Categories
Ethereum

Moving beyond the crisis narrative: Crypto in a post-pandemic world

Everyone knows the story. When the first block of Bitcoin (BTC) was mined, the protocol itself entered a world of grave economic uncertainty. Not long before the market would hit its lowest point of the 2009 recession, Bitcoin was quietly created, dropped like a life raft alongside a then-sinking economy. The now infamous phrase “Chancellor on brink of second bailout for banks” was cribbed from the headlines, immortalized in code in the origin story of one of the most compelling, innovative, best-performing assets of the last decade.

But Bitcoin did not immediately take root beyond a small community of true believers. Bitcoin and digital assets, in general, have been a lot of things in their relatively short histories, from purely speculative investments and “magical internet money” to a crisis-time safe haven and an attractive hedge against “the great monetary inflation.”

In the face of the COVID-19 pandemic, an associated market meltdown and huge amounts of central bank stimulus, cryptocurrencies have proved themselves to be remarkably resilient.

But as we watch vaccines being distributed around the country, cautiously optimistic that the end of the pandemic is within reach, where will crypto fit in a post-pandemic world? If its history of resilience shows us anything, we expect crypto to adapt to whatever the next few years will bring — crisis or not.

Related: How has the COVID-19 pandemic affected the crypto space? Experts answer

Crypto banks

Just three years ago, leaders of some of the largest banks in the world refused to even talk about Bitcoin in interviews, calling the asset itself a “fraud” and referring to those who would buy it as “stupid.”

Today, the general sentiment across banks is markedly different. On the heels of the United States Office of the Comptroller of the Currency’s Interpretive Letter #1170, which made explicitly clear that federally chartered banks can provide banking services to legally operated companies in the digital asset space and custody digital assets on behalf of their clients, banks have been looking for the best way to get their clients the crypto exposure they demand. We anticipate legacy financial players’ interest in crypto to only grow in the coming years, with crypto becoming a mainstream requirement of financial services.

In the short term, banks will almost certainly rely on subcustody relationships with digital asset specialists to safely and effectively get crypto into their clients’ hands. And this is because the complexity is easier to address from the crypto-native side than the other way around.

Related: The need for a dialogue between crypto businesses and regulators

We also anticipate some number of acquisitions to occur, with some crypto service providers being swallowed up by banks with pockets deep enough to buy them. As demand for crypto services grows, and as regulatory clarity comes, more and more institutions will enter.

Proliferation of decentralized apps

Just as Bitcoin was built in response to the failings of a legacy system, decentralized finance has emerged as crypto’s answer to financial intermediaries. Until recently, though, entire portions of this ecosystem have been unavailable to institutions, mostly for lack of a secure means to participate.

Slowly but surely, institutional-grade DeFi tools are coming to market, and we anticipate this trend to continue. Not only will we see a continued proliferation of DeFi growth, but institutional-grade tools will make institutional participation far more accessible.

Related: Was 2020 a ‘DeFi year,’ and what is expected from the sector in 2021? Experts answer

Despite its significant growth, the DeFi space is still very much fragmented. Cross-chain interoperability — or lack thereof — is still a problem. Institutions want to be able to put their assets to use across the DeFi ecosystem. We anticipate significant growth in this area, with more and more layer-one protocols being bridged to DeFi and the broader Ethereum ecosystem — a development that also has the potential to improve liquidity along with market stability and efficiency.

Corporate treasuries and lowered barriers to entry

Against a backdrop of seemingly endless monetary stimulus, a significant number of private companies are treating digital assets as an inflation hedge. Some of these, like Square and MicroStrategy, have taken significant positions in recent months. We’ve seen MassMutual buy up $100 million in Bitcoin. And with Tesla’s $1.5-billion dollar Bitcoin purchase this month, the trend shows no signs of slowing. In the coming years, we expect digital assets to become an instrumental part of private-company balance sheets.

Related: Tesla, Bitcoin and the crypto space: The show Musk go on? Experts answer

Another factor at play is the lowered barrier to entry on the retail front. With tools like Celo’s Valora coming to market, Diem expected to launch in 2021 and firms like PayPal making it easy for their clients to buy crypto, we expect to see more of crypto as a tool for banking the unbanked — for putting financial tools into the hands of the millions without access to traditional banking services.

Related: Will PayPal’s crypto integration bring crypto to the masses? Experts answer

Beyond the crisis narrative

By virtue of being built in response to one economic crisis, crypto seems to be locked into a crisis narrative. In reality, digital assets have more than proved to be resilient in even the most challenging economic times. Just this past year, crypto proved itself in the grips of a once-in-a-century global emergency, earning a place in the portfolios of institutional and retail investors alike.

