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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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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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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
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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Categories
Bitcoin Blockchain Ethereum

5 Legendary Investors Share Their Predictions About Bitcoin Prices

Undoubtedly, Bitcoin has reshaped the dimensions of the cryptocurrency market with its bull runs.

Bitcoin transactions are confirmed by miners who are rewarded with BTC for each block that is verified and added to the blockchain. Bitcoin block reward is reduced to half every four years. As a result, miners receive less BTC over the course of time.

Today, Bitcoin prices are trading at around $49,000. Different aspects of Bitcoin make it an incredible financial technology with the potential to revolutionize the world. Bitcoin’s projected growth is expected to be significant and reflects its true usefulness as a global currency. 

Are there any boundaries that are set to bitcoin growth? If yes, then where is it? 

There is a wide range of long-term and short-term Bitcoin price predictions. There also exists some predictions that are not bound to any time span. Below are some predictions from Bitcoin’s well-known evangelists.

Prediction #1: Pishevar claimed that Bitcoin will reach $100,000 by 2021

Shervin Pishevar is an angel investor and venture capitalist. He is also the co-founder of Hyperloop One and Sherpa Capital. He has invested in numerous tech giants such as Uber and Airbnb. 

This legendary investor tweeted that Bitcoin will reach $100,000 by 2021 considering its rapid pace of acquisition. This prediction was made after December 2020, when Pishevar met the CEO of MicroStrategy, Michael Saylor because his company invested more than $1 billion in Bitcoin during 2020. It is not a surprise to see how Pishevar is obsessed with Bitcoin considering his meeting with Saylor and his previous predictions about the United States’ economy.

Prediction #2: Casares believes that Bitcoin will hit $1 million by 2027

The founder, as well as CEO of Xapo – a Bitcoin wallet startup – Wences Casares, is also a board member at PayPal among numerous other roles. The reason why Casares became interested in Bitcoin is due to the high financial volatility experienced by Peso, his hometown Argentina’s native currency. The tech giant then went on to buy its first Bitcoin in 2011. 

In New York, Casares claimed in the Consensus 2017 conference that he strongly believes that Bitcoin will hit $1 million before 2027. Even better, on 23 May 2017, he also claimed that Bitcoin will bypass 1 million dollars within the next 5 to 10 years. 

Prediction #3: Winklevoss predicted that Bitcoin will reach $500,000

One of the famous Bitcoin billionaires out there, Tyler Winklevoss, said that the Bitcoin market has the potential to emerge with the speed of light and successfully reach the price of $500,000 by 2030. This evolution will put its market cap on a certain level in comparison to gold. 

Tyler Winklevoss affirmed:

“According to our hypothesis, bitcoin is gold 2.0 and will be a solid reason for the disruption of gold. If this estimation became a fact, bitcoin will have a market cap of 9 trillion. It is predictable that one day, the bitcoin price will be $US 500,000. ”

Prediction #4: Liew said that bitcoin prices can realistically reach $500,000 by 2030

Jeremy Liew is a partner at Lightspeed Venture Partners. The reason why he is famous is because he is the first investor in Snapchat, a very well-known social media application. He has also invested in the listing service VarageSale, the hardware wallet LedgerX, and the multimedia company Beme. The net worth of Jeremy Liew is estimated to be north of $2 billion. 

In May 2017, Liew claimed in an exchange with a business insider that realistically, Bitcoin prices can hit the figure of $500,000 by the year 2030. Peter Smith, who is the CEO and co-founder of the world’s most well-known Bitcoin wallet “Blockchain.com” supported this prediction. 

Prediction #5: Chamath Palihapitiya said bitcoin will bypass $1,000,000 by 2037

The founder of Social Capital and co-owner of Golden State Warrior, Chamath Palihapitiya, started his Bitcoin journey by investing back in 2012. By the year 2013, he added Bitcoins successfully in his general fund, private account, and hedge fund. There was a point in time when he owned 5% of all evolving Bitcoin. 

Palihapitiya predicted that in the next 3 to 4 years, Bitcoin prices will reach $100,000. He added in his prediction that Bitcoin will surely hit $1 million by the year 2037. 

