Katherine Wu was up until 3 a.m. Wednesday annotating Kik’s response to its complaint from the U.S. Securities and Exchange Commission (SEC).
“That’s what I do for fun,” she told CoinDesk later that morning.
And now Wu is once again employed to dig deep, into startups.
Revealed exclusively to CoinDesk, Wu has been named a principal at Notation Capital, a venture capital firm that invests across the technology sector, including parts of the crypto industry.
Founded by Nicholas Chirls and Alex Lines, Brooklyn, N.Y.-based Notation invests based on its teams’ areas of interest, which has included several blockchain-related investments, such as Filecoin, Livepeer and Bison Trails, to name a few. Notation is also known for investing in the very early stages of a company or project.
In a draft blog post shared with CoinDesk in advance, the company writes:
“We weren’t hiring for this role – and then we met Katherine. For anyone that’s been fortunate enough to spend some time with K-Wu, it’s clear within minutes that she has a unique talent to bring people together, ask the right questions, and then get shit done in a way that is very much her own.”
Last month, the firm hired crypto mining veteran Thomas Bailey. Wu makes it a team of four.
Down the rabbit hole
A graduate of the Cardozo School of Law in New York, Wu discovered crypto while studying to be a securities attorney.
“I fell into crypto first and then fell in love with the tech world later, which I feel like is the opposite of most people,” Wu said. “When I first got into crypto was when SAFT was starting to become a thing and ICOs were starting to become a thing.”
The legal questions raised by those token sales interested her first, but then she became more interested in the technology. “It was simply the most intellectually challenging topic I’d ever come across,” Wu said. “You’re constantly being questioned on every assumption you make.”
She was a member of the founding team at Messari, where she served as director of business development before leaving the crypto data firm in March.
While Wu will not be exclusively crypto-focused at Notation, she does expect to help the company source some of those deals. She’s reluctant to identify specific areas of the industry she’s on the lookout for.
“Because of how quickly the landscape changes and how quickly your assumption changes, it’s sometimes hard to hold onto one cool idea at a time and look at it on a long term horizon,” Wu said, concluding:
“It’s definitely really exciting for me to be given this role to write checks and support businesses if I really feel strongly about that.”
A small bank in New York City has started doing business with cryptocurrency firms, joining the very short list of U.S. financial institutions to embrace the sector.
Quontic Bank opened a checking account for a bitcoin ATM company a few weeks ago and is in the process of completing a contract to deliver banking services to another crypto startup. The bank wouldn’t name either client.
“We’re just taking steps so that when the regulatory environment becomes more crypto-friendly, we don’t have a lot of catching up to do,” said Quontic chief executive Steven Schnall, who acquired the bank in 2009. “We’re looking to diversify our product offering and our customer mix by entering into that field.”
While Schnall wouldn’t say how big he wants Quontic’s crypto business to be, he claimed the pending contract “could impact millions of Americans.”
Crypto-friendly banks are extremely rare, in part because of the extra work they have to do complying with know-your-customer (KYC) and anti-money laundering (AML) regulations.
“Banks and other financial institutions have to look out for any suspicious activity,” said Joshua Klayman, head of the blockchain and digital assets practice at law firm Linklaters. “If you have a startup that raised money doing an ICO and didn’t do proper KYC or AML, that bank doesn’t know who the proceeds are from.”
Like those institutions, Quontic is a relative pipsqueak in the banking industry. With $420 million in assets, it is only 0.015 percent the size of JPMorgan.
Yet Quontic stands out because its leaders caught the crypto bug early on.
Students of crypto
Schnall, a longtime mortgage lender, became interested in bitcoin when it was worth less than $1, bought his first bitcoin at $75 in 2013 and lost 500 BTC in the Mt Gox debacle.
Patrick Sells, now the bank’s chief innovation officer, said Schnall began to educate him on bitcoin the first few times they met, while Sells was doing mortgage lead generation for Quontic through his own firm.
To learn more about the mechanics of cryptocurrency, Schnall and Sells built an ethereum mining operation, independent from Quontic, in January 2018. (Schnall said he is now more bullish on bitcoin than any other cryptocurrency.)
The two executives even came close to launching their own cryptocurrency, also separate from the bank, called QCoin. They lined up $2.5 million for an initial coin offering (ICO) but called it off after the market crashed.
Undeterred by the ups and downs, the bankers said that they believe banking and crypto can have a symbiotic relationship and are exploring what steps toward that goal might look like under the U.S. regulatory framework.
The bankers helped educate their staff of 180 by giving them each $20 in bitcoin when the price of bitcoin was around $3,000, and they’re looking to hire employees with experience in cryptocurrency.
“We can teach them the banking side,” said Sells, vaping in a white v-neck and jeans at Quontic’s Manhattan headquarters. “It’s easier to do that than vice versa.”
While the bank wants to let cryptocurrency companies know that it’s open to banking them, Quontic said it has high standards for crypto customers.
When the bitcoin ATM network approached Quontic a year ago, the company was not prepared for the bank’s compliance vetting.
It didn’t have a disaster recovery plan, it was not properly tracking the currency transaction reports (CTRs) filed to regulators, and the company’s reporting was not up to Quontic’s standards.
After working closely with the bank for a year, the company opened an account at Quontic a few weeks ago.
To Schnall, such professionalism is necessary for crypto startups to be taken seriously.
“You don’t have mom-and-pop financial institutions. You’re not going to have mom-and-pop crypto players of any significance,” Schnall said. “Crypto companies have to have strong controls, internal audit, and a very robust system of compliance.”
Additionally, the juice has to be worth the squeeze for Quontic to bank a crypto firm.
“There must also be a strong strategic motivation for us as well – such as meaningful deposit balances, etc.” Schnall said. “‘Meaningful’ is relative to how complex, risk-laden and labor-intensive the account will be.”
Blockstream has launched a colocation mining service and already counts the Fidelity Center for Applied Technology and LinkedIn founder Reid Hoffman as customers.
On Thursday, the bitcoin and blockchain technology firm announced a new mining wing, Blockstream Mining, along with a BetterHash-based mining pool, Blockstream Pool. Led by cryptographer Dr. Adam Back, Blockstream is best known for its bitcoin-sidechain ecosystem, the Liquid Network.
Blockstream Mining will host colocation services across North America with its most recent installation in Georgia. The announcement stated that 300 megawatts, or 300,000 kilowatt-hours of energy, will be made available to customers.
That level of energy supply would be able to power up around 100,000 more-advanced ASIC mining models such as MicroBT’s WhatsMiner M20S or Bitmain’s AntMiner S17 Pro.
These machines on average have an electricity consumption of about 3 kWh per unit with a hashing power of around 55 terahashes per second. That could add about six exhashes per second to bitcoin network’s computing power (1 exhash = 1 million terahash).
Blockstream says its self-mining efforts currently make up one percent of the global bitcoin hash rate. The future relationship between Blockstream’s self-mining and Blockstream Mining was not specified.
Blockstream CSO Samson Mow says the firm’s mining efforts, even before the latest launch, were largely based on concerns about the network’s future:
“We began self-mining back in 2017 after being motivated by widespread concern that mining decentralization was declining. At the time it appeared that parties involved in ASIC manufacture, hosting, and pool operations were becoming a centralizing force and holding back Bitcoin from reaching its full potential. We figured we could use our Bitcoin expertise to improve the situation.”
In this vein, Blockstream also announced the launch of Blockstream Pool running the BetterHash mining protocol. Introduced in 2014 by Blocskstream project OpenHash, BetterHash decentralizes mining pool decisions, such as which block to mine, to individual owners. Proponents argue it further decentralizes and democratizes bitcoin mining.
Blockstream Pool is the graduate of a one-year testnet and is available to Blockstream Mining customers. As of now, Blockstream Mining is exclusive to enterprises and institutions.
The European Central Bank (ECB) has issued a new report indicating that it plans to use more on-chain data to better monitor the crypto markets.
Titled “Understanding the crypto-asset phenomenon, its risks and measurement issues,” the reportreveals that the ECB has already built a system that uses “high-quality” aggregated data available online in its efforts to analyse “the crypto-asset phenomenon” to identify and monitor how the financial technology might affect monetary policy and the risks it potentially poses to market infrastructures, payments and financial stability.
However, using available data in this way has limits to its value. The report explains that this data leaves “gaps and challenges,” such as the exposure of financial institutions to crypto-assets and payment services that use layered protocols.
It lists, among others, derivatives and investment vehicles’ exposure to digital assets, financial firms moving into custody and other services, and payments platforms using cryptos as potentially having implications for financial policy and stability.
While currently “contained and/or manageable,” such links with regulated financial firms “may develop and increase over time.”
Going into more detail on these issues of collecting accurate data, the EU banking authority says:
“Specifically, it is hard to retrieve public data on segments of the crypto-asset market that remain off the radar of public authorities; some relatively illiquid trading platforms may be affected by wash trading; and there is no consistency in the methodology and conventions used by institutionalised exchanges and commercial data providers. Moreover, new and unexpected data needs may well arise with further advancements in crypto-assets and related innovation.”
