Asia, Africa, & South America Combined Accounts for Less than 10% of Lightning Network Nodes

About 87% of all the Lightning Network nodes are LND nodes. In comparison, about 11% are C-Lightning, and only 2% of the remaining are Eclair, according to the latest report by members of the Faculty of Computer Science from the University of Vienna, Austria, and Christian Decker of Blockstream, Zurich.

Lightning Network is a layer 2 solution on the bitcoin network for scalable and instant transactions. It currently has a capacity of 1,040 BTC with 14,273 nodes running it, as per 1ML.

In the past couple of years, several implementations of LN have popped up.

In early 2018, Twitter CEO and bitcoin proponent Jack Dorsey-backed Lightning Labs’ CEO Elizabeth Stark, announced the initial release of LND for developers to make it available for testing purposes on the main Bitcoin network.

C-Lightning is Blockstream’s own implementation of the Lightning Network built in the C programming language.

Eclair is for those who want to set up a full Lightning Node, which needs a lot of computer know-how. With this approach, you are routing transactions on the network and can also make your own transactions.

Geographic distribution of LN Nodes

The report titled “Node Classification and Geographical Analysis of the Lightning Cryptocurrency Network” also found that a large share of the total Lightning Network nodes, 44.8%, are located in North America and close behind is Europe with 43.1% share.

In Europe, most of these nodes are located in Central Europe with a very high node distribution on both the East Coast and the West Coast.

The remaining nodes are located in Asia at 6.2% share, Oceania at 2.2%, and then South America and Africa, each having 0.8% and 0.6% of the Lightning Network nodes.

In Asia, most of the nodes are located on the coasts of South Korea, China, and Japan.

It has been further found that multiple node clusters are centered in metropolitan areas. For instance, in Germany, the largest node hub is located in the metropolitan area in Berlin and then Munich and Frankfurt. In Japan, this has been found true with Tokyo, Osaka, and Kobe.

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Author: AnTy

Biggest News of the Week: Going Mainstream or A Sacrifice in the Name of Pump?

This week, the big news came in the form of PayPal announcing support for cryptocurrencies.

Not only the payments company would allow its users to buy, sell, and hold crypto, but soon it will also allow the users to shop at its 26 million merchants using crypto.

For now, Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC) are the ones supported directly within the PayPal digital wallet.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” said Dan Schulman, president, and CEO of PayPal.

As reflected in the price of Bitcoin surging past $13,000 to a new 2020 high, the market was elated. The other three digital assets had a good time with gains.

First Thing First

Why was this particular set of cryptos selected?

These crypto are actually among the digital assets approved by the New York State Department of Financial Services, and the NYDFS has granted PayPal a first-of-its-kind conditional Bitlicense.

Other coins approved by NYDFS for listing include Binance USD (BUSD), Gemini Dollar (GUSD), Paxos Standard (PAX), and Pax Gold (PAXG). Ethereum Classic (ETC) and Ripple (XRP) joined these cryptos in approval for the custody list.

Now, some feel by adding altcoins, it has just become another ‘exchange listing pump’ phenomenon.

“New bullish catalyst will be which altcoin Paypal lists news. They will be the Coinbase listing of 2020 and 2021,” noted one trader.

As a matter of fact, the company could really be setting the stage for its own dollar-pegged digital currency to “reduce their dependence on the correspondent banking system and other card networks,” as Facebook is doing with Libra, said Meltem Demirors, the chief strategy officer at CoinShares.

Bullish AF

PayPal news was met with excitement; the market celebrated it with gusto, seeing it as a sign that other institutions now would have no choice but to follow suit.

“We knew crypto trading on PayPal was coming, but to also enable crypto use for shopping at its 26 M merchant network is huge. Also, with PayPal and Venmo in the fray, every Fintech firm will now follow,” said a partner at the crypto fund, The Spartan Group.

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“If you liked the recent PayPal and Revolut launches, you’ll love the dozens of neo-banks and fintech teams currently scrambling to figure out what their “crypto strategy” is,” said Arjun Balaji.