As the pandemic (hopefully) fades into the rearview, it’s exciting to think about what crypto can do without being forced into a defensive posture — without being defined against legacy assets like gold. It would be naive to say that crypto will never face another crisis — it almost certainly will. But from here, at what feels like the tail end of the pandemic, it’s exciting to think about what crypto can do in whatever “new normal” comes next.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Diogo Monica is a co-founder and the president of Anchorage. Before co-founding Anchorage, Diogo was the security lead at Docker — an open platform for building, shipping and running distributed applications. He has a B.Sc., an M.Sc. and a Ph.D. in computer science, has published several papers in peer-reviewed security conferences on the topic of distributed systems and information security, and is the author of several patents in secure communications, encrypted hardware and payment systems.

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Categories
Bitcoin

Etsy CEO Is A Bitcoin HODLer But Won’t Be Accepting It As A Form Of Payment Until This Happens

Etsy CEO Is A Bitcoin HODLer But Won't Be Accepting It As A Form Of Payment Until This Happens

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Over the last few months, the amount of institutional support that the crypto institution has received has been remarkable. After years of being shunned by the mainstream financial world, PayPal, CashApp, and Mastercard have enabled crypto transactions on their various platforms. And just a few weeks ago, Tesla and BlackRock formally entered the bitcoin market.

Since then, there has been a lot of speculation about what company is going to embrace bitcoin next, and in seemingly every interview with company executives, this question is asked. The latest of these was with Etsy, a popular online marketplace.

Etsy and Bitcoin

The question of Etsy and the potential for bitcoin in its future was brought up during its Chief Executive Officer Josh Silverman’s interview with CNBC. When quizzed about this, Silverman clarified that there are no immediate plans for the company to accept bitcoin as a form of payment.

The reason for this, he said, is that not enough people are making use of bitcoin at the moment and that more people need to use and own bitcoin before Etsy will consider it. This is not to suggest that Silverman himself is against bitcoin.

On the contrary, Silverman confirmed that he has held on to bitcoin as an investment for roughly seven years as he sees it as a viable investment. Despite this, he does not feel that bitcoin is ready to be used as a medium of exchange on Etsy.

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More and more people use cryptocurrency than ever before and more merchants are able to accept it but Silverman’s statement calls into question whether the asset is truly ready for large-scale use. One of the reasons that Tesla gave for its $1.5 billion bitcoin investment was to provide liquidity for when they begin receiving payments in bitcoin.

However, the situation at both firms isn’t the same. Tesla delivered 180,000 cars in the last quarter of 2021 while Etsy has almost 40 million users worldwide. Should bitcoin become more widely used, we can expect more companies at the level of Etsy to embrace the use of digital currency.

Etsy is not the only company that is avoiding the use of bitcoin for now as Twitter’s CFO stated in a recent interview that there are no current plans to add bitcoin to the social media giant’s balance sheet.


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The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

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Categories
Ethereum

Many pieces of the Diem puzzle still missing as launch gets delayed

Back in June 2019, social media giant Facebook released the details for a much-talked-about digital currency platform dubbed “Libra.” These days, Libra is known as Diem, with the project undergoing a significant rebranding in a bid to smoothen regulatory wrinkles.

A year and a half later, the Diem Association has yet to launch a digital token with regulatory approval from Swiss authorities yet to materialize. Even if Switzerland’s Financial Market Supervisory Authority, or FINMA, does grant a payment license to the digital currency project, Diem will be debuting its offerings to a global landscape that is significantly more fractured in terms of digital currency regulations than was the case 18 months ago.

Stablecoin regulations seem to be the focus of attention for governments in major economic blocs including the United States and the eurozone. China continues to accelerate the pace of its nation digital yuan project, and despite initial assertions to the contrary, authorities in Beijing appear to have a more domestic agenda for the e-yuan.

Major crypto markets in terms of trading volume like India and Nigeria are becoming increasingly anti-privately-issued digital currencies. In effect, if Diem were to launch today, that would be four prominent digital currency transaction theatres where the legality of the project’s “coin” would be tenuous at best.

When will Diem launch?

In November 2020, the Diem Association announced plans for a limited launch of its project with a U.S.-dollar-pegged digital token. Far from the ambitious plans of a “Facebook coin” backed by a basket of fiat currencies that heralded the debut announcement back in 2019, this new USD stablecoin was a consequence of the successive rebranding attempts necessitated by the vociferous pushback among global financial regulators.

January came and went, and now February is almost over, but no sign of the Diem USD stablecoin. The Swiss FINMA has not approved Diem’s payment system license yet but recent developments in the country around crypto and blockchain regulations likely put Diem’s application in good stead.

Switzerland has established itself as a crypto-friendly nation, allowing the digital asset space to flourish within its borders. Earlier in February, Phase one of the country’s blockchain law focusing on company reforms went into effect. Meanwhile, the second part of the new legal framework, which creates regulatory clarity for trading crypto securities, will become law later in the year.

Plans for the Diem launch received another boost with the announcement of the partnership between crypto security outfit Fireblocks and First Digital Asset Group — a payment provider on the Diem platform. As part of the collaboration, both companies have created a secure wallet allowing financial institutions to process transactions on the Diem network.