Going forward, the ECB plans to go into more granular detail for its analyses of crypto assets, and “will continue to work on indicators and data by dealing with the complexity and growing challenges encountered in analysing on-chain and layered protocol transactions.”
It will further seek new data sources for information on links between crypto assets and regulated firms.
Regarding off-chain transactions – transactions conducted off the blockchain and later aggregated back on-chain in fewer transactions – the ECB said it will work on increasing the “availability and transparency” of reported data and the methods used to provide it, “harmonising and enriching the metadata and developing best practices for indicators on crypto-assets.”
Arrington XRP Capital-backed financial startup Nexo has unveiled a crypto card with a line of credit backed by the user’s crypto holdings.
Nexo partnered with an unnamed intermediary to issue the card, which offers a way for users to “spend the value of their crypto without actually spending it,” said firm partner Antoni Trenchev.
Unlike other crypto credit cards like TenX and Crypterium that convert cryptocurrencies to fiat for every transaction, Nexo collateralizes users’ crypto and supplies them with a fiat loan. Since its founding, the startup has extended more than $700 million in crypto-collateralized loans to over 200,000 clients. Now, the loans can be used to make purchases at merchants that accept MasterCard, through a co-branding.
After swiping, an oracle confirms the user has enough collateral to cover the purchase, instantaneously executes a loan, and settles the transaction in fiat. Trenchev claims the card’s issuer is licensed within the European Economic Area.
Through additional partnerships with intermediaries, Nexo aims to expand to the U.S. and Asia by the end of the year.
The cards are available independent of a client’s credit history, as the staked collateral reduces default risk. Likewise, interest rates are set between 8 and 24 percent APR based on the loan structure and local regulations.
Users can repay their loans in either crypto or fiat, though using Nexo’s token will reduce interest rates to 8 percent. Additionally, minimum payments will be eliminated if the value of bitcoin increases. This is because the credit line is “dynamic,” meaning as the value a client’s collateralized assets increases relative to the market, their fiat debts decrease.
In fact, crypto entrepreneur Brock Pierce mortgaged a house in Amsterdam through a $1.2 million line of credit through Nexo, and hasn’t made a single repayment due to the rising value of bitcoin since he took the loan, Trenchev said.
Conversely, if cryptocurrencies crash, users will either have to “deposit more crypto, pay a part of their loan to reduce exposure, or sell a portion of their collateral to restore the loan-to-value ratio,” Trenchev said.
The company complies with know-your-customer ustomer protocol, follows international sanctions, and has integrated with blockchain investigators Chainalysis to check if collateralized crypto has been ill-gotten, it says.
Nexo has previously paid out dividends of 30 percent on $3 million of profit made during its first 7 months in operation to token holders.
Bitcoin.com has announced it will launch a crypto exchange called Exchange.Bitcoin.com.
Price of BCH last 30 days via CoinDesk data.
This is the latest addition to a suite of products Bitcoin.com provides beyond their news service. The company has also developed a crypto casino, a wallet, and a P2P bitcoin cashexchange, aimed at furthering the utility of the forked alternative to bitcoin.
“While our company thinks the bitcoin cash network will be adopted by the masses worldwide, we also think it’s important to promote free markets and choice,” the company said in a statement.
Expected to launch in early September, the exchange will list many of the largest capitalized coins including bitcoin, ethereum, and litecoin. Additionally, it plans to offer around 50 trading pairs, as well as Simple Ledger Protocol (SLP) tokens tied to the BCH blockchain.
Former CEO and proponent of bitcoin cash Roger Ver said:
“We’re on the cusp of something very exciting with SLP tokens — It’s the beginning of a world where we can tokenize anything and, as people realize the potential this holds, they’re going to start demanding a place to trade their tokens.”
The Financial Intelligence Unit (FIU) of South Korea’s Financial Services Commission has revealed plans to bring cryptocurrency exchanges under its direct regulation.
On August 7, Business Korea reported on the FIU’s decision to shift away from its current practice of regulating crypto exchanges indirectly by providing administrative guidance to domestic banks.
A shift away from indirect regulation
In order to bring crypto exchanges into the country’s regulatory system, an FIU official revealed on Aug. 6 that the South Korean government will introduce a crypto exchange licensing system, as recommended by the Financial Action Task Force (FATF). This will reportedly enhance the transparency of cryptocurrency transactions.
At a public hearing held at the National Assembly Member’s Office in Seoul, Lee Tae-hoon — who serves as head of administration and planning at the FIU — stated:
“If an amendment to the Act on Reporting and Use of Certain Financial Transaction Information, which reflects the FATF’s international standards for cryptocurrencies, passes the National Assembly, it will be possible to prevent money laundering through cryptocurrencies.”
Lee added that should lawmakers approve the decision to shift away from “indirect regulation through commercial banks to direct regulation,” oversight of the sector would be more effective.
Commentators reportedly noted that regulatory amendments would need to integrate existing stipulations, which hold that banks must issue real-name accounts to crypto exchanges. This would ensure that crypto exchanges adhere to the same know-your-customer and anti-money-laundering standards as traditional financial institutions.
Impact of FATF guidance
This week’s news aligns with recent unofficial reports that four South Korean crypto exchanges were facing stricter regulation as they attempted to renew their banking accounts.
The tightened requirements were reportedly imposed in the wake of the FATF’s new June 2019 guidance for strengthening control over crypto exchanges in order to better combat money laundering.
Amazon is looking to hire a software development engineer to develop an advertisement blockchain.
Amazon works on an advertising blockchain
Amazon posted a job offer on LinkedIn for a software development engineer for its Colorado team, who is supposed to work on an advertisement blockchain. The online retail behemoth aims to grow its advertisement business by leveraging its online retail data, industry-leading cloud services, and a fast-moving startup culture. The post declares:
“Our new team in Boulder, CO is looking for a Sr Software Engineer to work within our Advertising FinTech team focused on a Blockchain ledger, billing and reconciliation systems to provide data transparency on transnational financial data.”
An important role
The chosen engineer’s role will consist of requirements analysis, lead design, implementation and deployment of core components, interfacing with engineers and program managers. The position will also be responsible for the operational support and maintenance of the systems.
Furthermore, the engineer will also “have an opportunity to define the technical and architectural roadmap for the systems.” The company noted that it prefers candidates with experience in the advertisement, financial technology and blockchain.
As Cointelegraph reported in May, Amazon has been awarded a patent for generating Merkle trees as a solution to the Proof-of-Work algorithm. Still, the exact plans of the company remain unclear.
Public enterprise blockchain platform VeChain has partnered with Autralian winemaker Penfolds to release a case of blockchain-encrypted wine bottles for sale, as part of its Wine Traceability Platform (WTP) initiative.
More specifically, the launch of Penfolds Bin 407 in July marks the beginning of VeChain’s WTP phase 2, per a press release from VeChain on Aug. 6. The bottles from this case are reportedly available at the Waigaoqiao International Alcohol Exhibition & Trading Center, D.I.G.’s Flagship Store and the Sen Lan Shang Du in Pudong New District.
As per the press release, each bottle inside Bin 407 comes attached with an encrypted NFC chip. This chip reportedly contains the bottle’s product information on a blockchain, which can be accessed with a chip reader. These details reportedly include the bottle’s provenance information, which is verified by third-party auditors.
Blockchain for wine
A number of companies are beginning to issue blockchain verification systems for wine. As previously reported by Cointelegraph, the big four audit firm Ernst & Young announced that it’s Ethereum-based blockchain solution will be used to verify the authenticity of imported European wines in Asia. This solution would reportedly be implemented on the e-commerce platform Tattoo, for use by Blockchain Wine Pte. Ltd.
Near the end of July, the Chinese alcohol wholesaler and marketer also announced that it would be using a blockchain solution to verify its products. This solution purportedly makes use of proprietary anti-counterfeiting laser recognition for certification and blockchain technology for tracking.
On a slightly different note, retail giant Overstock announced its move into blockchain-based wine futures back in Oct. 2018. Overstock reportedly also intended to fight wine fraud, but in this case by means of developing a digital trading platform for wine futures. This would reportedly result in a secure supply chain that verifies wine industry products, they said.
Overstock founder and CEO Patrick M. Byrne commented on the company’s idea, saying:
“Like any economy, the wine industry has difficulty scaling its middlemen-heavy systems in parallel with the growing demands of an increasing global market. VinX’s steps in tokenizing wine futures while allowing wine enthusiasts to know without a doubt that the bottles they purchase are filled with authentic wines will position the entire industry as a model of a new global economy that replaces old boys’ networks with frictionless trust through technology.”
- Bitcoin could rise to $10,500 in the next 24 hours or so, as the 4-hour chart is looking more bullish.
- A break above $11,120 is needed to revive the short-term bullish outlook, though.
- Some expert believe the just-announced U.S. Fed interest rate cut could bode well for BTC in the long-run.
