Less than a year ago, the average human did not know what cryptocurrency was. The market was limited mostly to a techy crowd of developers and very early adopters, considering Bitcoin was the only major currency on the block back then. But thanks to a number of really smart entrepreneurs, rising prices, and a powerful community, everything is changing and crypto is going mainstream.

Ethereum, Stratis, Sia, AntShares/NEO, TenX, and others are leading the charge of the technological revolution that is blockchain. Cryptocurrency-based crowdfunding known as Initial Coin Offerings (ICOs) are also a major player in the revolution. Blockchain startups like TenX have raised $80 million dollars in a matter of literal minutes to solve a big challenge for cryptocurrency holders--actually spending the currency in the real world.

Entire governments, such as China's, are considering utilizing a national digital currency. Even the president of Russia, Vladimir Putin, met with the founder of Ethereum, Vitalik Buterin. All of this good press and positive outlook has caused many billions of dollars to be added to the market in the last seven months.

The excitement about the cryptocurrency market has attracted a lot of entrepreneurs who are looking to disrupt big industries through Blockchain technology.

I think of Blockchain disruption as creating disrupters to the disrupters. This new wave of Blockchain startups, such as Sia, are looking to disrupt companies like Dropbox and Amazon AWS. If they are even remotely successful, we are looking at many 10s if not 100s of billions of dollars being added to the overall cryptocurrency market as they continue to grow.

Another example of entrepreneurship at its finest is TenX. They are literally solving the biggest spending issue in cryptocurrency, actually making the tokens spendable in the real world. They are using debit/credit cards that physically store cryptocurrency then instantly convert them into Fiat (USD, EUR, YEN, etc.).

Stratis is considered a sleeper cryptocurrency because of its relative low price compared to its technological advancement. It's a BaaS (Blockchain as a Service) platform that aims to provide enterprise level Blockchains and services to companies like Microsoft. AntShares/NEO is also considered a sleeper cryptocurrency by many.

The cryptocurrency market can seem volatile compared to traditional markets. There is more up and down movement, but the general trend line is a strong uptrend. A lot of people believe Ethereum alone will be worth over $1,000 a token in the next year or two. That will drive the prices of many other currencies up a lot.

Bitcoin, the oldest of popular cryptocurrencies and current market leader in terms of market cap, but not technology, is facing a potential split on or around August 1. There are a number of possible scenarios, including breaking Bitcoin into two separate coins. This could cause what is referred to as The Flippening to occur, and if it does, look for Ethereum to rapidly gain in price and for Bitcoin to fall from its first-place market share.

If (or, most likely, when) this event does happen, Ethereum could be more of the market indicator than Bitcoin currently is. Meaning, if Ethereum goes up, everything else tends to go up, which has been the case for Bitcoin recently, as it tends to control the market.

The market as a whole has been particularly strong in recent weeks. Ethereum was worth as much as $420 a token and as little as the $180 range in the last few weeks. But the strength of the market really shined when the $180 "drop" happened and it quickly re-tested $200 multiple times and showed that $200 was the current floor price. This creates a sense of security in the market and helps people believe in it more long term when they see these quick rebounds from drops in price.

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Here's How Entrepreneurs Are Making Cryptocurrency Mainstream and Starting a Revolution - Inc.com

Tezos, a new cryptocurrency network that could compete with Ethereum, raised a record-breaking $232 million in a nearly two-week-long token sale that closed on Thursday.

Although the first version of its network has yet to launch, Tezos has piqued the interest of major investors and cryptocurrency experts. It promises to support smart contracts and offer innovations in governance for decentralized systems that could prevent the sort of infighting that has consumed the bitcoin community for more than a year.

Among those who see value in it are venture capitalist Tim Draper and Olaf Carlson-Wee, formerly the first employee at Coinbase and now the founder and CEO of Polychain Capital, a San Francisco hedge fund that focuses exclusively on blockchain assets. Zooko Wilcox, the founder and CEO of privacy-focused cryptocurrency Zcash, serves as a Tezos adviser.

Tezos's founders, the husband-and-wife team Arthur and Kathleen Breitman, have been developing the technology since mid-2014, when they published the white paper describing what they hoped to accomplish. Between them, they have backgrounds at Goldman Sachs, Morgan Stanley and R3, a blockchain consortium of which dozens of banks are members.

When Tezos's token salea special kind of crowdfunding campaign also known as an "initial coin offering," or ICOfinally launched on July 1, it inspired a mad dash among investors. The project ultimately took in 65,627 bitcoins and 361,122 ether, according to its website.

The value of both cryptocurrencies has fallen sharply in recent days, but, even at relatively low current prices, Tezos raked in enough digital money to smash the previous ICO record of about $150 million set by another blockchain project, Bancor, in June.

Thanks in large part to Bancor and Tezos, the amount of money raised by blockchain startups through ICOs has far surpassed the amount raised through traditional venture capital in 2017. Because of the extreme volatility of the cryptocurrencies used to fund ICOs, it is tough to pin down a round number for the total amount raised so far this year, but it appears to be more than $700 million at then-current prices.

Most of the projects that have raised funds through token sales are built on top of an existing blockchain, usually Ethereum's. But Tezos will be an entirely new protocol with its own rules.

Tezos is also one of the few token projects that has gained support from traditional investors. Tim Draper participated in the ICO and also invested an undisclosed sum in Dynamic Ledger Solutions, the Breitmans' startup that is behind Tezos.

Participants in the crowdsale will be given Tezos network tokens, known as "tezzies," in exchange for their investment, but not until the network launches. That is expected to happen in four months or so. Investors are betting that as the network grows and proves its worth, the exchange value of their tokens will riseperhaps exponentially.

Ethereum's own crowdsale raised about $18 million in 2014. The total market capitalization of ether is now more than $19 billion, according to CoinMarketCap, which tracks the fluctuating value of blockchain assets.

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Tezos raises $232 million for new cryptocurrency project - American Banker

On July 11, 2017, the United States Patent and Trademark Office granted Goldman Sachs a patent for a Cryptographic currency for securities settlement. The patent, which was originally filed in October 2014, includes a cryptographic protocol and a supporting virtual wallet that, in various embodiments, is a security and cash account for storing and managing the cryptographic currency.According to the document, the virtual multi-asset wallet possesses the ability to generate, manipulate, and store SETLcoins, a new cryptocurrency for exchanging assets, like securities, cash, and cash equivalents, through a peer-to-peer network.

For example, a virtual wallet can exchange (e.g., via a transaction method described below, such as a two-phase transaction) one or more SETLcoins for, e.g., U.S. dollars and/or other currency at a brokerage account, deposit account, bank account or other financial storage entity. Alternative or additionally, U.S. dollars and/or other currency at a brokerage account, deposit account, bank account or other financial storage entity can be exchanged for one or more SETLcoins in virtual wallet on the peer-to-peer network.

SETLcoins can house one or more securities. Using the wallet, traders can immediately exchange stocks in companies like IBM and Google for cryptocurrenciesby sending transaction messages. Each transaction message includes a transaction and digital signature. And once a message is broadcasted to the network, settlement is immediately processed by a two-phase commitment protocol and/or trusted node that both traders mutually agree to have act as coordinator (including each other).

SETLcoins are exchangeable for, e.g., other SETLcoins and/or other cryptographic currencies (e.g., peercoins). For example, a single IBM-S SETLcoin may be exchangeable for one or more "GOOG" SETLcoins (i.e., Google shares), for 13,000 USD SETLcoins, 100 litecoins, and/or for 5 bitcoins.