Chamath Palihapitiya claimed: 

“Bitcoin has a potential to be comparable with the value of gold which is a fantastic hedge and stores the value against financial infrastructures and autocratic regimes which is crucial to the proper working of this world.”

Conclusion

Cryptocurrencies are becoming a widespread acquisition by the mainstream public in this modern era of digitization and evolving technologies. Keeping in view these massive price predictions and forecasts from legendary industry experts and investors, there is a high possibility that Bitcoin will replace all other local currencies and cryptocurrencies around the globe in the near future. It is understandable why evangelists are bullish on Bitcoin, with Bitcoin prices hitting such high numbers, ranging from thousands to over $58,000 per BTC. The technological advancements have stimulated an entire industry, projecting an aim to disrupt traditional finance. 

Image source: Shutterstock Source

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Ethereum

Chainlink rolls out OCR system upgrade, reducing gas costs tenfold

Chainlink (LINK) has launched a major upgrade for its oracle network, dubbed Off-Chain Reporting, or OCR. The upgrade was announced on Wednesday, though the implementation has been live for some time already.

OCR changes how data across multiple sources is joined together by the oracle network. Previously, the process of aggregating different readings of the same desired input, for example a token’s price, was done on-chain. Chainlink nodes would submit their individual readings of the data, which would be verified by a smart contract on Ethereum and other blockchains. This approach, while guaranteeing reliability of the data, was inefficient in terms of gas costs, as each node would need to spend resources to publish the data.

The new architecture replaces on-chain aggregation with an off-chain consensus round. The aggregated data is then passed on to the blockchain, where a smart contract verifies that a quorum of nodes agreed on this version of the data.

Sergey Nazarov, founder of Chainlink, told Cointelegraph that the team has been working on the protocol since 2017. “We’ve started to put the best minds behind [it] over the last year and a half and have done substantial multiple audits on it,” he added.

The most immediate effect of the upgrade is reduced gas costs and load on the Ethereum network. According to the team, the upgrade will result in a tenfold increase in the amount of real-world data that could be available on the blockchain. As Nazarov explained, this increase is “partially related” to the gas limitations of the Ethereum blockchain:

“I think the nuance here is that we want to do this in a scalable way, basically, and we want to do it in a scalable way that works for Ethereum and various other chains. What this means is that, in times of congestion, the system should be able to continue to deliver these amounts of data because when you architect a system like this, you don’t architect for the best case.”

Chainlink nodes thus could have chosen to publish more data with the previous system, though the gas costs would have made that significantly difficult. “Our system needs to be able to function even in extreme situations, which so far it has been, better than all other oracles,” continued Nazarov. “So that’s the standard we need to meet. And if we suddenly increase 10x the amount of data on the current system — yeah, it could work in some good conditions and it would be costly, and it would actually raise everybody’s costs, which is not something we believe in.”

But beyond the immediate effects, Nazarov believes that this upgrade will have more important effects in the future. “Really what you’re seeing here now is the Chainlink network growing into something that is going to do more and more off-chain computation.”

While that does not mean Chainlink will transition to building rollups and layer two solutions, Nazarov said there are three distinct services that the Chainlink network will soon provide. This includes verifiable randomness, a feature that has already been launched and that allows DApps to have a trusted source of random numbers, which could be particularly useful for gambling platforms and prediction markets. The other services, enabled by OCR, include keeper functions and fair sequencing, both solutions to very practical problems affecting DeFi.

Keepers are a type of maintainers necessary in smart contract environments. For example, some contracts require conducting periodic actions, which are normally triggered by the team or someone in the community — formalizing this behavior is what projects like Keep3r or Fetch.ai are trying to do.

Fair sequencing is a proposed service that aims to fix front-running and miner extractable value in DeFi. The issue arises when a blockchain operator can freely rearrange transactions to theirs or someone else’s benefit. For example, when they see a multi-million swap about to be confirmed on Uniswap, they can quickly place their transaction to benefit from a better price.

