EY, ConsenSys, Microsoft Launch Baseline Protocol; Enterprise Data On Ethereum Mainnet

ConsenSys and EY have commenced the formation of a blockchain protocol suited for enterprise clients. According to a press release on March 4, ConsenSyns said that the ‘Baseline protocol’ will leverage Ethereum’s Mainnet to deliver its distributed services.

This new innovation is meant to increase corporate efficiency especially in communication systems. As it stands, companies spend a fortune to integrate systems like ERP and CRM without a proper guarantee for functionality in their projected life time. Blockchain on the other hand offers an opportunity to create a common frame of reference although it is yet to gain the market’s confidence in terms of data security and privacy.

ConsenSys Group Executive for Mainnet, John Wolpert, is however optimistic that Baseline protocol will change the narrative in blockchain and attract enterprises to the market;

“A lot of people think of blockchains as the place to record transactions. But what if we thought of the Mainnet as middleware? This approach takes advantage of what the Mainnet is good at while avoiding what it’s not good at.”

Baseline Protocol in Detail

The whole idea is tokenization of financial services with blockchain as the underlying tech to facilitate these operations. Given the sensitivity on information sharing, Baseline implemented an open-source using the Zero-Knowledge Proof (ZKP) consensus within its ecosystem. Basically, enterprises can be mathematically recognized as network participants without the hustle of sharing private information.

This platform will further leverage smart contracts to create digital agreements on Ethereum. It is also designed in a compartmental manner such that enterprises can only access information from a permissioned chain. Despite its potential, Baseline protocol is not very scalable given the fundamental ZKP consensus. This algorithm is highly computational which in turn increases the amount of gas to be spent on Ethereum.

The Opportunity!

Notably, this decentralized project has attracted Microsoft which is set to contribute to its development. A technical steering committee is also being established with over 10 members confirming so far. Other significant players who are onboard include; Duke University, ChainLink, MakerDAO, Envision Blockchain and Splunk.

The Baseline protocol code is currently available for testing although this has been limited to a specific group. Plans are however underway to make it open to the general public over the course of March. EY’s Global Blockchain leader, Paul Brody, was keen to highlight this journey;

“Over the last two years, we have been advancing the state of the art for private, secure transactions on public blockchains. This takes the groundwork we have built and starts filling in gaps such as enterprise directories and private business logic, so companies will be able to run end-to-end processes like procurement with strong security.”

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Author: Edwin Munyui

Upbit Blames South Korea’s Taxation and KYC Hurdles in Foreigners’ Frozen Funds Saga

Upbit crypto exchange woes are still on after it emerged that foreign clients to this South Korean firm are yet to withdraw their ‘frozen’ funds. The platform suffered a blow when close to $50 million worth of Ether was stolen upon a successful hack towards the end of 2019.

Most of the affected clients are from China with over 6,000 crypto traders’ assets being frozen; they cannot even withdraw using the Korean Won. This group has since concluded that Upbit may be on its way to insolvency and also understated the financial damage caused by November’s 2019 hack. So far, organized efforts to have Upbit act on its obligations have been futile.

Upbit’s Defense

The Korean crypto exchange came out to clear the air on why they are yet to release frozen funds. According to them, structural hurdles under the legalities of financial markets have mainly contributed to this situation.

Top of the list is an internal Korean tax obligation under review; this came up after the authorities took a look of Upbit’s reports in December. The firm however highlighted that,

“Upbit has been working closely with the tax authority to ensure accurate taxation standards, and also with tax experts to review taxation standards by country.”

The other hurdle is a KYC process that has been prolonged despite Upbit submitting updated clients’ records upon request last year. New regulatory pressures from Korea’s regulator may have actually caused this delay given the financial attention and scrutiny triggered by Upbit’s hack.

Users who submitted their ID’s afresh are now wondering whether they are safe or more exposed? This is quite frustrating for them and only time can reveal if indeed Upbit is being truthful in its excuses.

