Daily Archives: October 8, 2019

There will be a new cryptocurrency available in 2020Libra. Although it is backed by several Silicon Valley and mega-companies that make up the Libra Association, Facebook is clearly the leader driving the currencys adoption. Heres everything you need to know.

Facebook's Blockchain-Based Cryptocurrency Libra: Everything You Need To Know

What is a cryptocurrency?

Although there are variations of virtual currency called cryptocurrency, the one most people have heard about before is Bitcoin. They are all based on the concept of blockchain. A blockchain is a distributed computer file that can be read by people across many computers. There is not one entity with control over the file. Blockchains contain encoded information that can't be changed unless a user has a key that corresponds to the "block" in the chain they want to update. These changes get replicated across the chain. Blockchains are highly secure and publicly viewable. Cryptocurrency is a currency that uses a mathematical blockchain to track exchanges and value, rather than a central bank.

About Libra

Facebook announced Libra on June 18, 2019. A Swiss group called the Libra Association will govern Libra and currently includes 28 member companies, including Facebook, MasterCard, Visa, PayPal, Lyft, Uber, and Spotify, and plans to have 100 companies on board in 2020 when Libra is expected to launch.

According to the 26-page technical white paper released to describe how Libra will work, it will run on a blockchain. However, it's important to note; Libra diverges from a traditional blockchain in a couple of ways.

1.A traditional blockchain is decentralized. Libra is not decentralized in the way that Bitcoin is since Libras nodes (independent computers that process and verify a blockchain) will only be run from the servers of Libra Associations 28 current members. In response to critics who question the fact that Libra isnt fully decentralized, Facebook said that Libra cant be fully decentralized if its to create a global financial infrastructure. The goal is to have Libra be capable of handling 1,000 transactions per second; Bitcoin can only process seven transactions per second, but Visa's payment network can support 24,000 a second.

2.Libra is also being designed as a stablecoin. The value of Libra units in circulation will be tied to assets made up of various currencies stored by the Libra Association. This is to minimize the traditional volatility of cryptocurrency. In a letter Facebook sent to Fabio De Masi, a German politician, Libra will be backed by the U.S. dollar (50 percent), euro (18 percent), Japanese yen (14 percent), British pound (11 percent) and Singapore dollar (7 percent). Interestingly, the currency of the world's second-largest economy, the Chinese yuan, is absent. There are pros and cons to the yuan not being included, but some believe its omission could help assuage concerns of American regulators.

How world leaders are reacting to Libra

Since Facebook announced Libra, its faced criticism. Regulators and policymakers around the world are concerned about Libras impact on financial stability. The EU launched an investigation of the Libra Association on antitrust issues. In the United States, lawmakers are pressing Facebook for a moratorium on the project until all issues can be analyzed and understood. Due to this and other concerns, its being reported that some of the original supporters of Libra are backing out.

In France, Bruno Le Maire, the French Economy, and Finance Minister stated that they could not "authorize the development of Libra on European soil due to the threat to monetary sovereignty.

Some world financial leaders have expressed concern that Libra threatens the financial stability of nations. Facebook refutes these claims while pointing to the stablecoin aspect of Libra and the reserve of currencies that backs it up.

A Libra spokesperson told The Independent: "We welcome this scrutiny and have deliberately designed a long launch runway to have these conversations, educate stakeholders, and incorporate their feedback in our design."

Theres certainly a revolution underway in payment technology from Chinas Alipay to Facebooks Libra. Since finance is a critical part of the worlds infrastructure and a crisis in one market can ripple across the world, it behooves governments and regulators to critically assess new technology thats untethered from traditional control systems. Not only does a new global financial system need to be safeguarded from breaches and transparent to officials, but it also must not succumb to whims that would only benefit a few. Thats why there are significant questions that need to be answered to fully understand the implications prior to the launch of Libra in 2020.

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Facebooks Blockchain-Based Cryptocurrency Libra: Everything You Need To Know - Forbes

ThinkMarkets chief analyst Naeem Aslam on his outlook for Bitcoin.

Investors around the world have taken notice of Bitcoins rapid rise in price as well as some dramatic falls since it launched just a decade ago.

Buying and selling cryptocurrencies can feel like doing commerce in a sort of digital wild west. There are fortunes to be made, but also scammers and thieves ready to take advantage of the unprepared.