Bitcoin (BTC) has eked out moderate gains amid the U.S. Federal Reserve’s announcement of its first rate cut in over a decade.
The top cryptocurrency by market value is currently trading at $9,950 on Bitstamp, representing a 2 percent gain on a 24-hour basis.
The Federal Reserve (Fed) on Wednesday said it will lower interest rates by 0.25 percent to cushion the economy from a global slowdown and trade tensions. That was the first U.S. interest rate cut since the great financial crisis of 2008, and indeed since the creation of bitcoin in 2009.
BTC rose by over $200 to $10,000 in the three hours leading up to the Fed’s announcement at 18:00 UTC. More importantly, the cryptocurrency remained bid in the following hours and hit a high of $10,172, according to Bitstamp data.
The price action seems to have convinced investors that BTC picked up a bid due to Fed’s rate cut.
Boon for bitcoin?
Some observers believe rate cuts by the Fed bode well for BTC.
This is because an interest rate cut reduces the yield on a currency. Further, the liquidity added to the economy via rate cuts often leads to inflation and loss of purchasing power of the currency.
Put simply, falling interest rates mean fewer reasons to hold U.S. dollars, as pointed out by Alan Silbert, executive managing director at INX Trading Platform.
Silbert believes the Fed will deliver more rate cuts in the near future. The central bank, however, refrained from signaled further easing yesterday.
The Fed has cut rates less than 12 months away from bitcoin’s mining reward halving – a process aimed at curbing inflation by reducing reward for mining on the blockchain by 50 percent every four years.
Essentially, BTC’s monetary policy is on a preset path – its supply is halved every four years.
The monetary policy divergence would widen further if the Fed embarks on a full-blown easing cycle, as anticipated by Silbert. That would further strengthen bitcoin’s appeal as store of value and may bolster the bull market.
As for the next 24 hours, bitcoin looks set to test key average located at $10,500.
BTC rose above $10,000 yesterday, validating the seller exhaustion signaled by the long-tailed doji created on the 4-hour chart on July 28.
That bullish doji reversal indicates that the sell-off from recent highs above $13,000 has ended and the path of least resistance is to the higher side. The descending triangle breakout confirmed yesterday also indicates a bull reversal.
Notably, buying volumes picked up following the price breakout. The green volume bar created in the four hours to 16:00 UTC yesterday was the highest since July 19.
Hence, the cryptocurrency may rise toward $10,500 (50-day moving average) over the next day or two. However, the outlook as per the daily chart would turn bullish only if and when BTC invalidates the bearish lower-highs pattern with a move above $11,120.
The case for a rise to the 50-day MA in the next 24 hours would weaken if prices find acceptance below yesterday’s low of $9,574, although that looks unlikely.
Lightning-centric bitcoin wallets are gaining traction in 2019 and making small transactions affordable by reducing network fees.
The bootstrapped Spanish startup Bluewallet garnered 35,000 downloads so far this year, according to co-founder Nuno Coelho, a significant jump from the 5,000 users it had in 2018.
Coelho told CoinDesk the wallet’s built-in lightning marketplace, offering connections to external services like the crypto exchange ZigZag, the blog Yalls and games like Lightning Roulette, facilitates nearly 10,000 referrals a month. So far, BlueWallet users have completed more than 100,000 lightning transactions.
“The things we are working on now are to prepare the wallet for the next bull run,” Coelho said. “To allow users to have more control over the fees when the market will be with higher fees.”
After a year of operations, Bluewallet is currently raising its first round of venture capital. It is hardly alone. Competition across the marketplace is ramping up with a crop of new wallets seeking funding to support lightning development, sources told CoinDesk.
The price of bitcoin over the last 30 days via CoinDesk data.
In June, the Lightning Labs wallet launched and attracted 2,000 downloads within the first 24 hours. That same month, the bitcoin wallet provider Samourai Wallet announced a partnership with the French lightning node-maker Nodl to make the mobile wallet lightning-compatible.
At the same time, Zap wallet creator Jack Mallers told CoinDesk that 500 Android users downloaded Zap since early June. This summer could be described as a lightning boom for product development.
Plus, Mallers added, Zap now has more than 25,000 desktop downloads and 1,000 active TestFlight users on iOS.
“Not only are they downloading it, but the applications are actually checking assets because they’re using it and the wallets are open,” Mallers said. “On average, we get thousands of asset downloads a day. That means we have thousands of active users.”
According to Google’s analytics, Mallers said, only 33 percent of those users are located in the United States. While Bluewallet has far more American users, Coelho said his company’s wallet also appears to be gaining traction in Indonesia, the Philippines and Japan, based on App Store data and the times that users interact with the product.
Across the board, all of these apps share a common trait: They lack a clear business model.
However, for some, that process might be seen as a feature, not a bug.
“It’s not our main priority to focus on a business model at the moment,” Coelho said. “It’s our priority to … put product out there and talk to users.”
Like Coelho, Mallers said he is not in a rush to profit from this wallet because playing the long game means focusing on users for now. Lightning Labs developers told CoinDesk the startup will offer premium services for wallet users in the future, but collecting fees from users isn’t a priority for their team either.
“It wasn’t very clear how a lightning wallet would make money. A lightning wallet’s point is to help with scaling,” Mallers said.
Most mainstream wallets like Jaxx and Bread earn revenue by taking a percentage of transaction fees. They also rely on other revenue models like fundraising tokens (Bread) or integration partnerships (Jaxx). Meanwhile, open-source wallets like Bluewallet and Zap de-prioritize the business model as they seek to stabilize the product with the help of volunteer contributors.
“You cannot accelerate the development of bitcoin,” Coelho said. “We see this as a long-term project, from 5–10 years.”
So far, most of these wallet apps rely on an autopilot setting rather than making users manage channels and independent nodes. Coelho said those options for experts will come with time, considering that the LND beta version many such wallets are experimenting with is just one year old.
As such, Coelho concluded:
“Our goal was just to show this is what lightning could be in the future.”
Bitcoin futures platform Bakkt is gearing up to launch soon, the head of its parent firm said Thursday, although he did not set a firm timeline.
Intercontinental Exchange (ICE) CEO Jeffrey Sprecher, speaking during a quarterly earnings call, said Bakkt is “working to develop a regulated ecosystem that services the evolving needs of [participants] around the world,” adding:
“Subject to final regulatory approvals, we plan to launch our physically settled bitcoin futures in the very near future.”
Sprecher did not provide a specific timeline.
Bitcoin prices over the last seven days via CoinDesk data.
ICE first announced Bakkt in August, unveiling an ambitious plan to offer physically-settled bitcoin futures contracts and additional work with Microsoft, Starbucks and BCG Consulting.
While the company initially planned to launch the platform in December 2018, Bakkt was delayed a number of times, and does not currently have a firm launch date.
Bakkt initially intended to have the Commodity Futures Trading Commission (CFTC), which oversees derivative products in the U.S., approve its futures contracts, but ultimately self-certified.
The company is now waiting on a trust charter from the New York Department of Financial Services. Once NYDFS approves Bakkt’s warehouse, the company will be able to launch its new product.
The company is facing competition, however: TD Ameritrade-backed ErisX is also planning to launch physically-settled bitcoin futures contracts, and LedgerX announced Wednesday that it had already gone live with a product.
Bakkt aside, ICE generated $1.3 billion in revenue across the second quarter, according to a release.
ICE chief financial officer Scott Hill said ICE intends to launch its ETF Hub, a single portal for traders to take part in the exchange-traded fund market, in the coming months. The company believes the ETF market might double in the next few years.
Payments company Square reported its second-quarter earnings Thursday, revealing $125 million in bitcoin sales through its Cash App, nearly doubling a record first quarter.
“During the quarter, bitcoin revenue benefited from increased volume as a result of the increase in the price of bitcoin, and generated $2 million of gross profit,” the earnings report explains.
Founded by Twitter co-founder Jack Dorsey, Square reported that bitcoin represented very nearly half of the total revenue on its Cash App, at $260 million, for the second quarter of 2019. Bitcoin costs, however, are listed at $122.9 million in the unaudited quarterly report, yielding the aforementioned $2 million in profit.
On an investor call Thursday afternoon announcing the numbers, Dorsey said:
“We love you, bitcoin.”
The first quarter of 2019 was Square’s best quarter for bitcoin at the time, with $65.5 million in revenue and $832,000 in profit. Clocking $125 million in sales in the second quarter, however, represents significant growth and a new record for the company. For comparison, the company reported $166 million in bitcoin sales in all of 2018.
With a net loss for the quarter of $6.7 million on $1.17 billion in total revenue, bitcoin remains a long way away from the center of Square’s overall strategy. Transaction-based revenue in Q2 topped $775 million, according to the report.
The company sells bitcoin to users through its Cash App, a service that expanded to all 50 U.S. states in August 2018.
Earlier this week, the company clarified the role of Square Crypto, a project within the company created to make open-source contributions to the bitcoin protocol and ecosystem.
