Daily Archives: October 2, 2019

If asked 5 years ago if youd rather have a Bitcoin or a single ounce of gold, you probably wouldnt bat an eyelid, unless it was a stunned reaction to the audacious question. Until two years ago, the notion that the value of Bitcoin would ever come close to that of gold was unimaginable.

Yet, in 2017, the price of Bitcoin finally caught up to the age-old unit of value and reached unit-for-unit parity with gold. Unsurprisingly, when this came to the attention of gold investors around the world, the trading game was spun on its head.

Increasingly, the concept of gold-backed cryptocurrencies has surged and paved the way for a new generation of altcoins and new, innovative methods of storing value. In combination with the need to tackle the inherent fractures within the crypto market, such as violent and unpredictable volatility, the new generation of stablecoins have come to serve a great purpose.

Stablecoins are designed to minimize the volatility of the price of the currency in the market. Pegged to a cryptocurrency, fiat money or another exchange-traded commodity, the stablecoin remains relatively stable with respect to the asset to which its pegged. And stablecoins do so in two main ways. Asset-backed stablecoins, such as Tether (USDT), value their currency against the value of fiat currencies or a precious commodity, like gold.

Image Source: CoinMarketCap

Algorithmic stablecoins such as Timvi (TMV), rely on computing logic to monitor the supply and demand of its currency to achieve stability.

Stablecoins are primarily pegged to the stable values of fiat currencies or precious commodities. In the case of a gold-backed cryptocurrency, one token should equate to one gram of gold. The price of the cryptocurrency wouldn't fall below the current price of gold, hence, price stability. The reserves of gold must be held by some third party and must be perfectly representative of the amount of stablecoins in circulation. When the gold reserves of the third party grow, new coins can be issued.

One of the most prominent stablecoins backed by exchange-traded commodities, Digix Gold Token (DGX), is backed by physical gold bullion, with 1 DGX equating to 1 gram of 99.99% LBMA (London Bullion Market Association) standard gold. Reserves are kept in a custodial vault in Singapore and users can redeem their gold by mail or pick it personally.

The traditional financial economy abandoned the gold standard in 1944 following the Bretton Woods Agreement. The gold standard restricted the ability of governments to use monetary policies such as quantitative easing to ease adverse conditions. The core values of the crypto market are based on the premise of non-intervention, meaning that the restricted ability of governments to intervene is a nonfactor in the crypto exchange.

There have been some eyebrows raised regarding the logistics of having a mainstream cryptocurrency pegged to gold. Bitcoin's growing market cap of $146 billion (CoinMarketCap) is indeed immense compared to most companies but this pales in comparison to gold.

Image Source: CoinMarketCap

As of now, there are an estimated 190,040 metric tons of gold above ground and 54,000 metric tons in known reserves underground that can be mined.

So, todays rate of $1,485 per ounce of gold means that theres approximately $12.8 trillion worth of gold in the world. If a small portion of global gold reserves were to be replaced with Bitcoin, its value would continue to grow and prices would be kept at a minimum of the price of gold.

Image Source: BullionByPost

Gold-based cryptocurrencies have some distinct advantages. Some have even gone as far as to say that they should replace gold itself, as a store of value. The amount of gold in the world is limited to the amount that can be mined. Likewise, the supply of Bitcoin maxes out at 21 million coins.

Gold is relatively portable since it can be melted and divided into smaller units. It can also be verified and is transportable given that the weight of an ounce of gold is equivalent to a slice of bread. But Bitcoin is cryptographically secured and controlled by a private key and they can be divided infinitely. I believe these features make cryptocurrencies more attractive than gold as a store of value.

The main reason for restoring a gold standard in a cryptocurrency exchange is to create a baseline or minimum value of the coin or token that will always be equivalent to that of gold. It places no limitations on prospects for growth as the price of the coin can exceed the value of gold.

Gold-pegged digital currencies offer protection from sharp dips, stabilize the market and encourage investment. The math adds up and gold would appear to be the most appropriate commodity to back a stablecoin.

No financial investment is free from mishaps, and cryptocurrencies pegged to gold are no different. While the blockchain is a highly secure means of tracking digital transactions, there are still tangible risks. This valuation system introduces concerns over storing large supplies of physical gold. If said gold were to disappear or be stolen, so too would the value of the coin.