Since the introduction of bitcoin in 2008, the popularity of cryptocurrencies and blockchain technology has increased tremendously in the financial service industry. Due to a sizeable market cap and wide array of sought-after options like Ethereum, Litecoin, NEM, and Ripple, the cryptocurrency market is becoming more attractive as an investment opportunity for financial magnates. This has led banking giants like Goldman Sachs to begin analyzing the market for clients and concentrating investments in technologies, like SETLcoins, that bridge cryptocurrency and blockchain technology with the financial sector.

Dan is a US Army veteran and Los Angeles-based writer passionate about science and technology, current events, human rights, economic impacts, and strategic calculus. Dan is a full time staff writer for ETHNews and holds value in Ether.

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Goldman Sachs Awarded Cryptocurrency Patent - ETHNews

It comes with the territory that digital currency will be susceptible to digital threats. Hacking and theft have almost grown up side by side with things like Bitcoin, and, as the popularity and value of the digital currency rises, its attraction to thieves also grows.

The most recent major hack has seen one of the top five biggest Bitcoin and Ethereum exchanges, Bithumb in South Korea, fall prey to hackers. The hack was confirmed July 5 when information, as well as hundreds of millions of South Korean won, were been made off with in an attack with a difference.

Most exchanges know they are susceptible to network intrusion via their internal systems, but the entry point in this instance was through the personal computer of one of the exchange's employees. Thus it was not the standard network compromise, rather a more sophisticated phishing attack that led to the information heist.

It was personal information, such as names, email address and phone numbers of clients that were predominantly taken luckily no passwords but this was enough for the hackers to target customers and drain their accounts of their cryptocurrency.

Since the highly publicized Mt. Gox hack in 2014, in which 800,000 bitcoins were stolen, exchanges have boosted their security astronomically. Mt. Gox almost spelled the end of Bitcoin as people lost a lot of faith as well as a lot of money in the security systems of cryptocurrencies.

While security has been boosted in recent times, and thievery and hacking is far less common, it is still a threat that is ongoing and sometimes hidden.

In fact, Bithumb customers had forwarded complaints on a Korean social media site about threats of attacks, yet not much extra was done on the part of the exchange to try and quell these worries or protect clients.

The exact figure stolen is still unknown as Bithumb is trying to play it off as less of a hack and more of a phishing attack for information. However, despite what they are trying to convey, Bithumb has to admit that the 30,000 customers whose information was compromised were victims of a dangerous cryptocurrency attack.

The Korean exchange has come forward and said it will be compensating those whose data was compromised. Even those customers who would have lost nothing other than data will be getting paid 100,000 Korean Won, which is equivalent to around $86.50 USD for the inconvenience. The hope for Bithumb is that they will be able to retain some of these clients who surely will be feeling much more vulnerable and less trusting.

Bithumb's transactions with bitcoin make up almost 3 percent of the entire market, but it is its share of ether transactions thats its major claim to fame: 13.5 percent of the total ether market goes through Bithumbs exchange.

It is a major blow for a big player in the exchange game, and it is a blow that will be felt in the global digital currency sphere. Trust has slowly been rebuilt for those who have lived through the teething stages of Bitcoin security, and, as the door opens on new and mainstream markets, hacks like this can cause adopters to have second thoughts.

However, one aspect of digital security that has changed since bitcoin has been accepted by a much wider audience is that governmental agencies are taking it under their wing.

There are differing stages of regulation for digital currencies, but these arguably bring with them added security. In the case of Bithumb, Koreas Internet and Security Agency has plans to initiate a probe into this cyber attack with a full investigation to follow.

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Latest Cryptocurrency Exchange Hack Highlights Need for Better Security Protocols - Bitcoin Magazine

News wallets and exchanges

In anticipation of the upcoming user-activated soft fork on the Bitcoin blockchain, Japans Cryptocurrency Business Association is creating guidelines for virtual currency exchanges to protect customer investments.

According to a report by Nikkei Asian Review, Japans Cryptocurrency Business Association (JCBA) has begun preparing for the looming bitcoin fork that is expected on August 1. The association brings together leaders from banks, securities firms, exchanges, and other virtual currency businesses in Japan. It counts board members from Kraken, Coincheck, and Money Partners among its ranks. The association is chaired by director Tadayoshi Okuyama (Japanese: ).

Ahead of the user activated soft fork on the Bitcoin blockchain, the JCBA has issued guidance to key stakeholders and association members. Through a freeze, the association hopes to protect customer assets. The halt in trading may last anywhere from one day to a full week.

However, the report by Nikkei attests that some exchange operators (including Bitbank and Tech Bureau) will allow trading to continue, simply suspending deposits and withdrawals until the dust has settled from the fork. As of this publication, the countrys largest bitcoin exchange, BitFlyer, has not chosen a course of action.

As demonstrated by the GDAX flash crash, thin trading books could threaten investors. With this in mind, its vital for bitcoin exchanges (in Japan and worldwide) to plan for a few contingencies.

First, companies ought to keep their customers apprised of the forks implementation and the timeline for exchange freezes, if applicable. Next, the exchanges should provide customers with sufficient time to withdraw their investments if desired. After the fork, companies ought to provide a roadmap for which chain (or chains) they will support. This will help restore investor confidence and ensure that customers receive exactly what they are due. Coordinating disbursement of fork funds may prove challenging initially, so its crucial to keep customers in the loop.

The US-based GDAX has already taken that step, posting on its blog about the companys intentions to implement safeguards for addressing the fork.

Fortunately, for the most part, Japanese exchanges also appear to be proactive in their preparation. At this point, its virtually impossible to determine which Bitcoin blockchain will become dominant or how market share will be impacted. Still, investor protection should remain a priority for all.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles.

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Freeze! Japan Cryptocurrency Business Association Prepares For Bitcoin Fork - ETHNews

Ethereum cryptocurrency code is used, which means the following options:

The technology of blockchain proved itself as perhaps the safest way of keeping records of transactions performed within a certain society, each member of which owns a copy of the database distributed among members of the given society.

Blockchain - a chain built from the formed blocks with records of all transactions. A copy of the Blockchain chain or its part is simultaneously stored on multiple computers and synchronized according to the formal rules for constructing the chain of blocks. The information in the blocks is not encrypted and is available in clear form, but is protected from cryptographic changes through hash chains. Thus, the Blockchain database is distributed (decentralized) and cryptographically protected (https://en.m.wikipedia.org/wiki/Blockchain).

The possibility of mining, which gives the use of the methodology of protection against false data and fraud PoW, is by far the most widespread and reliable crypto currency in the environment.

A proof of work is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to verify and which satisfies certain requirements. Producing a proof of work can be a random process with low probability so that a lot of trial and error is required on average before a valid proof of work is generated (https://en.bitcoin.it/wiki/Proof_of_work).

The minimum unit is 10^-4, 0,0001 RCN.

The conclusion of the block will occur every 20.5s (Similar to the Ethereum software environment, https://bitinfocharts.com/ru/ethereum/ ). The block volume limit is 12 KBytes.

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REcoin is a new Ethereum-based cryptocurrency

Unless you've been under a rock, you've likely read a lot about ICOs (initial coin offerings) in the last few weeks. These are offerings by companies starting their own variant of blockchain-based digital currencies.

