Russian President says Cryptocurrency May Become A “Means of Savings” at Some Point

Russian President says Cryptocurrency May Become A “Means of Savings” at Some Point

Vladimir Putin also said cryptocurrencies can also be used as payment though it is still too early to say.

Russian President Vladimir Putin said on Thursday that cryptocurrency can become a settlement unit though it is very unstable and still too early to use for energy.

These positive comments for digital currencies were given by Putin in an interview with CNBC that was posted on the Kremlin’s website Thursday.

Cryptocurrency “has the right to exist and can be used as a means of payment,” said Putin. But he did say that it was too soon to use crypto assets for trading oil and other commodities that make up the bulk of Russia’s exports.

“It’s too early to talk about this issue. Of course, cryptocurrency can become a settlement unit, but it is very unstable. It is possible to transfer funds from one place to another. But I think it’s too early for transactions, especially energy transactions, to use cryptocurrency for settlement.”

Russia, on which the US has imposed sanctions since 2014, has sought alternatives to trading in USD and has accelerated the de-dollarization plans with gold and has also set up an alternative SWIFT System to connect with other countries.

As we reported, Deputy Finance Minister Alexei Moiseev said this week that the country has no plans to ban crypto in countries like China.

Meanwhile, the central bank, the Bank of Russia, continues to issue warnings to investors about the crypto market being volatile and digital currencies not allowed to be used as a method of payment domestically. Putin meanwhile emphasized that they will

“pay attention to the development trend of cryptocurrency, which may also become a means of savings at some point. We have seen how the market fluctuates, and it is still early.”

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Author: AnTy

Bitcoin Network Can Start Recovering with Hash Rate Dumped 50%, Chinese Miners Already Migrated Overseas

Many small and medium-sized operations in China are also not affected. The upside further means the path to recovery is faster, and miner capitulation usually represents the best buy signals in Bitcoin history.

Bitcoin hash rate dropped to 91.2 Th/s over the weekend, a level last seen in early November, representing a decline of 47% from its all-time high of 171.4 Th/s on May 13. As of writing, the hash rate is back above 104 Th/s.

As a result, block time has reached above 14 minutes, the same as in mid-April. Difficulty meanwhile is at 19.93 trillion last seen in January, after the recent negative adjustment. Bitcoin mining profitability is still at 0.226 per day for 1 THash/s, at late January levels.

The latest drop came after Bitcoin mining farms in Sichuan were closed on Sunday. Central and provincial government-owned power companies were ordered to immediately stop electricity to crypto mining projects.

Sichuan is 90% renewables powered, and about a year and a half ago, it represented more than 50% of the Bitcoin network.

According to an estimate by the University of Cambridge, about 65% of the world’s Bitcoin mining took place in China as of April 2020.

According to a Communist Party-backed Global Times report, this closure of so many Bitcoin miners in the province has resulted in more than 90% of China’s Bitcoin mining capacity being shuttered.

Many small and medium-sized Bitcoin mining farms in China, however, haven’t been affected, and neither has Ethereum, Filecoin, and Chia mining.

Additionally, new pools such as Foundry USA launch now account for more than 7% of the global network and have entered the top 10 mining pools list.

China’s clampdown helped ViaBTC temporarily become the world’s largest bitcoin mining pool. Its founder Yang Haipo said for over two years, its mining pools and other businesses have begun to resolutely take the international route and de-sinicize.

“Institutional miners had already started migrating overseas from China as early as March,” said Sino Global capital. And expecting more bans came from the officials, “Chinese miners accelerated their process of migration to other countries.”

Kazakhstan AIFC officials are also looking for Chinese miners as they have power facilities with a capacity of 1,685 MW, which can help establish a managed mine within 3-4 weeks. Jonathan Cheesman, head of over-the-counter and institutional sales at crypto-derivatives exchange FTX said,

“Longer term most see hashrate moving out of China as positive but in the near term may have/has already resulted in inventory sales.”

China’ mining shutdown is leading to a real drop in hash rate and may cause a difficulty adjustment and perhaps even slightly slower blocks for a while, “but it’s not yet that big relative to the last 3 years (see below). And we’d prefer this to a firewall attack,” said Balaji Srinivasan, former Coinbase CTO, and General Partner at Andreessen Horowitz.

In a separate tweet, Srinivasan noted that Bitcoin mining is actually no longer in the exponential growth phase. He added,

“Hashrate isn’t increasing 100X in a year, hardware now lasts longer, opex/capex is more predictable, and tools for bounding risk now exist. So it’s easier to mine anywhere.”