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Equities Contributor: Oleg Spilka

Source: Equities News

DISCLOSURE:The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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24-Carat Cryptocurrency: Returning to the Gold Standard - Equities.com

Controversial USD-backed stablecoin Tether is now the worlds fourth biggest cryptocurrency, only surpassed by Bitcoin, Ethereum, and Ripple.

Tether, which is actually only 74-percent backed by cash and other assets, garnered a higher share of the market after a major sell-off.

According to CoinMarketCap, Tether currently has a market capitalization of $4.13 billion.

Its trading volume stands at $36 billion over the past 24 hours.

Meanwhile, Bitcoin undoubtedly the worlds most famous cryptocurrency suffered a considerable decrease in terms of both price and market cap.

Although Tether enthusiasts may see this as cause for celebration,I wonder how hardcore cryptocurrency fans will stomach a stablecoin pegged to the US dollar being in the top four its likely theyll find it outright tragic.

Come say hi to the Hard Fork teamat our blockchain event. On October 15-17 in Amsterdam, hear from top experts as they discuss the industrys future.

Published September 25, 2019 15:29 UTC

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Dollar-pegged stablecoin Tether is now the worlds 4th biggest cryptocurrency - The Next Web

Blockchain payments provider BitPay will add support for XRP, the worlds third-largest cryptocurrency by market capitalization, by the end of this year.

Revealing the news exclusively to The Block on Wednesday, BitPay said it has partnered with Ripples Xpring unit to integrate XRP on its platform so that businesses and merchants can accept the cryptocurrency.

XRP can offer a payment option that is fast, cost-effective and scalable, said Sean Rolland, director of product at BitPay.

With the partnership, BitPays wallet users, as well as its prepaid cardholders, will also be able to store and spend XRP via its merchants and businesses.

Just last month, BitPay added support for ether (ETH) cryptocurrency. The firm also supports payments in bitcoin (BTC) and bitcoin cash (BCH), as well as three stablecoins - Circle and Coinbase-led USD Coin (USDC), Gemini Dollar (GUSD), and Paxos Standard Token (PAX).

BitPay processed over $1 billion in payments last year from global merchants including Microsoft, Dish Networks, FanDuel and Avnet. BitPays B2B business continues to grow rapidly as our solution is cheaper and quicker than a bank wire from most regions of the world, Stephen Pair, co-founder and CEO of BitPay, said at the time.

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BitPay to add support for XRP cryptocurrency later this year - The Block Crypto

Thieves have ransacked the Fusion Protocol, a blockchain-powered platform for exchanging stablecoins and other tokens, stealing roughly $6.4 million worth of cryptocurrency.

[On] September 28th 2019, the Fusion swap wallet was compromised, resulting in theft of 10 million native FSN and 3.5 million ERC20 FSN token, reads a Fusion Foundation blog dated September 29.

The post then confirms the platforms own wallet was the only one affected, as the firm had received no reports of compromised user wallets.

Cryptocurrency traders reacted immediately to a prior announcement in the firms Telegram channel. The value of FSN halved, dropping from around $0.50 to below $0.25 over a seven-hour period.

Later investigations revealed abnormal wash-trading behavior, and discovered the perp(s) had sold some of the stolen funds on obscure exchanges Bitmax and Hotbit.

Cryptocurrency exchanges OKEx, Huobi, Citex, Bitmax, and Hotbit have since suspended deposits and withdrawals of FSN tokens.

Curiously, the firm suspects this was an inside job. The announcement noted the private key of Fusions wallet had been stolen, and that the technology powering the platform remains secure.

The Foundation deeply regrets this incident and its impact on the path of Fusions innovation, said the firm. While private key theft is an industry-wide risk and occurrence, we clearly must strengthen the protection around our private keys.

Want more Hard Fork?Join usin Amsterdam on October 15-17 to discuss blockchain and cryptocurrency with leading experts.

Published September 30, 2019 12:09 UTC

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Fusions $6.4M cryptocurrency theft could be an inside job, firm says - The Next Web

Algorand, the much-hyped project of Silvio Micali, a professor at MIT and a recipient of the Alan Turing Award, promised speed, security, and a new proof-of-stake mechanism.

But since its native token, the ALGO, launched in June, it has dropped like a stone. The coin launched at a high price of $3.28, saw an initial sell-off in the first few days and then slumped over the long term down to just $0.20. Thats a drop of 94 percent. In the last 24 hours alone, ALGO fell 27 percent. So what happened?