In terms of exposure, “PayPal is bullish AF,” as the company has 487 million userbases while the bitcoin network currently has only 187 million total on-chain participants (23.4 million on-chain holders plus 101 million exchange users).

But is it Really?

While the digital asset price remains in bullish momentum, it didn’t take much time for the excitement to die down in the market.

Some even called this rally, “insiders frontrunning the PayPal news,” while others think it just “the most bullshit cope.”

For starters, PayPal has been merely playing catch up, and Bitcoin is the one providing PayPal an alternative to central banks – “archaic inflationary political central bank monopolies.”

The real caveat is that merchants won’t be receiving payments in virtual coins. But the biggest issue has been taken with the fact that PayPal doesn’t allow the cryptocurrencies in its account to be transferred to other accounts, on or off PayPal.

“So, this is all a big PayPal nothing burger, just entries in a central PayPal database, nothing to do with bitcoin,” said analyst PlanB.

Popular hardware wallet Trezor also said: “You shouldn’t use PayPal” because ‘not your keys, not your coin’ as Paypal doesn’t provide the private key of the crypto holdings.

Not only its ex-CEO Bill Harris called Bitcoin “the greatest scam ever,” but PayPal is also known for “stifling competition and preventing users from ever withdrawing their cryptocurrency to the safety of a wallet they control the keys to,” wrote Trezor in a blog post.

Amidst this hard criticism against PayPal for restricting self-custody being “objectively bad” and “necessary for Bitcoin to succeed,” others argue that this was exactly how Square’s Cash app started out, and eventually, it opened up.

“This is a great way for a risk-averse firm to offer its customers exposure to Bitcoin without worrying about “travel rule” compliance,” said Jerry Brito, executive director at crypto think tank Coin Center.

“In all fairness to PayPal, those features may come later,” tweeted Weiss Crypto Ratings.

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Author: AnTy

Bitcoin Miners Generating BTC at Fast Pace & ‘Running Down Inventory’ Just as Hard

Bitcoin started this week on a bullish note, reaching above $11,700 only to drop to nearly $11,200 level on Friday after crypto exchange OKEx announced that cryptocurrency withdrawals had been suspended.

According to the local media, two of the executives, including its founder, Star Xu, arrested by the police, have been released on bail. Star Xu has been reportedly assisting in the investigations.

The exchange maintained that the investigation is “not related in any way to anti-money-laundering or to OKEx,” and that the funds are safe and all other functions are unaffected.

OKEx actually holds 1.1% of Bitcoin’s circulating supply (200,000 BTC worth $2.3 billion), and before the suspension of withdrawals, large BTC outflows were observed from the exchange.

As per Glassnode, “a total of 10,000 BTC ($113 million) were withdrawn in two large batches in the past 48h.”

Market Unchanged

Yesterday, what made matters worse for the already jittery markets was the Deribit exchange that was temporarily out of action due to maintenance that had not only BTC price falling but also the futures curve flattening yet again.

On-chain analyst Willy Woo actually expects the last CME gap around $11,200 to get filled as he sees hidden distribution at spot exchanges, with volume sell-off not yet reflected in the price.

But in the near term and overall, he remains bullish, signaled by the growing market fundamentals.

“The on-chain fundamentals which are 3-6 weeks at the minimum timeframes are still unchanged in bullish mode, if we do get a pullback, I’d take it as a chance to deploy capital into BTC if you missed it in the 10k zone,” said Woo.

Still, Some Weakness in Near Term

While the network fundamentals, the hash rate has made an all-time high, miners are “running down inventory quite hard today.” With MRI currently above 100%, it means miners are selling more Bitcoin than they are mining.

This, according to Charlie Morris of ByteTree, is an indication of a “Healthy market to sell into.”

Interestingly, with more than ever hash power used to mine bitcoin, the standard 10 minute time to generate a bitcoin has fallen to 8 minutes 8 seconds, as per Bitinfocharts. In the second half of 2020, the block time has been kept between 12 to 8 minutes.

