Libra Whitepaper Gets Updated, Association Members Won’t Get Paid On Reserve Asset Profits

  • The new whitepaper doesn’t use interest to pay early investors, which are predominantly involved in the Libra Association.
  • The interest will still go towards operational costs, keeping transaction fees low, and further development.

Ever since the Libra Association released their whitepaper for their crypto asset (Libra), there have been many regulators pushing for change. Reports by CoinTelegraph shed light on a recent article by Chris Brummer, a law professor at Georgetown University, discussing the new changes that the whitepaper has gone through. Apart from the amendments that were expected with the new list of members, the Libra whitepaper also removed the dividends that were meant to be paid out to early investors in the project.

The original whitepaper for Libra, published in June 2019, stated that the interest accrued for the reserve assets would be used for multiple purposes, including the coverage of system costs, and supporting growth. One of the other uses for the interest was meant to be used towards paying dividends to Libra Association members as the earliest investors in the project. However, the revision has created the following change:

“Interest on the reserve assets will be used to cover the costs of the system, ensure low transaction fees, and support further growth and adoption.”

Brummer stated that the possible reach for the change is that, by awarding dividends to early investors, there’s the possibility of a conflict of interest with the Libra Association members and the currency’s end-users. The reserve assets need to be stable to promote the update of the Libra token, and paying out dividends would put the reserve at risk with other assets. Trust would be reduced or lost entirely, resulting in a lack of uptake for the asset, since the stablecoins rand to lose their value.

Another potential reason for the changes is to address the worries that Libra and other stablecoins could end up being defined as a security, which is the hope of two lawmakers. Still, Brummer remarked that this new definition won’t likely happen, since stablecoins generally keep the same value.

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Author: Krystle M

Blood on the Streets: Bitcoin Miners Hurting and Operating at a Loss

  • BTC price remains above $7,000 but trading volume is extremely low at below $200 million
  • Miner price and electricity cost puts Bitcoin production cost at $8,941
  • Bitcoin miners are struggling at present with most operating at a loss
  • Bitcoin production price will double at halving, putting it at $17,800

We are almost in the middle of December and Bitcoin continues to trade above $7,000 level. We haven’t dropped below this level, not even once but it’s to be seen what will happen to BTC price once this accumulation phase is over.

At the time of writing, BTC/USD has been trading at $7,270 with 24 hours gains of 1.04%, as per Coincodex while managing the daily trading volume of just $193 million.

Just like the price which is trading sideways, the hash rate is behaving the same way. Ever since hitting the all-time high at 110 Th/s on October 23, the Bitcoin hash rate has been oscillating between 80 to 100 Th/s.

Recently, a report found that the majority (66%) of Bitcoin mining is still dominated in China. However, the mining is predominantly hydro-electric powered, so that’s good.

“Mining is highly encouraged in China now. They hope to control bitcoin by having all the miners in the country (ie, under their control),” said Binance founder and CEO Changpeng Zhao.

Bitcoin Miners Taking Short-Term Losses

According to Bitinfocharts, Bitcoin mining difficulty has been declining since June when Bitcoin hit 2019 high at $13,900. Currently, at 0.133, the profitability is close to hitting a new low of 2019 at 0.118 reached on Oct. 24.

Charles Edwards of Capriole Investments says,

“Bitcoin miners are hurting. The last 12 months has been the least profitable in all of the prior 5 years to be a Bitcoin miner. There’s blood on the streets.”

In the blog post, the company points out that Bitcoin’s production cost and miner prices together suggest that Bitcoin miners are struggling and potentially taking short-term losses.

The current Bitcoin production cost in terms of the miner price is at $7,399 and electricity cost is at $5,365. This puts the total cost at $8,941.

Price dropped below the Bitcoin Production Cost, however, tends to be short-lived as high-cost miners go out of business, the hash rate plateaus and then falls, and miners are less inclined to sell at a loss.

Over shorter periods, bitcoin miners can operate at a loss. Bitcoin price however never quite reaches the electricity cost to produce a Bitcoin, despite coming close in November in 2018.

Historically, the electricity to produce a Bitcoin represents a price floor.

This suggests Bitcoin miners are struggling at present with most operating at a loss. In 2019, miners had average daily profitability of 10%. The year has been actually the least profitable for Bitcoin mining in all of the last 5 years, notes the firm.

However, because several of miner costs are sunk, meaning already paid for such as hardware and locked in such as rent, they can operate at a loss over short periods.