Well it largely seem to be bad timing. The crypto markets peaked in June, and then have been on a downhill slide since then. And the pain was exacerbated yesterday when the crypto markets took a sudden turn for the worse.

Its possible that its fundraising method may have had a part to play too. Many cryptocurrencies raised all their funds via ICOs (whether legally or in violation of securities law) resulting in a bunch of people invested in the coin, talking about it on social media, in short, a community.

Instead, Alogrand only raised half of its funds through an ICO that brought in $60 million after a previous funding round delivered $66 million. This may explain why there was very little grassroots movement around the ALGO, and an eerie silence on social media.

Worse, not even an innovative real-world use case could save the day. Earlier this month, real estate platform Assetblock tokenized $60m worth of shares in its hotels on the Algorand blockchain. But the price has fallen 40 percent since then. Is there any hope left for the nascent coin?

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Algorand cryptocurrency lost 94% of its value in its first three months - Decrypt

Hundreds of thousands of pounds worth of bitcoin seized from TalkTalk hacker Elliott Gunton have been auctioned off in the first-ever case for UK police.

Bitcoin, Ether and Ripple amounting to more than 240,000 were sold to bidders in an auction last week, set up through the Eastern Region Special Operation Unit's (ERSOU) asset recovery programme.

It's the first-ever auction of cryptocurrency as the result of police instruction in UK history, with officials saying the proceeds will go back into fighting crime.

Wilson's Auctions hosted the bidding for the cryptocurrency last week; only individuals approved by the police could bid for the digital assets to ensure the coins wouldn't be reinvested into crime.

"This historic auction should help us instil the public's confidence in our open, transparent system to recoup the proceeds of crime in a secure and innovative way," said detective chief inspector Martin Peters, ERSOU Cyber Crime Unit.

"Asset recovery in a digital world has evolved, so it's really important that, working alongside commercial partners, we have a clear process for the storage and sale of cryptocurrency.

"This goes to show there is no place to hide criminal assets - we are constantly developing our techniques and capabilities to ensure that proceeds of crime are either given back to the rightful owner or, as in this case, are reinvested in crime."

Gunton was sentenced in August 2019 to 20 months in prison for hacking offences, money laundering and breaching a Sexual Harm Prevention order issued to him in 2016 for a separate offence.

The teenage hacker was also ordered to pay back 407,359 and was given a three-and-a-half-year community order, which restricts his use of IT.

Gunton, of Old Catton, Norfolk, hacked TalkTalk when he was 16 years-old and sold the data he stole from the telecoms company on the dark web, specifically for fraudulent purposes.

He charged dark web criminals $3,000 (2,469) in bitcoin for the data he held so they could use it for activities such as intercepting phone calls and texts to commit fraud.

Gunton's parents were later charged with helping their son move some of the cryptocurrency he earned form dark web dealings out of a seized police-bitcoin wallet.

Carlie and Jason Gunton pleaded guilty to transferring criminal property, with his father admitting to the additional charge of perverting the course of justice. The pair are due to be sentenced at Norwich Crown Court on Wednesday.

Link:
TalkTalk hacker's crypto assets auctioned off by police - IT PRO

Justin Sun, the founder of blockchain platform TRON, and current CEO of BitTorrent, is appearing a little desperate for the attention of US Democratic presidential candidate Andrew Yang.

Sun reinforced his desire to work with Yang to make Universal Basic Income (UBI) a reality during a livestream on Tuesday, just after promising to reschedule his $4.6 million charity lunch with Warren Buffet very soon.

Yangs plans to establish a UBI wererevealed on September 12, when he announced plans to give away $120,000 through the course of the next year as part of a pilot program for this key policy plan.

One day after Yangs announcement, Sun seized on the opportunity to latch onto Yangs popularity by signalling his desire to work with the presidential candidate to help him fulfil his pledge.

The entrepreneur is seemingly looking to position himself as a cryptocurrency luminaire on a mission: becoming the link between the world of digital currencies and institutional investors, but really, its seems to be pure marketing based on latching onto UBI hype.

Suns relentless self-promotion has surely helped him grow his own profile far beyond the digital currency space (for better or worse), but its fast becoming tiring for the rest of us.

Want more Hard Fork?Join usin Amsterdam on October 15-17 to discuss blockchain and cryptocurrency with leading experts.

Published September 26, 2019 10:12 UTC

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Justin Sun seeks Andrew Yangs attention with another cryptocurrency UBI pitch - The Next Web