Daily Archives: April 7, 2017

The Digital Asset and Blockchain Foundation of India aims to create awarenessabout the benefits and risks of cryptocurrencies, liaise with regulators and get clarity on taxation, attract investment and set up incubators to promote startups.

Four years after it first warned the users of virtual currencies (VCs), including Bitcoin, in 2013 of the potential financial, operational, legal, and security-related risks that they were exposing themselves to, the Reserve Bank of India(RBI) recently again expressed concern over the risk-prone Bitcoin players, who have no authorisation to deal with Bitcoin.

But these warnings seem to have had no effect on the Bitcoin and cryptocurrency players, who that have now gone a step further and set upthe Digital Asset and Blockchain Foundation of India (DABFI) as a kind of self-regulatory body to lay down rules and regimes for the trading of Bitcoins and other blockchain-based digital assets.

The DABFI initiative is being spearheaded by Bitcoin startups such as SearchTrade, Zebpay, Unocoin, and Coinsecure, and follows from the need to ensure an orderly and transparent growth of the virtual currency market. The foundationis mandated to standardise KYC (Know Your Customer), AML (Anti-Money Laundering), and STR (Suspicious Transaction Report) norms for the member companies and create awareness about the benefits and risks of crypto-currency.

In addition, DABFI will alsoliaise with regulators and get clarity on taxation, attract investment and set up incubators to promote startups, build global relations and actively engage with the international community, and create a public website and regularly print reports on and around Bitcoin and the blockchain.

The foundation is currently working on creating awareness among investors and firms against such schemes and programmes that lead to problematic transactions and mistrust around cryptocurrencies. Vishal Gupta, CEO, Searchtrade and founding member of DABFI, says,

Bitcoin and other cryptocurrencies have tremendous benefits for most marginalised people, merchants, tax departments, and regulatory authorities. It has better price discovery, is anti-inflationary, and the transactions are irreversible.

Vishal says he appreciates RBIs warning in the light of many multi-level marketing (MLM) and network marketing companies offering cloud mining and alt coin, and promising unreal returns to investors. These companies, according to him, are trying to ride the popularity of Bitcoin and trapping uninformed investors with their schemes.

According to Bitcoin startups, since there is no formal recognition of Bitcoin or cryptocurrency, raising capital from accredited investors becomes a major challenge for them. Besides, there is little clarity about the taxation that is applicable to various types of Bitcoin transactions.

The RBI, on its part, maintains that it has not given any licenceor authorisation to any entityor company to deal with Bitcoin or any virtual currency, and as a result, any user, holder, investor, or trader dealing with virtual currencies will be doing so at their own risk.

In response to RBI's stance, Vishal says there is no real need to apply for any licence to deal in Bitcoin, since it has not been definitively identified as a currency yet. So, most businesses treat it as commodity trading, which does not require any sort of licensing.

Bitcoin players believe that self-regulation has worked for various industries that are not covered by any regulation. The Code for Self-Regulation in Advertising, for instance, adopted by the Advertising Standards Council of India (ASCI) has been widely accepted by regulators (through incorporation in the relevant rules), courts, and industry alike. DABFI has engaged an international law firm, Nishith Desai Associates, to assist it in developing norms for self-regulation.

Self-regulation does not work outside the framework of existing laws, but rather tries to create best practices for participating members to comply with established norms. Since blockchain is a relatively new technology, one that is still evolving, self-regulation helps, since experts who are in the know of development and working in the industry can keep pace with rapid developments and study compliances with the law on a day-to-day basis, says Vishal.

He emphasises that there are around 400,000 to 500,000 people who have bought or sold Bitcoin, and that the total market size is approximately Rs 2,000 crore a year in India. Most investors primarily use it as an investment rather than as a currency. Think of it as digital gold rather than currency, says Vishal. According to Mohit Kalra, CEO and Founder, Coinsecure,

"Regulating something so decentralised as Bitcoin is not an easy task. By the time authorities figure it out, all DABFI members will be working on self-regulation to ease out complications for the authorities and the community in the future.

Referring to the RBI caution, Sandeep Goenka, Co-founder of Zebpay, says, "The cautionary note addressed to the regular public is correct in its intention. Cryptocurrencies do face technical risks. However, the cautionary note should not be used against companies who are trying to do legitimate business and self-regulating themselves.

The Digital Asset and Blockchain Foundation of India is an association of people who are keen to propagate the use of digital assets like Bitcoin and Ethereum within India. It is engaged in educating people about the risk associated withinvesting and trading in cryptocurrencies. It also creates and propagates practices Bitcoin businesses must adhere to based on consultations within the industry, as well as with regulators and various other stakeholders. in addition, DABFI has organised various events, bringing in Indian and overseas experts to share their experiences in Bitcoin so as to help people gain a better understanding of the subject.

