Daily Archives: August 15, 2017

The working group on crypto currencies at Russias State Duma monitors Bitcoin price moves and still has to establish a common stance for all parties involved in the legislative process.

There has been some serious speculation about Russias plans to legalize Bitcoin and its likes. This has been due to a large extent to comments like those made by Russias Deputy Finance Minister Alexey Moiseev, who said in April this year that Russia may recognize bitcoin and other cryptocurrencies as legal in 2018. His comments were followed by more moderate statements, including ones by the Maxim Grigoriev, Chief of the Centre for Financial Technologies at the Bank of Russia, who said it was too early to talkof legalization of crypto currencies in Russia.

The latest news concerning the coming cryptocurrency legislation in Russia are in tune with the more sceptic stance on the matter.

In an interview with online news source Invest-Foresight, Elina Sidorenko, who heads the working group on cryptocurrencies at the State Duma, the lower chamber of the Russian parliament, said the bill for regulating Bitcoin and its likes is about to get delayed.

Ms Sidorenko explained that the bill, which was originally set to be ready in October, will be ready in the winter at the earliest. She mentioned several factors for the delay the need to establish a common position for all institutions involved in the process, as well as the recent Bitcoin price fluctuations, which raise additional questions about the vulnerability of crypto currencies.

Ms Sidorenko said that at present there are discussions on whether cryptocurrencies need a new law altogether or should an existing law (or laws) be amended to cover Bitcoin and its likes. In case of the latter, there has to be consensus on which law(s) should be amended.

Another important discussion topic is the nature of crypto currencies. There is disagreement on whether they should be treated as means of payment, derivatives, digital assets, etc.

Ms Sidorenko concluded that there is a chance that the cryptocurrency legislation will be passed into a law in 2018, but added that the timing depends on market developments.

In July this year, Russias Internet ombudsman Dmitry Marinichevalso commented on the coming cryptocurrency legislation in Russia, saying that it will partially resemble that of Japan, and will also have elements of the New York DFS licensing system.

Regarding Bitcoin trading, however, he was rather sceptic, and said that although the long-term perspectives for cryptocurrencies are good, he would not recommend to Russians to participate in Bitcoin trading in the near future, as the risk of loss is too high.

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Russian cryptocurrency legislation faces delays amid Bitcoin price ... - FinanceFeeds (blog)

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By Team CommerceMashable Shopping2017-08-14 18:44:31 UTC

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The wild world of cryptocurrencyand how it could make you rich - Mashable

Jackson: That brings to mind the recent investor letter which Oaktree's Howard Marks sent out in which he said that Bitcoin and other digital assets aren't real. What do you say to that?

Sacks: Marks isn't wrong to raise an alarm bell about speculation, but he's wrong in saying it's not "real." That's like saying software isn't real. Of course it's real.

Did the U.S. dollar become less real when it stopped being backed by gold? Cryptocurrency is the next step in that same evolution to make currency more virtual.

In its purest form, currency is confidence. It's a network effect around an agreed-upon medium of exchange that has some promise of scarcity. Bitcoin enforces its scarcity through a combination of cryptography and economic incentives ("cryptoeconomics"). A lot of people find that more comforting than relying on the good faith of a government. In math we trust.

People in the U.S. and especially longtime participants in the U.S. financial system have tended to underestimate bitcoin because we have long enjoyed relatively stable political and financial systems. People in parts of the world with less trusted systems have gotten it sooner because almost anything would be preferable to having their life's work trapped in a fiat currency that could collapse or be confiscated at any moment.

Jackson: If the current moment with cryptocurrencies is like the dot-com era, does that make it a bubble, and if so are we in 1995 or 1999?

Sacks: The technology is probably 1995 and the pricing is either 1999 or getting close. It's a combination of something real with a lot of speculation.

What I've been trying to figure out is: Who are the good teams and interesting projects in the space? Also I've been trying to understand the future regulatory environment and invest only in companies that have structured correctly and are likely to survive the inevitable crackdown.

I think the trigger for a big correction is more likely to be regulatory than technical. The SEC provided some important guidance in its DAO report a couple of weeks ago, but we will learn a lot more if there's an enforcement action. That's going to be much more important to the future of this movement than the dreaded bitcoin fork that occurred a couple weeks ago and turned out to be a Y2K-like non-event.

Jackson: So is there going to be a similar three-year nuclear winter when the bubble bursts like what happened after the dot-com boom?

Sacks: Hopefully it will be a soft landing rather than a nuclear winter. It could be a positive thing if all the scammers and pumpers get washed out of the space.

