The race for blockchain adoption is on in South Korea.
South Korea’s well-known chat application, Kakao, bolsters its presence in blockchain and crypto with its partnership with a non-fungible token-powered trading platform and its new crypto wallet Klip.
According to Hanguk Kyungjae, the trading company Angel League will receive support from Kakao’s Klip platform for its digital certificates based on NFTs.
Angel League allows groups of investors to jointly purchase the stocks of startups in the “pre-IPO” stage. The members, known as “lead angels,” are selected through a recruitment process to incorporate new people willing to sign a stock trading contract to operate on the platform.
The trading company will then issue membership confirmation on an NFT-based digital card through the Kakao’s Klip crypto wallet. It is permanently stored in the blockchain platform of the chat application, Klaytn. With the NFT-based digital card issued, members can then trade on the platform.
Jae-sun Han, CEO of Ground X, the chat app’s blockchain company affiliate, explained the decision behind joining the NFTs’ support:
"By making it possible to verify the membership of the Angel League through the NFT digital card of Klip, we have reduced operational hassle and strengthened the convenience of members. It will also expand the way to transfer ownership of the company through Klaytn. Together with Ground X, we will discover several examples of NFTs that can promote financial innovation.”
In June, Kakao listed its Klaytn blockchain-issued Klay token via a local cryptocurrency exchange on June 5. This news follows their launch of a new crypto wallet feature in KakaoTalk earlier the week.
Klay’s listing announcement came after the South Korean company said that its new crypto wallet function surpassed 100,000 users in less than a day in its chat app, KakaoTalk. The feature went live on June 3.
Showing up in person to steal cash from a digital asset machine?
Authorities recently took three men into custody following their alleged swindling of $226,000 in Hong Kong dollars from Bitcoin (BTC) ATMs in the territory.
The apprehended male trio, ranging from age 26 to age 55, allegedly exploited six different Bitcoin ATM machines, manipulating them to cough up the Hong Kong dollar equivalent of roughly $30,000 U.S. dollars, an article from the South China Morning Post detailed on Aug. 15. The alleged robbers took the cash out across 11 transactions.
Authorities think the three males in question reportedly make up part of a larger criminal operation, the South China Morning Post article said.
Two crypto exchanges tipped authorities off to the nefarious activity prior to the arrests. Wilson Tam, superintendent of Hong Kong's cyber security and technology crime bureau, did not divulge the exact thievery methods used, although the bureau did provide the two affected ATM businesses with tips on increased security measures.
"It is the first time we came across fraud linked to bitcoin ATMs," Tam said, as reported by the South China Morning Post.
The number of Bitcoin ATMs in the world reached 8,000 in June 2020, while Bitcoin itself has gained further publicity as a viable asset over the course of the year, making the asset a logical target for attacks.
Precious metals used to be the best way to protect your portfolio from natural value deterioration, but Bitcoin is changing the game.
During times of international economic crisis, governments print money. This leads to inflation and investors subsequently stashing their investment capital in long-term, stable investments. Historically, that has meant gold, but in the current economic crisis, gold has been joined by another long-term store of value: Bitcoin (BTC).
There are several good reasons for this. The United States Federal Reserve is handling the crisis terribly, and has responded to soaring unemployment numbers in the same way they always do: by printing money. Already, the dollar has lost 5% of its value, with predictions that this is only the beginning. The currency is expected to shed up to 20% in the next few years, according to analysts at Goldman.
Alongside this devaluation has come another threat to investors: deflation. With the value of dollar assets dropping rapidly and the worst yet to come, investors are looking to Bitcoin as a hedge against deflation. This appears to be the primary reason why Bitcoin has retained its value despite woeful news in other parts of the economy.
Are these investors correct, though? Can cryptocurrency act as a hedge against the dollar’s inflation? Let’s dive into it.
Inflation and deflation
For crypto investors accustomed to dealing with daily — or even hourly — market movements, it can sometimes be easy to forget about the macro-level trends that drive our economy. Inflation is one of these, and it’s useful to have a broad definition of the term before we look specifically at the role of crypto in beating it.