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Author: Edwin Munyui

Bitgo, Crypto Custodial Service, Launches In-Platform Trading For Institutional Clients

It has been a while coming as crypto custodians look for better ways to serve clients on their platforms. With security protocols no longer a competitive advantage in the field, ease of access and management costs are taking shape as the differentiating factors across most crypto custodial services, Bitgo becomes the latest to offer trading with coins stored in a hardware wallet.

On Tuesday cryptocurrency custodian, Bitgo announced a partnership with SettleBit, which aims to provide a direct gateway for clients, mostly institutional, to trade digital assets directly from their Bitgo account. Bitgo which was founded in 2013, offers specialized custody, ensures security and liquidity options for digital assets. They are currently handling over $15 billion in cryptocurrencies monthly.

Bitgo clients assets stored in Cold storage entirely

Now using SettleBit’s digital asset trade settlement platform, which has been integrated with their own, Bitgo clients can trade directly from their custodial accounts. Through a liquidity network, the clients can try to get their best rates and come to an agreement as soon as verification is complete and in the meanwhile their funds are safely stored in cold storage.

As for now the platform only deals with Bitcoin (BTC), Ethereum (ETH) and only one fiat currency namely the US dollar although they have expressed the desire to expand to more stablecoins and tokens. During the announcement Bitgo’s Head of financial services Nick Carmi explained how the partnership with SettleBit has brought about a solution that enables client’s assets to remain in cold storage as they trade.

“We know that many of our clients want to be able to trade without moving their assets out of cold storage… Using our settlement API, SettleBit has created a simple and elegant solution”

SettleBit’s CEO, Leor Tasman seemed excited at the opportunity they had created for the Institutional clients, the ability to securely trade digital assets that are with no settlement risks which is not common especially on Cryptoblocks.

“Trading with no settlement risk is the Holy Grail for any investor, especially on crypto block trades. Together with the world’s leading custodian, our technology is creating new opportunities for all market participants. We are excited about this opportunity”

The first successful trade was completed on Jan 22, by the Entertainment distribution network CTM Digital who transacted with $100,000 worth of Bitcoin.

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Author: Lujan Odera

Silvergate Bank Closes Out 2019 WIth Over 800 Crypto-Related Clients Despite Down Q4

One of the most crypto-friendly banks in the US, Silvergate, added 48 clients that use cryptocurrencies, in Q4 of 2019.

In a published report, this week on Silvergate’s earnings shows a 4% decrease in the deposits from their crypto customers, even though the La Jolla California-based bank managed to add almost fifty new crypto clients in the same period. Also, the bank’s deposits were down 1.8% in the same 4th quarter, they are currently trading on the New York Stock Exchange under the symbol (SI).

The Silvergate Exchange Network Brought the New Clients on Board

Silvergate Bank’s CEO, Alan Lane, has explained in a press release that progress has been made, and the Silvergate Exchange Network (SEN) has brought new clients on board. (SEN) commercial investors to move US dollars between crypto exchanges instantly. The number of transactions on the exchange in Q4 was 14,400, 17% more than in Q3.

The bank has $2.1 billion in assets. It increased the cost of deposits from 0.5% to 0.84% and earned $1.4 million in fees from its crypto clients, which is 12.5% less than the $1.6 million from Q3. Besides, it added 11 crypto exchanges with some over-the-counter desks included, 16 crypto businesses like crypto application firms and mining operations, and 21 institutional investors.

Using Bitcoin for Fiat Loans Collateral

Silvergate had a decrease in the net income by about 45%, with $6.6 million in Q3 and only $3.6 million in Q4. Back in 2013, the bank decided to add to its traditional commercial banking services the cryptocurrency products, in an attempt to gain more clients that make non-interest bearing deposits.

What Silvergate does is convert deposits at other banks into interest-bearing ones, also in loans and investment securities. Just as this year started, They launched the SEN Leverage product for traders to use Bitcoin (BTC) as collateral against their fiat loans. The bank also hired Benjamin Richman, the former Blockstream exec, as the new director.