This year has not only seen the explosion in the price of bitcoin itself but also the second and third most popular cryptocurrencies Ethereum and Ripple.

More interesting, there's been a rise of many additional cryptocurrencies such as Steem, Dash, AntShares and Dogecoin. In fact, if you measure bitcoin's market capitalization as a percentage of the market capitalization for all cryptocurrencies, it's currently at 45.5 percent, down from 94 percent a year ago.

The value of all cryptocurrencies now is $88 billion, which is actually down from $114 billion a few days ago.

New ICOs have raised $500 million so far this year. One community that is showing great interest in becoming part of the trend of launching a new cryptocurrency is start-ups.

Last week, Thai fintech start-up Omise raised $25 million in an ICO to develop a decentralized payment platform. The company had already raised $20 million in traditional VC funding.

Rahul Sood's esports betting company Unikrn is launching its own cryptocurrency called UnikoinGold as the way to place esports bets on its platform. Unikrn has raised $10 million from Mark Cuban, Shari Redstone's Advancit Capital, Elisabeth Murdoch's Freelands Ventures and others.

However, social messaging company Kik has bigger plans for its upcoming ICO. In a recent talk given by Kik founder and CEO Ted Livingston, he explained that Kik saw its ICO of a currency called Kin as a potential alternative exit for them.

Like the Omise and Unikrn examples, Kik has also raised traditional venture capital money more than $120 million, including $50 million from Tencent most recently valuing the company at $1 billion. Kik's ICO will help bring it more money. Kik will sell 10 percent of its Kin currency (half to institutional investors and half to retail investors). Kik will keep 30 percent of Kin and 60 percent of Kin will be overseen by a nonprofit Kin Foundation aimed at making Kin a popular cryptocurrency. That foundation will give away 20 percent of its stock of Kin every year to developers and others who help build out the economy for Kin.

Kin will be used as the currency on the Kik social network for things like emojis, stickers, hosting and participating in group chats, building apps like bots, etc. However, the stated goal is for Kin to also be used as currency outside of the Kik app.

Even if stays confined within the Kik community, Kik has 15 million monthly active users. It's currently ranked in the 60s in terms of popularity on the App Store. That community alone will make the currency among the more popular cryptocurrencies.

But here is what's interesting, Livingston said that, if all goes well, this ICO could be Kik's liquidity event. Up until now, Kik has been thinking it had to translate its popular youthful community chat service into ad dollars in order to make a successful business similar to what Facebook has done. The problem is that Facebook and Google continue to suck up more and more of the ad dollars that are getting spent in the space.

Livingston said in the talk that the penny dropped for him when he saw Snap's S-1 IPO filing in February. Here was a young Facebook competitor seemingly doing everything right and yet still failing in its growth of its ad-based revenue. If Snap was failing, Livingston thought, what hope did Kik have of building a better ad mouse trap?

Yet, he thought, if Kik could develop a cryptocurrency that became a self-sustaining economy and Kik owned a big chunk of that supply limited currency the value of that stake in Kin could end up being more valuable than the potential exit valuation for Kik as an ad-based business in an IPO or through an acquisition. Luckily, one of Kik's earliest investors was Fred Wilson of Union Square Ventures, also a big investor in the cryptocurrency space. He agreed with Ted.

Can you name the fourth most popular cryptocurrency? It's Litecoin and has a market cap of $2.5 billion. If Kin got that kind of valuation and with an established community of 15 million monthly active users, it could be a currency worth more Kik's 30 percent stake in Kin would be worth $750 million, almost equal to the valuation of Kik's last round. If Kin became as valuable as Ripple the third most popular cryptocurrency today Kik's stake would be worth $2.5 billion.

Livingston pointed out that, in this kind of scenario, an exit via M&A or an IPO would be unnecessary for Kik. Its existing backers could simply convert their shares into Kin and liquidate them. Kik could stop trying to win advertiser dollars, if it wanted. It could simply focus on developing the community's use of Kin and helping Kin proliferate outside of the Kik ecosystem.

In this scenario, according to Livingston, "we just step back and watch it continue."

Will it work out this way? Possibly for some lucky start-ups but certainly not for all. The world likely doesn't need 1,000 different cryptocurrencies. The current gold rush mentality with ICOs will probably only get bigger in the months and years to come but will probably also meet the inevitable bust of the dot-com era.

But some cryptocurrencies will endure especially ones with strong use cases and/or communities supporting them. It's intriguing to imagine if some ad-dependent companies like Kik will opt to stop competing with Facebook and Google on a battlefield they can never succeed at and go for an alternative cryptocurrency path to value creation.

Kik is truly breaking new ground with its ICO. It will be intriguing to see if it causes other unicorns to follow its lead.

Commentary by Eric Jackson, sign up for Eric's monthly Tech & Media Email. You can follow Eric on Twitter @ericjackson .

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

Disclosure: CNBC parent NBCUniversal is an investor in Snap

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Kik looks to cryptocurrency instead of an IPO commentary - CNBC.com - CNBC

With the meteoric rise in popularity of Ethereum, cryptocurrencies and blockchains are back in the news again. Graphics card prices have soared with the promise that those who have the computers and know-how to do some serious mining can take home huge sums in a Bitcoin-like gold rush to snatch up as much virtual currency as possible. But how easy is it to make your fortune in cryptocurrency? And is it worth your while getting started?

For the uninitiated, mining for currencies like Bitcoin and Ether means devoting a huge amount of computer processing power to doing accounting sums for the platforms behind them, helping to verify the accuracy of the public blockchain ledgers.

Youre essentially getting rewarded for keeping the books for these platforms, which weve explained in more detail here, and the rise of cryptocurrencies like Bitcoin and others has led to a flood of amateur enthusiasts jumping into the mining businessthe idea of having your computer whirring away making you free money sounds almost too good to be true.

And in reality, it almost isyou can get rich from cryptocurrencies, but you need to put in plenty of work, and have luck on your side. Youre more likely to get a windfall due to market pressures than the quality of your mining rig, which is why its only worth a shot for the most committed and the most adventurous.

Mining for cryptocoin requires some free software tools and a dedicated rig. Turn the clock back several years and you could get away with a powerful home PC and make a few bucks. These days you can waste a weekend and a months wages on building a machine with four graphics cards purring away in a row and still not make a profit.

GPUs are now established as the mining processors of choice in most situationsgraphics cards are even built for and marketed towards miners nowbasically because theyre better at doing lots of laborious, repetitive tasks, whereas CPUs are better suited to switching between many tasks quickly.

The trouble is, the serious players have got whole farms of these computers, and unless youve got a warehouse and some life savings to spare, youre going to be lagging a long way behind. Youre up against huge foreign operations running off cheap electricity and hardware bought wholesale.

Even if you do get yourself a rig set up and find a currency with a bit of a profit margin, youre still putting yourself at the whims of the cryptocurrency marketsmining can start or stop becoming profitably depending on a currencys current value.

There are several profit calculators on the web that will tell you how much computing power and electricity you need to make a certain amount of cash, so you can see exactly how much (or more likely, how little) you could make. Take Bitcoin, for example, which is now just about impossible to mine profitably for average users at homeyoud need thousands of GPUs running before youd get close to getting more back in Bitcoin than youd be paying for electricity.

You can fork out thousands of dollars on specialized kit, if you want to, but even then youre only going to be raking in a handful of dollars a day with Bitcoin. That of course can go up or down as the currency value fluctuates, and whats profitable one day might not be the next if your chosen cryptocurrency dips in value, or gets some bad media coveragethats where the slice of luck we mentioned earlier comes in.