Essentially (and as you might remember from Economics 101), inflation generally comes about because of a general decrease in the purchasing power of fiat money. Many things can cause this loss of purchasing power: foreign investors pouring out of a particular currency, or even investors attacking a currency. Most often, though, inflation is the result of an increase in money supply, like when the Fed unilaterally creates billions of dollars and sends out checks to millions of Americans, for instance.
Deflation is the opposite. In deflationary scenarios, prices decrease as fiat currency increases in value relative to different goods and services. Again, there can be different causes for this, but it generally comes about due to tightly controlled fiscal policies, or technological innovation.
The global pandemic and inflation
The key point in these definitions is that inflation can only occur in fiat currencies — i.e., those not based on the market value of a tangible asset, but largely on confidence in growing gross domestic product. Since the Bretton Woods agreement of 1944, the latter has been the basis of the U.S. dollar’s value.
Having a fiat currency gives governments a powerful degree of freedom when it comes to printing money, and supposedly when it comes to controlling inflation. However, when confidence in the government is low (as it is now), government spending programs can lead to inflation quickly getting out of control. In the 1970s, gold boomed because investors saw it as a hedge against the dollar’s rapid inflation.
This is similar to what is happening now. The global COVID-19 pandemic has given rise to a massively inflationary monetary policy and aggressive expansion of money supply while prices in certain key areas such as food staples keep increasing due to supply shocks caused by lockdowns.
In this environment, it’s no surprise that gold is booming. There is, after all, only a limited supply of gold on earth, and so its price cannot easily be affected by government policy. Some crypto currencies, however, are also booming — apparently for the same reason. Billionaire investors are therefore lining up to compare Bitcoin to gold.
Bitcoin: A deflationary asset?
The reason why some forms of cryptocurrency can act as a hedge against inflation is precisely the same reason gold can: there is a limited supply. This is something that is often forgotten about by many, even those in the crypto space, but it’s worth remembering that many cryptocurrencies — and most notably, Bitcoin — are built with an inherent limit.
The 21 million Bitcoin limit means that at a certain point, there should be fewer Bitcoins versus the demand for them, meaning that in terms of value, the price per unit should increase as the supply decreases. In addition, the fact that Bitcoin allows investors to limit their exposure to government surveillance networks means that, in this time of low confidence in government, many people are moving their investments away from the U.S. dollar and toward crypto in order to avoid inflation and government tomfoolery. In other words, the comparison with gold investments of previous crises seems pretty apt.
But here’s the thing: It’s not completely clear that Bitcoin is, in fact, a deflationary asset. Or at least, not yet. While it is technically true that the supply of the currency is limited, we are nowhere near that limit, with most estimates putting the last Bitcoin to be mined in 2140. What this means, in practice, is that Bitcoin will be unable to act as a completely stable hedge against inflation for at least another 120 years.
Flexibility and stability
This might not matter that much, of course. One of the primary driving forces behind the rise of Bitcoin has been the combination of (relative) stability and (relative) variability that it affords. In this context, it’s heartening that investors now regard crypto as a stable hedge against an inflating U.S. dollar, but to regard crypto as merely a replacement for gold would be to miss the point: Cryptocurrency is far more than just a hedge.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
The upcoming election is a big deal for financial markets.
Galaxy Digital CEO and known Bitcoin (BTC) proponent, Mike Novogratz, said he sees upcoming financial market difficulties if Democrats take the U.S. presidential bid in November.
"Electing Biden and Harris, as much as it's going to be great for the country, it's not going to be great for the market," Novogratz told Bloomberg in an Aug. 14 interview.
Following his comments on Biden's vice president, Kamala Harris, being "fair" to Wall Street if elected, Novogratz mentioned heightened taxes from a Democratic presidential win. "The Democrats are going to be tougher on Wall Street in terms of the tax plan," he said, noting increased corporate, income and capital gains taxation.
In the midst of answering other questions, Novogratz described mainstream markets at present as comparable to Bitcoin's exuberant 2017 ride, due to various measures, such as government spending. "Everything is trading literally like Bitcoin in 2017, into a speculative frenzy," he said.
Noting abnormally high company valuations seen stock prices, Novogratz added:
"Bubbles normally end with policy response. Usually its Fed action. It could be action on raising taxes that could end this froth we have."