Charles Edwards of Capriole Investments noted that we are now seeing the worst-case scenario for a China mining ban played out. “The brunt of the force of the China mining bans has been dealt. We are at a point where the network can now start to recover,” he wrote.

The upside here could mean the path to recovery is faster, given that mining is still largely profitable and that this capitulation wasn’t caused by genuine business collapse, said Edwards adding, Miner capitulation usually represents the best buy signals in Bitcoin history.

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Author: AnTy

Bitcoin ‘May Have Extrinsic Value In The Sense That People Want It’ Says BoE Governor

Bank of England (BoE) Governor Andrew Bailey cautioned over the use of Bitcoin as a means of payment on Monday.

He said he was “very nervous” about people using the leading digital currency for payments because it has uncertain value. Investors should realize that its price is extremely volatile, he said during a BoE question and answer sessions with the public.

He further talked about how the digital currency has little intrinsic value if any. “I have to be honest, it is hard to see that Bitcoin has what we tend to call intrinsic value,” said Bailey.

“It may have extrinsic value in the sense that people want it.”

The intrinsic value of bitcoin remains a central topic of debate amongst bitcoin skeptics and believers.

Read More: BTC Scales Just Fine As A Store Of Value Says MicroStrategy CEO Michael Saylor

Recently, cryptocurrency exchange Kraken in a report dedicated to this subject, talked about how intrinsic value, much like beauty, is in the eyes of the beholder.

“As time passes and bitcoin continues to navigate through uncharted waters, the intrinsic value of bitcoin will also likely change and as a result, so will its market value.”

However, Bailey snubbing Bitcoin isn’t anything new; it has actually been going on for years, even when BTC was at its peak. Just last month, he said, Bitcoin and other crypto-assets have no connection to money, whatsoever, citing its price fluctuation.

“They strike me as fundamentally unsuited to the world of payments where a certainty of value matters,” he had said at that time.

He, however, did feel that stablecoins could offer some useful benefits once consumers could use them with confidence, that is. Fiat-backed cryptos, according to him, can reduce friction in payments by lowering the cost and increasing the speed of payments.

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Author: AnTy

Mining Pools Hoarding Bitcoin Since November, BTC Balance Jumps by 103%: Chainalysis

The third Bitcoin halving is past us and the block reward is now officially 6.25 BTC which means miners profitability is shot by 50% and there will only be an inflow of 900 BTC per day now.

The after-effects can already be seen in the bitcoin market, with the hash rate declining over 20% after hitting a new all-time high yesterday.

Bitcoin’s price has also dropped from $10,000 last week to about $8,700. The reduced price means miners’ margins are cut down requiring them to expend the same resources for half the reward.

But interestingly, mining pools have been holding more bitcoin before the halving suggesting mining pools believe post-halving surge is on its way, as per the latest report by Chainalysis.

Holding more BTC than selling it off

The aggregate balance of all mining pools first started changing in the lead up to the halving in October 2019.

Throughout October and into mid-November, the total amount of bitcoin held by mining pools hovered around 10,000 BTC. But from there onwards, balances started climbing steadily, indicating miners have been holding more BTC they generated than selling it off.

This trend intensified around March 12, the day bitcoin crashed about 50%. Mining pools actually started holding even more bitcoin that has their collective balance at 17,422 BTC on May 6, 2020, compared to 8,579 BTC on Oct. 29, 2019.

Source: Chainalysis Research

The number of days mining pools held each new bitcoin they acquired before selling also rose to 3.68 days by the week of March 1 from 2.24 days during the week of Oct. 6. In May, this further increased to 5.74 days, more than double that it was in early October.

F2Pool & Poolin Leading the Trend

The Chainalysis report further found that individual mining pools are driving the trend with F2Pool miners mining more Bitcoin than any other pool since Oct. 1, “taking in 17% of all Bitcoin generated since then.”

Source: Chainalysis Research

F2Pool currently accounts for 39% of all BTC held by mining pools, with a current balance of 7,109 BTC. It started increasing holding more BTC in mid-Nov. Only to double down on March 12.

The second-largest mining pool, Poolin follows F2Pool which is taking just under 17% of all bitcoin generated since Oct.

Source: Chainalysis Research

Poolin’s current balance is 5,272 BTC, accounting for 29% of all Bitcoin currently held by mining pools.

Polar Opposite of 2016 Halving

This is completely different from the last bitcoin halving in July 2016 where Mining pools sold their BTC for the first few months of the year, the aggregate balance fell from 421,132 BTC on January 1 to 46,955 BTC by April 16.

But it grew steadily through May and June only for the most of it to be sold off by mid-June, weeks before halving.