Other options, like Feathercoin and Ether, have a better profit potential than Bitcoin right now, with the caveats weve already mentioned: If youre serious about your mining then you need to keep a very close eye on the market trends, because the situation can change on a weekly or even daily basis. A single Litecoin, another cryptocurrency, has swung from costing you between $10 and $55 this year alone.

For instance, a huge $64m Ether heist carried out last year was severe enough to cause a fork in the Ethereum platform it runs on top of, and a halving in price of Ether itselfif youve got a powerful, expensive, cryptocurrency mining operation going on in your basement then thats a serious hit on your profits through factors completely out of your control. Sure, a swing the other way can make you relatively rich, but its a risk, and the upward trend wont necessarily continue.

Many modern-day miners join a mining pool, combining resources with other users and getting a share of the profits, but the same risks remain. Fork out a few thousand on a mining rig, take the time to study the market trends, go through the process of setting up the programs, join up with a mining pool, and yes you canif the prices stay buoyant and youve picked your cryptocurrency wiselymake a few thousand dollars a year. Whether or not its worth the risk and investment is up to you.

And if your investment isnt already precarious enough, remember the scene is constantly changing: In the near future Ethereum is set to switch from its existing Proof of Work (PoW) system for extending the blockchain to a new Proof of State (PoS) system which is easier to scale and less energy intensive.

Without going too far into the technical details, it essentially makes the mining process more like earning interest on money youve already got: Racks of graphics cards wont be able to generate wealth as they did in the past, which is bad news for miners looking for a profit even if its good news for your electricity bill. Instead, earning money will rely on staking (investing) rather than mining.

In other words, if youre already halfway through building your Ethereum mining machine you might want to pick a new cryptocurrency... at least until the ground rules change on that one too. (Remember what we said about the constant state of flux?) And thats really the only way to squeeze any profit out of cryptocurrency mining operationskeep moving as fast as the market does, and switch up the currencies you target as conditions change.

As soon as one cryptocurrency becomes profitable to mine, as weve seen with Bitcoin and Ethereum, everyone wants a piece of the action and making money gradually gets harder. Its then time to get in early on another currency. In short, if you want to get rich (or at least make a profit), you need to pick and keep picking the right cryptocurrencies, have a serious amount of graphics processing power in hand, hope that your chosen currencies stay secure and keep increasing in value, and put in a lot of time and effort.

Its not impossible, but we can think of easier ways to make a buck. If youre determined to jump in and get involved in cryptocurrency mining, if only for the educational and geek appeal rather than to make any money, your best bet is to immerse yourself in one of the many mining forums out there, which will give you the inside track on the latest news and market trends.

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How Exactly Do You Get Rich of the Hot New Cryptocurrency? - Gizmodo

The cryptocurrency Cassandras are starting to look right.

The sector has lost about a third of its market value since peaking in early June, pushing it into what traditional equity market analysts label as a bear market. Bitcoin, the largest of the digital currencies, is down about 20 percent from its peak of $3,000, reached June 12. Smaller rivals such as ethereum and ripple are getting hit even harder.

When when we look for signs of excess in the market, I look at bitcoin and to me that looks pretty scary, Richard Turnill, global chief investment strategist at BlackRock Inc., said during a midyear outlook presentation in New York on Tuesday.

Whether the virtual currencies were caught up in an asset-price bubble was debated as the market capitalization of the sector soared this year, raising skepticism from pundits including tech billionaire Mark Cuban. Backers such as Ripple Chief Executive Officer Brad Garlinghouse, whose money-transfer company is tied to the third-largest cryptocurrency by market value, said he isnt convinced.

"I would be surprised if there was a major crash," Garlinghouse said in an interview at Bloombergs New York headquarters Monday. "Could we see digital assets continue to double or triple or quadruple from where we are today? That wouldnt surprise me at all."

Digital coins are currently worth around $80 billion, down from a market capitalization of $100 billion on Friday and $115 billion on June 14, according to data from Coinmarketcap.com.

This weeks slump coincides withinitial hearings in the trial of the former head of Mt. Gox, the bankrupt Japan-based bitcoin exchange that imploded in 2014 after losing hundreds of millions of dollars worth of bitcoin. Chief Executive OfficerMark Karpeles pleaded not guilty in Tokyo on Tuesday to charges of embezzlement and inflating corporate financial accounts.

The turbulence may be far from over, too, as rival bitcoin enthusiasts are set to adopt two competing software updates at the end of July. This has raised the possibility that bitcoin will split in two, an unprecedented event that would send shockwaves through the market.

Read more on the dispute between bitcoin developers

Volatility is nothing new for cryptocurrency buyers, who have faced losses in recent months as exchanges grapple with outages and poor performance, struggling to keep up with the volume surge that has swept the market amid speculation about the potential for widespread adoption of virtual assets and blockchain technology.

"It is easy to look at the appreciation that we have seen this year and conclude that we are witnessing a bubble, said Martin Garcia, vice president of sales and trading at Genesis Global Trading. While I understand that the prices we are seeing now a more than a little frothy, I think that we are in the very early stages of the development of an entirely new asset class."

Read more from our TOPLive Q&A with Martin Garcia

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Cryptocurrencies Are Getting Crushed - Bloomberg - Bloomberg

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BlackRock Global Chief Investment Strategist Richard Turnill argued Tuesday (July 11) that loose monetary policy has resulted in a huge run up in cryptocurrency, such as bitcoin, but it doesnt pose a risk to the financial system.

According to a report in Reuters, Turnill said bitcoin price movements could be influenced by easy monetary policies that were instituted by central banks following on the heels of the global financial crisis that started in 2007 and lasted until 2009. The gains in cryptocurrencies could also be a sign the market could be in a bubble.

I look at the charts, and to me that looks pretty scary, Turnill said at a media briefing in New York covered by the newswire. He and his BlackRock colleagues have been telling clients to remain invested in global stocks despite the risk and despite warnings from some strategists that prices are too high. As to the speculations, hes not concerned about the broader implications from the wild movements in the digital currencies.

Theres no evidence that if that price went to zero tomorrow that thered be any broader financial implication over time, but to me it is [an] example of where youre getting some big price movements in the market.

BlackRock isnt the only one to warn about a bubble in cryptocurrencies. Those same concerns have hurt Ethereums price this week. According to a news report, the digital currency has been having a tough go of it lately, falling more than 45 percent since hitting a record high of $400 in mid-June.

There is talk that the cryptocurrency market is reaching a bubble after Mark Cuban said bitcoin, the Ethereum competitor, was already in bubble mode. I think its in a bubble. I just dont know when or how much it corrects, Cuban recently tweeted, noted the report. When everyone is bragging about how easy they are making $=bubble.

Following those speculations, came a statement from Jeffrey Kleintop, Charles Schwabs chief global investment strategist, who, according to the report, also suggested bitcoins price was in a bubble and in one not seen before.

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BlackRock Strategy: Cryptocurrency Speculation Doesn't Present Systematic Risk - PYMNTS.com

Former Credit Suisse Group AG trader Nikolay Storonsky is getting $66 million from investors including Index Ventures to help grow his two-year-old banking startup in the U.S. and Asia and enabling it to offer cryptocurrency trading.