The OCR system enables more freedom in how computations are performed on the Chainlink network, enabling new kinds of services centered around computing data instead of publishing it. Nazarov said that these ideas come from very practical needs that are unaddressed in the current market. “We generally do not want to build the pieces of the stack that we do not have to build,” he said. “We want to be the maximally positive-enabling force for smart contracts, closing all the gaps in the stack that aren’t closed.”

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Bitcoin Ethereum

1 billion people will store life savings on their phone in Bitcoin by 2026 — MicroStrategy CEO

Bitcoin (BTC) will be the savings method of choice for one billion people on their phones by 2026, MicroStrategy CEO Michael Saylor predicts.

In an interview with CNBC on Feb. 23, Saylor, whose company owns in excess of 70,000 BTC, continued his public Bitcoin advocacy, calling it “the dominant digital monetary network.”

Saylor: Billions will choose Bitcoin for savings

Saylor was speaking a day after U.S. Treasury Secretary Janet Yellen described Bitcoin as “inefficient,” comments which accompanied a price dip of over 20% from all-time highs of $58,300.

For him, however, he comments were of little consequence compared to the broader Bitcoin use case quickly encroaching into more and more people’s financial lives.

“The story here that’s not being told is that Bitcoin is egalitarian progressive technology,” he told CNBC’s Squawk Box segment.

“We’re going to see a day when 7-8 billion people have a bar of digital gold on their phone and they’re using it to store their life savings with it.”

Continuing, he cited Bitcoin’s 12-year race to becoming a trillion-dollar asset — two to four times quicker than tech giants including Amazon, Google and Apple.

“So the world needs this thing and I think you can expect that we’ll have a billion people storing their value — in essence a savings account — on a mobile device within five years and they’re going to want to use something like Bitcoin,” he added.

“Bitcoin is the dominant digital monetary network.”

Analyst: Tesla will “double down” on BTC holdings

Saylor continues to make waves with MicroStategy’s ongoing Bitcoin buys, the latest of which involved raising $900 million solely to add to its existing holdings.

While skeptics claim that few others will follow in the company’s footsteps, another CNBC guest on Tuesday forecast that Tesla, which itself bought $1.5 billion of BTC, will “double down” on its exposure.

 “I think this is not just a fad; I think Tesla’s going to continue to double down on its Bitcoin investment and you’ll see it from a transaction perspective as well,” Dan Ives, Managing Director and Senior Equity Research Analyst at Wedbush Securities said.

BTC/USD 1-hour candle chart (Bitstamp). Source: Tradingview

BTC/USD saw a welcome reprieve on Tuesday as lows of $45,000 reversed upwards on news that U.S. lawmakers had reached a settlement with stablecoin issuer Tether, ending a two-year lawsuit.

At the time of writing, the pair traded above $48,000, with $50,000 appearing to act as current resistance.

“As expected, ‘they’ protected the 44k level. I think $BTC will go up or sideways as there’s no more Tether FUD,” Ki Young Ju, CEO of on-chain analytics service CryptoQuant added about whales controlling the extent of further losses.

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Ethereum

Bitcoin prints biggest hourly candle in history after BTC rebounds strongly to $54K

Bitcoin (BTC) fell below $50,000 on Feb. 22 as a correction gathered pace at Wall Street’s opening to deliver 20% daily losses prior to a strong response from the bulls. 

BTC/USD 1-hour candle chart (Bitstamp). Source: Tradingview

Bitcoin loses $6,000 in minutes

Data from Cointelegraph Markets and TradingView shows BTC/USD falling heavily during Monday trading, hitting lows of $47,400.

After reversing at all-time highs of $58,312 on Sunday, Bitcoin fell almost $7,000 in under an hour, sparking intense volatility, which continued at the time of writing.

“Almost a $7,000 hourly candle. That has to be by far the largest hourly move in history,” analyst Scott Melker reacted.

Earlier, Cointelegraph Markets analyst Michaël van de Poppe highlighted the area between $50,500 and $52,000 as being crucial to hold in order to preserve the chances of the bull run continuing in the short term. 

In fresh analysis on Monday, he noted that historically, this time of year is not when crypto markets put in their strongest performance.

At the time of publishing, Bitcoin had recovered to trade back above $53,000.