Source: Chainalysis Research

One mining pool, HaoBTC, ninth-largest mining pool by BTC received at that time, did hold more BTC in advance of halving, taking in 2% of the total mined. It’s BTC balance jumped from 1,000 BTC in late March 2016 to 2,337 in early July — HaoBTC also launched an exchange in April 2016.

Post-2016 halving, their balance constantly hovered between 2k to 3k BTC only to be sold off by February 2017, remaining just 920 BTC.

HaoBTC yet again repeated its strategy and started holding more bitcoin before the 2020 halving. Its bitcoin balance which was between 600 and 1,000 BTC before April spiked to 1,787 BTC on May 1.

Just like many bitcoin holders, looks like these mining pools are also expecting 2020 halving to signal another bull run.

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Author: AnTy

Coinbase Commerce Crosses $200,000,000 In Crypto Payments Since Launch

Covid-19 hasn’t kept consumers from using bitcoin (BTC) as a means of payments for goods and services according to a merchant transaction report from Coinbase Commerce.

A Coinbase Commerce report shows that on 3-26-2020, clients made bitcoin transactions that helped the company surpass a goal of $200 million in transactions since it launched the payments portal. The results come from an enormous network of eight thousand retailers that accept cryptocurrencies together with other methods of payment.

BTC Preferred Over Other Cryptocurrencies

The news is great for those who encourage the adoption of Bitcoin (BTC) and cryptocurrency altogether. The COVID-19 crisis doesn’t seem to have affected the way people use digital money. However, the situation is not the same for merchant crypto payments, as John Zettler, Coinbase Commerce product’s lead, said there hasn’t been too much activity in this area in March.

He added that money comes very often in BTC but didn’t mention the exact usage breakdown of crypto-by-crypto. People seem to prefer BTC more than other digital currencies. Here are his exact words about how customers at Commerce feel about this digital currency:

“Merchant customers often tell us it’s the crypto they’re most familiar with and the one they trust the most.”

USDC Is Also Growing

Coinbase is also witnessing an increase in stablecoin based payments, especially in its own USD coin that’s dollar-pegged, USDC. Zettler mentioned USDC is leading the growth pack and is expected to have a material growth through Q2 and Q3 of 2020. Support for USDC was added by Commerce back in May 2019.

Zettler further said that Coinbase is working to improve Commerce’s features so that merchants’ demands are being met. The service was launched for refunds and with the intention to normalize the crypto e-commerce space. At the moment, crypto is only an insignificant e-commerce method, with a $3.5 trillion sales marketplace in 2019.

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Author: Oana Ularu

Is A Fed-Controlled Digital Dollar A ‘Win’ For the Public; Will it Pave Way For Faster Payments?

  • A digital dollar means Fed will be “free to impose negative nominal interest rates on all dollar-holders,” and privacy concerns – Lawrence H. White, a professor of economics
  • Fed-issued digital currency would need to be carefully designed, implemented, and regulated for faster, cheaper and more secure payments – Neha Narula, the director of the Digital Currency Initiative at MIT

Central banks around the world are assessing the benefits of issuing a state-controlled digital currency after China announced that it is close to launching its digital yuan and Facebook launching Libra. Just last week, there have been reports that Riksbank has started testing e-krona.

Even the Federal Reserve chairman Jerome Powell came forward to share that Facebook’s so-called cryptocurrency has been a wakeup call for them to start researching the concept of a digital dollar.

However, there has been much debate about Fed-controlled digital currency where proponents say it would facilitate faster and cheaper payments while protecting the Fed’s ability to conduct monetary policy, opponents say it would be costly and less efficient and could harm the government’s privacy.

Digital Dollar a “No Win” for the Public

The US government issuing a digital currency may not be a no-brainer but “it won’t be a “win” for the public,” said Lawrence H. White, a professor of economics at George Mason University.

According to the Wall Street Journal, White argues that most proponents of central bank digital currency are envisioning a currency that would give the government the

“ability to track all payments and eliminating the anonymity provided by physical cash today.”

And the claims of the national digital currency making retail payments costless, secure, and almost instantaneous are “dubious”. A central bank retail-system he said would require the Fed to match the level of services provided by commercial banks today which means investing in ATMs, branch offices, phone apps, tellers, and much more. Also, the payments system needs to be continually improved through innovation. White said,

“Given the government’s poor record on efficiency, the likely outcome would be a system that falls short on customer service or loses money at taxpayers’ expense — or both.”

This would also mean, the Fed will be “free to impose negative nominal interest rates on all dollar-holders,” and further raising serious concerns about privacy because the government will be able to track every single dollar spent.