His London-based Revolut Ltd. raised the money in a round that included Balderton Capital and Ribbit Capital, according to a statement on Wednesday. Storonsky, 32, will use the funds to expand in Asia and North America, and let customers hold cryptocurrency. He also plans to gather $5 million in crowdfunding from consumers on Seedrs later this month.

Source: Revolut

Revolut, which Russian-born Storonsky founded two years ago with former Deutsche Bank AG technology developerVlad Yatsenko, makes money from fees on ATM withdrawals and takes a cut from merchant charges on payments in shops. As early as next week, it plans to let customers hold, exchange, spend and transfer virtual currencies such as bitcoin, litecoin and ethereum for free, profiting from the price differences between buyers and sellers as opposed to charging commission.

Adding cryptocurrencies and the ability to buy and sell them is a big step forward for a financial organization, Storonsky, who used to trade equity derivatives, said in an interview. Big banks are looking at us and seeing what were doing, for future things they want to add to their product pipeline, but theyre very slow.

For more on digital startups challenging European lenders, click here

The cryptocurrency sector has lost about a third of its market value since peaking in early June, pushing it into what traditional equity market analysts label as a bear market. Bitcoin, the largest of the digital currencies, is down about 20 percent from its peak of $3,000, reached June 12. Smaller rivals such as ethereum are getting hit even harder.

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Storonsky is among former bankers such as ex-JPMorgan Chase & Co. executive Blythe Masters and erstwhile Barclays Plc Chief Executive Officer Antony Jenkins who are taking advantage of new technology to win customers in an industry dominated by their old employers. Although most fintech firms have yet to achieve significant scale and profit, the startups as a whole are threatening to upend banks handicapped by creaky computer systems.

Revolut, which currently employs 140 people in London, Krakow and Moscow, plans to open offices in New York and Singapore and hire about 20 more staff, according to Storonsky.

The Asia and North American growth plan will come in parallel to expanding in Europe. These are big markets, theres huge demand for our products, he said. Weve got waiting lists and now is the time to enter.

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Ex-Credit Suisse Trader Raises $66 Million for Bitcoin Push - Bloomberg

Veteran Japanese cryptocurrencyexchange Btcbox has announced that it will be establishing a subsidiary to target the Hong Kong bitcoin markets. The subsidiary, MBK Asia Limited, will operate in partnership with Japanese investment bank, MBK CO. Ltd.

Also Read:Rollout of 260,000+ Bitcoin-Accepting Stores in Japan Begins

Japanese bitcoin exchange Btcbox will be establishing a Hong Kong bitcoin exchange subsidiary in partnership with investment bank MBK Co. Ltd. The proposed subsidiary, MBK Asia Limited, this week announced that it has filed for registration as an incorporation within Hong Kong.

Btcbox has been operating since 2014, making itone of the oldest bitcoinexchanges in Japan. Since 2016 the company has increasingly geared its operations toward altcoin trading. Despite its longevity, Btcbox has struggled to capture a significant share of the Japanese cryptocurrency markets, posting the first profitable single month in the companys entire history this May.

Japanese investment bank MBK has already reaped benefits from its pending entry into Hong Kongs cryptocurrency markets. The recent liberalization of Japans regulatory stance toward bitcoin and dramatic rise in price seen by many cryptocurrencies have inspired sharp gains in the share price of Japanese businesses with exposure to virtual currencies with MBKs shares rising in price by approximately 17% since February.

MBK has traditionally engaged in the provision of equity investment, debt financing, fund management, and merger and acquisition advisory. The move to enter the cryptocurrency markets is a notable diversification for MBK, which was first founded in 1947 and has traditionally been associated with Japans post-war manufacturing and merchant banking sectors.

The establishment of Btcboxs subsidiary has been largely inspired by Japans permissive regulatory climate, with the company perceiving recent regulations as a likely catalyst for both recent and future growth. In April of this year, demand for virtual currencies has been increasing more than ever since the revised fund settlement law etc. came into effect in order to optimize the service on the virtual currency. Btcbox has also seen an increase in customer assets under management expected from an increase in new customers, as well as an increase in sales of bitcoin.

The Hong Kong-based subsidiary also announced future plans to negotiate partnerships to provide remittance and settlement services to the international finance markets.

Do you think that Btcbox will be successful in capturing a significant share of the Hong Kong bitcoin markets? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, and BTCbox

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Japanese Cryptocurrency Exchange BTCBox Enters Hong Kong ... - Bitcoin News (press release)

Over a month ago, speculation abounded on whether China was developing its very own cryptocurrency to essentially digitize RMB. Now we know quite certainly that the Central Bank of China has developed and is currently testing a cryptocoin.

Although there have been no official statements from China, according to several reports online, the Peoples Bank of China has been slowly testing its cryptocurrency through mock transactions between commercial banks within the country. The plan would be to eventually launch the digital currency alongside Chinas primary currency RMB (aka yuan). Some of the key benefits of having a fiat cryptocurrency for China include: making it easier forpeople in more rural areas that dont have access to traditional banks toreceive financialservices which would in turn lower transaction costs; greater oversight over other digital currencies like Bitcoin and Ether; as well as the reduction of corruption, fraud, and counterfeiting.Yao Qian, the Deputy Director of the Science and Technology Department at Chinas central bank recently authored an extensive report detailing many of the ways China could benefit from digital currencies.

One of the fears highlighted by some experts is the fact that by having a central digital currency, commercial banks could be undermined and lose customers. Chinas goal, though, is to integrate the digital currency into the existing banking system by allowing commercial banks to operate cryptocoinwallets for the central coin. The mock transactions between commercial banks would be a good place to test the planned integration.

Cryptocurrencies have been making headlines recently; mostly on account of the extreme volatilityinvolving the price of coins like Bitcoin and Ether as well as the many Initial Coin Offerings (ICOs) that have raised ridiculousamounts of money within a few hours and even minutes. With much of the news focused on only one aspect of the cryptocoin market, its easy to lose sight of the technologys many other uses. The central idea behind cryptocurrencies is decentralization; allowing people anywhere in the world to transact instantly with zero transaction costs.

The fact that a country as large as China is developing and prototyping a cryptocoin, even though it will likely be controlled and restricted by the central government, speaks volumes to the technologyspotential. China is not the only one getting involved, however. Last month, Singapore made headlines as well when it announced it had successfully digitized its currency. Canada, England, and Russia are also experimenting with cryptocurrencies. Hopefully, more countries will follow suit.

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China's Central Bank Testing Prototype Cryptocurrency - Crowdfund Insider

Investors looking to make an investment in an exciting new area are increasingly turning to cryptocurrencies. It's no wonder why: Bitcoin, the leading digital currency by market capitalization, has gained nearly 200% since the beginning of 2017. Ethereum, the next biggest currency, has gained more than 3,000% over the same period. (See also: Why Ethereum Prices Reached Record Highs.)

There are new currencies added to the list every month, and a sharp uptick in the number of initial coin offerings, or ICOs, means there are many other new startups and ventures related to the burgeoning crypto industry as well. As investors move to place their assets in the digital realm, demand in other areas seems to be drying up. In fact, gold may have been the most heavily impacted by the recent gains in the cryptocurrency world.

Cryptocurrency supply has actually dropped fairly significantly in recent months, according to a report by Business Insider. The rate of Bitcoins added to the market has more than halved in the past 12 months, from a rate of 9.3% to 4.4%.

If mining continues to slow down, Bitcoin won't reach its theoretical maximum number of 21 million Bitcoins until the year 2045, if not later. As supply has dwindled, prices have continued to rise.