There's going to be a correction though. Many of these ICOs are still just slideware but are getting a Series D type of valuation. They don't deserve that type of valuation at this stage of development. That will rationalize at some point.

Jackson: How are ICOs and future SEC regulation going to mesh?

Sacks: Hopefully the SEC distinguishes between "protocol coins" (which have an actual use in a software ecosystem and should not be viewed as securities) and "asset coins" (which are securities). The public policy think tank CoinCenter has done some excellent work in laying out the legal frameworks and policy rationales for this.

Until now, most of the action in ICOs has been in protocol coins. The better projects have worked hard to structure their tokens so they are not securities.

However, I believe we will soon see the emergence of asset coins (aka traditional asset tokens). These will be securities. It must be done correctly, but it's going to be an exciting area.

Jackson: What securities could tokenize?

Sacks: Almost any illiquid asset today lends itself well to moving onto the blockchain and becoming tokenized. It will create a deeper market with improved price discovery and should increase the value of those assets.

In the long run, even liquid assets like stocks could move onto a blockchain because of the benefits of this platform.

Ultimately this is a technology for maximizing the efficiency of every asset, means of ownership, fluidity of markets, and mechanism of payments. The goal is the optimization and maximization of the world economy. That may make it the biggest revolution of all.

Jackson: Are digital assets and tokenization a long-term threat to traditional venture capital?

Sacks: Yes in two ways.

First, a lot of start-ups that would have sought venture capital can now raise money through an ICO. I've called this "crypto capitalism" in contradistinction to venture capitalism.

The terms of crypto capital are more favorable to entrepreneurs than venture capital. So any start-up that can ICO will ICO. Whether a start-up can ICO will depend on technical and regulatory suitability, but it could ultimately be a very large category of start-ups.

If so, that will certainly challenge VC. Larger VCs who would typically invest after the ICO will have to compete with hedge funds, which is not a great place to be. VCs who want to invest before the ICO will have to compete with angels to offer a real value-add.

Second, at the level of the VC's own investors, I think LP interests are likely to be tokenized, along with most other illiquid assets. The prestige VC firms will resist this, but there are already a few new VC firms at the margins that are tokenizing. Soon, a few more will do it. Then a few more. Eventually, illiquidity will be a competitive disadvantage in fundraising that only the top firms will be able to justify.

All of this being said, the SEC's rulings in this area will have a huge impact on how this plays out. If those rulings support innovation, that will lead to a more competitive world for VCs, whose world is already quite competitive. But that world will also be more frictionless and efficient.

Sacks posted a tweet storm about this idea:

Jackson: What are the biggest challenges that still lie ahead for cryptocurrencies?

Sacks: I see three big areas for concern: scalability, slideware and regulatory.

First, the number of transactions per second that either bitcoin or ethereum can handle is still orders of magnitude less than what PayPal or the Visa network can do. It's been estimated that ethereum, which is the main developer platform for decentralized apps, would need a 250x improvement to run a 10 million user app and 25,000x improvement to run a billion-user app like Facebook. That improvement requires real work and involves some risk. There's a product roadmap, but it's going to take years.

Second, most of the ideas out there today for ICOs are still just white papers, or what we used to call "slideware." There is a lot of execution risk in turning these ideas into usable software that actually gets adopted. One fortunate effect of the crypto boom is that it has been helpful in attracting talent to the space. We will need that migration of talent to continue in order to realize the potential.

Third, as we've discussed, will be the extent and nature of regulatory acceptance. The eventual rules governing the application of securities laws to tokens will have a major impact on adoption and innovation in the space, at least in the United States. There is some risk that if the wrong regulatory regime gets adopted in the U.S., then the center of innovation could move to other countries. If blockchains are the next internet, that would be a very unfortunate development for the U.S.

Jackson: We have bitcoin and ethereum plus a number of smaller, lesser-known currencies out there including the new Filecoin ICO. What lesser-known currencies intrigue you most?

Sacks: I prefer to think in terms of use cases, rather than recommending specific currencies. The most promising use cases to date are: store of value, payments, crowdfunding, file storage, identity management and authentication, prediction markets, escrow, title chains, notary chains, provenance, and supply chains. There are 1,500 ICOs already launched or announced, plus many other blockchain companies, so there's a lot more to come. This is an extremely exciting and fast-moving space.

That said, one admonition I would make to your readers is that most probably shouldn't be investing in ICOs directly. We are seeing white papers for technology that doesn't truly belong on the blockchain or, worse, could be pump-and-dump schemes. Many of the scams originate outside of the United States, so they will be harder to regulate. Just like a lot of retail investors lost money in the dot-com era, the ICO era has the potential to do the same unless people really take the time to understand what they are investing in. A number of professionally managed crypto funds, with real technical expertise to evaluate ICOs, are starting to emerge and may be a safer way to participate than investing directly.