Buyers line up to steal sub-$50,000 Bitcoin

According to reports on Twitter, the action accompanied fresh criticism of Bitcoin from U.S. Treasury Secretary Janet Yellen, who reportedly referred to it as “inefficient” while repeating claims that it is used in criminal activity. 

In a curious coincidence, Sunayna Tutejahe, a Bitcoin proponent and well-known financial innovator, became the new chief innovation officer at the Federal Reserve.

“OUCH! #Bitcoin plunges >10% on worries prices are excessive. Elon Musk tweeted on Saturday that prices ‘seem high,'” markets commentator Holger Zschaepitz tweeted, quoting a headline from Bloomberg that focused on off-the-cuff remarks from Musk last week.

“The selloff across the board this week is a result of some of last week’s exuberance easing, as well as a much needed unwinding of over-leveraged long positions,” Ross Middleton, co-founder of exchange DeversiFi, added to Reuters.

For those familiar with Bitcoin and crypto markets in general, meanwhile, even the precipitous drop was just business as usual.

“After a while, you become immune to these price drops. Only makes you stack even harder,” popular Twitter account Armin van Bitcoin responded.

Coinbase premium vs. BTC/USD chart. Source: CryptoQuant

Contributor Joseph Young further pointed to the so-called Coinbase premium returning to positive almost immediately once the $47,400 bottom reversed, reaching an eye-watering $500 — a bullish sign. Melker, in turn, emphasized the amount of buying volume that the dip had unleashed.

As Cointelegraph reported, various factors were converging to signal that a correction was imminent even before it gathered pace, among them being suspected plans among whales to sell some BTC.

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Ethereum

Banks will be required to work with crypto, e-money and CBDCs to survive

Image a scenario where you need different messengers to send different types of messages — for example, WhatsApp for text messages, Viber for audio, Telegram for video, etc. Rather inconvenient, right? But this is exactly what happens in finance: There is no way to send both digital fiat money and cryptocurrency from a bank account without extra steps. It’s not affecting the masses just yet, but after the issuing of national digital currencies, or central bank digital currencies, in the next few years over the world, the situation is about to become complicated. We need to start looking for a solution now.

CBDCs require a multi-format framework

The traditional financial system can’t brush off new technologies anymore. According to the Cambridge Center for Alternative Finance, the number of cryptocurrency users has almost tripled from 35 million people in 2018 to 101 million people in Q3 2020. Another study, conducted by researchers from the United Kingdom’s Financial Conduct Authority, revealed a 78% increase since 2019.

Cryptocurrency operations are profitable. In Q4 2020 alone, PayPal increased its number of transactions by 36%, which is worth about $277 billion. The increase began in Q3 2020 when the company introduced crypto transactions. This is one of the best quarterly returns in PayPal’s history.

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

However, central bank digital currencies are going to become a part of our daily lives in three to five years. And we need completely new infrastructure for its mainstream adoption. China was the first to actively promote its digital yuan project — referred to as the Digital Currency Electronic Payment, or DCEP. China is fully focused on the infrastructure because several local banks have already developed or are developing their own e-wallets — the main tool for working with DCEP.

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

So far, the Chinese digital yuan is the only example of digital money issued by central banks that is actually working. Notably, more than 60 central banks around the world are exploring this opportunity. DCEP is built on centralized blockchain technology fully managed by the Central Bank of China. This technology makes it possible to gain full control over all financial transactions, ensures social spending targeting, increases tax collection, and prevents financial crimes.

In turn, international payments system Visa recently introduced a protocol for offline transactions with central bank digital currencies. To pay or accept payments offline simply requires downloading a mobile application. In this case, CBDCs essentially replace cash, leading to an increase in the number of transactions controlled by the issuer, bank or financial intermediary.

The monetary multi-format framework is about to become a requirement for financial instruments. Banks will have to make sure that fiat, CBDC and crypto transactions can be made in one place: in a banking application. But there is a catch: The new formats have nothing in common with their predecessors. Moreover, governments view the launch of CBDCs as autonomous. In other words, it doesn’t follow a unified standard with neighboring countries.

What stands in the way of combining “old” and “new” money?