Responding to Cointelegraph, a spokesperson for FINMA declined to comment on the status of Diem’s application but confirmed that the licensing process was still ongoing. The Diem Association did not immediately respond to Cointelegraph’s request for comments on the matter.

According to Jackson Mueller, head of policy and government relations at blockchain compliance and financial markets infrastructure outfit Securrency, a Diem launch in Q1 2021 appears unlikely. In a conversation with Cointelegraph, Mueller remarked:

“Several representatives of the Diem Association have made it clear that a rollout will not happen until they meet regulatory expectations and requirements, and it is unclear, at this time, whether and to what extent the Association is close to achieving this.”

Private stablecoins in the cross-hairs of regulators

The Diem announcement back in the Summer of 2019 seemed to spur financial regulators across the world to scrutinize stablecoins. The likely network effect of a digital currency enjoying such benefits of Facebook’s 2.8 billion users seemed to spur intense discussions among national and international regulatory agencies.

According to Mueller, government scrutiny surrounding privately issued stablecoins has increased: “The conclusions and follow-on outcomes from these efforts are unclear, at present, which, I imagine, adds further challenges to the rollout of Diem in the first quarter.”

Apart from the series of congressional hearings that took place in 2019 after the Diem announcement, some congresspeople are pushing for stricter stablecoin regulations. The measures, if passed, would force private stablecoin issuers to comply with banking standards.

Intergovernmental bodies, such as the G-7 and the G-20, have also expressed their concerns about stablecoins, with Diem often being singled-out. These bodies have issued numerous papers and research studies highlighting the potential for private stablecoins to disrupt legacy financial systems.

The European Central Bank recently asked European Union lawmakers for veto powers concerning stablecoins in the eurozone. If granted, the ECB would have the final say on stablecoin regulations with its pronouncement enforceable across the European Union. Indeed, the ECB laid down the crux of its reservations with stablecoins especially those not issued by recognized financial institutions, stating:

“The additional requirements laid down in the proposed regulation for significant stablecoin issuers are therefore welcome. Having said that, these additional requirements may not be sufficient to address growing risks where stablecoins become widely used as a means of payment or a store of value in multiple jurisdictions across the Union.”

Furthermore, ECB President Christine Lagarde is a noted critic of stablecoins and cryptocurrencies in general. Thus, it’s likely that the ECB having veto powers on stablecoin regulations would mean strict compliance mandates for issuers in the eurozone.

Officials in Germany are also among one of the more vocal opponents of Diem in the eurozone. While the country is by no means anti-crypto, Germany’s finance minister, Olaf Scholz, has stated on numerous occasions that the country’s government will oppose Diem’s operation in Germany.

According to Ran Goldi, CEO of First Digital Assets Group, much of the negative sentiments espoused by European regulators stem from a lack of understanding of the Diem model. “I think the ECB is still looking at Diem as a new currency instead of a representation of existing money (as in, they think this is still Libra, a basket of currencies),” Goldi told Cointelegraph, adding: “They should take the time to learn more and perhaps realize there is no threat to their economy.”

CBDC: Central banks answer to Diem and private stablecoins?

Apart from the threat of decidedly onerous regulatory measures, several governments have also begun exploring the creation of their own central bank digital currencies. These sovereign digital currency projects seem to be the response of central banks to the perceived threat of privately issued stablecoins.

Seeing as digitization appears to be the next phase in the evolution of money, legacy finance figures, such as Agustín Carstens, general manager of the Bank for International Settlements, have argued for central banks playing a key role in the pivot to digital currencies.

According to a recent BIS survey, about 86% of major central banks are studying CBDCs. China’s e-yuan project is currently undergoing several testing protocols, with banks in the country helping to bootstrap adoption by creating hardware wallets for the digital currency/electronic payment.

Related: China turns up pace on CBDC release, tests infrastructure prior to adoption

There also seems to be a significant level of international collaboration surrounding CBDCs. Recently, the central banks of China, Thailand, the United Arab Emirates and the Monetary Authority of Hong Kong inked a partnership to create a cross-border CBDC. These international collaborative projects appear to be geared toward establishing protocols for interoperability among national CBDC projects.

In India, the country’s central bank has confirmed that it is actively developing a digital rupee. According to a recent statement by Shaktikanta Das, governor of the Reserve Bank of India, the RBI is “very much in the [CBDC] game” and wants to follow China’s footsteps in creating a digital companion to its national currency.

Meanwhile, India’s government is reportedly close to issuing a blanket ban on cryptocurrencies, which will include stablecoins. People with knowledge of the plan have been speculating, saying that crypto owners will be given a transition period to sell their digital currency assets.

India is Asia’s third-largest economy and a potential market base for Diem payment transactions. Already, another major arena like China with its DCEP could be a difficult proposition for Diem to achieve significant adoption.

In Europe, the ECB wants stablecoin veto power but has said that any digital euro created by the central bank will be exempted from digital currency regulations enforced on other stablecoin issuers. Nigeria — Africa’s largest economy — has banned banks from servicing crypto exchanges.