It seems that the opposite may be true for gold. Gold production has climbed significantly since 2009, now sitting at 3,100 metric tons. This constitutes a record high level of production of the precious metal.

Tom Lee, managing partner and head of research for Fundstrat Global Advisors, indicated in a letter to clients that "cryptocurrencies are cannibalizing demand for gold. Bitcoin is arguably becoming a scarcer store of value. Investors need to identify strategies to leverage this potential rise in cryptocurrencies."

What could the future look like for the prices of Bitcoin and gold? Fundstrat's research indicates that prices for the cryptocurrency could climb by about eight times over the next five years, with Bitcoin prices reaching $20,000 during that time.

If the scenario turns out more bullish, Fundstrat believes Bitcoin could surge to more than $55,000 by 2022. What would happen to gold during that period? "Our model shows gold's value being relatively static against a rise in Bitcoin," Lee suggested.

Lee believes that if central banks begin to invest in Bitcoin and other digital currencies, that could speed up the process by which Bitcoin takes the place of gold in the international markets.

"Already central banks have looked into this possibility. In our view, this is a game changer, enhancing the legitimacy of the currency," he wrote. Of course, there are also analysts who believe a potential crash or bubble collapse is imminent in the cryptocurrency space, so only time will tell what will happen. (See also: Goldman Sachs Takes Bearish View on Bitcoin.)

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As Investors Turn to Cryptocurrencies, Gold Suffers - Investopedia

Cryptocurrency mining is a difficult and costly activity. Miners must pay to build rigs capable of vast amounts of processing power, and then the rigs themselves must be powered with large quantities of electricity. It's all a careful balance between how much the operation costs and how much profit it is able to generate. (See also: What Happens to Bitcoin After All 21 Million are Mined?)

With mining operations for Ethereum, one of the leading digital currencies on the market today, taking up the same share of electricity as that of a small country, miners have to be careful that they aren't spending more than they are making. Because of that, some mining operations have begun to look to solar-powered rigs, set up in the desert, in order to reduce mining costs and make the largest profit possible. (See also: Chinese Investment in Bitcoin Mining is Enormous.)

Mining operations with the tools and resources to be able to set up solar-powered rigs in the desert are finding that it is a good investment. Once you have paid for the solar panel system itself, the cost of mining is virtually free. Getting rid of a hefty electric bill which typically weighs down mining operations leaves more room for profit.

The Merkle recently documented a mining operation focused on Bitcoin in this manner. The setup has been running successfully for almost a year and currently uses 25 separate computing rigs. The process has been so profitable, in fact, that the miner running the operation plans to increase the number of computers to 1,000 this fall.

In the case of this particular desert miner, the individual mining rigs cost about $8,000. This cost has included all solar panels, power controls, batteries, and the Antminer S9 ASIC processor. When fully operational, each miner brings in a profit of about $18 per day.

Of course, a cheap mining operation is only part of the equation. In order for miners to make a tidy profit, the price of the cryptocurrencies they are generating must remain high.

In the case of the mining operation in question, Merkle suggests that Bitcoin prices must stay above $2,000 in order for the operation to be profitable. Considering that the price of most cryptocurrencies is highly volatile, and that drops of 205 or more have occurred in many individual days, this keeps a certain element of risk present in any mining operation.

It seems likely that more and more miners will turn to areas in which renewable energy is easily accessed. Iceland has already become a popular destination for Bitcoin miners thanks to its fast, virtually limitless internet. Miners looking to move to the desert should be cautious for other reasons, though: mining in the heat can cause rigs to break down more easily.

Read more:

Is Solar-Powered Cryptocurrency Mining the Next Big Thing ... - Investopedia

'P4man' is an active bitcoin miner and investor with an academic background in economy and IT. He has been a member of the online discussion forum Bitcoin Talk since September, 2011.

In this opinion piece, P4man looks at the cryptocurrency market to see if there is a credible investment alternative to bitcoin, focusing this time on XRP, the native token for blockchain startup Ripple's consensus protocol.

I have to admit, I've dreaded writing this part of my series.

Among investors, Ripple is one the most divisive cryptocurrencies around it's either loved or despised, both with equal passion. Even more than ethereum, I believe, it's misunderstood because it's so different from bitcoin.

But, being number threein market cap (actually number two, but more on that later), I can't really avoid writing about it.

Ripple dates back to 2012.I remember when it was launched, as I was one of the beneficiaries of what I believe was their first public giveaway on Bitcoin Talk forums.

If memory serves, I received something like 30,000 XRP tokens (although, I probably cheated using multiple accounts...). Once I received the tokens, I tried out the protocol and tried to understand what it was about. I was equally intrigued and confused by the concept, which was new to me: a peer-to-peer payment network where anyone could issue debt and that was, in essence, currency agnostic.

If I had trouble understanding what that even meant, I understood even less how the XRP token fitted in. What was it for? The only explanation that I remember being given at that time, was that it was meant to prevent network spam. A token of which 100 billion exist that serves to "prevent spam" didn't sound particularly exciting or valuable to me. So, I quickly swapped my free anti-spam tokens for more bitcoin.

It wasn't until much later, when I read Peter Todd's now infamous analysison Ripple's predecessor, Ripplepay, that I began to understand not only what Ripple is, but also what I had only sensed intuitively about the XRP token.

To explain, we need to go back in time.

Before Ripple, and in fact, before even bitcoin launched, Ripplepay was a peer-to-peer payment network created by Ryan Fugger around 2004. This old website, which for some reason still exists, explains it in very simple terms.

In a nutshell, Ripplepay allowed users to issue and swap credit between network participants that trusted each other. Think of it as an online equivalent of someone writing on a Post-it note "good for $50," then signing it. If you trusted whoever signed that note, then that note would be worth $50.

It's simply an IOU, a concept that forms the basis of how banks operate and create fiat money.

In the real world, it's much easier to create and swap IOUs, or "Post-it notes" between trusting individuals, than it is to design a method for cash payments. With cash payments, you don't rely on trusting each other, you exchange something of value. Instead of accepting a counterparty risk, the parties need to trust the value of the object they exchange. So, you need some kind of store of value that can't be easily counterfeited. Something like gold or bank notes (although technically, the latter is also a IOU, only one that is issued by a bank).

It's very similar when you try to digitize it: Ripplepay, as payment system, was a much simpler problem to solve electronically than a digital cash system like bitcoin. First of all, in a payment system, you do not need to worry about double spends; if I issue an IOU to Alice, I can still issue the same amount to Bob, and there is no risk this is somehow the same debt: if I issue it twice, I will just owe both. However, if you allow a (digital) cash asset to be spent twice, this is essentially counterfeiting.

In a payment network, there is also no need for a global consensus: Bob doesn't need to know, or agree with me about how much money I owe to Alice. As long as Bob and I, and Alice and I, agree among each other how much we owe each other, then a local consensus is established, and that's all thats needed.

What you do need in a payment network however, is trust among users.

You can't issue debt to someone who does not trust you. So, you need to set a trust line, or credit limit, that defines to what extend you trust which participant. Trust lines can "ripple" through a network, allowing trading of IOUs with participants you may not know, but with whom you share trusted intermediaries. If Bob and Alice both trust me, Bob could pay Alice with an IOU that I issued to Bob.

Besides requiring trust, in a payment system, you are always exposed to counterparty risks. You might have trusted me when I wrote that good for $50 note, but what if I don't or can't pay back?