A senior research director at market intelligence firm CB Insights told CoinDesk he believes adding bitcoin is helping Square drive more usage from its customers.
“They don’t really make a lot of money on it, but it is driving engagement,” Chris Brendler said.
Canada’s transcontinental railway, Canadian Pacific (CP), has joined the Blockchain in Transport Alliance (BiTA). CP announced its new membership in an official press release on July 31.
According to the announcement, CP is looking to support improvements in supply chain technology through blockchain technology. BiTA says that by joining the group, CP is helping them to drive global supply chain interoperability.
BiTA president Patrick Duffy also commented on the potential benefits of blockchain in the transportation sector, saying that the new tech “has the potential to smooth the transactions that occur between shippers and carriers, but it requires the active participation of transportation leaders like CP.”
The Blockchain in Transport Alliance
According to the announcement, BiTA has nearly 500 member organizations in the freight, transportation, logistics and affiliated industries. Members reportedly share a common goal of facilitating the adoption of new technology in these sectors, and work to both establish industry standards and provide education on blockchain solutions and distributed ledger technology.
As per a report by the Canadian Broadcast Corporation, Duffy expounded on the issue of transportation currently requiring multiple tracking systems, saying that more systems means more room for human error:
“When you order a pair of shoes and they’re manufactured in Vietnam, currently the information you put into the website where you order those shoes goes from a website into an ERP [a type of business management software] that’s transmitted to a manufacturer’s system … the possibilities of the number of people involved and the number of technology systems involved, it grows exponentially […] At each one of those steps there’s an opportunity for human-induced error.”
The blockchain-based decentralized internet browser Brave now allows Twitter users to tip content creators with its native Basic Attention Tokens (BAT).
Brave discussed the public launch of its token tipping service in an announcement on Aug. 1, wherein users can reportedly specify the amount they wish to tip a given Twitter account, and the recipient will receive their tip in BAT directly.
The announcement also lists a number of features associated with the tipping service, including setting up regularly recurring tips as well as a mechanism for Tweeting at a tipped creator to tell them how to claim their donation.
Brave began testing its Twitter tipping service in May on its testing and development browser version called Brave Nightly.
As detailed in the announcement, the new feature comes as new in-browser offering via Brave Rewards. Users who have opted into Brave Rewards will now see a tip option on Twitter posts when viewing Twitter through their Brave desktop browser. Brave Rewards also supports tipping on YouTube and Twitch, and will reportedly be coming to Reddit, GitHub and Vimeo.
Brave Rewards users can also earn the token by watching privacy-preserving ads or through traditional purchases.
At press time, BAT has a market capitalization of over $302 million and is trading at $0.237, down 3.4% on the day, according to data from CoinMarketCap.
The National Basketball Association (NBA) and Dapper Labs are teaming up to announce the launch of a digital platform for blockchain-based collectables, NBA Top Shot.
According to the companies, fans of the game can buy, sell, and trade digitally collectable in-season moves like “Kevin Durant’s 3-point shot or Joel Emiid’s dunk.” Digital collectables can be used for on-chain games or tournaments.
Similar to current products like NBA 2K, Dapper’s NBA Top Shot allows users to acquire players and build rosters with an additional hook: purchasing specific moves from the prior season.
Dapper Labs next product comes two years after the launch of CryptoKitties, the number one blockchain-based game, and months after a pre-sale and of its second major game, Cheese Wizardz.
The National Basketball Association is joined by the National Basketball Players Association (NBPA), a player’s union founded in 1954. Speaking on the matter, NBPA commerical executive Josh Goodstadt touts Dapper’s product as “an entirely new way for fans to connect with their favorite athletes.”
“We believe blockchain technology creates a truly unique product that fans can collect, manage and engage within a fun environment.”
NBA Top Shot Collectibles is set to launch this fall in time for the NBA’s regular-season tip-off, with the full game going live in early 2020. Per an email, Dapper Labs says they are “working directly with the [NBPA] to make sure players benefit from the experience.”
Dapper’s product is not the first introduction between blockchain and major league sports: the Cleveland Cavaliers recently signed UnitedCoin as its official cryptocurrency with the Miami Dolphins signing with the Litecoin Foundation last month.
Kyoto University and the University of Tokyo have joined Ripple’s University Blockchain Research Initiative (UBRI) per CoinDesk Japan. The 2018 program now boasts 33 participants including Princeton University, Carnegie Mellon, and the National University of Singapore, among others.
Ripple committed $50 million toward the project to develop blockchain, cryptocurrency, and digital network programs. Funds sent to the Japanese universities will fuel undergraduate, graduate, and PhD studies. The University of Tokyo will also issue scholarships with the funds.
“University partners will continue to increase positive awareness of the transformative impact that blockchain technology will have across various industries,” SVP of Global Operations at Ripple Eric van Miltenburg said. “As the industry matures, the academic community plays a pivotal role in paving the road for innovative companies and entrepreneurs leveraging blockchain technologies and digital assets.”
Price of XRP over the last 30 days via CoinDesk data.
Academia continues to play a role in Ripple’s roadmap. The payment network announced commitments to the Brazilian Universities of São Paulo and Fundação Getulio Vargas in June as part of a greater South America investment strategy. At the time, Ripple reported it was adding two to three financial institutional partners to RippleNet per week in the region.
Competition for the firm is greater than ever, however. A recent testing report from dominant financial network SWIFT showed quickening settlement speeds. Test runs through 17 participants averaged 25 seconds per transfer. The fastest settlement took all of 13 seconds.
Still, quarterly sales for Ripple’s XRP are on the rise. Ripple’s Q2 numbers were up 50% with $251.51 million XRP sold. Following inflation criticisms, Ripple plans on slowing its sales across the board in Q3.
Two groups seeking to promote blockchain technology in the Asia-Pacific have officially merged.
Announced July 22, the Australian Digital Currency Association (ADCA) and Blockchain Australia (BA) signed documentation that will see the two groups formally combine efforts under the BA logo and brand.
ADCA is the industry’s leading network for businesses seeking to implement blockchain solutions while BA is the industry body that represents domestic organizations participating in the crypto asset economy.
Bitcoin versus the Australian dollar via CoinDesk data.
The announcement, as well as the unveiling of the group’s new logo, took place at the Annual APAC Blockchain Conference in Sydney.
Further, the news was presented by the assistant minister for Superannuation, Financial Services and Financial Technology, the Hon. Senator Jane Hume, demonstrating government support for the merger and future developments from the Australian blockchain community.
“I’m absolutely delighted to see that ADCA and BA have decided to merge, having a consistent and united voice advocating for the responsible adoption of blockchain technology,” Hume told attendees. “We need to recognize the potential for Australian blockchain businesses to tap into the demand that’s deriving from Asia’s growing middle class.”
The official merger was hosted by the Sydney Stock Exchange (SSX) and witnessed by directors and members from both organizations.
Nick Giurietto, CEO and managing director of BA, told CoinDesk:
“Bringing the two organizations together will allow the whole Australian blockchain community to speak more clearly and consistently to key stakeholders including governments and regulators and will strengthen the connections between all parts of the Australian blockchain ecosystem.”
“The merger of our two organizations creates a stronger and more united voice,” added Adam Poulton, director on the newly formed organization’s board.
Those involved in the new organization hope the merger will open pathways for greater opportunities and advancement in the APAC region.
Yesterday, ethereum celebrated its fourth birthday.
Four years ago, on July 30, 2015, the world’s first general-purpose blockchain platform went live. Called ethereum, the platform was the first of its kind to feature a Turing-complete virtual machine and native programming language able to deploy code of any algorithmic complexity.
“Before ethereum, developers had to design and write extremely complex software,” blockchain researcher Mihailo Bjelic told CoinDesk. “Ethereum introduced a generic programmable layer which abstracted this whole process and enabled developers to build decentralized applications by only writing their applications’ core logic.”
There are roughly 800 monthly active developers building on the ethereum blockchain, according to new data from investment firm Electric Capital.
“This means that the ethereum ecosystem is experimenting an order of magnitude more than almost every other ecosystem,” said Electric Capital founder Avichal Garg.
Ether prices over the last 12 months via CoinDesk data.
That said, ethereum is no longer the only general-purpose blockchain in the world, nor even the most active by some metrics. The most recent quarterly report from Dapp.comshows that while ethereum is still the first choice for developers, other decentralized application (dapp) platforms such as Tron and EOS surpass ethereum in the number of active dapp users.
That leaves many industry observers wondering where ethereum will be in another four years. Will it retain its lead as a general-purpose blockchain platform in the face of a fast-rising competition?
Eric Conner, founder of information site ETHHub and product researcher at blockchain startup Gnosis, said:
“I think in four years, Ethereum will be moving past the hardest parts of its ambitious goals around proof-of-stake and scaling. At that point, the network will be able to onboard more users and we’ll start to grow beyond the use cases we are seeing today.”
Both proof-of-stake (a comparatively more eco-friendly version of the current consensus algorithm on ethereum) and scaling are bundled into an ambitious upgrade called ethereum 2.0 that many, not just Conner, envision to be completed in the next four years of ethereum’s existence.