Cryptocurrencies and blockchain are poised to have a profound impact on both Indian as well as global economic landscape. Beyond currency, blockchain development is now moving into the space of decentralised contract and record management. This has huge implications for transparent governance and land record management, says Vishal.

Website:DABFI

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Will self-regulation by Bitcoin players spur RBI to authorise use of virtual currencies? - YourStory.com

What is even more interesting is how over US$150m worth of bitcoin passed through all of these casinos.

It is evident there is a bright future ahead for bitcoin in the gambling industry. Particularly bitcoin-based provably fair gambling has become a lot more popular throughout 2017. Casinos and gambling platforms dealing with cryptocurrency offer many different benefits, that much is certain. Over 1 billion bitcoin-based bets were placed with bitcoin through March of 2017, which is a spectacular number.

There are plenty of reasons as to why people switch to bitcoin casinos. First of all, the vast majority of platforms focus on being provably fair. In doing so, these companies ensure players can manually verify the outcome of every game. Ensuring the casino doesnt have an unfair house edge is of the utmost importance. Traditional casinos cannot provide such unprecedented transparency.

Additionally, bitcoin offers a lot of advantages compared to traditional payments. First of all, bitcoin provides more privacy, as no personal information is exchanged. Additionally, it is also a transparent payment solution, as anyone can verify the payments in real-time. From a safety point of view, one can rest assured there are no chargebacks or refunds, which matter a lot to casino operators.

Finding the top bitcoin casinos is not an easy feat, although eery platform has something to offer. Most platforms have a wide variety of games and provide some great bonuses to boot. Thankfully, there are some good platforms keeping track of the top bitcoin casinos on behalf of cryptocurrency enthusiasts. Especially the year 2017 has been quite positive for bitcoin casinos in general, with thousands of players making the switch.

Although traditional casinos still have a lot of appeal, trusting them is virtually impossible. Scam accusations can be found all over the internet, and their restricted withdrawal options are not helping matters much either. All of this translates to exponentially increasing amounts of money being bet across bitcoin gambling platforms. Close to US$360,000 worth of bitcoin profit was generated for bitcoin casinos in March, which is quite impressive.

What is even more interesting is how over US$150m worth of bitcoin passed through all of these casinos. If this trend continues, it is very well possible the year 2017 will see US$2bn or more in bets on bitcoin platforms. The first quarter and first week of April combined have netted some interesting results so far. Over US$520m worth of BTC changed hands across 3 billion bets. This translates to 360 bets per second throughout the year, which is a staggering number. Things are definitely improving for bitcoin casinos, that much is certain.

Header image courtesy of Shutterstock

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Bitcoin Casino Gambling Surges In March With Over 1 Billion Bets - newsBTC

Not long ago I gave a talk at Israels first Blockchain conference. It was somewhat of an intro to Blockchain technology as a whole and Bitcoin in particular. Today I wanted to share this talk with you. You can also view the slides for the talk below the video to follow along.

If you enjoy the talk Id appreciate if you could upvote it on YouTube. If you have any questions, feel free to leave them in the comment section below.

Have fun!

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Blogger and owner of 99Bitcoins. I've been dealing with Bitcoin since the beginning of 2013 and it taught me a lesson in finance that I couldn't get anywhere else on the planet. I'm not a techie, I don't understand "Hashes" and "Protocols", I designed this website with people like myself in mind. My expertise is online marketing and I've dedicated a large portion of 99Bitcoins to Bitcoin marketing.

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[Video] Introduction to Bitcoin and Blockchain Technology - 99 Bitcoins (blog)

BitMEX, a digital currencies exchange that offers 100x futures on bitcoin, ethereum and other currencies, today announced they are to launch two new prediction markets related to the bitcoin scalability debate.

The first one is a segwit prediction future on whether or not BIP141, also known as Segregated Witness, will be activated on the longest Bitcoin chain by the expiry date (31 December 2017, 12:00 UTC).

The second one is BLOCKS, which is a prediction future on whether a block larger than 1MB will be mined on the longest Bitcoin chain. This, of course, precludes segwit, defining bigger blocks as an increase to the maxblocksize parameter. Arthur Hayes, BitMEXs co-founder, told CCN:

We are launching these markets because we are committed to providing price discovery on issues that are important to the Bitcoin trading community. We do not have a view on whether SegWit should or should not be activated. We do not have a view on whether the block size should or should not be increased. We are agnostic.