Overall, bulls haven’t lost yet, and they could further continue higher, especially if equity markets trade up given their correlation that continues to increase, currently above 57%.

“Recent BTC breakout was legit, but more effort needs to be coming from the bulls. Price action remains in a three-wave corrective move after bearish impulsion. Break of $11,740 & $12,500 Highs needs to commence, otherwise bears might try to force more consolidation/downside,” says one analyst.

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Author: AnTy

Vitalik Buterin: Ethereum has No Non-L2 Path for Scalability in Medium Term with ETH 2.0 Years Away

“Base-layer scalability for applications is only coming as the last major phase of eth2, which is still years away,” wrote Ethereum co-founder Vitalik Buterin in the Ethereum roadmap update.

But Buterin doesn’t like that crypto media is putting it out there. Buterin’s saying that the media “selectively sound-bites” him and he’s just going to ignore it all has been in response to a crypto community member‘s remarks on the co-founder “comments not helping ETH.”

On ”A rollup-centric ethereum roadmap,” Buterin proposed a full focus on the second layer method because the base layer is nowhere near becoming a reality yet.

Buterin may not like what the media is publishing, but it has been just his words. About a year back, he had also talked about scalability being a “big bottleneck” for Ethereum blockchain, which is “almost full” and “keeping people from joining.”

“No Choice”

Over the past few months, the DeFi mania took over the Ethereum network sending the fees to an all-time high, breaking new records every month, pushing the small players out, and making it a big players game.

“The L1 is nearly unusable for many classes of applications, and there’s no non-L2 path that can get us to scalability in the short-to-medium term,” are exactly Buterin’s words this time.

He further talked about how the high fees on prediction platform Augur made it “very much “for the niche people and not for the world.”’

“If you are not convinced to go “all the way” on the “phase 1.5 and done” direction, there is a natural compromise path to take,” — which is to have a small number of execution shards and more data shards.

He has also been a staunch supporter of Layer 2 solutions, which he suggests building into the wallets like Metamask or Status. But more work needs to be done on cross-L2 transfers.

With most of the applications on layer 1, they would need to be migrated to layer 2 solutions. Some of the popular DeFi projects like Compound, Sunyetix, and Uniswap have already announced support for one such solution, Ethereum Optimism, which recently launched the first stage of their testnet.

Though there is “no choice” but to go with Layer 2 solutions, that will still take time.

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Author: AnTy

UNI Shorts Get REKT As it Goes Into Price Discovery While Uniswap TVL Hits a Record $2B

It has been only three days since Uniswap launched its governance token UNI.

The free $1,200 crypto stimulus saw 32k accounts selling their 400 UNI instantly, under $5.

This much activity resulted in ETH gas fees skyrocketing to $11.60, yet again and seeing a level of congestion; the Ethereum network has “never” faced before. The good thing is ETH price also spiked to $392 amidst the ETH balance on exchanges reaching the lowest levels so far this year.

But what these sellers didn’t anticipate was the price discovery the token would go on. Yesterday, UNI hit an all-time high above $8.37, and currently, it is trading at $7.13.

“UNI shorts getting rekt. I’m pretty sure there’s a lot of farmers that leverage hedge yields because I do that often, but Jesus this chart looks like someone got rekt, futures were 35% below index and it teleported to the index in a few ticks,” noted trader CL.

These sellers also didn’t take notice of the fact that the decentralized exchange (DEX) handles the same level of volume as the top centralized exchanges such as Coinbase.

“There are VERY few productive assets in crypto space,” said Dovey Wan of Primitive Crypto. “Uniswap Protocol operational efficiency is an order of magnitude higher than Binance and Coinbase.”

Uniswap is currently the dominant force (19.4%) in the DeFi space with a record of $2 billion in TVL, as per DeBank.

This week, the volume on the platform is also gradually growing to over $600 million, which is much more than the likes of Coinbase, Gemini, Poloniex, and Bitfinex.