With Bitcoin reward halving less than five months away, estimated to occur in May 2020, the Bitcoin Production Cost will double. On this basis, if the hash rate and mining hardware efficiency were to remain unchanged, the Bitcoin production price at halving would be at $17,800.

But with halving, the inflation rate will drop from 3.7% to 1.8%, as such miner influence on supply and demand is dropping.

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Author: AnTy

Blockchain Capital’s 12 Bold Predictions For 2020: Number 7 is Controversial But Inevitable

2019 is coming to an end and Bitcoin price is currently trading at $7,265, down 63% from its all-time high of $20,000.

But according to Blockchain Capital’s bold predictions for next year, Bitcoin could very well make a new ATH. But that doesn’t mean we will get to see $500,000 by the end of 2020.

In November 2017, John McAfee clarified that this price is based on the model that predicted $5,000 at the end of 2017 but Bitcoin accelerated much faster than his model assumptions. As such, he re-upped the bet from $500k to $1 million.

But Blockchain Capital doesn’t see this happening, at least not in 2020.

Positive Development…

Coming onto the 7th bold prediction for the Bitcoin network, it involves Bitcoin fees that the company is predicting to exceed $100 on the back of demand for Bitcoin transactions next year.

This prediction Spencer Bogart, General Partner at the company says is a controversial one but an “inevitable part of a successful Bitcoin trajectory.”

Given that the next block halving will cut down the rewards from 12.5 BTC to 6.25 BTC, as Bogart says this would be a “positive development.”

Growth for Stablecoins but Tighter Regulation as well

Blockchain Capital sees growth in the crypto market next year with the prediction of a crypto company being acquired for more than $500 million. The value locked in DeFi is projected to hit a whopping $5 billion, currently, it’s nearly $672 million.

On the regulatory side, KYC/AML is projected to be DeFi’s “primary regulatory battleground.” But a federal judge might rule against the SEC in a crypto case.

When it comes to stablecoin, the company particularly talks about USDC, a US dollar-pegged stablecoin launched by Coinbase and Circle. It is expecting to see a 300% growth measured by transaction value, issuance, market cap, and trading volume.

However, FinCEN and FATF will hold stablecoin to a stricter standard than even paper cash by “requiring broad application of the travel rule.”

As for social media giant Facebook’s project Libra, Blockchain Capital predicts that it will receive the green light for a dollar-backed stablecoin, in the light of competition from China.

Amidst all these positive predictions the company also expects the privacy coins to continue to be delisted from major exchanges. Also, “not a single 2020 L1 network launch achieves top 10 status, as defined by network value.”

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Author: AnTy

Proof Of Death: QuadrigaCX Creditors Want Former CEO Gerald Cotton Body Exhumed

The law firm that represents the users of the collapsed QuadrigaCX crypto exchange have asked the investigating authorities to confirm the death of former CEO by exhuming and conducting forensic investigations of his body, CoinDesk reports.

The law firm known as Miller Thompson sent a letter asking the Royal Canadian Mounted Police (RCMP) to exhume and carry out forensic on the body belonging to Gerald Cotten. The letter states,

“The purpose of this letter is to request, on behalf of the Affected Users, that the Royal Canadian Mounted Police (the ‘RCMP’), conduct an exhumation and post-mortem autopsy on the body of Gerald Cotten to confirm both its identity and the cause of death given the questionable circumstances surrounding Mr. Cotten’s death and the significant losses of Affected Users.”

Cotten’s death was hidden from the public for more than a month, but QuadrigaCX still accepted deposits but some customers were not allowed to withdraw their funds within that period.

Later, Cotten’s wife, Jennifer Robertson, announced his demise in QuadrigaCX website upon which it went offline. She then proceeded to file for creditor protection explaining that her husband was the only person who held the private keys for the crypto exchange’s cold wallets. She went ahead to state that Cotten was the only person who had access to the exchange’s crypto holdings.

However, the court-appointed Ernst & Young as a monitor which went ahead to conduct an investigation and revealed that QuadrigaCX wallets had zero crypto holdings. The investigation also showed that the majority of the funds had been moved to different exchanges and private wallets. It was also revealed that the CEO had already used some of the funds deposited in QuadrigaCX.

Cotten’s death raised lots of eyebrows given that his wife indicated that he died of Crohn’s disease which is not fatal. In addition, he allegedly died in India and his death certificate issued misspelled his name.

According to the CoinDesk report the law firm is requesting for the exhumation to be expedited and the entire process be completed before the end of the next Spring season due to decomposition concerns.