Even with a license approval by FINMA, Diem might have a few regulatory hurdles to navigate seeing as major economies are not looking to allow the disintermediation of their legacy banking systems without a fight.

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Kraken Uncategorized

Meet The Kraken Bank Executive Team: CEO David Kinitsky

First revealed last September, Kraken is quietly hard at work gearing up to launch Kraken Bank. This exciting new venture is helping to shape the landscape for both Bitcoin and other cryptocurrency services – and the banking industry – well into the future. 

While we can’t reveal all the details yet, we sat down with Kraken Bank CEO David Kinitsky to get a glimpse into how he’s leading the charge to ensure the next generation of financial firms are built with the next generation of assets in mind. 

David brings more than 15 years of experience in cryptocurrency and financial services. He helped launch a streak of innovations with Grayscale, Fidelity, Circle, SecondMarket, and the private investment funds he’s managed.

He’s full of industry knowledge and always adds a colorful perspective to the conversation. Enjoy!

Hi David! You worked at some of the biggest names in the industry. How did you get into crypto, what were those experiences like?

I first came across Bitcoin when I was working at a company called SecondMarket, which would become Digital Currency Group, one of the largest players in this industry. SecondMarket built marketplaces for illiquid, esoteric, and emerging assets. Eventually we got into Bitcoin and sold the legacy business to NASDAQ. 

I took the lead in setting up Grayscale, structuring it’s first and flagship product – the Bitcoin Investment Trust – and served as GM of the business, which I ran for the next couple years. Today, Grayscale is the largest digital asset manager in the world with some $25-30 billion assets under management. (Big shout out to the team over there that took the baton, executed with remarkable consistency, and grew it into the juggernaut it is today.)

I left Grayscale to join Fidelity as their first digital asset hire, helping them to develop their strategy in the crypto space. I also ran a proprietary crypto fund there as a co-portfolio manager alongside the team that now runs Castle Island Ventures, an early stage VC firm focused on crypto.

My next stop was at Circle where I helped to restructure their business, refocus it around their USDC stablecoin, and relaunch with their payments/treasury platform.

Finally, when I saw Kraken pursuing the SPDI bank, I jumped at the opportunity and went all in, moving along with my family to Wyoming where the bank is based. It’s important infrastructure for Bitcoin and crypto, and is also reshaping traditional banking and financial services.

There is a lot of discussion about regulating cryptocurrencies. What do you find fascinating about bitcoin in this respect and how do you look at regulation of the space?

There’s not just a lot of discussion about regulating, there’s real regulating going on already. I sometimes hear this misunderstanding that crypto is not regulated. It’s regulated in the same way we regulate most financial services and other industries – by regulating the services providers and the actions taken by users. Just look at crypto companies and the licensure/registrations they maintain.

We should want to be especially smart about how we regulate these crypto companies as compared to their more traditional counterparts. There’s a key distinction to consider. In traditional financial services – say banking or brokerage or whatever – end users have no other alternative to access these services. They can’t opt out. If you want to send money across space and time, you need a bank or other financial service provider. Crypto is different. Users can receive, hold, and send their own assets themselves. It may be clunky for some, but they can do it. So there is some level of burden above which users will just not use the key nexus through which regulation is enforced. And the first ones to leave are the “bad guys” you want to be able to oversee.

I’ll also say that crypto provides new tools and abilities. For example, financial institutions can incorporate verifiable proof of reserves or to build other auditable assurances into their operations to ensure they’re solvent and doing what they say they are.

I’m optimistic that we’ll be able to thread the needle on the right regulation in the long term, and just hope we don’t shoot ourselves in the foot nearer term.

What about political and public opinion? How is Bitcoin and crypto currently being viewed and how might that affect its status and regulation?

It’s a good question. Absolutely foundational. After all, law and regulation arise out of policy objectives that take into account certain cost-benefit tradeoffs. Historically, we haven’t been able to have these serious conversations about Bitcoin or crypto here in the US because of some absolutist or ill-informed opinions. 

The most common is that there’s no use case other than speculation or illicit activity, and no reason to make any accommodations within the existing system. I do think that more recently – especially in this macro environment – there’s an increasing appreciation for the benefits that Bitcoin provides as a store of value and in terms of censorship resistance, as well as an openness to the other opportunities crypto could create in the future. There’s also starting to be some recognition that Bitcoin and crypto will continue to operate regardless, and will simply do so outside of the existing financial system if we don’t pave a path for them within it.

Another is that they’re necessarily adversarial to America somehow, or simply incompatible with our laws, regulation, and institutions. But, Bitcoin is as American as apple pie. Its values are exactly the same as American values – free speech, free association, free enterprise, individual liberty, property rights, and so on – all the principles this country was founded on and the engines for growth throughout our history. And either way, the fact is that Bitcoin exists and other countries are getting involved. It’ll be critical that the U.S. maintain a position in this emerging industry to ensure its global competitiveness and national economic security.

What is it about Kraken Bank that makes this a venture worth building? 