The token has already been listed on the top cryptocurrency exchanges with futures contracts, providing the opportunity to short or long the crypto asset. DeFi options protocol Opyn also launched the UNI put options.

“DeFi will devour CeFi, piece by piece. It will be very difficult for proprietary, closed platforms to compete with neutral, open infrastructure,” said Jake Chervinksy, a legal counsel at Compound Finance, about the ongoing development in the DeFi space.

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Author: AnTy

BoE Governor Calls for Setting Global Standards for Stablecoins, Instead of Playing Catch Up

Stablecoins have been enjoying tremendous growth, and DeFi mania has only been pushing it further, so much so that these USD-pegged coins have been adding $100 million per day since mid-July.

“DeFi yields/interest rates are clearly a vacuum sucking in a lot of stablecoins,” shared Coin Metrics co-founder Nic Carter.

Source: CoinMetrics

As such, it makes sense these coins will continue to be under the increased scrutiny of regulators, which first came under their radar after Facebook unveiled its Libra stablecoin last year.

Now, Bank of England Governor Andrew Bailey is saying that financial regulators must avoid playing catch up with them. Bailey said in a speech to the Brookings Institution,

“If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them.”

Calling for a clear G20 mandate for standard-setting bodies to clarify or refresh standards, he said existing regulatory standards must be examined and updated as necessary in the light of stablecoins. He said in the prepared speech,

“Regulators of global stablecoins must, and are, working with other regulators in other jurisdictions to ensure that they are appropriately regulated and gaps in coverage, opportunities for regulatory arbitrage, do not emerge.”

Any stablecoin which is based on the pound and launched in Britain should meet standards that are applied to banks, Bailey said. Also, the issuer of the stablecoin needs to be based in the country, he added.

“If a sterling retail stablecoin wishes to operate at scale in the UK, then we will strongly consider the need for an entity to be incorporated in the UK.”

Meanwhile, central banks have taken to work on their own state-owned digital currencies. China is already in the testing phase of its DC/EP, and Japan is also making digital yen its priority while both the BOE and US Federal Reserve have taken a cautious approach towards launching their central bank digital currency.

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Author: AnTy

Bitcoin & Gold Crashes as S&P 500 Races towards All-Time High

After making a bullish start of the week, by surging past $12,000 only to drop, bitcoin is continuing its descent. The largest digital asset has gone down to under $11,300 in red by 2.76% while managing $2.2 billion in ‘real’ trading volume.

These losses came despite the bullish news of billion-dollar Nasdaq-listed MicroStrategy becoming the first publicly-traded company to buy Bitcoin. The company purchased $250 million worth of BTC as a reserve asset in its search for yield and an inflation hedge.

However, digital gold is not alone in running the streets red. The precious metal is also falling; gold has been having a rough couple of days.

The Driving Force

After surging to its all-time high of $2,075 on Friday, the yellow metal has been on a pullback. Today, the spot price of bullion went down as low as $1,937 and is currently trading around $1,945.

“This is a rates driven correction. The bond market is in charge,” said trader and economist Alex Kruger. “Bond prices => yields => dollar => metals.”

Rates are the primary driving force behind not only those moves that involve the dollar but also for gold, he said.

“This is all BTC bearish. With a little luck can have some proper wicks lower to get some fills,” Kruger added.

This makes sense given that the one-month correlation between bitcoin and gold has spiked to an all-time high of 68.9% on August 7th, as per Skew. This has been exactly opposite of what’s going on with the one-month correlation of bitcoin and the S&P 500, which has fallen to 23.6% from ATH of 78.8% in early July 2020.

So, it’s no wonder that today’s equities market is enjoying gains, outpacing previously flying tech stocks. As yields went up, there has been a “rotation from tech to “epicenter” stocks,” akin to what has been seen in the Dow and small caps as well.