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Author: Oana Ularu

TradeStation Users Now Have Access To CME, Bakkt Bitcoin Futures Options Trading

TradeStation is an online brokerage firm for securities and on 27th January announced that its clients can now trade Bitcoin Futures Options from CME and Bakkt on their recently revealed FuturesPlus platform.

The new futures platform would come equipped with various analytical tools and simplified pricing to help institutional clients to trade the futures contractor from both the popular platforms in one place.

Futures contracts have become the hottest crypto trend since it has given a smooth pathway for institutional traders to enter the digital space. Earlier these big shot traders avoided crypto markets owing to its high price volatility and risk-return factor.

However, the likes of CME and Bakkt has efficiently managed to bring in these institutional players by offering a less volatile form of investing via futures contracts. These contracts are settled at the prefixed date of every month to depending on the time frame of the trader’s contract.

CME Group was the first exchange to enter the futures market for digital currencies as it launched its Bitcoin futures contract during the peak bull market for the king coin in December 2017. Recently they also launched the Bitcoin Futures Options trading with tremendous response from the community as it’s volume soared and doubled in just the first week.

Bakkt’s physically settled Bitcoin futures were launched in September 2019 amid high speculations and hopes. However the start was quite disappointing for Bakkt as it failed to generate trading volumes anywhere near CME’s, but slowly picked up the pace by December and since then has seen significant rising volumes with each passing day.

TradeStation Securities has been in the business since 1980’s catering its services mainly towards institutional clients. The securities brokerage firm has been known for offering commission free trading for traditional stocks, futures, options and exchange traded funds as well.

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Author: James W

Ethereum Muir Glacier Update: Parity Upgrade Alert Due to Attack, 75.7% of Node Operators Ready

  • Those running Parity nodes are asked to update their clients “ASAP”
  • 75.7% of the node operators are ready for Muir Glacier
  • Down 92% from ATH, it is still one of the best performers of the decade, with nearly 18,000% gains

Just a day before Ethereum’s latest and unexpected network upgrade Muir Glacier, Ethereum client Parity came under attack.

Parity Ethereum took to Twitter to announce that on investigating the reports of some of the Parity Ethereum nodes not syncing, they came to believe there may be an attack underway.

Reportedly, valid blocks with manipulated directions, added or replaced, caused the client to stall, according to GitHub. Sergio Demian Lerner, a cryptocurrency security consultant, explained:

“The attack is simple: you send to a Parity node a block with invalid transactions, but valid header (borrowed from another block). The node will mark the block header as invalid and ban this block header forever but the header is still valid.”

New versions v2.6.8-beta & v2.5.13-stable have been released that will protect against this attack. As per this upgrade,

“Make sure to not mark block header hash as invalid if only the body is wrong.”

Those running Parity nodes are asked to update their clients “ASAP.”

Parties involved were already unhappy with the situation as Ethereum chose New Year’s Day for the upgrade. And now Parity underwent an attack.

Moreover, currently, 75.7% of the node operators are ready for Muir Glacier, as per Ethernodes.org.

Binance however, has announced its support for the ETH Muir Glacier upgrade. Because of which, deposits and withdrawals of ETH will be suspended.

When it comes to mining pools, only one, Ethermine is ready while the rest Sparkpool, F2Pool, Nanopool, Zhizhu, and MiningPoolHub still showing ‘no information’.

Earlier this month, the Ethereum network has its Istanbul upgrade and now they are ready for another. Ethereum was forced to have another update (EIP-2387) in less than a month due to a mistake and to delay the difficulty bomb feature that will slow down the Ice Age by about 611 days.

2020 to be the year of Ethereum?

The second-largest cryptocurrency by market cap is currently trading at $131, down 92% from its all-time high of $1,570. Ethereum’s 2019 performance surely has turned negative by 3.50% but it is still one of the best performers of the decade, with nearly 18,000% gains.