Being able to pay electronically without trust, and without counterparty risk, only became possible several years later when Satoshi Nakamoto introduced the world to his solution to this old problem in the form of bitcoin. By using proof-of-work, he created the first real solution for a digital cash system that could store and exchange value, was extremely resilient to counterfeiting, involved no trust and had no counterparty risk.

So, a trust-based IOU payment network like Ripplepay, and a trustless digital cash network like bitcoin, are two completely different things, and yet they are actually quite complementary. Ripplepay, for instance, could easily allow the creation and management of bitcoin-based IOUs among trusting users.

The electronic equivalent of a "good for 1 BTC" Post-it note. Issuing debt is impossible in bitcoin itself, though certainly useful.

A few years after bitcoin was launched, OpenCoin, later Ripple Labs, took over Ripplepay. They completely reworked the protocol. The concept still revolved around managing IOUs, but inspired by bitcoin, they also included a new token called XRP.

The inclusion of a cash token, that is not an IOU, automatically means you now need a protection against double spends and thus a global consensus protocol, because now everyone on the network needs to agree about token transactions and ownership.

What had been a relatively simple concept now became a very complex onethat faced the exact same problems that bitcoin had only just managed to overcome.

And there is no free lunch; bitcoin, revolutionary as its concept may have been, had to make significant sacrifices to achieve a global distributed consensus, such as electricity-consuming proof-of-work (mining), high-latency transactions (multiple transaction confirmations) and limited scalability (monolithic blockchain containing every transaction, ever).

These were problems that a distributed payment network shouldn't have.

Ripple tried to overcome these challenges in a different way than bitcoin. Instead of using proof-of-work, it relied on a new, unproven consensus protocol. This protocol requires users to extend trust to validating servers that produce this consensus. Relying on trust, rather than proof-of-work, kind of makes sense for Ripple, because you need similar trust relationships anyway for IOUs to work.

But this means that an XRP token is absolutely nothing like bitcoin. Instead of needing to trust only the mathematics of proof-of-work, you can only trust the XRP token by setting up trust lines that almost inevitably end at Ripple. And while in theory anyone can set up such a server, if Ripple does not include your server in their trust lines, then you're not part of the consensus-making process.

So, Ripple is highly centralized and XRP is more akin to a PayPal account than a trustless system like bitcoin.

As Peter Todd pointed out in his study, the new requirement of a global consensus protocol which arose solely from the decision to add the XRP token also has serious implications on scalability and security. If the token results in a more complicated, more centralized, less secure and less scalable protocol, you have to ask, why the token was added in the first place? What was wrong with the original concept, which is often compared to an electronic Hawala system, which needed no monolithic global consensus or ledger, and thus could have scaled almost arbitrarily?

The original argument, that the token is needed to counter network spam is not a good one; spam can be prevented by other means, including charging transaction fees that can be paid in any currency on the network, instead of just in XRP. The other argument I hear nowadays, is that XRP would be used as a sort of reserve currency by banks or liquidity providers on the network.

This seems pretty far-fetched to me; why would liquidity providers not use any other common (reserve) currency like US dollars for that, especially considering the highly volatile price of XRP ?

That you don't need a private token on a payment network is perhaps best illustrated by Hyperledger. This is a family of open-source protocols hosted by the Linux foundation, backed by a large consortium of 80 companies that includes IBM, Intel, JPMorgan and Accenture. Hyperledger Fabric in many ways resembles Ripple, but has no preferred, native token, and thus doesn't need a single global consensus. Instead, it supports many concurrent consensus protocols, that can be localized or centralized, depending on what is needed.

In short, it's hard to come up with any rational reason why XRP exists in the Ripple protocol, other than as a means for Ripple to make money. Lots of money. When Ripple launched, Ripple created 100 billion XRP tokens. To achieve some resemblance of fair initial distribution, they donated billions of XRP in various giveaway schemes.

But the company, its founders and associated foundations, still own well over 60 billion of the 100 billion tokens. That should give any investor pause.

For some reason, the existence of these tokens is also ignored by online data source Coinmarketcap, which significantly distorts the actual value of the token supply (basing market cap on "circulating supply").

These tokens are supposed to be fungible, so even if parts of them are temporarily locked up by promises or via "smart contracts" (which ironically, Ripple can't really do), I see no reason to pretend only 38 billion tokens exist.

That's like ignoring the estimated 1 million bitcoin in [bitcoin creator] Satoshi Nakamoto's wallet just because they are not circulating at the moment, and may never circulate. The only correct market cap for Ripple is based on 100 billion tokens, and that currently puts it at the number two spot, above ethereum. A few weeks ago, even temporarily above bitcoin, peaking above $45bn.

Is such valuation reasonable for a token that serves no obvious purpose, and even seems to undermine the usefulness of the underlying protocol?

Ripple investors will point to Ripple's strategic partnerships with significant financial institutions and some ongoing experimental implementations. They will point to the 160 employees, possibly making them the largest blockchain company. They will point out the astronomical figures involved in intra-bank settlements, the market Ripple is aiming for, by presenting its protocol as an alternative to systems like Swift.

Some of these points are absolutely reasonable. Ripple has highly qualified engineers working for it, that undoubtedly produce some useful code that can solve real-world problems. It also has more than credible financial backing and partners in the sector.

There have been a few proof-of-concept implementations and recently Thailand's Siam Commercial Bank announced they starting using Ripple software for Thailand-to-Japan remittance.

This is a big deal, but it needs context; first of all, SCB bank is an investor in Ripple company, making it fairly logical they would experiment and promote the blockchain technology they invested in. More importantly however, I see no mention of XRP in any of the press releases.

Is it being used? Or are they using Interledger Protocol (ILP)? ILP was also developed by Ripple, and appears to be a fairly impressive piece of technology to bridge between various blockchains and systems. It's open source, hosted by the Linux Foundation and could become a part of the Hyperledger framework.

But note that ILP itself has no native token; it doesn't depend on XRP and doesn't add value to it. Even if ILP finds wide adoption in the fintech industry, it will do precious little for XRP.

As for the moonshot of replacing Swift; first of all, I highly doubt a global consensus protocol is the right approach and could even scale to that level. But also, banks currently control Swift. How likely is it they would relinquish control to a small startup and allow themselves to become beholden to its private currency, that they have no need for? I just don't see that happening.

This is especially true when alternatives like Hyperledger exist that do not suffer from Ripple's inherent drawbacks; a protocol which is backed by a far larger consortium of corporations, which relies on proven consensus algorithms that have been researched, peer reviewed and thoroughly tested for over 15 years, and a protocol which at least at first glance, appears to do almost everything Ripple does and more, including things like smart contracts.

The only obvious thing that appears missing from Hyperledger compared to Ripple, is the one thing for which I see absolutely no reason for them to want: the XRP token.

Disclosure:CoinDesk is a subsidiary of Digital Currency Group, whichhas an ownership stake in Ripple.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Ripple image via Ripple/YouTube

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email [emailprotected].

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Ripple's XRP: Giving the Third-Largest Cryptocurrency a Second Look - CoinDesk

Mumbai, July 10:

Crypt currency guru Amit Bharadwaj has launched an e-book Cryptocurrency for Beginners, which seeks to provide context and clarity on cryptocurrencies.

This is his third book in the series, after Cryptocurrency Trading for Beginners and Cryptocurrency Mining for Beginners.