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Author: Joseph Kibe

DigixDAO Offers DGD Token Holders The Option To Dissolve The $56 Million ETH Treasury

DigixDAO, a blockchain project which tokenizes gold on the Ethereum platform with the DGD token, made headlines on the 29th of November when they addressed the community saying they would offer an option to its token holders to either completely liquidate the treasury or keep making grants unless the project sees some headway. Interestingly, right after the announcement, the price of the native token DGD has seen a significant bump. DGD was trading at around $10 mark on 29th and currently, it has reached $19.

The blog post was written by the firm’s CEO Kai Cheng Chng, who noted that the community from now on will be given the option to vote whether they want to keep DAO’s Ethereum treasury intact.

Digix conducted its ICO in 2016 and collected around 466,648 ETH in public sales which were worth the value of around $6 million to $7 million. Cheng mentioned that they had 386,000 ETH in their treasury but DGD token’s market cap is a mere $39 million while if we calculate the value of the ETH held in the treasury it comes to around $58 million.

Should All ICOs Offer a Token Buyback Option?

The decision by Digix has prompted a discussion in the decentralized space on whether more projects should offer a similar exit plan for unsatisfied investors. The discussion seems legit in the light of the fact that a significant majority of projects which raised 100s of millions of dollars have either turned out to be a Ponzi scheme or they are not able to make any headway in terms of development on the project.

Ryan Zurrer, an investor himself welcomed the idea and believed that more people should call out such projects who are sitting on millions of investors’ capital without doing much with it. Nic Carter from Castle Island Ventures agree with Zurrer and called the move from Digix quite mature.

Ricky Li from Autonomy, a token trading company, however, does not agree with Zurrer’s point of view and explained that most of the ICOs raise capital to develop their project and bring real-world value, so it’s highly unlikely they would be keen on buying back their token using the treasury holdings. He said,

“ICOs are not really keen on buying back the tokens with their treasury holdings since they raise money to develop, not speculate on the token price,”

Many others like Mona El-Isa, CEO of Avantgarde Finance were undecided whether it was a good move or not. El-Isa explained why the same parameter cannot be used for every project and said,

“It’s hard to generalize on whether this would be a good or bad thing for space as each situation has its own unique characteristics. Some of these tokens will become very interesting token-activist opportunities. It’s a little bit surprising that we haven’t seen much of that yet.”

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Author: Hank Klinger

Lisk’s Lightcurve Blockchain Studio To Layoff 40% Its Workforce To Reduce Burn Rate

The blockchain project Lightcurve has made the decision to lay off 40 percent of its employees in order to enable moving forward in the market. It is worth mentioning that Lightcurve is part of the open-source platform Lisk, which is powered by a cryptocurrency called LSK and is among the top 100 largest cryptos in the space.

Lisk’s Lightcurve Blockchain Project Reduces Its Staff

Volatility in the cryptocurrency market continues to show its effects on different crypto and blockchain projects. The CEO and co-founder of Lisk, Max Kordek, said on Discord that Lightcurve had to fire 21 employees considering they had to reduce costs. The company had 53 employees that will now become 32.

They will not only help in reducing costs but they will also be focusing on keeping talent in the research and backend development sectors. Meanwhile, frontend development, marketing, and other operations would be downsized.

This staff reduction would also allow the company to become ‘more agile,’ considering a large degree of the funds were going to human resources. Lightcurve is currently based in Berlin, Germany, and the remaining employees will continue with their jobs at the firm.

This is not the first time that a blockchain and a crypto-related company decides to reduce its number of employees. Circle, for example, informed back in May this year that they were reducing staff by 10 percent. This represented 30 employees at that time.

Furthermore, the blockchain firm ConsenSys decided at the end of 2018 that they were reducing the number of employees to rebalance their priorities. After this lay off of around 10% of its staff, the company announced a new roadmap for ConsenSys and a change in its business strategy. And just recently they are parting ways with operations in India and the Philippines.

Chainalysis is another firm that decided to lay off 20% of its workforce to remain profitable while operating in the market. Huobi Global laid off Australian employees back in Feb.

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Author: Carl T

Bank of America Merrill Lynch Calls Bitcoin (BTC) The Best Asset Class In The Last 10 Years

This may not be news for anyone following cryptocurrencies in the last couple of years, but Bitcoin is now considered the best asset class in the last ten years. This is according to a list from the banking giant Bank of America Merrill Lynch (BAML) in which it included some of the best and worst asset classes of the decade.

Bitcoin Became One Of The Best Asset Classes In The Last Decade

According to BAML, an investor who would have paid $1 for a Bitcoin in 2010 would now have a $90,026 investment today. This is a large difference compared to an investment in U.S. equities that would have turned $1 in 2010 to $3.46 today.