Equity Markets to ATH

S&P 500 is nearing its all-time closing high from February, just 0.38% down from the ATH, after White House officials and top Democratic lawmakers indicated on Monday that they were ready to resume talks on the new coronavirus aid package.

President Donald Trump also suggested he was considering a tax reduction for “middle income” earners. Moreover, Trump is closing the gap on Joe Biden’s presidential election opinion polls, which is working in the market’s favor.

On the coronavirus front, the number of new cases in the US has fallen 18% over the past 14 days. Meanwhile, Russia has registered the world’s first COVID-19 vaccine, said President Vladimir Putin today.

Bitcoin’s Time to Come

A combination of fresh hopes for another stimulus package and signs of pandemic spread slowing are boosting the stocks.

Even the bubbling tensions between the US and China, reignited by a dispute over TikTok, might not affect the markets much as Goldman Sachs analysts expect an estimated 1.2% decline in SPX for an unexpected $10 billion increase in US tariffs on China.

In contrast with bitcoin, the US Dollar has also recovered somewhat, currently at 93.43 from the lows of 92.50 from last week, last seen over two years back.

However, BTC is holding firm above $11,000; up 60.32% YTD and new highs could come soon too.

“Bitcoin’s 4 Year Cycle suggests that it will be in 2021 where we will see peak euphoria and a new All-Time High for BTC,” said analyst Rekt capital. “In 2021, simply holding Bitcoin will be the most optimal investing strategy.”

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Author: AnTy

Teenage Mastermind Behind the Twitter Hack Owns $3.39 Million in Bitcoin (300 BTC)

The 17-year old Twitter-hack mastermind holds over $3 million in BTC value with only $725,000 set for bail.

In a bizarre moment last month, Twitter faced a massive hack that over 30 celebrity and business accounts hacked with the hackers gaining nearly $117,000 in a Bitcoin giveaway scam. Authorities identified 17-year old Graham Ivan Clark as the mastermind of the hack, and after a court hearing, bail was set at $725,000 on Saturday, but recent reports show the teen can afford to pay it.

In a report first published by Tampa Bay Times, Graham holds over $3.39 million in Bitcoin (BTC) at current prices (about 300 BTC), which would be sufficient to post bail. However, the prosecutors were calling out for a $1 million bond for each of his 30 charges before the court. Claiming the BTC must have been obtained illegally due to his conduct in the Twitter hack.

Clark’s attorney, David Weisbrod, had a different view on the legitimacy of the BTC, claiming that the court in a separate case earlier retuned the 300 BTC to Clark after seizing $15,000 in cash and over 400 BTC. Weisbrod believes the action of the court giving back the coins makes them legitimate. He said,

“I can think of no greater indication of legitimacy than law enforcement giving the money back.”

However, there lingers a loophole on why the court withheld some of the amounts and not returning the full value.

So far, two more accomplices (proxies) have been identified – 22-year-old Nima Fazeli of Orlando and 19-year-old Mason Sheppard of the United Kingdom – who face federal charges as adults.

The judge has further ordered the 17-year-old off any internet-connected devices once bail is posted and restricted his movement to doctor and attorney appointments only. The judge has also asked Clark to surrender his passport to authorities.

Clark is facing 17 counts of communications fraud and 11 counts of fraudulent use of personal information. One count each for organizing fraud that saw him collect $5,000 and another for accessing a computer or electronic device without authority.

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Author: Lujan Odera

Lebanon’s Fiat Currency, the Lira, Drops 50% of Its Value in 10 Days Due to Hyperinflation

Lebanon’s financial crisis is only deepening with each passing day, as the country is engulfed in hyperinflation.

An unofficial report suggested that the value of the national fiat Lira has fallen by 50% in a matter of two weeks. The devaluation of Lira has made it equivalent to 2 satoshis at present, highlighting the growing problem with the world’s financial policies.

Saifedean Ammous, the author of The Bitcoin Standard, took to twitter to point towards what flawed and centralized monetary policies can do. He highlighted that just ten years ago, one Lira was valued at 0.67 bitcoins while today it is mere two satoshis.