Said Anthony Sassano, marketing and growth lead at ethereum-based startup Set Protocol:
“I believe that ethereum will achieve the original ‘world computer’ vision within the next four years because Ethereum 2.0 will have completed its roll-out. We will have mature scaling solutions (at all layers) and we will have proper privacy solutions.”
Ethereum’s future as money
At the same time, it’s not just core bottlenecks in the technology limiting transaction throughput and efficiency that experts say will need to be resolved about ethereum in coming years. Others both within and outside of the ethereum community say in the next four years, ethereum will also have to overcome challenges associated with its monetary identity.
Yaz Khoury, director of developer relations for the Ethereum Classic Cooperative (which helps build the protocol for ethereum’s sister chain, ETC), said:
“[Ethereum] is still struggling with a monetary identity. It’s not so much a cryptocurrency as much as a dapp market and network.”
Prices for ether classic over the last year via CoinDesk data.
To this, Ryan Sean Adams, founder of another crypto investment firm called Mythos Capital, sees ethereum establishing itself as a digital currency in four years time.
“Four years from now, it’ll be obvious that ETH isn’t a utility coin, it’s money. A programmable store-of-value money,” he said. “Lending, borrowing, trading, saving. Each of these will be public protocols in the ethereum economy.”
As such, MakerDAO’s Conti thinks ethereum 2.0 and scalability challenges aren’t all that important to the immediate future of the protocol.
The continued growth of decentralized finance applications, on the other hand, is.
Mariano Conti, the MakerDAO Foundation’s head of smart contracts, said via email:
“I honestly believe that even if Ethereum 2.0 is significantly delayed, what we have right now is good enough for proper Decentralized Finance in the next three or four years. I expect more companies paying their employees streaming salaries in DAI. … I also expect (dread) the first big DeFi hack to happen soon, and this’ll be something to watch out for.”
What ethereum investors are saying
On the flip side, major investors in ethereum say they aren’t worried about how the platform will transform in the next few years. On the contrary, progress in the last four years of ethereum’s existence has only proven to cement the technology’s lead.
“Ethereum has progressed significantly in making it easier for developers to build,” said Scalar Capital founder Linda Xie. “There’s improved language, tooling and infrastructure. It’s still a work in progress but it’s much easier to build an application now than in the early days.”
Mythos Capital’s Adams estimates that close to $15 billion worth of tokenized assets have been generated on ethereum thus far. These assets will continue to snowball in popularity and generate even greater value for the ethereum platform in future years, says Adams.
“We’re also seeing a first generation of [decentralized finance] protocols [on ethereum], with $500 million locked in lending and exchange protocols over the last 18 months,” Adamas said via email. “These protocols will form the banking layer of this new open finance system.”
2019 alone has been and will continue to be an inspiring year for ethereum, said Paul Veradittakit, a partner at Pantera Capital, the oldest U.S. bitcoin investment firm which has invested in over 20 different ethereum-based startups to date.
“The Ethereum community has stayed focused during bull runs and kept faith during the crypto winter,” Veradittakit said, adding:
“That focus on building is really paying off, and the ecosystem is healthier and richer because of it. So many great Ethereum projects are set to launch this year, and it’s been incredibly inspiring to watch.”
A team of former Royal Bank of Scotland (RBS) engineers is bringing trading and settlement of digital assets, including cryptocurrencies, to a private blockchain network originally developed for enterprise.
Revealed exclusively to CoinDesk, London-based LAB577, led by ex-RBS innovation lead Richard Crook, is rolling out its first platform offering, the Digital Asset Shared Ledger (DASL, pronounced “dazzle”). DASL is built on top of the Corda Network, the open-source blockchain system created by R3, a bank consortium that once personified the “blockchain, not bitcoin” ethos of 2015-2016.
As such, it’s a sign of how much the industry has evolved that DASL will be used to facilitate the trading of bitcoin, ether, and the like.
Crook told CoinDesk:
“Crypto is clearly converging with blockchain. We spent quite a lot of time in 2015 separating the two, to make sure we could have a conversation about blockchain, and now here we are converging the two back.”
Ether prices over the last 12 months via CoinDesk data.
LAB577 is working with prime brokerage BCB, which will park its clients’ assets, both fiat and crypto, with custodians; mirrored representations of these assets will trade on Corda, in a process known in blockchain parlance as layer 2 settlement.
(A similar arrangement is in the works to bring ethereum tokens onto the architecture R3 is building for Swiss stock exchange SIX.)
In this way, investors will be able to conduct both legs of a trade, whether fiat-to-crypto or crypto-to-crypto, on the same system, and have them settle instantly and simultaneously, instead of waiting days for a bank transfer, or minutes (sometimes hours) for a public blockchain confirmation.
BCB says it has a pipeline of clients to bring to Corda via DASL including a couple of big banks.
Oliver von Landsberg-Sadie, BCB’s founder and CEO, said his firm is already live with a couple of beta clients, settling ethereum and British pounds bilaterally in a kind of closed environment.
“It is live in the sense that it’s using the live Corda network and live Corda nodes, but not yet a released product out in the wild,” he told CoinDesk. (Crook said BCB will be migrating from its old tech stack over the coming months.)
Apart from speed, Crook said plugging a crypto prime brokerage into the Corda Network (the free, open-source version of R3’s tech) makes sense because you have to be a known legal entity to operate on that network.
Richard Crook on stage at TechXLR8, image courtesy of LAB577.
In other words, banks and financial institutions can rest assured they are meeting things like anti-money-laundering and sanctions compliance.
“DASL wants to assist those regulated financial institutions to be able to deal with digital assets,” said Crook. “It could be something they want to issue themselves like debt or equity. It could be cash. And some of them do want to handle crypto.”
For prime brokerages, a core challenge of crypto is negotiating a host of network structures, wallets, proprietary blockchain protocols and so on. Similarly, on the fiat side, a unified settlement layer is lacking, said Landsberg-Sadie. The U.K. has a leg up with its Faster Payments system, he added, but firms still have to deal with a mishmash of payments systems in different jurisdictions.
Landsberg-Sadie pointed to certain operational challenges around storing and moving crypto safely, and also accounting for it in a unified way, adding:
“What we have always been on the lookout for is something which is a credible institutional bridge and a kind of settlements layer for cash and for crypto.”
To be fair, similar sorts of off-chain settlement arrangements have been created recently. These include tie-ups between custodians and trading firms (BitGo with Genesis Trading; Kingdom Trust and OTCXN) and networks built by crypto-friendly financial institutions for their clients to trade with each other (Silvergate Bank; Signature Bank; and Prime Trust).
In the DASL solution, BCB parks crypto in cold, or offline, storage with Volt, a crypto custodian which works with insurance broker Aon. The equivalent in the fiat world is physical bank accounts, which in the case of British pounds will be BCB’s banking partner, ClearBank, said Landsberg-Sadie.
Using Corda as a settlement layer also addresses the scaling problem which has dogged the cryptocurrency industry for years, added Landsberg-Sadie. Two counterparties exchanging a bunch of litecoin, for example, would be unaffected by the transaction time of the public blockchain to settle.
“You don’t need to move the physical litecoin out of its cold storage, you can just represent these as ledger entries on Corda,” Landsberg-Sadie said.
Stepping back, settling the fiat side of trades on a blockchain instantly with cash on the ledger is an alluring proposition well beyond the crypto markets.
A lot of work is being done to bring digital fiat to distributed ledgers, with projects like Utility Settlement Coin drawing a lot of attention.
Crook, whose team started the work of building bridges between public and private blockchains while at RBS with projects like Cordite, said the likes of BCB and also SDX coming on Corda creates a rising tide which will also lift pure enterprise plays being built on the network.
“In the case of trade finance, you want to have stores of value on-chain which the Marco Polos and the TradeIXs of the world can use,” he said, referring to a Corda-based trade finance consortium. “So you can get the goods and services to flow one way across the ledger and the payment for those goods and services to flow the other way on the same ledger.”
Coinbase Custody announced the addition of the recently Reg A+ certified Props token to its custodial listings.
The institutionally-weighted, and independently-funded custodial wing of Coinbase will provide cold storage as well as a wallet for holders of Props. The tokens were designed by YouNow developers as a way to reward users of the platform and its content creators.
Furthermore, the Coinbase wallet will act as the default wallet offered by YouNow to users.
“This wallet has a tighter integration with the YouNow app, which makes for a smooth UX when using Props,” according to a company statement. YouNow has a 47 million user base.
Currently available on YouNow, with three additional applications announced, Props’ unique Reg A+ investment structure, and regulatory status, acts as an incentive for users to build upon and disseminate the platforms on which the tokens operate by giving holders a vested interest in the platforms’ success.
Indeed, Yonatan Sela, Co-founder of Props, told CoinDesk that since launching earlier this month, more than 230,000 individuals have acquired Props through engaging with either YouNow.