So I would just urge everyone to temper their excitement with sound business judgment. Or does that sound too much like Howard Marks?

Sign up for Eric's monthly Tech & Media Email. You can follow Eric on Twitter @ericjackson .

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David Sacks cryptocurrency interview - CNBC.com - CNBC

News business and finance

The predominant financial information website for Chinese speaking investors in the United States and abroad announced the launch of a cryptocurrency education and trading subscription service.

On August 14, 2017, ChineseInvestors.com, Inc. (CIIX) launched a new subscription-based service that will cover the emerging world of cryptocurrencies. The new service will provide timely news and analysis for cryptocurrencies, like Ether, including pricing and industry trends.

CIIX is a periodical with offices in Los Angeles, New York, and Shanghai serving the Chinese speaking population in the United States and abroad. CIIX offers a variety of subscription services and websites for investment and educational content. Such topics range from basic information about companies listed on US exchanges and real-time analysis and market quotes to trend analysis of market sectors and trading simulations highlighting different trading techniques for instructive purposes. CIIX is renowned for providing its customers with educational content regarding how to evaluate investments using fundamental and technical analysis methodologies.

Cryptocurrencies like bitcoin have become a global phenomenon, stated Warren Wang, founder and CEO of CIIX. Since January 2015, the price of bitcoin has increased 500% from $200 to $1,000 in January 2017, and just spiked to a record high over $4,000 as US-North Korea tensions escalated. Likewise, Ethereum has surged from less than $10 to more than $300 this year.

Asia has been a relative hotbed for cryptocurrencies since their inception in 2008 and implementation in 2009. This move by CIIX serves as an indicator that demand for cryptocurrencies and related information is still growing in Asia. Countries like China, which possesses an estimated 85% market share of bitcoin, along with neighboring nations like Japan, which recently legalized bitcoin as a form of payment, stand to benefit greatly from CIIXs new service. Straightforward explanations of what cryptocurrencies are and how to use them will be included in the newly offered subscription. The news agency will also cater to experienced cryptocurrency users by providing content spanning from mining and blockchain technology to pricing trends and exchange traded funds.

Founded in 1999, CIIX has built a reputation primarily on real-time market commentary, advertising, and public relation related support services. In addition to its financial market services, CIIX also has a foothold in the US cannabis industry, investing in research, development, and distribution of cannabidiol (CBD) medicine and health products.

Jordan Daniell is a writer living in Los Angeles. He brings a decade of business intelligence experience, researching emerging technologies, to bear in reporting on blockchain and Ethereum developments. He is passionate about blockchain technologies and believes they will fundamentally shape the future. Jordan is a full-time staff writer for ETHNews.

Originally posted here:
ChineseInvestors.com Launches Cryptocurrency Beat - ETHNews

News world

In Ukraine, cryptocurrency does not have an official status. By the end of August 2017, the Eastern European nation will clarify its position through a meeting of the Financial Stability Council.

On August 11, 2017, the National Bank of Ukraine released a statement by deputy chairman Oleg Churiy. According to Churiy, the Financial Stability Council (FSC) will meet by the end of August 2017 to work out a joint position on the legal status of bitcoin and its regulation.

Although Churiys comments specifically single out bitcoin, it seems likely that the FSCs conversation will encompass additional blockchain-based digital assets. The term bitcoin often functions as a catch-all placeholder for government agencies.

To date, the National Bank of Ukraine has collaborated with many governmental agencies on the topic, including:

Ukraine is clearly taking a broad and holistic approach to its digital asset guidance. A multi-pronged approach is vital because of the many functions of virtual money. The Ukrainian government may consider instances where a digital asset serves as currency, provides utility to consumers, or even grants ownership in a company.

In his statement, Churiy references the diverse cryptocurrency regulatory schemes currently employed by the European Union, Israel, Japan, Australia, Canada, and the Peoples Bank of China. He notes that discordant regulatory schemes around the world have made it difficult to give bitcoin a definite status in Ukraine. The FSCs meeting should generate needed dialogue, if not a resolution.

In the meantime, a lack of government guidance has not prevented Ukrainian involvement in cryptocurrency. For example, a Ukrainian white hat helped rescue funds from wallets that were compromised during Julys Parity hack. More recently, the Kyiv Post reported that a group of Ukrainian entrepreneurs have invested in 150 bitcoin teller machines, to be installed across the country by January 2018.

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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National Bank Of Ukraine To Clarify Legal Status Of Cryptocurrency ... - ETHNews