I do actually think that this initiative has some symbiotic elements to it, but – and maybe it’s gauche to say these days – we’re building Kraken Bank because it achieves some very clear organizational objectives of ours. 

It provides the business with better legal/regulatory positioning, improved infrastructure and resultant customer experience, and more product/market opportunities. More broadly, it supports Kraken’s mission of promoting crypto adoption to enable more financial freedom, by seamlessly connecting crypto all the way down to the bottom of the financial services stack, which is entirely buttressed by banking. It puts us in a position to help shape the future of banking and it incorporates crypto.

Finally, I’m excited to help develop the ecosystem right here in Wyoming. Banks have always played important roles and re-invested within their communities. Kraken will be no different. We’re not carpetbaggers. We want to be connected to communities where, and with which, we conduct business – and to build something special together. 

Want to help? Kraken and Kraken Bank are actively hiring, with new jobs posted periodically on the company’s careers page.  If you don’t see a role at the bank that’s right for you today, stay tuned for more listings soon!

Thank you David. 

-The Kraken Team

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Categories
Bitcoin Crypto_Currency

Hedge Funds Scare Bitcoin’s Volatility: Bridgewater Executive

Many hedge funds have diversified their portfolio with Bitcoin exposure in recent years, but a majority still do not encourage digital currency investments. Rebecca Patterson, Investment Research Director at Bridgewater Associates, recently explained the major hedge funds’ hesitation in Bitcoin.

“Right now, Bitcoin can move 10 percent on a tweet. That’s not exactly a stronghold of wealth for most institutional investors,” Patterson told Bloomberg TV in an interview. She was referring to the tweets of billionaire Elon Musk.

Patterson elaborated that Bitcoin is ten times more volatile than the US dollar and double of the Venezuelan bolivar, the fiat of a hyper-inflated country. “You want to see lower volatility, more stable asset if you want to consider it as a stronghold of wealth, a diversifier,” she added.

But, volatility is not the only drawback of hedge funds’ Bitcoin adoption. Liquidity is also a major concern, as we have seen supply shortages multiple times, along with regulatory uncertainty.

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“The more you get a real regulatory ecosystem developing around bitcoin, other cryptocurrencies, the more other types of investors are going to be comfortable coming in. That’s going to bring the liquidity. That’s going to reduce the volatility,” Patterson added.

“If there were one thing I were watching first, it would be seeing more regulatory certainty, and I’m not sure when that’s going to come in the US.”

Bitcoin Is Gold

 Bridgewater Associates is currently the largest hedge fund, managing more than $150 billion worth of assets. Its Founder, Ray Dalio earlier compared Bitcoin with gold, setting a stage for institutional adoption of digital currencies.

Despite Patterson’s concerns, many major hedge funds are investing in Bitcoin. The Miller Opportunity Trust, the flagship fund managed by Bill Miller, received regulatory permission for up to 15 percent indirect Bitcoin exposure.

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Categories
Bitcoin Blockchain

Bitcoin’s Illiquid Supply Continues to Grow – What This Means

Bitcoin’s uptrend is currently slowing as the leading cryptocurrency has been down by 10.47% in the last 24 hours, trading at $45,213 at the time of writing, according to CoinMarketCap. This outcome is linked to the fact that risk assets are experiencing a global sell-off, and bond yields are surging on the expectation that inflation will continue to rise.

Nevertheless, crypto trader Carl Martin tweeting under the pseudonym The Moon believes that Bitcoin (BTC) may be getting ready for a monumental move because the present price correction may a temporary pullback before the cryptocurrency surges higher.

BTC is not a stranger to numerous steep pullbacks in a bull run, as acknowledged by Bloqport. The crypto data provider explained

“Historically, Bitcoin goes through multiple steep corrections in a bull run. Between 2016 to 2017, we saw at least six. On Nov 13, 2017, BTC hit a low of $5,844 then hit $20,000 34 days later.”

The crypto trader, therefore, believes that the present price consolidation could trigger a monumental move.

Growing illiquid Bitcoin supply – what this means

Martin’s sentiments are echoed by on-chain analyst Rafael Schultze-Kraft who disclosed that Bitcoin’s liquid supply is nosediving. This can be interpreted as a bullish signal. He explained:

“The amount of illiquid Bitcoin supply in the network has grown more than the circulating supply since 2017. Meanwhile, liquid supply continues to see a steep decrease. Pair this with the demand from MSTR, Square, Tesla, Grayscale, et al., and understand how bullish this is.”

Image

Source: Glassnode

Illiquid BTC supply signifies a holding culture as more participants are storing Bitcoin for speculative or future purposes, which is an indication of bullish behaviourr. 

Jan & Yann, the co-founders of on-chain data provider Glassnode, have also delved into the issue of the current pullback being bullish. They said

“Confidence in the continuation of the Bitcoin bull market during this pullback seems to be higher than for the previous dip in Jan. This chart is a great proxy for long-term holders’ sentiment.”