Blockchain and cryptocurrencies are set to transform the world with their efficient solutions. However, the promise and power of cryptocurrencies remain to be unleashed meaningfully - as limited awareness across stakeholder categories, plays spoilsport, Bharadwaj said.

My book has a simple objective - making the readers realise that blockchain is just like the internet or a motorbike - one doesnt need to know the underlying technology to use it. The book empowers readers with requisite knowledge of the concept of blockchain and helps them appreciate its massive potential, he added.

Amit Bharadwaj is founder of Amaze Mining & Research Ltd.

(This article was published on July 10, 2017)

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Crypto currency guru Amit Bharadwaj launches e-book - Hindu Business Line

The increasing energy consumption by cryptocurrency mining operations has surpassed the energy requirements of many smaller nations. Read more...

While some continue to praise Bitcoin and other cryptocurrencies as the beginning of the new world order, there are some who believe that the very digital currencies might spell doom by accelerating global warming. The dissent against Bitcoin and other PoW based cryptocurrencies is fueled by the extent of mining operations. As the mining hardware continues to become more powerful, the mining difficulty rises proportionally to maintain a constant emission of new tokens.

An increase in mining difficulty also means increasing energy requirements. According to reports, the recent rise in Ethereum value has led to an increased interest among the cryptocurrency community members. Many people have taken up Ethereum mining using graphic processors.

The increasing demand for graphics processors has not only caused a scarcity of GPUs in the market. It has, in turn, increased the energy consumption. According to reports, the total energy consumed by the Bitcoin network has risen to 14.54 terawatt hours (TWh) per year. The energy requirement is expected to further grow with the growth of the community.

It puts the total amount of energy required to process each Bitcoin transaction at 163 kWh, equivalent to the amount of energy used by an average household in the United States for five and a half days. A further extrapolation puts the electricity consumption of Bitcoin network to be equivalent to the overall annual energy consumption of Turkmenistan, that ranks 81 in energy consumption ranking on a global scale.

While Bitcoin network takes the first place when it comes to overall energy consumption, Ethereum isnt far behind. According to the report, the total annual electricity requirement for Ethereum mining is equivalent to that of Moldova (with an energy consumption ranking on 120) at 4.69 TWh. Each Ether transaction uses an average of 49 kWh, which is equivalent to one and a half days worth of electricity for an average US household.

The upcoming Bitcoin scalability options and Ethereums impending switch from Proof of Work to Hybrid Proof of Stake algorithm may lead to a significant reduction in the electricity consumption trends.

Read more from the original source:

Cryptocurrency Electricity Requirements Surpasses Annual Energy ... - newsBTC

A pair of Polish regulators said today that investors and banks should avoid dealing with digital currencies like bitcoin and ether.

In a joint statement, the Polish National Bank and the Financial Supervision Commission delivered a broad warning against investing in digital currencies, citing price volatility and the risk of fraud. The regulatorsclarified thatcryptocurrencies it identifies bitcoin, litecoin and ether are not consideredlegal tender in Poland.

While the statement itself does not outline any specific policy measures in light of the tech, it does state that financial institutions should avoid doing business with cryptocurrency exchange services "in particular with regard to the risk of exploitation of these entities for money laundering and terrorist financing", according to the statement.

"The decision in this regard should be preceded by a thorough analysis of the potential consequences, including legal risk and reputation risk," the regulators added.

While arguing thatdistributed ledger techshould be distinguished from cryptocurrency applications, the regulators called for increased scrutiny before any broader adoption happens.

"Many functional, operational and legal aspects of this technology, however, should be subject to a detailed and thorough analyzes and tests before the mass introduction of the financial market," the statement read.

In February, CoinDesk reported that Polands financial ombudsman, Aleksandra Wiktorow, urgedthe country's Ministry of Finance to regulate cryptocurrency exchanges. That call followedthe closureof Bitcurex, the country's oldest bitcoin exchange,which sparked an investigation by local authorities.

Image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [emailprotected].

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Polish Regulators Warn Banks and Consumers on Cryptocurrency Risks - CoinDesk

Cryptocurrencies like Bitcoin and Ethereum, while potentially transformative on the macro level, are hard for most people to adopt on the micro-level. Indeed, the opportunities created by Bitcoin and its underlying technologyblockchainare only being used by 8-10 million people (1% of the worlds population), and a significant share of that number comprises government entities, stock exchanges, banks, financial services firms, and startups.

For the large majority of people, the technology is hard to grasp, and the cryptocurrency is difficult to mine given the hard-earned cryptographical skill set needed to mine it. Bitcoin and Ethereum are relatively popular cryptocurrencies, but with new digital wallets with no instruction manuals and no single platform to centralize trading for the everyday consumer, progress towards full integration of the currency in world economies remains slow. Yet, as with many affairs in the world of financial services, there may be hopeand it comes from Switzerland.

Corion, a unified, unregulated, decentralized, mobile cryptocurrency platform operating on the Ethereum Classic blockchain, is underway in its Initial Coin Offering (ICO). The offering, which will close on July 30, will pay out between 3-25% bonus to participants, with early birds earning 0.2% daily during the offering and service providers generating between 5-10x more return on existing 0-2.5% coin supply growth in the medium term.

The ICO gives both service providers and consumers the opportunity to invest in a new cryptocurrency that allows them to help build the Corion ecosystem, a multifunctional platform allowing businesses and individuals to transact between each other on the Corion platform, which provides and hosts secure, convenient, and real-time financial transactions between members using Corion coin.

The main pain point within the overall blockchain environment Corion seeks to alleviate is that the current collection of cryptocurrencies operate in centralized and debt-based contexts. The value of these cryptocurrencies, especially Bitcoin with its various and controversial hard forks over the last few years, are volatile, with Ethereum being held up as Bitcoins potential yet uncertain successor. Driving such volatility is the scarcity-based value of cryptocurrencywith only so many cryptographers and developers able to mine and distribute it, demand simply isnt part of the equation here. And, with only 1% of the worlds population actively using any such currency right now, theres just not the level of adoption present to transition it from short-term, speculative income for a majority of people.

Corions main goal is to create a blockchain-based, decentralized cryptocurrency ecosystem driving demand based on coin rewards and benchmarking against current fiat currencies. The ecosystem, accessible through the Corion platform, would focus cryptocurrency into mainstream usage, taking it from short-term speculative income to continuous passive income through community management. More, Corion consists of separate smart contracts, implemented in Solidity language for maximum transparency and trust.

Corion has created an ecosystem and suite of services that rival emerging blockchain services offered by bulge-bracket banks like Citi and BNY Mellon, integrating payment, finance, and trading functionalities on its singular mobile platform, accessible by any user. At the same time, Corions developers are working B2B to increase the total user base of all cryptocurrencies, something no company has done until now. This innovative business model encourages cross-currency exchange, and inter-wallet and inter-platform cooperation and synergy.

To facilitate the transition of cryptocurrencies to mainstream use that Corion looks to achieve, the Corion platform features seven unique features to humanize the cryptocurrency experience for the average user. These features include a marketplace that promotes commerce, a stable cryptocurrency to promote mainstream use, a reward system for users based on Schelling points which allows users to grow their coins, a multifunctional wallet that operates as the main interface of the platform, and more.

Currently, the battle for cryptocurrency supremacy is ongoing. Corion enters with high aspirations, and well have to keep watch to see if this innovative platform can change the crypto world.

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New ICO Promises Mainstream Adoption of Cryptocurrencies - HuffPost