While the Lira versus the US Dollar has trended at $0.00066 since 1997, the past 2 years, with several economic mismanagements, saw its value fall by 56%. The life of ordinary citizens has become quite troublesome as their income remains the same while the cost of goods has doubled.

Hyperinflation: The Worst Effect of a Flawed Centralized Monetary Policy

Lebanon is currently undergoing economic hyperinflation, where the national fiat continuously loses its value, and people’s confidence in the central bank and the government is at an all-time low.

Just before the coronavirus pandemic hit the world in late February, Lebanon saw a string of violent protests and demonstrations against the central bank. It was also reported that citizens have burned down the central bank complex.

Hyperinflation is probably the last and worst stage of an economic system failure, which in turn leads to instability and, in many cases, civil riots as people go on a looting rampage once they can’t afford their basic amenities.

However, Lebanon is not just the only country struggling with this problem; Venezuela is a shining example of what corruption and flawed monetary policy can do. A state counted among the richest a decade ago has seen the value of its currency become negligible and not even worth the paper it is printed on. Similarly, countries like Iran, Zimbabwe, and even a few North American countries are facing the same problem.

Cryptocurrencies To the Rescue

It’s a common occurrence that countries the worst affected by hyperinflation or similar economic crisis turn to cryptocurrencies. People in these countries may not directly use bitcoin or crypto to make direct purchases. Instead, they use it as a bridge currency to keep the value of money intact.

A recent twitter survey of Lebanon’s youth suggested that 57% of the locals would prefer to be paid in bitcoin. Mahmoud Dgheim, a Lebanon citizen, said that people in his country are currently looking for a way to escape tight cash withdrawal restrictions and transfers and looking for a tool to give them financial freedom. Bitcoin is probably the answer to their problems.

Not just Lebanon, the Venezuelan government has started to accept bitcoin for its services after a failed attempt at national digital currency in the form of Petro.

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Author: Silvia A

XRP is Waking Up But Liquidity in All the Major Corridors Are Taking A Hit

The fourth-largest cryptocurrency XRP isn’t doing really well. Not only it is one of the worst-performing top coins of 2020 with over 6% negative returns but is still down more than 95% from its all-time high of $3.92.

But it might start picking up finally. Today, XRP has jumped nearly 4% and is currently trading at $0.185.

“Suddenly, the majors start waking up. LTC, EOS, and even XRP are showing great candles,” tweeted trader Crypto Michaël.

According to him, XRP needs to reclaim $0.195 for a test of $0.23 which should put it back above 100-day and 200-day MA.

“For this one; back to support,” he said adding “Similar to BTC pair -> needs to reclaim 2075 and then 2400 sats test likely.”

Adding pressure to the price is the 415 million XRP that is moved by the $2 billion PlusToken Ponzi scheme. Some of these XRP are also sent to exchanges viz. Huobi, OKEx, and HBTC.

Amidst this, XRP holders are partaking in some accumulation. Small to big XRP holders, all bought more XRP but the amount added has been relatively low.

As per the rich list, the top 100 accounts own over 69% of XRP in circulation at 35 billion.

Declining Liquidity Across the Board

XRP may be ready to move but its inaction for a long time has spilled onto its ODL indices. The liquidity index for Bitso, XRP/MXN, one of the most active corridors has fallen to its lowest numbers.

On June 1st, 2020, it hit its all-time high of 37.3 million which has declined to 2.3 million on June 25th, a new low for 2020.

The market liquidity here covers more than just trade volume and helps in assessing “net” liquidity provision.

The case is the same for all the other Liquidity Indexes.

Bitstamp XRP/EUR, has fallen to 7.3 million, last seen in March 2020, from the high of 35.7 million earlier this month. Coin.ph XRP/PHP climbed to 11.5 million in April and is currently at just 1 million, back to early January levels. XRP/AUD market tumbled to 992k, down from 16 million high last month, as per Liquidity Index Bot.

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Author: AnTy