Image

Source: Glassnode

Time will tell how the leading cryptocurrency moves from here. Bitcoin billionaire Tyler Winklevoss has hinted that the current price of $45k “smells of opportunity,” perhaps suggesting that this is the optimal time to buy the dip and purchase BTC at a lower price.

Image source: Shutterstock Source

Categories
Bitcoin Blockchain Coinbase Crypto_Currency Ethereum Investment

Coinbase’s S-1: The Number That May Make the Exchange Nervous

Jeff Roberts, executive editor at Decrypt and author of “King of Crypto: One Startup’s Quest to take Cryptocurrency Out of Silicon Valley and Onto Wall Street” talks about Coinbase going public. In this episode we discuss:

  • Jeff’s biggest takeaways from Coinbase’s S-1 filing (0:56)
  • why institutions are choosing Coinbase (2:42)
  • how Coinbase going public feels like validation for bitcoiners (4:37)
  • issues Coinbase may face as a business that currently generates 96% of revenue through transaction fees (6:25)
  • Why Surojit Chatterjee has so much equity in Coinbase (11:29)
  • why Coinbase has only invested $130 million in crypto through its corporate treasury (12:26)
  • whether or not decentralized exchanges like Uniswap pose a threat to Coinbase, and whether unregulated centralized exchanges might squeeze them from the other end (15:41)
  • challenges Coinbase will face going forward (19:13)
  • how well the stock will do once it’s listed (20:05)
  • Crypto News Recap (20:59)

Thank you to our sponsor!

Crypto.com: https://bit.ly/3jzkTAD 

Download the Crypto.com app here: https://crypto.onelink.me/J9Lg/laurashinpodcasttesla

Episode Links

Jeff Roberts

Twitter: https://twitter.com/jeffjohnroberts

Personal Website: https://jeffjohnroberts.com/ 

Decrypt: https://decrypt.co

Kings of Crypto: https://store.hbr.org/product/kings-of-crypto-one-startup-s-quest-to-take-cryptocurrency-out-of-silicon-valley-and-onto-wall-street/10436

Coinbase S-1 Filing Information

S-1 Form: https://www.sec.gov/Archives/edgar/data/1679788/000162828021003168/coinbaseglobalincs-1.htm

Coinbase Profit: https://decrypt.co/59347/coinbase-big-profit-for-2020-ahead-of-milestone-ipo-direct-listing

S-1 Deep Dive: https://www.theblockcrypto.com/post/95921/coinbases-s-1-public-filing-is-now-public-setting-stage-for-a-direct-listing-on-nasdaq

Sending to Satoshi Nakamoto: https://decrypt.co/59509/coinbase-s-1-filing-bitcoin-satoshi-nakamoto + https://twitter.com/laurashin/status/1364954956571279369 

Share Distribution: https://decrypt.co/59439/coinbase-insiders-very-rich-goes-public

Pre-IPO Shares: https://www.theblockcrypto.com/linked/96057/coinbase-pre-ipo-shares-ftx-s1 

Armstrong Income: https://www.coindesk.com/coinbase-sec-form-s-1 

Balance Sheet: https://www.theblockcrypto.com/post/96021/coinbase-says-holds-bitcoin-btc-on-balance-sheet 

Transaction Revenue: https://twitter.com/lawmaster/status/1364972834167148548

Link to the Crypto News Recap:

https://unchainedpodcast.com/the-one-figure-in-the-coinbase-s-1/

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Categories
Crypto_Currency

BitMEX Crosses $1T in Yearly Volumes Catalyzed by Bitcoin Rally

One of the major cryptocurrency derivatives exchanges, BitMEX, said a total of $1.0 trillion was traded on the platform over the past 365 days.

BitMEX, the largest coin-margined swaps exchange, added that this milestone comes after it completed the month-long process of verifying its entire user base in December. Verified users can also trade on the go with BitMEX Mobile, which was launched last year in over 140 countries.

Over $335 billion worth of cryptocurrency derivatives has been traded following the verification deadline. Following the completion of the process, BitMEX recorded in January and February 2021 two of the highest monthly volumes in its history.

Alexander Höptner, Chief Executive Officer of 100x Group, the holding company for the BitMEX platform, said: “2021 will be a resurgent year for BitMEX and the pillars of this platform have proven themselves to be rock solid. In 2021, which we think could be a sea-change year for the cryptocurrency landscape, BitMEX will differentiate itself by offering the best of both worlds – a fair trading environment composed of verified users alongside top-tier liquidity, performance, and security.”

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In the aggregate, growth in crypto derivatives trading volume is now outpacing that of spot trading. According to data analytics company, CryptoCompare, cryptocurrency derivatives trading volumes more than doubled in January to $2.9 trillion. That was a new all-time high, breaking the previous record of $1.43 trillion set in December, also highlighting the trading frenzy that has accompanied bitcoin’s charge to uncharted highs.

BitMEX, however, lags behind its major rivals. The largest derivatives exchange by monthly trading volume in January was Binance, which traded a total of $890 billion. It was followed by OKEx, which saw its derivatives trading volume go up 102% to $582 billion, and by Huobi, whose volume increased to $499 billion.