But as the world enters its second decade with crypto, traditional financial services and mainstream businesses have been examining how they can get in on it, and regulators have also taken note. As the market continues to evolve, here are five things to know about cryptocurrency:

Cryptocurrencies rely on a technology called blockchain, which is an open database of every transaction that verifies the security of transactions.

For Bitcoin, each block contains numerous transactions, and they are added to the blockchain by computers doing complex mathematical equations, a process called mining. The miners are then provided Bitcoin as transaction fees for the service.

The amount of Bitcoin rewarded to miners decreases by half for every 210,000 blocks confirmed, and theres a maximum amount of potential Bitcoin: 21 million. The ability to create Bitcoin will stop in the year 2140, when the supply reaches that limit.

A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017. REUTERS/Benoit Tessier/Illustration (Reuters)

Other cryptocurrencies are tied to other systems. Some are even connected to physical assets like gold. Popular cryptocurrencies besides Bitcoin include Ethereum, Litecoin, Bitcoin Cash and XRP.

People store their cryptocurrencies in a wallet, an app that contains the mathematical signature proving ownership of the currency.

Cryptocurrencies can be bought and sold on exchanges. Popular ones include Coinbase, Binance and Gemini. Intercontinental Exchange Inc., the owner of the New York Stock Exchange, has announced plans to launch a crypto exchange called Bakkt.

The first - and to date - most popular cryptocurrency, Bitcoin, went live on Jan. 3, 2009. It was created by someone named Satoshi Nakamoto, who may actually be several people using a pseudonym. The first 50 Bitcoin were mined that day.

Bitcoinmarket.com, the first Bitcoin exchange, opened in March of 2010. Others soon followed.

On May 22, 2010, a man paid 10,000 Bitcoin to someone who ordered two pizzas for him from Papa Johns. As the market value of Bitcoin later skyrocketed, that Bitcoin would be worth millions of dollars.

Namecoin, the first alternative cryptocurrency called an altcoin was launched on April 18, 2011.

A customer feeds cash currency in to a Bitcoin ATM located in Flat 128, a boutique in New York's West Village, U.S. on August 22, 2014. REUTERS/Brendan McDermid/File Photo

Bitcoins market price hit $10,000 per coin for the first time on Nov. 28, 2017. It peaked less than a month later at its all-time high price of $19,783.21.

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In June of 2019, Facebook announced that it planned to launch a cryptocurrency called Libra.

The price of cryptocurrencies can fluctuate widely. Bitcoins price has previously dropped about $1,000 in a single day.

Bitcoin remains the most valuable cryptocurrency and has the highest market capitalization calculated by the number of currently available currency and the price. Other cryptocurrencies range in price from a few hundred dollars per coin to a fraction of a cent.

Exchanges like Coinbase keep track of the prices of various cryptocurrencies and provide a platform for trading them.

Cryptocurrency market statistics. Photograph of computer screen. (iStock)

The short answer is, Yes. But illegal activity can still be tied to crypto.

The IRS has treated cryptocurrencies as property for tax purposes since 2014. The U.S. Commodity Futures Trading Commission defines virtual currencies as commodities. The Securities and Exchange Commission says offers and sales of digital assets were subject to federal law.

In April of 2019, the SEC issued its framework on digital currencies that fall under the category of a security.

The SEC has recently announced several cases of litigation related to cryptocurrencies:

Cryptocurrencies are a rapidly evolving field.

One exchange, Mt. Gox, was shuttered after it lost hundreds of thousands of Bitcoin and went bankrupt. In May, the exchange Binance said hackers stole thousands of Bitcoin worth millions of dollars.

Some lawmakers are eager to add additional regulations, just as more traditional businesses like Facebook with its Libra are looking to get into the market.

Facebook CEO Mark Zuckerberg's face is visible on a mock "Zuck Buck" depicted on a screen as David Marcus, CEO of Facebook's Calibra digital wallet service, foreground, is questioned by Rep. Brad Sherman, D-Calif., during a House Financial Services C (AP)

Federal Reserve Chairman Jerome Powell said in early September that Libra will need to be held to a high standard.

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Libra would have to be held to the highest regulatory standards and supervisory expectations, he said.

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Cryptocurrency: What to know about digital money - Fox Business

The fate of Indias cryptocurrency ecosystem has been in limbo for a while.

In April 2018, the countrys central bank cut off the communitys ties with the financial system by barring banks from dealing with crypto exchanges. In July this year, an inter-ministerial panel, set up to study bitcoins, led by the top bureaucrat Subhash Chandra Garg, recommended imprisonment for those who even hold cryptocoins.