For the next year, Ethereum might be in for some good time as it might have hit the bottom.

Trader Crypto Michaël also sees 2020 a good year for Ether as he says, “Each massive breakout of ETH in January showed a significant move.”

Historically, he says Q1 of the year has been a great period for altcoins and their dominance bottoming. So “Let’s rock in Q1 2020!”

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Author: AnTy

BitGo Requests Its Users to Convert/Move BSV Assets

BitGo, the digital currency management firm has asked its clients to consider transforming or transferring their BSV (Bitcoin SV) assets. The request to alter any funds held in this altcoin was issued as a result of a compatibility issue.

On December 18th, BitGo, through a blog post noted that Genesis—the hard fork to be performed on Bitcoin SV would come with a change in protocols.

This change would make it hard for digital wallets to receive any BSV related transactions.

BitGo Issues a Warning on the Deprecation of Bitcoin SV

Genesis, the BSV hard fork has been slated to take place sometime in February next year. Once the hard fork is completed, existing BitGo clients will not be able to consent to any incoming trades. They will still, however, be able to use the Bitcoin SV tokens that may be remaining in their wallets.

The blog post went ahead to refer to the hard fork as a “deprecation.” As such, it sought to advise its clients to contemplate transferring all the Bitcoin SV tokens they had in their wallets on to other wallets. Alternatively, clients could also consider converting their tokens into BTC (Bitcoin) tokens. It summarized the announcement by stating that:

“Clients will need to take one of two actions before February 4:

1.Contact BitGo via [email protected] to convert your BSV holdings to Bitcoin

2. Move BSV funds to an external wallet

If you continue holding BSV in your BitGo wallet after February 4th, you will only be able to sweep the wallet and most functionality will be disabled.”

An analysis of the issues arising with Bitcoin SV indicates that the compatibility issues are being occasioned by the removal of the P2SH protocol. Given that BitGo relies on MultiSig addresses, it means that this hard fork will cripple its whole customer base when the protocol is removed.

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Author: Daniel W

60% Of German Banks’ Charge Negative Interest Rates, ECB Says It Could Give Rise To ‘Bigger Risks’

Nearly 60% of German banks are charging negative interest rates from corporate clients on deposits while 23% are doing the same for retail customers, revealed a survey by the German central bank.

Two weeks after the European Central Bank cut interest rates deeper into negative territory, from minus 0.4% to minus 0.5% in mid-September, the Bundesbank surveyed 220 lenders.

These practices are proving to be controversial in Germany where ECB has been attacked for penalizing savers. ECB President Mario Draghi is being depicted as the “Count Dracula” a vampire sucking the savings dry in Germany’s tabloids.

Everyone Boarding the Negative Interest Rate Train

Last month, James von Moltke, Deutsche Bank’s CFO said Germany’s largest lender will start changing its client’s deposits.

Germany’s second-largest listed lender Commerzbank has also started approaching wealthy retail customers holdings deposits of more than €1m. Last month, Berliner Volksbank, the country’s biggest co-operative lender said it would start applying minus 0.5% on any deposits over €100,000.

State-owned German development bank KfW is also preparing to pass on negative interest rates to its borrowers.

According to a german price comparison website, Biallo.de, 140 lenders are already charging negative interest rates.

Now to give banks some relief from the negative rates, the ECB is introducing a “tiering” system that will exempt their part of the deposits with the central bank from charges.

ECB Warning About their Own Policy Measure

The eurozone economy has been struggling in the aftermath of the debt crisis in 2011.

To boost the flagging economy, negative interest rates were first introduced in the eurozone in 2014. But its knock-on effects have put a dent in the weakening earnings of Europe’s banks.

ECB vice-president, Luis de Guindos in a speech on Monday said the profitability of European banks had been “persistently low” and their aggregate return has dropped below 6%.