On the regulation front, US authorities claim BitMEX served US customers while flouting the nation’s banking laws. The popular bitcoin futures platform defended itself explaining that while Americans cannot access its trading services through IP addresses based in the US, some users may have masked their actual identities through virtual private networks, or VPNs, to disguise their locations.

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Bitcoin

BTSE Introduces Earn Feature for Crypto Assets

BTSE Introduces Earn Feature for Crypto Assets

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Dubai, United Arab Emirates, 25th February, 2021, // ChainWire //

Cryptocurrency exchange BTSE has introduced an Earn feature that enables users to generate yield from their digital assets without being exposed to any volatility. 

By giving traders an opportunity to earn returns on their idle assets, BTSE has expanded its ecosystem to cater to savers as well as traders. Both flexible and fixed-term deposits are available for crypto-assets such as Bitcoin and Ethereum, as well as popular stablecoins with varying interest rates. BTSE is expected to release a variety of additional currencies in the near future.

The flexible option allows users to unstake whenever they wish, while locked term deposits require tokens to be staked for an extended period of time but provide a higher APY. No minimum deposit is required, and there are zero fees on deposits.

In phase one, compatible cryptocurrencies will include USD-pegged stablecoins Tether (USDT), USD Coin (USDC), and True USD (TUSD), as well as Bitcoin (BTC) and Ethereum (ETH). Once the time period has been determined by the user, they will start to earn interest with BTSE.

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To date, 70% of people on BTSE are choosing stablecoins because of the higher yield and more safety against volatility. This is compared to 30% of people who are receiving yield on Bitcoin.

As time goes on, the BTSE team will bring additional functionalities to the table. The second phase of this launch will include lending and borrowing capabilities to match the spirit and momentum of the DeFi trend. BTSE would like to give growth to its community with Earn as well as lending. 

Jonathan Leong, co-founder and CEO of BTSE, said: “Cryptocurrency holders like nothing more than earning yield on assets that are otherwise gathering dust in their digital wallets. BTSE’s earn feature is an important milestone in our transformation into a comprehensive digital bank at the juxtaposition of crypto and fiat.”

BTSE recognizes the growth of the DeFi space and sees a shift towards lending and borrowing in addition to Earn. 

Earn features have become extremely popular elements of several top cryptocurrency platforms, providing a means by which asset-holders can earn passive income from their crypto portfolio. Interest rates are generally far superior to those offered by traditional financial institutions.

About BTSE

Founded in 2018 and powered by a custom built from the ground up matching engine, BTSE brings institutional-grade trading technology to the world of cryptocurrency. The platform acts as a bridge between the existing financial system and the digital money of tomorrow. BTSE is capable of handling over a million order requests per seconds and stores 99.9% of customer funds in cold storage. Built by traders for traders, BTSE Exchange offers a suite of financial services which extend the capabilities of digital assets including asset management, exchange, OTC, lending, debit card, white labeling, and defi.

Learn more: https://www.btse.com/

Contacts

Senior Marketing Specialist

  • Hai Ho
  • BTSE
  • Marketing@BTSE.com

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The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

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Blockchain Ethereum

Inside the blockchain developer’s mind: Koinos approaches testnet

Cointelegraph is following the development of an entirely new blockchain from inception to mainnet and beyond through its series, Inside the Blockchain Developer’s Mind. In Part Four, Andrew Levine of Koinos Group discusses some of the challenges the team has faced since identifying the key issues they intend to solve.

Earlier in this series I outlined three of the “crises” that are holding back blockchain adoption; upgradeability, scalability, and governance.

In this post I will summarize the solutions we’ve developed to these problems, which we will be showcasing in the upcoming Koinos testnet planned for the second quarter of 2021.

Since that series Koinos Group has successfully launched a token, KOIN, as a proof of work mineable token on Ethereum. By using proof of work to distribute the initial token supply we were able make the token accessible to early adopters and forgo an ICO.

Assessing the ICO model

ICOs and similar token sale tools, while not without their use cases, have created their own crisis within the space by misaligning incentives before development even begins. The issue is not with the ICO as a tool, but what happens when a team is financially rewarded before they have even shipped a product.

While so many projects have followed in the footsteps of Bitcoin, it’s surprising how few have replicated arguably the most successful aspect of its launch; a token distribution exclusively through proof of work.

The benefit of this approach is that it ensures with algorithmic certainty that the people behind the blockchain have no advantage in acquiring the token. In short, everyone, no matter who they are, has to make a financial sacrifice in order to acquire that token and the scale of that sacrifice is determined by some neutral third party. In the case of proof of work, that neutral third party is the manufacturer of hardware.

For Koinos Group, that means we had to spend money to acquire our token just like everyone else. In fact, because we have to spend most of our time developing the product, we are even at a disadvantage relative to professional miners. So we have to keep working to add value to the protocol if we’d like to get a return on our investment.