Additionally, while he couldn’t disclose hard figures, Sela said YouNow has seen “content creation increase by double digit figures [since the introduction of the Props rewards incentive], which is huge for a platform all about content creation.”
As part of the regulatory arrangement, which took approximately a year to sort out, Props are fully transferable between participating wallets and platforms, but cannot be exchanged for fiat currency. In this sense, Props function as a utility token, bound to its specific purpose.
However, through the Coinbase Custody listing, the institutional investors and major content creators that hold Props will be able to shield their funds with an industry-recognized custodian. All digital assets with Coinbase Custody are segregated and covered by the company’s insurance policies. Sam McIngvale, CEO of Coinbase Custody, said in a statement:
“No other platform can offer the safety and protection of our technology and comprehensive insurance. But more than that, for projects like Props where network participation and validators are critical to the chain’s operation, Coinbase Custody offers the only option that allows for both the secure cold storage of assets and the ability to interact with the network.”
Sela noted in 2017, Props pre-sold $21.5 million tokens to such investors, who “have received the tokens, and have meaningfully exposure.” He said these holders include Union Square Ventures, Comcast, and Coinfund.
Though the token has attracted a number of institutional investors, Sela also stressed the amount of holders who first came to cryptocurrencies through being rewarded with Props.
“It’s an experiment to see what happens when putting a crypto token in hands of real world people that are attracted by its utility.”
American tech giant Seagate has entered the pilot stage of its blockchain project designed to fight counterfeit hard disk drives (HDD), Forbes reported on July 30.
This pilot is a part of the joint initiative Seagate and IBM launched last November. The project aims to help manufacturers, integrators and business partners to better authenticate the provenance of HDDs by using IBM’s Blockchain Platform.
According to Seagate’s data security research group managing technologist Manuel Offenberg, in the pilot IBM “is both the customer of these drives, as well as the technology provider for the underlying Hyperledger Fabric platform”.
Seagate’s blockchain is designed to improve the supply chain of hard drives and track products to the customers and back to the company in the event of a return.
Personal data protection
With this move, Seagate also intends to ensure that HDDs returned due to defects contain no customer personal data. Mentioning a so-called “certified erase” as a solution, Offenberg said that the company wants “to make sure that these devices have no PII [personally identifiable information] data on them,” adding:
“When a drive fills in a customer’s system and the drive comes back as part of its returns process, if we can prove that the drive was cryptographically erased, and therefore, the information is no longer on the device, then, from a risk perspective, this reverse supply chain can treat that device differently.”
Speaking further about the preliminary work with IBM, Offenberg said that the company is “involving the cryptographic identity of the device in the blockchain transaction, such that the digital trust of the product itself is part of the transaction.” According to Offenberg, Seagate is also planning to extend its partner network in the reverse supply chain.
As a recent study by the market research and consulting firm Allied Market Research shows, the global blockchain supply chain market is expected to reach over $9 billion by 2025. Among the key driving factors the study named the sector’s demand for transparency and improved security of supply chain transactions that blockchain technology could purportedly ensure.
Nasscom, a major Indain trade organization, has said that it is against a blanket ban on cryptocurrencies, which was recently proposed by a governmental panel in the country According to a report by local financial periodical The Economic Times on July 30, Nasscom commented:
“Nasscom believes that the recent proposal of the inter-ministerial committee of the government to ban all cryptocurrencies barring those that are backed by the government, is not the most constructive measure. […] Instead, the government should work towards developing a risk-based framework to regulate and monitor cryptocurrencies and tokens.”
As per the report, Nasscom claims that crypto projects can always be tested in regulatory sandboxes prior to launch. Nasscom also reportedly believes that banning crypto will only serve to push away legitimate businesses who are already pro-compliance.
However, Nasscom does believe there is work to be done in terms of creating a regulatory framework to mitigate illegal activities in the crypto space:
“We should work towards creating a regulatory framework that will constantly monitor and prevent illegal activities. Regulating would allow the law enforcement agencies to be better equipped to understand these new technologies, enable them to gather intelligence on criminal developments and take enforcement actions.”
Nasscom was founded in 1988 and has over 2,700 member companies across the IT, business process outsourcing and other technology-related industries.
India: a hostile regulatory environment
Despite there being no current official ban on cryptocurrencies in India, a number of crypto exchanges have closed as the Reserve Bank of India (RBI) has barred financial institutions in the country from offering services to crypto-related businesses.
The circular prohibiting banks from offering services to crypto-related firms was released by the RBI in April 2018 and subsequently upheld by the country’s Supreme Court that May.
In May 2019, the crypto exchange Coinome halted its services in India due to regulatory pressure. The exchange allegedly wrote in an email to customers:
“India is currently going through uncertainty on crypto guidelines and regulations. The government of India has not yet taken a decision on the regulatory framework for crypto exchanges or wallets. Further, the supreme court is yet to act upon the public interest litigation (PIL) on (the) regulation of crypto assets.”
Coinbase Pro announced the coming addition of the proof-of-stake and democratically-governed Tezos blockchain to its institutional trading platform.
Tezos (XTZ), a multi-million dollar blockchain that officially launched in September 2018, offers the opportunity for its stakeholders to vote on-chain on proposed upgrades. When Tezos was added to another Coinbase affiliate, Coinbase Custody, in March, the move was contested by those who opposed the extension of voting rights to custodial token holders.
It is unclear whether Coinbase Pro will offer “self-amending” duties to users of its platform.
Tezos price last 30 days via Coinbase data
Before trading is activated, Coinbase Pro must build reserves of the coins in trading pairs with BTC and USD. Beginning on Monday, August 5, the firm will accept inbound transfers of XTZ 12 hours in advance of launch, according to a company blog post.
“Once sufficient supply of XTZ is established on the platform, trading on the XTZ/USD, and XTZ/BTC order books will start in phases, beginning with post-only mode and proceeding to full trading should our metrics for a healthy market be met,” the company states.
Similar to onboarding other digital assets to the trading platform, Coinbase expects to move through four stages before tezos functionality is fully operational.
The first is “Transfer-only,” when orderbooks will only support incoming coins. Once a reserve is established, the platform will enter into the minute-long “Post only” phase, where users will be able to post limit orders that will remain unfulfilled. Third is “Limit-only” in which “limit orders will start matching but customers are unable to submit market orders.”
After these embryonic stages, full trading will be enabled. Importantly, Tezos will not be available on Coinbase itself. Tezos held a $232 million initial coin offering (ICO) in 2017, one of the largest funding events at the time.
Last month, Coinbase Pro added trading Chainlink, the company expects to roll out additional digital assets.
The United States Committee on Banking, Housing and Urban Affairs has ended the hearing on “Examining Regulatory Frameworks for Digital Currencies and Blockchain” today, July 30.
Circle CEO Jeremy Allaire, Rebecca M. Nelson, a specialist in international trade and finance; and Mehrsa Baradaran, a professor of law at the University of California Irvine School of Law all testified before the committee.
Lawmakers want the U.S. to lead in blockchain
Senator Michael Crapo of Idaho began the hearing saying that cryptocurrencies and blockchain technology are inevitable and could be beneficial, further noting that the U.S. should establish itself as a global leader in this sector. Crapo concluded:
“I want the U.S. to stay at the forefront of this technology, which both has incredible potential and incredible risk.”
Sen. Catherine Marie Cortez Masto of Nevada said that she believes in the potential of blockchain, and the importance of leading in this technology over China.
Facebook’s Libra concerns many
For many lawmakers, the issue of crypto has now become synonymous with Facebook’s Librastablecoin. Sen. Sherrod Brown of Ohio pointed out that the social media giant has “proved over and over that they can not be trusted.” Brown stipulated that Facebook intends to undermine the U.S. dollar and payment systems, while hiding behind the phrase “innovation.”
Parrying Brown’s statement, Nelson said that Facebook could be a game changer for cryptocurrencies, however it has raised both regulatory and systemic concerns before it can be implemented. Nelson also stated that Facebook has changed the debate about cryptocurrencies.
Sen. Mark Warner of Virginia then asked about the literal meaning of the 1:1 backing of the Libra, wherein Allaire explained that while the first wave of these types of digital currencies were focused on establishing a global digital currency, the critical mainstream use cases for the financial services sector has needed the development of stable coins, with Libra as an example.
Allaire further noted the government’s restrictive stance towards crypto-related companies, which led them to be based overseas rather than in the U.S. Allaire said that it is necessary to regulate digital assets, however, Congress should define digital assets as a new asset class. Allair stated:
“Digital money will move frictionlessly, everywhere in the world, at the speed of the internet, hopefully with a high level of security and data protection.”
Today’s hearing is part of a recent trend of increased regulatory scrutiny toward cryptocurrencies in the U.S., following the hearings on Libra. Industry players thus tend to discuss an array of relevant issues such as identity, privacy, data security, domestic and international approaches to regulation, as well as the potential of blockchain and crypto solutions for finance in the near future.