Fed’s Involvement would make Payments Easier

On the other hand, Neha Narula, the director of the Digital Currency Initiative at the Massachusetts Institute of Technology’s Media Lab, makes the case for digitizing the U.S. dollar which she said would make payments easier.

The current cashless payments systems rely on financial intermediaries and aren’t much different from paper checks that means their fees are higher, slow settlement, and micropayments are almost impossible.

“The U.S. could help pave the way for faster, cheaper and more secure payments by allowing consumers to hold central-bank-issued digital currency outside of commercial banks.”

As for the Fed-issued digital currency, it could coexist with physical cash or Fed could provide accounts directly to consumers and businesses, said Narula. She went on to say,

“A Fed-issued digital currency would need to be carefully designed, implemented and regulated to reduce the risk of fraud, protect privacy and ensure that commercial banks aren’t drained of the funds they need to make loans.”

According to her, if the US does not embrace this opportunity someone else will. There is already exciting experimentation happening with cryptocurrencies, leaving innovation to private companies could mean a small number of large companies dominate and control payments, stifle competitors, and “undermine the Fed’s ability to set monetary policy and regulate financial flows.”

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Author: AnTy

Shopify Joins Facebook-led Libra Association To Help Build Stablecoin Payment Network

E-commerce platform Shopify has announced that it has joined the Libra Association. This means that the online shopping firm is the latest entrant of the Facebook-led stablecoin project. The entry of Shopify into the association comes barely a month following Vodafone’s pull out with the aim of developing its solo virtual payments platform. This marks the first time the organization is admitting a new member since it was created.

In a blog post, Shopify stated that it aims at working with other members to develop a payment system which can work everywhere in the world.

Libra was released by Facebook last year to work as a worldwide payment system with the Libra stablecoin pegged on various global currencies. A governing council to guide the execution and implementation of the project was formed in October and named the Libra Association in order to decentralize the stablecoin’s leadership albeit on paper. However, Facebook is not a member of the council but Calibra, its subsidiary, is a member.

The Libra Association brings together various firms such as Coinbase, Andreessen Horowitz, Anchorage, Xapo, Bison Trails, Union Square Ventures, Uber, Spotify, PayU, among others.

Other firms like PayPal, Mastercard, eBay, Visa, Booking Holdings, Mercado Pago and Stripe were initially to be members of the organization but withdrew from the project before its official launch, CoinDesk reports. Vodafone has been a member of the council but withdrew last month.

Shopify stated that it is joining the association in order to be active in the development of an infrastructure which empowers the majority of entrepreneurs across the globe. The press release also stated that most of the existing financial infrastructure in the world is not developed to scale in the right manner to meet the needs of online commerce.

Dante Disparte, the policy head in Libra Association expressed the organization gratitude in welcoming its 21st member. He added that Shopify will bring immense expertise and knowledge to the Libra project, since it is present in more than 175 countries with more than 1 million businesses. He added that Shopify will be crucial in the development of a financial system that will efficiently serve billions of people.

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Author: Joseph Kibe

Libra Association Vice-Chairman Calls Bitcoin An ‘Exciting Asset’ But ‘Not For Payments’

According to Dante Disparte, the Libra Association vice-chairman, Bitcoin isn’t a means of disbursement. Disparte said this when speaking to early adopters of tech and gadget fans in Las Vegas who had attended the Digital Money Forum at CES (Consumer Electronics Show). Disparte noted that:

“The bottom rung of the ladder of economic mobility is payment access.” He went on to note that” crypto just isn’t cutting it on payments.”

He mentioned that this was the sole reason he was fascinated in what Facebook was trying to create with Libra.

The Libra Association comprises of a grouping of numerous corporations which seek to ultimately release the Libra stablecoin. The stablecoin will be a coalesced digital asset designed by the social networking giant. It’s intended for use by the millions of people around the world who currently lack access to the services provided by modern-day banking institutions.

Each corporation involved in its development would operate a node. However, the only companies that would be allowed to do so are those that would receive the formal go-ahead from the existing members.

While the cryptocurrency is expected to be more decentralized compared to existing finance, there’s a difference in that the asset is not permissionless, as is the case with ethereum and bitcoin.

Disparte added that Libra was making an attempt to try and solve complicated issues.

Pushback

Akin Sawyerr, the strategy leader on the Decred Project stated that he was not convinced that a group of corporations interested in their own interests would do finances any better compared to the devolved systems. He added that:

“The only way to really get there is to empower the individuals to have some base-level sovereignty.”

By independence, what Akin was referring to was ensuring that individuals had complete control over their finances. When you look at it in terms of bitcoin, when the crypto asset owner has control over their keys, it means that no other person can take control over that particular asset.