The prediction market is not necessarily indicative of the level of support for either segwit or bigger blocks as traders are betting on activation. It may, therefore, assist in suggesting the likelihood of activation of either, with traders who do not necessarily support segwit or bigger blocks nonetheless betting if they think they have information that the wider market does not have.

On this point, Hayes said that they have attempted to craft the prediction markets to be as objective as possible, but a good objective measure of support levels remains lacking despite two years of debate.

Nonetheless, many may see these two new futures as more impartial and fair than what BitFinex offered recently as the terms appear to be what one might expect on a prima facie reading. Potentially offering the market extra information on developments in the scalability debate.

However, the exchange is unlicensed, but Hayes says we abide by all applicable regulations in our home jurisdiction of the Seychelles, a tiny former British colony in the African continent.

Liquidity, of course, is expected to be short to begin with, which may lead to a considerable spread. On that point, Hayes says:

Regarding the spread and liquidity, these are new trading instruments. In the beginning, they will be illiquid, but as people get more comfortable with trading prediction futures contracts on BitMEX, the liquidty will grow and the spreads will tighten.

BitMEXs spread in general and on bitcoin futures appears to be considerable, however Hayes says our Bitcoin/USD swap is one of the most if not the most liquid Bitcoin/USD trading products on the market.

Asked whether they charge traders through spreads like traditional Foreign Exchange platforms, Hayes said no we charge per transaction. We dont trade against our customers.

Of course, for the market to have any confidence that is indeed the case independent audits would be very useful as well as licensing. On the latter point, however, BitMEX might be excused because CFTC continues to make it very difficult to provide margins or futures in a fully regulated manner.

Featured image from Shutterstock.

More:
BitMEX Launches a Segwit and Bigger Bitcoin Blocks Prediction Market - CryptoCoinsNews

A startup called bridge21 thinks it can use bitcoin to beat banks and money transmitters at the international transfer gameat least for remittances to Mexico.

It works like this: The startup allows any user with a U.S. bank account to send money to a Mexican bank account. Dollars are withdrawn from the user's account and used to buy bitcoin, which bridge21 refers to simply as "digital cash." The company then sends the bitcoin to Mexico, where it is sold for pesos, which are deposited into the recipient's bank account.

The process takes only minutes, following a single confirmation on the bitcoin network.

"Our rates are based on the price of digital cash in the sending and receiving countries, not the bank exchange rates used by everyone else, Will Madden, bridge21's founder and CEO, said in a news release. This means we can often send money at rates no other money transfer company or bank can offer."

Bridge21 is often able to send money to Mexico for 2% or even 5% less than the midmarket rate, he added.

The company has chosen a fraught time to launch its service. As immigration has become a hot-button issue in recent years, remittances have come under fire. President Trump has said he wants to confiscate a portion of Mexicans' remittances to pay for his border wall. Meanwhile, bitcoin is going through one of its periodic constitutional crises, with a technical debate over how to scale the network threatening to split the currency into two competing systems. But the problem bridge21 seeks to solve is real. Remittances are costly, and the poorest or more desperate people are often charged the highest fees. Migrants from sub-Saharan Africa, for instance, pay more to send money home than any other groupan average of 9.81%, much higher than the global average of 7.45% and more than one and a half times what it costs to send money to South Asia.

Global remittances totaled more than $601 billion in 2015, according to World Bank estimates. In order to send money home to their families, migrants pay billions in fees. As a result, cross-border payments, and particularly remittances, are often mentioned as an area of finance that fintech in general, and bitcoin specifically, could disrupt.

Bitcoin, of course, can be sent anywhere in the world without the need for a third party such as bridge21; the trouble is spending the digital currency once it arrives.

That is where bridge21 sees an opportunity. The startup launched in beta in January, claiming to provide money transfers in mere minutes from the U.S. to any Mexican bank account for a 2% fee, which was levied in addition to the midmarket rate for exchanging dollars for pesos.

"It's an instantaneous international bank wire using bitcoin," Madden said at the time.

The startup's new service for Mexican remittances, announced this week, offers better than midmarket rates.

Banks themselves are experimenting with ways to achieve faster, better payments. At least one, the Japanese megabank Mitsubishi UFJ Financial Group, is considering bitcoin.

MUFG has partnered with Coinbase, a leading digital currency company, to explore the use of bitcoin as a means of moving money across borders. MUFG's chief executive, Nobuyuki Hirano, has said that by using digital currency to connect two fiat currencies or two separate banking systems, it might be possible to send money more cheaply and easily than traditional methods allow.

Bridge21, for its part, is not stopping with Mexico. It is planning to expand later this year to several additional payments corridors.

Read more:
Remittance startup uses bitcoin as a bridge between bank accounts - American Banker