuade taxpayers from participating in blockchain token staking.
These politicians believe Americas ingenuity can help drive this promising staking technology.
The four congressmen are Bill Foster (D) of Illinois, Darren Soto (D) of Florida, Tom Emmer (R) of Minnesota, and David Schweikert (R) of Arizona.
In their letter addressed to IRS Commissioner Charles Rettig, the quartet expressed concern that the taxation of staking rewards as income may overstate taxpayers actual gains from participating in this new technology.
They add this could result in a reporting and compliance nightmare, for taxpayers and the Service alike.
The letter, in which the U.S. politicians explain their understanding of proof-of-stake (POS), also gives reasons why they favor POS ahead of bitcoins proof-of-work consensus.
The politicians say in addition to needing massive amounts of energy, the Bitcoin network is secured by a relatively small number of miners. On the other hand, in POS, all tokenholders can contribute to network security.
By staking tokens, participating third-party tokenholders can also receive newly created tokens as rewards for helping to maintain the network.
The quartet says it agrees with the principle that taxpayers true gains from these tokens should indeed be taxed.
However, the politicians suggest a different solution:
Similar to all other forms of taxpayer-created (taxpayer-discovered) property such as crops, minerals, livestock, artwork, and even widgets off the assembly line these tokens could be taxed when they are sold.
Eager to keep the U.S. abreast with this technology, the congressmen end their letter by urging the IRS to continue pursuing its mandate but also (to) ensure innovation wont be driven elsewhere.
This letter by the four members of Congress is the latest signal that the U.S. is moving to embrace blockchain technology and cryptocurrencies.
In July, the Office of the Comptroller of the Currency (OCC) clarified that national banks and federal savings associations can provide cryptocurrency custody services for customers.
Also in the same month, a U.S. federal court ruled that bitcoin is a form of money.
Meanwhile, reacting to the letter by the U.S. congressmen, Tim Ismilyaev, CEO and founder at Mana Security, says the growth of POS has finally forced some people in the U.S. government to see the importance of embracing cryptocurrencies.
The US government recognizes the immense growth of assets locked in POS and defi [decentralized finance] markets (over $15B is already locked in such products) although these markets did not exist a few years ago. The value of locked assets is likely to surpass $100B mark in upcoming years, and this will happen with or without US approval. So this move by Congress toward crypto is rational.
The bipartisan letter was written on July 29.
What do you think of this letter? Tell us your thoughts in the comments section below.
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US Congressmen Want IRS to Balance Taxation and Innovation in the Cryptocurrency Space | Taxes - Bitcoin News
Will This Quantum Computing Breakthrough Save Bitcoin and Cryptocurrency? – The Daily Hodl
A new computing breakthrough may just save Bitcoin and cryptocurrency from powerful quantum machines that have the potential to breach public-key cryptography.
Researchers are following the development of a new measure known as lattice-based cryptography that promises to make crypto technology more quantum-proof, reports MIT Technology Review.
Lattice-based cryptography may neutralize the massive computational capabilities of quantum computers by hiding data inside complex geometric structures that contain a grid of infinite dots that are spread across thousands of dimensions. The security measure appears to be virtually impenetrable even with the use of powerful quantum computers unless one holds the key.
The emergence of quantum computing machines has grabbed headlines over the past few months as the technology poses a threat to cryptographic algorithms that keep cryptocurrencies, like Bitcoin as well as the internet at large secure. The World Economic Forum explains how quantum computers can break current standards of encryption.
The sheer calculating ability of a sufficiently powerful and error-corrected quantum computer means that public-key cryptography is destined to fail, and would put the technology used to protect many of todays fundamental digital systems and activities at risk.
MIT Technology Review says that while the current iterations are not yet ready for implementation, the solution is promising, especially as a post-quantum future is fast approaching. Ripple CTO David Schwartz says he believes developers have at least eight years until the technology, which leverages the properties of quantum physics to perform fast calculations, becomes sophisticated enough to crack cryptocurrency.
I think we have at least eight years. I have very high confidence that its at least a decade before quantum computing presents a threat, but you never know when there could be a breakthrough. Im a cautious and concerned observer, I would say.
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Will This Quantum Computing Breakthrough Save Bitcoin and Cryptocurrency? - The Daily Hodl