Yet, a steering committee report by the finance ministry, released in September, recommended a softer approach, citing the importance of blockchain technology, which powers cryptocurrencies, to fintech.

The uncertainty arising from the lack of a legal framework for the sector has taken its toll. It is important to take a fresh look at bitcoin, and see it not just as a cryptocurrency, but also a computer network and a technology protocol.

As crypto investor Meltem Demirors recently argued before the US Congress, in a hearing on Facebooks Libra, bitcoin is a store of valuea digital gold of sorts. Despite its volatility, it is being used as a medium of exchange in places such as Venezuela, Argentina, and Zimbabwe.

Its true nature, though, goes beyond that.

Bitcoin is an open source technology protocol, not controlled by a single entity. In that sense, it resembles some of the more enduring vignettes of our times, such as Wikipedia or, arguably, the Linux operating system.

Cryptocurrencies can also be thought of as a network formed by computers running this open source code. This networks computing power is 72 million TH/s (trillion hashes per second). To put that in perspective, the computing power of Googles 10 million servers would be less than 1% of this.

It is their brute computing power that makes bitcoins uncensorable, inviolable, and ultimately, valuable.

Given these three ways to interpret bitcoins, the pertinent question is: what exactly should Indias regulators be regulating?

Apart from some anodyne lip service to blockchain technology, are policymakers trying to clearly parse out the distinction between the currency, the technology, and the network?

The Garg panels document seemed to be exclusively concerned with bitcoin as a cryptocurrency, and its destabilising effect on monetary policy. To be sure, these are valid concerns, and there are no easy, near-term answers.

Yet, the Indian government would do well to keep in mind the other two perspectives on bitcoin, which has inspired many to invest in cryptocoins.

In the period between the first quarter of 2017 and the second quarter of 2019, venture capital funds worth over $6.2 billion was poured into over 400 companies in this space, most of them in the US.

The top 10 unicorns in this space, led by Binance and Coinbase, are collectively worth around $50 billion, and companies built on top of the bitcoin protocol collectively employ hundreds of thousands of the sharpest business and technology minds globally.

Large corporations such as Facebook, Google, JP Morgan and Goldman Sachs are investing heavily in research and developmental efforts in this space. Institutions such as MIT, Stanford, and Berkeley are also emerging as leading centers of bitcoin research.

The important thing is, these efforts are not just focused on bitcoin, the cryptocurrency. They are looking at making the bitcoin network more scalable and more reliable so that people can send money to each other faster, corporations can settle international transactions more efficiently, participants in a supply chain can collaborate to make it more efficient, and some of the most disenfranchised people in the world can access financial services in a safe, secure, and convenient manner.

The current stifling of crypto enthusiasts in India will only hasten the exodus of some of the sharpest minds to global centers like Singapore, San Francisco, and Berlincities where they are likely to be welcomed with open arms, funding, and a friendly regulatory framework.

Indias Garg panel had also recommended that India must consider introducing an official virtual currency, the Digital Rupee, to replace private cryptocurrencies such as bitcoin.

This is an impractical idea.

For one, there is the infrastructure hurdle. Some entity (usually from the private sector) needs to invest heavily to build out the payment gateways and the user and exchange interfaces that will be needed to drive adoption of a crypto rupee.

The public sector has limited resources to develop virtual currencies.

The public sector has limited resources to develop or manage projects at this scale. Most Indian governmental websites still use the older, insecure, HTTP protocol without the SSL encryption. A wallet to store the proposed crypto rupee, for instance, would be considered highly unsafe, and find little traction.

Designing and developing critical components and building blocks like these is typically best left to motivated, young, geeky engineers congregating in hacker houses in Powai and Palo Alto, than to an army of for-rent consultants hired by the governments IT department through archaic tendering processes.

Some have termed cryptocurrencies as the Wild West of the financial world. Terrorists, pornographers, and money launderers can misuse it.

However, living in fear is to lose the battle to the neo-luddites and the rentiers reluctant to change the status quo. Given that bitcoin is here to stay globally, we might as well consider a progressive approach to a sector that is nascent, evolving rapidly and has transformational potential.

We welcome your comments at ideas.india@qz.com.

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India must note that bitcoin is much more than a cryptocurrency - Quartz India

It's been almost two years since cryptocurrencies went mainstream.