The Philipines’ UnionBank has issued its own stablecoin, PHX, according to Filipino media outlet PhilStar Global. With the issuance, the bank also conducted the first blockchain-based transaction by a Filipino bank.
The PHX stablecoin is pegged to the Philipino peso and backed by UnionBank reserves.
“PHX is a stable store of value, medium of exchange and is a programmable token with self-executing logic. It enables transparent and automatic execution of payments,” said UnionBank Senior Vice President Arvie de Vera.
UnionBank’s blockchain transaction occurred on its i2i payment system which connects islands, institutions and individuals, per PhilStar. Three rural banks took part in the inaugural transfer.
PHX is available to all UnionBank account holders and purchasable through debits to account holders. In the long run, UnionBank plans on making PHX and i2i interoperable platforms across wallets and platforms in the Philippines and abroad.
The stablecoin and i2i system are hardly baby steps for UnionBank which has maintained a growing interest in digital assets. In February 2019, the bank launched the first two-way virtual currency ATM, largely to address remittance service demand.
Remittance services continue to set the pace for bank development of digital assets. Financial giant J.P. Morgan launched its own payment rail, JPM Coin, on its Quorum blockchain earlier this year. Global settlement network SWIFT has also upped settlement time recently in a bid to counter alternative services like Ripple.
Some 10 million Filipinos live abroad creating a large demand for remittance services. In April, Coins.phinked a deal with Western Union for direct settlement into Coin.ph wallets. Over the last few years, remittance services have grown three percent annually in the island country.
Cryptocurrency giant Ripple has partnered with Kyoto University and the University of Tokyo as part of its University Blockchain Research Initiative (UBRI). Ripple announced its new Japanese partnerships in a press release on July 30.
Emi Yoshikawa, senior director of global operations at Ripple, noted that there is high interest in blockchain within Japanese academia:
“Japan is quickly becoming a leading force in crypto assets and blockchain. The region has always been forward thinking and exploring ways to improve the current financial system […] We have seen high levels of interest from the academic community on topics around blockchain and crypto. Ripple is committed to engaging and inspiring students to become part of the workforce of the future, across areas such as blockchain, distributed computing, banking and fintech.”
The University of Tokyo will reportedly award scholarships to students doing blockchain research, and its economics department is also arranging public seminars on blockchain and settlement.
The university’s economic professors are also engaged in research on the evolving financial system, as well as frameworks for regulation and supervision for crypto assets and blockchain technology.
At Kyoto University, graduate students are conducting blockchain research in areas such as remittances by migrant workers, digital identity management for refugees and supply chain management.
University Blockchain Research Initiative
According to the announcement, Ripple provides financial resources as well as expertise and technical resources to support research. UBRI is currently partnered with 33 universities, as per the press release.
Ripple states that it believes the demand for tech solutions is growing as globalization increases and hopes that by partnering with universities, the company can help usher in a new generation of engineers, business leaders, entrepreneurs and other professionals who are blockchain literate. Eric van Miltenburg, senior vice-president of global operations at Ripple commented:
“As the industry matures, the academic community plays a pivotal role in paving the road for innovative companies and entrepreneurs leveraging blockchain technologies and digital assets.”
As previously reported by Cointelegraph, the Institute for Fintech Research at Beijing’s Tsinghua University partnered with UBRI in January. The university launched the Blockchain Technology Research Scholarship Program, a program designed for researching global blockchain regulations as well as industry development.
Venezuelan President Nicolás Maduro and his administration appear to be leveraging tax revenue and cryptocurrencies as part of a broader effort to evade economic sanctions, an investigation by Spanish newspaper ABC has found.
As detailed in a story published Monday, the newspaper asserts it uncovered a scheme by which Maduro and his associates were using a digital wallet app to turn tax revenue from domestic airports into bitcoin and other cryptocurrencies that were then transferred to exchanges in Hong Kong, Hungary, Russia and China.
There, the funds were converted and sent back to Venezuela, according to the report.
The effort is the latest example of how the ban on Maduro’s government from using US bank accounts and from participating in the open international market has forced it to look at cryptocurrencies as a way to obtain dollars.
The newspaper alleges that the tax revenue in question came from the Maiquetia International Airport (IAIM) located near Caracas, the country’s capital, and that taxes were collected through an automated system that works with an app called Jetman Pay.
Maduro’s administration is said to be in talks to expand its use of the app, including for proceeds it collects from refueling airplane that traffic the airport.
In a contract – allegedly yet to be signed – the Jetman Pay app would be used to directly defy the U.S. ban again. Under the scheme, a plane would land at IAIM, at which point it would transfer fiat currencies in exchange for fuel. Petróleos de Venezuela, S.A, the state’s oil and natural gas company, would then use the app to pay government taxes, upon which it would be sent abroad as cryptocurrency.
The automated system has been used at IAIM since February 2018 for airport tax collection.
The report concluded by speculating that Maduro may be looking to expand the scheme to other airports across the country.
While post offices sometimes offer banking services, Croatian Post is looking at launching a nationwide cryptocurrency exchange service.
For a pilot effort, Croatian Post, or Hrvatska Pošta, is now offering crypto-to-fiat exchanges in three post offices in the coastal town of Zadar – a place popular with tourists.
Hrvatska Pošta said Thursday that the trial run will allow it to gauge the market interest for such a service and, if successful, it may roll out crypto exchanges “in all major towns and tourist centers in Croatia.”
According to the announcement:
“Over the past few years, cryptocurrencies have developed more and more users, and Croatia will, with its network of 1,016 post offices, surely contribute to their popularity. Digitalization is one of the Croatian postal development strategies and a driver of numerous business projects. Entering the digital currency market, Croatia Post confirms its position as one of the leaders in digital transformation.”
The pilot – which allows users to convert cryptos into the Croatian national currency, the kuna (HRK) – comes via a collaboration with Croatian crypto brokerage and payments firm Electrocoin, which has been in operation for five years, Hrvatska Pošta said.
Telecommunications giant Huawei’s chief executive has said that the time is ripe for China’s government to preempt Facebook’s Libra.
Speaking in an interview with Italian media outlet L’economia, CEO Ren Zhengfei remarked that China has the capability to pursue such an undertaking. He was asked a question about U.S. global hegemony and Facebook’s issuance of an international currency specifically.
Ren was quoted as saying (according to a translation):
“Even China is able to issue such currencies, why wait for Libra? The strength of a state is greater than that of an Internet company.”
Ren was not necessarily looking to take his company toe-to-toe with the social media giant. Though his firm has made significant inroads in the blockchain space – including joining the Hyperledger consortium and releasing a blockchain-backed cloud service – he instead pointed to the advancements in blockchain technology made by the Chinese nation-state.
In May, the People’s Bank of China hired blockchain experts in a move to widen its distributed network investments, useful for “large scale transactions,” bank representatives said at the time.
Additionally, while some members of China’s central bank have said that Libra’s deployment could negatively impact the country’ economy, Wang Xin, head of the research bureau at the People’s Bank of China, said the competition could propel the country to issue its own national cryptocurrency.
In fact, a few weeks after Libra was announced, searches on the China’s web search giant Weibo skyrocketed. This is in spite of the fact that Facebook has been banned in the country since 2009.
Cryptocurrency mining is now an official industrial activity in Iran after winning approval from the country’s cabinet.
In a session on Sunday, chaired by the country’s president, Hassan Rouhani, cabinet ministers endorsed the activity and said industry participants would need to seek the required licenses from the Ministry of Industry, Mine and Trade, the Mehr News Agency reports.
As CoinDesk reported last week, crypto mining had already being given approval by the Chamber of Commerce, Industries, Mines and Agriculture, a government economic commission.
On Sunday, the cabinet also said cryptocurrency users must accept the risks of the technology and that neither the government nor the banks would provide any guarantee.
Cryptocurrencies are still not allowed in domestic transactions, according to Mehr. Mined cryptos will be taxable under the country’s rules, unless the cryptocurrencies are exported and the revenues brought back to Iran.
The deputy minister energy for electricity and energy Homayun Haeri said recently that the government will also vote on a measure to approve an electricity rate for mining farms. Mehr’s report indicates that decision hasn’t yet been made.
The U.S. Department of Defense (DoD) is looking to forge a blockchain cybersecurity shield.
In a report published on July 12 titled Digital Modernization Strategy, the DoD outlined several ways to advance the nation’s digital defenses. This includes the integration of cloud and quantum computing, artificial intelligence, and improved communications through distributed ledgers.
In fact, DARPA, the research wing of the Department is already experimenting with the technology “to create a more efficient, robust, and secure platform,” to secure messaging and process transactions, reports Decrypt.
Specifically, blockchain may be deployed between units and headquarters as well as intelligence officers and the Pentagon. As part of the Digital Identity Management program, the agency may also issue a digital token that authenticates an agent’s identity.
The DoD is also experimenting with the technology to facilitate the creation of an unhackable code to secure its databases.
As part of the second Cryptographic Modernization program, in effect since 2000, the Department is replacing old hardware and cryptographic systems to meet the challenges of the improved computing power of the nation’s adversaries.