Cryptocurrencies and CBDCs are relatively new. So, there is a lot of uncertainty around these financial instruments. That being said, fiat and digital money share common functions, and the method and quality of their implementation affect how the multi-format financial solution is going to be created.

Building a multi-format financial solution requires a unified approach to compliance. If each service conducts Anti-Money Laundering checks for CBDC and cryptocurrency transactions following its own policy, the bank on the receiving end will not confirm them.

People who aren’t deeply involved in crypto might think digital assets cannot be integrated into traditional business processes. But this is untrue. Our experience shows that it is necessary to develop a unified approach to compliance — the same for both traditional fiat and crypto. Public vilification of all digital asset owners stands in the way of that.

Moreover, the tools in crypto finance are noticeably more effective in AML than those in the traditional system. For example, Know Your Transaction procedures can show the entire transaction history for a particular cryptocurrency — from the moment the token was created to when it was sent to the user’s wallet, including every operation in between.

Versatility is getting harder

The differences between “old” and “new” money shown above are just a few examples, but they are significant enough that we can’t anticipate the seamless use of different forms of money. That is why the compatibility between them is especially important for many banks and fintech services.

We are entering a new era of many financial intermediaries of all shapes and sizes. They will serve their own niche, combining different types of electronic money, CBDCs and cryptocurrencies, using a variety of services. For example, Visa cards already support fiat, crypto, precious metals and Bitcoin (BTC) cashback.

When companies and people can choose among different types of money/currencies/payment systems, only those financial institutions that can work with a wide variety of formats and services simultaneously can be considered universal banks.

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.

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 technological roles. He was the director of big data at the research and development center of JSFC AFK Systems. Prior to this role, Alex worked for Mobile TeleSystems, the largest telecom provider in Russia, where he headed the antifraud and cybersecurity systems development.

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Ethereum

BNB price surges as Binance Smart Chain grows in popularity with DeFi

Binance Coin (BNB) has been on an absolute tear in the month of February. It traded at $48.93 on Feb. 1 and grew to trade at $304 at the time of publication, amounting to a 521% month-to-date gain and 707% year-to-date gain.

This price rally has led BNB to become the third-largest cryptocurrency, with a $46.5 billion market capitalization. BNB achieved its all-time high of $342.88 on Feb. 19. This price rally and leap in market capitalization could be attributed to Binance Smart Chain gaining popularity within decentralized finance markets and other macroeconomic factors driving the growth of flagship assets like Bitcoin (BTC) and Ether (ETH) to new all-time highs this week.

While Ether price was rallying to it’s all time highs on Feb. 19, Binance announced on Twitter that they have “ temporarily suspended” withdrawals of Ether and all Ethereum based tokens due to a “congestion issue.” This led to the users not able to trade these tokens for around an hour and left the community speculating what actually happened. This pause led BNB to rise by another $60 in that time while Ether staggered around the same range.

Binance Smart Chain is the main driver?

Apart from macroeconomic factors such as the price of BTC and ETH reaching all-time highs this week, spilling over to drive up the price of BNB, Binance Smart Chain also has been gaining significant traction among the crypto community. BSC was launched in September 2020 and acts as a parallel blockchain to Binance Chain while enabling smart contract functionality and the staking mechanism of BNB, which powers Binance Chain as its native token.

Cointelegraph discussed this further with a spokesperson from Binance, who elaborated on the unique benefits that BSC offers users, saying:

“BSC offers a high-performance and low-fee blockchain network that’s compatible with the Ethereum Virtual Machine. Developers can worry less about transaction fees and focus more on innovating, while using all of the existing developer tooling they are familiar with in the Ethereum ecosystem.”

The entire Binance ecosystem is powered by BSC. Being a global cryptocurrency exchange with extremely high user traffic, it’s highly essential for scalability and low transaction fees to go hand in hand with the BSC ecosystem. BSC is now being used extensively by various DeFi protocols, with the latest to leave Ethereum for the blockchain being multiservice platform Value DeFi and yield aggregator Harvest Finance, which cited cross-chain yield farming as the prime reason for the shift.