“This low interest rate environment also affects the investment strategy of the asset managers and in this respect, this part of the financial system could give rise to bigger risks,” Guindos told CNBC on Wednesday.

So, the ECB is warning that their own policy measures could cause systemic risk. This Mati Greenspan, a senior analyst at eToro says is “great” because,

“The ECB is finally admitting that they’re policy of excessive stimulus and artificially low interest is actually incentivising investors to take way too much risk.”

As we reported, this challenging time for the financial industry is good for Bitcoin. Negative interest rates give an investor less incentive to save but with Bitcoin, a cryptocurrency that has established itself as an “institutional store-of-value asset class” and has registered more than 100% gains in 2019 alone, they have the incentive to hodl.

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Author: AnTy

Coinbase Custody Now Supports Maker (MKR) and MakerDAO’s Governance

Coinbase Custody keeps adding new options for its clients. Around six months after letting the clients use a crypto staking service for the assets that were being held by the company, Coinbase Custody has recently announced staking support for MKR tokens as well.

MRK the native token of the MakerDAO network, famous for its DAI stablecoin. Now, the clients of the company will be able to participate in the governance of the system directly by using the custodial solution.

Before now, if they stored their assets in custody, they would obviously not be able to vote on the decisions of the network, which basically defeats the whole idea of custody, so knowing that this could turn into a problem, Coinbase Custody decided to add this new options so that no funds would need to be withdrawn to participate in the voting system of the network.

This, the custody company affirmed, would help in the protection of the clients, as they could participate without suffering any risk of theft.

Before now, the only asset that could be staked on Coinbase Custody was XTZ (Tezos). The staking, however, was not a really big source of income for the clients. In the two first months of the operation, around $8,000 USD was gained from staking, which was about only 0.5% of the total staking in the ecosystem.

The next governance decision in the network is set for November 15. Then, it will be decided whether the network will adopt a new multi-collateral DAI system or not. The decision is expected to pass.

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Author: Hank Klinger

Stellar Foundation to Airdrop $121 Million Worth Of XLM Crypto Tokens to Keybase Messenger Users

Stellar Foundation is collaborating with messaging platform Keybase to reward Keybase clients for chatting with friends. On monday the two companies inked a deal of a 2 billion XLM airdrop worth about $121 million.

According to the announcement, this is the biggest XLM airdrop of Stellar’s five year existence. According to the agreement within the next 20 months, Keybase clients will be offered airdrops of about 100 XLM.

According to Keybase, it has 300,000 clients who are active in its different services and platform.

According to a blog post shared with CoinDesk, the clients will only need to have a valid Keybase account and the amount of XLM will automatically appear in their wallet. The XLM will appear on a monthly basis so long as the airdrop are in existence.

The company confirmed that the airdrops will be available for the next three months. However, the continuation of the program will depend on meeting various basic success metrics. According to Stellar Foundation CEO, Denelle Dixon, stated that Keybase is a crucial partner as the company pursues its adoption strategy He explained:

“The foundation’s mandate is to deliver lumens [XLM] into the world. This is part of that plan. The up to 2 billion is a really great way. And we will have checks along the way.”

The two companies are not strangers to each other as they have worked closely since March 2018 after Stellar invested heavily in Keybase’s Series B fund raising.

Dixon explained that Keybase is an example of what projects his foundation intends to invest in since Keybase have a lot in common with cryptocurrencies. He explained that the deal will allow Keybase users to know XML in details for the next 20 months.

The current airdrop comes days after Keybase upgraded various features after adopting Stellar in early May 2019. Using the Keybase platform, the users are able to transfer Stellar to various users or even phone numbers even those with no Keybase accounts. A spokesperson explained that Keybase is expected to include additional features in the near future that will comprise XLM payments.

The airdrop deal comes amid other rival messaging apps come up with their own crypto efforts. For instance, Telegram is expected to roll on its TON in the coming days while Facebook is set launch Libra.

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Author: Joseph Kibe