Citing the trustless, transparent, and immutable attributes of blockchain the Department writes:
“Blockchain networks not only reduce the probability of compromise, but also impose significantly greater costs on an adversary to achieve it.”
The shift from “low value to high-value work” is also part of the DoDs’ Big Data Platform (BDP), which will handle petabytes of data involved in a number of cross-agency projects. The platform “provides the ability to perform aggregation, correlation, historical trending,” and may perform pattern recognition to “predict attacks.”
Global crypto finance firm XBTO International (XBTOI) has gained legal status in Bermuda. XBTOI acquired a Bermuda Monetary Authority License under the island’s 2018 Digital Asset Business Act according to a statement.
Moving to Bermuda in April 2018, XBTOI is the third firm to receive a license from the regulator to date.
Per its domain, XBTOI operates on multiple finance fronts including over the counter desk trading, consulting, asset management, and VC work. The firm is looking to capitalize on the licensing with new product rollouts concerning digital asset solutions.
Solutions, it said, that were not available in other countries.
Commenting on the announcement, Chief Operating Officer Julien Auchecorne pointed out the importance of growing within Bermuda’s friendly regulatory environment:
“Our local commitment extends beyond our own office presence and working relationships with service providers on the island. We presently have a mandate to expand our office following our license obtention and remain committed to collaborating with all Bermudian stakeholders to explore how we can educate the island on the Digital Assets industry.”
XBTO first launched in 2015 under the name XBT, a play on the original bitcoin ticker symbol. The firm maintains offices in Paris and New York.
Smart Valor has secured a fresh $3.25 million round of investment, led by Venture Incubator, alongside Tally Capital and other Asian and U.S. investors.
With the news, the Zug-based startup is also announcing a new exchange operating from both Switzerland and Liechtenstein that will provide custody, trading and brokerage services. Initially, the exchange will offer BTC and ETH, each of which can trade against the fiat currencies CHF, EUR, GBP and USD.
Smart Valor CEO Olga Feldmeier told CoinDesk in an email:
“Today, Switzerland is the largest global wealth destination, home to a quarter of all global offshore wealth. For over 200 years this place stands for data privacy, safety and security, with an impeccable reputation and high-quality banking services. The same is true for Liechtenstein. But until today, ironically enough, neither Swiss Crypto Valley, nor Liechtenstein, had an exchange offering trading and custody of digital assets. Smart Valor is changing this, giving the privilege of stable, safe-haven jurisdiction not only to the rich, but to all.”
Smart Valor was approved as a regulated financial intermediary in Switzerland late last year. Venture Incubator is a joint initiative of ETH Zurich and consulting firm McKinsey & Company, and has backing from 10 of Switzerland’s most significant companies.
With the basic exchange now live, more tokens will be added monthly, with the goal of making it a leading exchange for security tokens backed by real-world assets, the company said in a press release.
“While hundreds of exchanges were created during the last several years, today there are just about a dozen which are legal, compliant, licensed and safe,” Smart Valor investor David Johnston said in a statement. “Switzerland, being at the top of the hierarchy of financially savvy but crypto-friendly jurisdictions, needs its own Coinbase.”
The exchange’s launch is accompanied by a campaign that gives initial users fee-free trading and brokerage services during the first three months. Not surprisingly, the full capacity of the early access program has been taken up by 5,000 users registered on the platform prior to today’s launch.
Feldmeier said in a release:
“This brings us a huge step forward to our vision of becoming the world’s first security token exchange for alternative investments.”
The European arm of Japan-based cryptocurrency exchange bitFlyer has launched a bitcoin buying and selling service aimed to be easier to use than spot trading exchanges.
BitFlyer Europe announced the news on Tuesday, saying the new trading platform targets people wanting “a simple way to buy and sell bitcoin, from total beginners to experienced traders.” Until now, the firm offered only a pro-trader service, dubbed Lightning, as its euro-bitcoin marketplace.
Available via the bitFlyer Europe website, the “bitFlyer Buy/Sell” service allows users to exchange bitcoin for euros, with a maximum of 20 BTC per transaction.
According to its website, the service is not an order book exchange and users will pay no fees on sales or purchases of bitcoin. Presumably, in that case, bitFlyer is making its money on the spread between its own buying and selling prices.
Indeed, while the global average price for bitcoin displayed on crypto data service CoinMarketCap is €8,526 at time of writing, bitFlyer is offering sales at €8,727.
On sign-up, new users are expected to check a box indicating they are not residents of the U.S. Standard know-your-customer procedures request personal details such as address and phone number, as well as an identity documents like a passport or driving license.
The firm describes itself as the “only” crypto exchange to be licensed in Japan, the U.S. and the EU.
Andy Bryant, co-lead and COO of bitFlyer Europe, said:
“bitFlyer Buy/Sell is a virtual currency exchange for everyone – with simple two-click buy and sell capability. Not only is bitFlyer Buy/Sell easy to use, but with us users have the confidence that they are using a trusted, regulated platform with long-standing global heritage.”
Solana claims to be first web-scaled blockchain
Per the release, the funding round was led by Multicoin Capital, with participation from Distributed Global, Blocktower Capital, Foundation Capital and Blockchange VC, among several other companies.
Solana claims that the platform is the first web-scale blockchain, since they believe it to be the first solution capable of hosting applications with computational bandwidth akin to the modern internet. Per the press release, the Solana network can support 50,000 transactions per second.
“Solana is the closest thing to the ‘world computer’ blockchain developers conceptualized in the early days of crypto,” said Kyle Samani, co-founder and managing partner of Multicoin Capital. He adds that Solana will allegedly scale on the base layer without sharding, explaining:
“While many developers have proposed sharding solutions for scaling existing layer 1 solutions, they introduce a tremendous amount of complexity and create new user experience problems that are difficult to solve.”
Solana is also launching its development network, where developers can now download the dedicated software development kit and start building decentralized applications based on the new chain.
The press release also claims that Solana is the first multi-threaded blockchain and that it is optimized to run on graphics processing units processing many transactions in parallel.
“Other than Solana, all blockchains are single-threaded processors,” explains Anatoly Yakovenko, Solana’s co-founder and project lead. “That is, they can only make one state update at a time. By architecting a system designed from the ground up to support concurrent processing, and by optimizing computation for massively parallel GPUs, Solana can process 50,000 TPS across a network of 200 nodes—and it does so without creating any additional overhead in terms of UX, latency, or composability for developers.”
As Cointelegraph reported in May, Ethereum co-founder Joseph Lubin said that the Ethereum blockchain will become about 1,000 times more scalable in 18 to 24 months, after changing to PoS.
Bitcoin wallet and blockchain explorer provider Blockchain just launched its first exchange platform.
Blockchain’s head of retail products, TD Ameritrade alum Nicole Sherrod, told CoinDesk the custodial exchange, called The PIT, can connect to non-custodial Blockchain wallets for nearly instant transfers. Registration opens today, with the ability to trade up to 26 assets rolling out over the next two weeks.
Sherrod said that with nearly 40 million wallets already created – and an exchange matching-engine set up in London’s Equinix LD4 data center – PIT could be posed to attract more liquidity than competitors.
“That’s what market makers are looking for,” Sherrod said. “They want to co-locate [data center servers] with you, they want to directly connect to your matching engine. It’s the way it’s done on Wall Street.”
Indeed, Tom Haller, previously the chief software architect for trading systems at the New York Stock Exchange, contributed to the development of PIT’s matching engine.
Sherrod added the exchange will measure speed in “microseconds,” like traditional asset exchanges. However, an anonymous industry expert was skeptical about whether that theoretical speed with remain constant under real pressures. The source said many infrastructure dependencies are “almost impossible to model out,” so the system will only prove itself when tested by “real-world trading volumes.”
Either way, Blockchain is prioritizing diverse token offerings over margin trading options and the bitcoin software update SegWit, both of which are also on the road map.
“Beyond the 26 [assets] we already know what our phase two asset listings are going to be, as well as phase three,” Sherrod said, declining to name any assets beyond what the wallet already supports.
It remains to be seen how PIT will compete with mainstream exchanges like Binance and Coinbase, which also offer a plethora of crypto assets. Coinbase was also a wallet provider and brokerage, before it became Silicon Valley’s iconic unicorn exchange.
“We’re looking to compete on the overall client experience,” Sherrod said, adding that a new customer support team has become the second-largest division of the company as part of a broader shift to exchange services.
Mainstream exchanges are generally slow to respond to retail users when market activity spikes, so Sherrod argued that beyond speed this is another area where PIT could rival incumbents.
Only time will tell if the new revenue flows Blockchain users generate through transaction fees will justify this expansion into the heavily saturated exchange space, with fierce competition for market makers and heavily regulatory costs.
Blockchain is applying for new licenses in various jurisdictions, Sherrod said, but failed to specify which ones. In the meantime, the exchange won’t operate in any jurisdiction that requires a license, a spokesperson added.