Back in the fall of 2017, the price of bitcoin rose over 500% in three months as investors all suddenly became aware of the apparent future of payments and saw a flurry of headlines like: As Bitcoin Scrapes $10,000, an Investment Boom Like No Other. But those highs were short-lived.

From "peak crypto" most actual cryptocurrencies are worth a fraction of what they were back in early 2018.

But some investors that played the craze without actually buying cryptocurrencies have done quite well. They've bought stocks that have beaten the S&P 500 by 30%, 60%, even 160%!

While crypto ripped through the hype cycle, the core trends pushing it forward are still incredibly strong and they continue to create interesting opportunities for savvy investors.

And so our analysts have been looking for more "backdoor" plays on cryptocurrencies and blockchain that offer big upside and stable core businesses, to boot. In this broadcast from our YouTube channel, they walk through their outlook on cryptocurrencies like Bitcoin and Ethereum, some interesting ways to play the future of payments, and a few cryptocurrencies investors should keep their eye on.

A full transcript will post after the broadcast is over.

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The Best Way to Play Bitcoin and the Cryptocurrency Market - The Motley Fool

It's a make-or-break moment for bitcoin ETFs.

The Securities and Exchange Commission has set an Oct. 13 deadline for approving a bitcoin-based exchange-traded fund from Bitwise Investments, a move that could mark a meaningful milestone in bitcoin's long-term growth story.

The digital currency has been volatile this year, falling by over 20% in one week in late September to its lowest level since July amid increasing skepticism and uncertainty. Bitcoin hit its 2019 high of over $11,000 in June, according to cryptocurrency exchange Bitstamp.

Interestingly, bitcoin is still 2019's best-performing asset, up almost 123% for the year.

That volatility isn't stopping Matt Hougan, managing director and global head of research at Bitwise, from being optimistic about the prospects for his firm's bitcoin ETF, which, if approved, would trade as the Bitwise Bitcoin ETF Trust.

"We're closer than we've ever been before to getting a bitcoin ETF approved," Hougan, former CEO of Inside ETFs, said Monday on CNBC's "ETF Edge."

"Sometime before Monday, the SEC has to give its decision: yes or no. They have no more ways to postpone it at this point," Hougan said. "We will hear clearly between now and Monday what they think, and then, depending on what we hear, we'll go forward from there. But it should be a very exciting week."

The road to bitcoin ETF approval has been a long one. The Facebook-famous Winklevoss twins first filed for a bitcoin ETF in 2013, launching a yearslong fight for approval with the SEC that ended in disappointment.

It's also come with a few casualties. In January, a government shutdown threw a wrench in many issuers' plans, with Cboe Global Markets withdrawing its application for a bitcoin-based ETF. In mid-September, VanEck and SolidX followed suit, pulling their proposal for a bitcoin-based ETF from SEC consideration.

But in the last few years, the outlook for Bitwise's proposal has improved significantly, Hougan said.

"The evolution of the bitcoin market over the last two years is from night to day," he said Monday, adding that some of the SEC's chief concerns about approving a bitcoin ETF mainly custody and proper regulation are starting to get resolved.

"Two years ago, there were no regulated, insured custodians in the bitcoin market. Today, ... there are big names like Fidelity and CoinBase [with] hundreds of millions of dollars of insurance from firms like Lloyd's of London," he said. "Two years ago, there were no regulated crypto exchanges. Now, six of the 10 big crypto exchanges are regulated by the New York Department of State with market surveillance technologies in place. And, most importantly, two years ago, it was a one-sided, inefficient market. Today, we have $200-plus million in volume and regulated futures every day."

Now, bitcoin is "among the most efficient institutional markets in the world" because of its narrow spreads and the involvement of major market makers like Jane Street Capital and Susquehanna, Hougan said.

All of those factors could bring Wall Street one step closer to welcoming the first-ever bitcoin ETF, a long-awaited event that would open up the crypto space to many more buyers, Hougan said.

"The opportunity that's taking place in bitcoin, crypto and blockchain today is one of the most exciting wealth-generation opportunities in the world," he said. "The problem is while big institutions have safe, secure ways to buy bitcoin today in private funds that are available only to the ultra-high-net-worth people, regular investors don't have a safe way."

A bitcoin ETF would change that layout entirely, the research pro said.