At the same time, the worst investment would have been Myanmar, the Burmese Kyat, that today would be worth $0.004. This shows Bitcoin registered a massive increase in price since it was launched back in 2008 by Satoshi Nakamoto.

Nowadays, the cryptocurrency is being stagnant trading in the range of $7100 to $7,250 with a market capitalization of $131.56 billion. Although this is a massive price compared to the early days of the cryptocurrency, enthusiasts are waiting for new all-time highs. Bitcoin hit $20,000 in 2017 and quickly started to decline afterward. Experiencing one of the worst bear markets in crypto history. While the BTC price did hit just shy of $14,000 earlier this year, investors are waiting on the digital currency to reach new highs again. And that may happen in the next 6 months if the Bitcoin reward halving in May 2020 will push the price towards an all-time high.

Bitcoin can be used to make international transfers in just a few minutes and it can also be used as a speculative asset. Many investors bet that Bitcoin would skyrocket to new all-time highs in the future. Indeed, some analysts suggest Bitcoin could be a once-in-a-lifetime opportunity for enthusiasts.

It is not possible to predict what can happen to Bitcoin in the next ten years and whether it will remain as the best performing asset class. However, larger investors such as institutions could enter the market and push its price even higher. If governments decide to adopt it, this cryptocurrency could eventually be considered the best performing asset in the next decade as well.

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Author: Carl T

Swiss Gov’t Says Digital Franc Is Too Risky Public Use, But Beneficial To Financial institutions

It may not be the time yet to have an electronic Swiss Franc for the population. The Swiss government considers that there are more risks than benefits in this digital currency that could eventually destabilize the financial system. This is despite the friendly position that the country has towards cryptocurrencies and blockchain technology.

No Electronic Swiss Franc For General Use

In a recent report released by The Federal Council, they analyzed the different opportunities and risks related to the creation of a digital Franc. At the moment, the risks outweigh the benefits of such a currency considering they could have a negative effect on financial stability.

The analysis was based on the creation of a digital currency that would be available to the general public and that it would be complementary to other existing forms of central bank money.

As the report explains, there are other countries that are exploring the possibility to issue a digital currency based on their local fiat currency. These countries include Sweden and China, however, there are no clear roadmaps about which could be the next steps before being able to use a Central Bank Digital Currency (CBDC).

Some of the benefits of CBDCs include better access to payment and financial services for users and easy access to money that is free of default risk. Moreover, it could be possible for monetary policies to become more efficient over time while reducing tax evasion and money laundering.

However, the government considers that digital currency for financial market players could be a much more promising strategy.

It is also worth mentioning that Christine Lagarde, the president of the European Central Bank (ECB) said that they should be ahead of the curve in terms of stablecoins and digital currencies because there is a demand that the ECB has to address.

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Author: Carl T

Ripple’s Real-Time Settlement Tech Gets Recognition by US Consumer Financial Protection Bureau

Ripple (XRP), which is a real-time gross settlement system and currency exchange network known for its use in cross-border payments was recently mentioned in an official US CFPB document. Most of the content in this document was based on changes and the future of remittance markets.

This is the first time in its existence that the 3rd largest cryptocurrency, in an official US document referenced the exchange. Ripple’s tech is an enabling real-time global payments system based on the blockchain network. The firm has invested in a number of small and medium sized businesses, mostly focusing on improving computer communication and exchange of information between blockchain platforms and Decentralized finance (DeFi) space.

The Consumer Financial Protection Bureau, (CFPB) which is an independent US agency, has since suggested a more accommodative approach regarding their settlement rule. For organizations that generate a defined amount in transfers for money each year, compliance costs are to be reduced. However, the document mentions that the rise and fast adoption of digital technologies offered by cross-border payment providers has brought about substantial changes in the remittance market. Such technologies are like Ripple, SWIFT Global Payment Innovation (SWIFT GPI) and non-bank financial companies.

In the document, the Consumer Financial Protection Bureau mentions that the adoption of Ripple’s XRP will go hand in hand with banks. It will be possible for banks to see the total of their transmission that will be collected by recipients prior to the transaction. For XRP and the crypto industry at large, this new system represents a major milestone in their overall service delivery. The Consumer Financial Protection Bureau, however, maintains that this new change might not take over by wave but will take some time before it is fully running.

The CFPB understands that however much the crypto industry is gaining mass adoption and popularity, it is very much unlikely that they will replace the traditional banking systems anytime soon.

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Author: Lujan Odera