The influence of BSC has extended to various DeFi protocols. Venus, an algorithmic money market and synthetic stablecoin protocol designed specifically for BSC, saw the price of its Venus Token (XVS) surge over 750% after it was launched on Binance Smart Chain, from a low of $10.04 on Feb. 2 to an all-time high of $95.90 on Feb. 20. 

Another prominent DeFi protocol on BSC is PancakeSwap, which went on to become the first billion-dollar project on the blockchain. It quickly doubled that to pass $2 billion in market capitalization, owing to the growth of its food-themed token, CAKE. Data from Cointelegraph Markets indicates that the price of the CAKE has surged 973% from a low of $1.89 on Feb. 3 to its all-time high of $20.33 on Feb. 19.

Speaking with Cointelegraph, Ilia Maksimenka, CEO of PlasmaPay — a DeFi investment platform — indicated that PancakeSwap could be one of the main reasons for BNB’s price rally:

“PancakeSwap traded over $400 million in daily volume and briefly became the world’s second-largest DEX. Its [BSC’s] unique propositions of a lottery service and a non-fungible token art platform have furthered PancakeSwap’s use cases.”

BSC gaining amid high Ethereum fees

Another reason for the popularity of BSC is the lower transaction fees when compared with Ethereum, which in its state of high demand sidelines retail investors in the DeFi markets, tailoring it more for whales. While Eth2 proposes to sort the transaction fees issue through its scalability solutions, currently there is a lot of congestion on the network due to the increasing popularity of DeFi protocols, leading to high gas fees for all transactions on the Ethereum network.

William Quigley, cryptocurrency fund manager at Magnetic Capital — a crypto-focused investment firm — told Cointelegraph that BNB’s rise comes down to the congestion on the Ethereum blockchain, adding: “Ethereum has an Uber-like surge pricing mechanism. When demand on the chain is high, the price to quickly process a transaction goes up.”

On Feb. 18, BSC recorded 2.5 million transactions on its network, compared with 1.3 million transactions on Ethereum. The Binance spokesperson explained to Cointelegraph why this might be the case:

“BSC daily transaction volume is up by 300% from YTD and bolsters an ecosystem of 100+ DeFi projects. Furthermore, the platform has succeeded in maintaining GAS costs as low as $0.04. Compared to Ethereum’s $5.53, BSC is 135 times less expensive!”

While Eth2’s phased launch promises speed in its proposed roadmap, history suggests that these launches often miss the deadline, with no clarity of when the actual updates will be done. Since Ethereum will take time to implement its scaling solutions, which should eventually reduce the gas fees on the network, until that point, blockchains like BSC stand to benefit the most from its delays.

The network speed of Ethereum compared with BSC could also be one of the reasons that DeFi protocols are migrating to BSC, as it is comparatively faster. BSC allows 300 transactions per second, while Ethereum, despite its higher transaction fees, can only process 15 transactions per second.

Blockchain disruption

Lower transaction fees and network speed might not be the only reasons that some DeFi protocols are migrating to BSC. The fact that BSC is 100% compatible with DeFi’s flagship blockchain, Ethereum — which allows protocols to deploy their application on top of BSC with no additional changes — is a design victory for Binance. The Binance spokesperson further spoke on some of the other reasons:

“Feedback we have heard is the DeFi protocols are increasingly chain agnostic. The rapid growth of BSC shows the users prefer lower transaction fees. BSC also provides a variety of assets, many of which are not available on DeFi protocols on Ethereum.”

Although various other blockchains like Cardano and Polkadot are trying to break Ethereum’s hegemony in the DeFi and NFT markets, none have quite achieved success at the rapid rate Binance Smart Chain is now witnessing. Disruptive blockchain innovation is bound to push the industry forward by challenging the status quo and pushing blockchain developers to focus on building universal, well-connected blockchains.

Related: DEXs becoming unusable? How to navigate record gas fees ahead of Eth2

Billy Adams, head of ecosystem development at XinFin — an open-source hybrid blockchain platform — told Cointelegraph that he believes blockchains like BSC are beneficial for the entire ecosystem:

“The market is demonstrating an appetite for emerging DeFi solutions, which can provide investor protection, sufficient liquidity for MSMEs and support interoperability between both other blockchains and legacy systems.”

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