Sawyerr doesn’t believe a permissioned system being run by a collection of big corporations would be resistant to censorship.

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Author: Daniel W

Bithumb Rolls Out Blockchain And Crypto Research & Development Center In South Korea

South Korea-based crypto exchange Bithumb has opened its own R&D center, which means it’s also going to do research and development from now on.

The announcement was released on January 6. Bithumb now has the first South Korean blockchain and cryptocurrency research center. The company expressed its hopes on how the new initiative is going to impact it:

“Bithumb will become a leading company in the blockchain and cryptocurrency ecosystem by strengthening its own R&D capabilities.”

What Will the Center Do?

Employing 30 people, Bithumb’s R&D center is going to start its activity this month. The team will study the architecture design of blockchain systems in order to improve the analyses of blockchain transactions and crypto private key security. The team in charge with researching this architecture will look at systems that make high-performance transactions and respond to large orders at the same time.

Bithumb is also planning to perform blockchain analyses to isolate crypto trading transactions and come up with a system that generates user addresses for allowing withdrawals and deposits on the exchange.

Encryption-Related Security Enhancement Tech to Be Developed Too

Bithumb’s plans also include the development of encryption-related security enhancement technologies, the implementation of systems that make verifications and private keys’ storage safer, and the separation of functions. The research team will furthermore work to make the data exchange between databases and blockchains more available and performant, also to build a programming interface for its crypto trading applications and to upgrade its matching engine.

More and More Funds for Research

Since cryptocurrency and blockchain technologies are showing more and more potential, their research is starting to receive more funds. Only at the end of last year, China’s WeChat operator Tencent has been reported to have plans of forming a research group for digital currencies in order to advance blockchain-related projects.

China’s state-run media publication Xinhua has predicted the country is going to spend more than $2 billion on blockchain research in 2023, while Global Market Insights expects the blockchain technology market to have more than $16 billion until 2024.

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Author: Oana Ularu

xRapid Update: Bitso Liquidity Index Breaks into an ATH as XRP/MXN Trading Gains Momentum

  • MoneyGram facilitating cross-border flows
  • Significant Volume means Ripple doesn’t have to incentivize
  • The Bitso Liquidity Index has broken into an all-time high (ATH).

Mexican licensed crypto exchange Bitso is seeing heightened activity when it comes to XRP/MXN trading. Though the volume in itself isn’t much, it is making progress and continuously growing.

In the past 24 hours, XRP/MXN registered the trading volume of $509,763, accounting for 0.05 percent of all the volume recorded in XRP markets, as per Coinmarketcap.

On Sept. 14, XRP/MXN trading volume surpassed BTC/MXN volume on Bitso. However, currently, while BTC/MXN accounts for more than half at 58.45% of all trading volume on Bitso, XRP/MXN only has about 32% share.

MoneyGram facilitating Cross-Border Flows

Just last month, Breanne Madigan, the head of Global Institutional Markets at Ripple and former Goldman Sachs executive shared despite the trading volume of the digital asset being down 65 percent, XRP/MXN has surged 25 percent.

Speaking at Global Blockchain Policy Forum organized by the OECD on Sept. 13 in Paris, Madigan shared how it works.

With one of its latest partner MoneyGram as an example, she detailed how MoneyGram help facilitate their cross-border flows for someone who lives in the US and wants to send Mexican pesos back to Mexico.

How it works is, through its partnership Ripple send MoneyGrams flow to one of the originating exchanges say Coinbase in the US where the US dollars get swapped to XRP and then they get sent to cross-border to a local exchange in Mexico say Bitso where it takes that XRP and swaps it into local Mexican pesos. The consumer then will receive Mexican pesos directly.

So, Ripple delivered significant cost savings to MoneyGram, a real value proposition to a company that’s affecting the end consumers because their fees will be lowered as a result.

As such as Ripple scale xRapid, its on-demand liquidity product, they’re launching new corridors.

Significant Volume Means Ripple Doesn’t Have to Incentivize

Madigan further states the way they’ve structured their contracts is in such a way that it leaves an opportunity for new liquidity participants to have the incentive to enter.

Since launching MoneyGram into that corridor, “a number of new liquidity participants are realizing there is a real arbitrage opportunity,” and Ripple doesn’t have to pay to incentivize people to make markets because there’s the significant volume going through that corridor.

On another note,

Madigan also talked about how they’ve seen global consensus from countries across the world including the UK, Australia, Malaysia, and Singapore noting that XRP is not a security but in fact a hybrid between a utility and settlement token.

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Author: AnTy