Proof of work algorithms are not without their problems, but we mitigated those in a few ways.

  • First, the mainnet will be governed by a totally different consensus algorithm that won’t be proof of work or proof of stake, so any attempt to develop an ASIC would be a waste of resources.
  • Second, we made the algorithm GPU resistant.
  • Third, we released this token long before releasing our mainnet. In fact, we released the token long before we had even completed development of our framework. Without a functional product, this token becomes a way for people who believe in our team and who share our vision for a fee-less smart contract platform to acquire the token at a reasonable cost.

Rapid rate of improvement

Part of what makes this launch strategy work is the innovative property set of Koinos. We built Koinos totally from scratch, not around any single feature like transactions per second or sharding, but with the goal of creating a blockchain that would improve at a much more rapid rate than any other blockchain out there.

In our experience developing the Steem blockchain, the need to execute hard forks was the single biggest factor holding back progress. If we wanted to eliminate that bottleneck, we reasoned, moving as much of the system code as possible into smart contracts that could be upgraded in-band would do the trick.

That’s why the Koinos blockchain framework contains only the most basic blockchain features (called “thunks”) like contract input/input, getting parameters, and writing to the database. All of the more complex features that people are more familiar with (consensus algorithm, accounts, resource management, governance, etc.) have been moved into modular WASM smart contracts running in the virtual machine that can be upgraded without a hard fork.

Because all behaviors are now coded in distinct “modules” that can be individually “upgraded” we call this feature modular upgradeability.

As a result of modular upgradeability, any behavior can be added to the blockchain without a hard fork because individual upgrades can be distributed in blocks and transactions that are pushed to the network much like an operating system patch, but with the added benefit of an on-chain record of the entire upgrade path.

By moving nearly all of the system code of the blockchain to smart contract modules that can be upgraded without a hard fork we have made Koinos into a blockchain that derives its strength not from the features it is born with, but based on its ability to rapidly acquire new and better features faster than anything else out there.

This is why we call Koinos the first blockchain capable of evolution.

Microservices

Modular upgradeability was just the first major technical innovation that we developed to make Koinos less monolithic and an order of magnitude more upgradeable. Just like there is code that does not need to be implemented natively (in the blockchain itself) but that can be implemented as smart contracts (most of it in fact), there is plenty of code that does not need to be implemented either natively or as smart contracts and can instead be implemented as microservices.

Microservice architectures have many benefits which is why this has become the industry standard for modern software development, but one major benefit is scalability because individual services can be scaled up without having to scale up the entire system. This can dramatically reduce the cost of running a network while improving both the speed and quality of improvements to that network. As a result of historical accidents, blockchain stacks appear to be the last to adopt this new standard as Koinos will be the first blockchain built on a microservice architecture.

This creates amazing new opportunities for developers who will be able to build application specific microservices for Koinos that will help them run their nodes, and their applications, more efficiently; and as a consequence deliver better user experiences. Best of all, this will make Koinos node operation more accessible, thereby improving decentralization, and enabling the network as a whole to run more efficiently so that developers and their end-users can get more out of their decentralized applications.

Multi-language support

Another benefit of a microservice architecture is that individual microservices (basically small programs) can be written in the best (fastest, most secure, best libraries, etc.) programming language for the job, a capability we also wanted to offer for smart contract developers. But in order to take advantage of this trait we needed to develop a way for these small programs written in different languages to “talk” to one another in a way that conformed to the unique needs of a decentralized network. To solve this problem we created a cross-language serialization framework named Koinos Types.

Koinos Types is like the Rosetta Stone for blockchain data structures. It allows programs written in different languages to talk to one another in a simple and unified way by giving them access to the same objects (the “building blocks” of modern programming languages). Koinos Types allows for the interpretation of Koinos (i.e. blockchain) data structures in practically any programming language which will be extremely useful for the development of blockchain-related microservices, clients, and smart contracts.

Koinos Types solves a number of problems. It helps us add multi-language support to Koinos more generally (including for smart contracts), it enables microservices to communicate with one another, and it makes it far easier to develop and update client-libraries. While modular upgradeability and the microservices architecture alone make Koinos far more upgradeable than any other blockchain, Koinos Types takes that upgradeability to another level. That’s why we were so excited to make Koinos Types the first piece of Koinos that we open sourced.

As you can see, ensuring that Koinos can improve at a more rapid rate than any other blockchain isn’t about any one feature.

  • It’s about getting the incentives right from the beginning.
  • It’s about ensuring that the blockchain has modular upgradeability.
  • It’s about modularizing the very architecture itself as microservices.
  • And it’s about making sure that developers operating at every level of the stack (not just smart contracts) are able to use the programming languages they already know and love.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Andrew Levine is the CEO of Koinos Group, where he and the former development team behind the Steem blockchain build blockchain-based solutions that empower people to take ownership and control over their digital selves. Their foundational product is Koinos, a high-performance blockchain built on an entirely new framework architected to give developers the features they need in order to deliver the user experiences necessary to spread blockchain adoption to the masses.

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