"What the bitcoin ETF would allow everyday investors to do is have safe, simple, secure access to the wealth generation taking place in bitcoin and crypto. It would let financial advisors give it to their clients easily instead of them going rogue," Hougan said. "It's just trying to solve that problem of simple, secure access to what is emerging as a very important technology and a very important asset class in the market."

Bitcoin was up by about 5% by Monday's stock market close, according to Bitstamp.

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'We're closer than we've ever been' to bitcoin ETF approval, says Bitwise head of research - CNBC

Over the past few years, cryptocurrencies such as Bitcoin have been the subject of much debate among regulators around the world. While a few critics of the technology have long held the position that cryptocurrency cannot compete with fiat currencies due to their decentralized and distributed nature, many are now realizing its sheer potential in use-cases such as cross-border trade and global financial inclusion. Governments are no exception to this, with many now suggesting, and even already developing, state-backed digital currencies to compete with the likes of Bitcoin.

Governments Take a Positive Stance on Cryptocurrencies

China famously termed initial coin offerings illegal in September 2017 and proceeded to clamp down on cryptocurrency exchanges operating in the region. Prior to the ban, the Chinese Yuan accounted for almost 90% of global cryptocurrency trades. In 2018, however, The Peoples Bank of China (PBOC) announced that the Yuan was being used in a mere 1% of Bitcoin transactions. Since then, however, several rumors surrounding the PBOCs plan to launch a state-backed digital currency have emerged. The central bank digital currency (CBDC) will likely be backed by the Chinese renminbi fiat currency and may even replace notes and coins in the future.

Countries like Japan, France, and Portugal, on the other hand, have made cryptocurrency trading much more attractive and accessible to the general public. Japan, for one, was the first nation to allow cryptocurrency to be used as a payment method and has since regulated the ecosystem to curb rampant fraud and hacks at various exchanges operating in the region. France and Portugal, meanwhile, have announced that crypto-to-crypto trades will not trigger a taxable event. The latters government has even exempted cryptocurrency from capital gains taxation.

Banks Embrace Blockchain, Tokenized Future

Even at the institutional level, banks, hedge fund management firms, and individual investors have reversed their cynical approach to the cryptocurrency market and are now actively embracing the technology.

On several occasions, JPMorgan Chase CEO, Jamie Dimon, claimed that cryptocurrencies, including Bitcoin, were fraudulent schemes that would eventually blow up. Dimon even went as far as stating that he would personally fire any JPMorgan trader who was trading Bitcoin. A few short months later, however, Dimon backpedaled in an interview with Fox Business, stating that he regretted making those comments and that he was aware of the potential implications of blockchain technology and the cryptocurrency ecosystem.

In 2019, JPMorgan Chase announced that it was developing its own digital currency called JPM Coin. Each token will reportedly be pegged to the value of one US dollar. In its JPM Coin announcement post, the bank echoed Dimons sentiment by stating, We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated.

Bitcoin: A Hedge Against Geopolitical Turbulence

Individual traders that typically deal with stocks, precious metals, and other traditional asset classes have also taken a keen interest in the crypto market. American investor, Anthony Pompliano, has repeatedly voiced support for Bitcoin, stating that 100% exposure to fiat assets is a bad idea due to the risk of hyperinflation or central bank failure. Given that countries like Greece, Zimbabwe, and Venezuela have experienced significant financial turmoil over the past few years alone, many believe that Bitcoin serves as the perfect diversification tool.

Due to the US-China trade war, many institutional investors are moving their funds away from the stock market into more stable asset classes. Founder and CEO of Digital Currency Group, Barry Silbert, said, Its certainly interesting that that price [of Bitcoin] started its acceleration, moving up and to the right, when the trade discussions broke down.

Adoption and interest in the cryptocurrency market has also been sparked by decentralized applications like Alluva that offer the ability to participate in the digital currency ecosystem without any investment. Alluva, for one, is building the worlds largest analyst network by incentivizing individual investors for accurately predicting the price potential of various cryptoassets, and providing institutional investors the data they need to boost transparency in investment within the sector.

As the cryptocurrency and blockchain ecosystem continues to grow, it remains to be seen if the next ten years will be just as influential and positive as the past. One thing is certain, however - governments and institutions have finally realized the true potential of decentralization.

Disclaimer: This article has been Produced on behalf of Alluva by Times internets Brandwire team.

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The World's View of Cryptocurrency and Blockchain Is Rapidly Changing - Times of India