Novogratz also touched on Bitcoin as a store of value — an extremely common tagline for the asset among crypto industry participants. The CEO explained he thinks Bitcoin, over the last year, has transitioned from people seeing it as a possible store of value, to a cemented position in that role.
"It's literally a downhill race from here as opposed to an uphill race," Novogratz said of Bitcoin gaining acceptance, noting mainstream institutions joining the game as of late.
"I like Bitcoin better than gold solely because Bitcoin has been hard to buy. Its only got a $220 billion market cap, where gold is over $10 trillion and so Bitcoin has a long way to go to catch gold in just adoption. That said, I still think gold goes higher."
Bitcoin has gained a significant amount of mainstream financial interest in 2020 alone, as hedge fund giant Paul Tudor Jones entered the asset alongside other developments.
Cointelegraph reached out to Galaxy Digital for additional comments from Novogratz, but received no response as of press time. This article will be updated accordingly should a response come in.
Originally seeking to define digital assets, the bill now orders for a study to look at the impact of digital assets if these were securities.
California’s Senate Banking and Financial Institutions committee has passed a bill seeking to define digital assets and measure its impact on the state and consumer protections.
Assembly Bill 2150, which can potentially influence how federal regulators approach digital assets, unanimously passed the Senate’s Banking and Financial Institutions committee. It will be discussed in the Committee on Appropriations as early as August 17. The bill had previously passed the California Assembly before moving to the Senate.
The bill, first proposed by California Assembly Majority Leader Ian Calderon, initially sought to presume digital assets are not securities. However, amendments to the bill by the Senate refrained from further defining digital assets and tokens. It now focuses on directing the Department of Business Oversight to conduct a study to see if California can enact policies similar to the Security and Exchange Commission’s (SEC) Proposed Securities Act Rule 195- Time Limited Exemption for Tokens.
The study wants to see how treating digital assets as securities for a limited amount of time can impact consumer protections, benefits to the state, and hat the minimum standards to meet the exemptions.
The Department of Business Oversight must also provide suggestions for regulatory frameworks and define key terms. The report should be presented to the California Legislature on or before January 1, 2022.
SEC Commissioner Hester Peirce proposed the token exemption back in February though the regulatory body has not officially enacted it.
The growth of decentralized exchanges in 2020 has been phenomenal, but there is a hard ceiling with current technology.
Decentralized exchanges, also known as DEXs, have risen significantly in popularity since the start of 2020, with both their user bases and volumes growing at an accelerating pace. The sector is currently being driven by so-called “automated market makers,” or AMMs.
In a nutshell, these exchanges do away with the traditional order book and custom price orders. Instead, an asset’s price is determined by a mathematical formula that depends on the relative share of the assets in liquidity pools. When a user transacts, this changes the balance of assets in the pools and results in the price moving slightly higher or lower. This mechanism lets AMMs follow the price movements of the market.
Bancor was the first live implementation of an AMM, though many others such as Uniswap, Balancer, Mooniswap and Curve later built similar systems. Yield farming and the subsequent decentralized finance boom has helped propel daily volumes to more than $400 million.
Matthew Finestone, head of business development at layer-two decentralized exchange Loopring, told Cointelegraph that AMMs “have product market fit,” a term applied to startups that are finding traction. But the current iteration of DEXs has a variety of issues that could severely limit the size of that market.
On-chain performance and target market
Ethereum-based DEXs are currently some of the largest gas guzzlers on the blockchain, contributing to gas prices rising to more than 250 gwei, while in quiet periods they can be as low as 2 gwei.
The skyrocketing gas prices suggest that the current volume levels are close to the maximum of what existing DEXs can achieve without completely barring average users. The growth of AMMs was already a direct result of the relative slowness of Ethereum, as Finestone said: “[AMMs] found ways to effectively ’solve’ the fact that market makers cannot be placing quick, precision orders on Ethereum.”
But while some of these issues could be solved with better on-chain scaling, Paolo Ardoino chief technology officer at crypto exchange Bitfinex, told Cointelegraph that on-chain settlement could never compete with centralized matching engines:
“The current solution for decentralized exchanges, even if Ethereum grows and becomes Ethereum 2.0 and the transaction speed becomes, let’s say 10,000 transactions per second, will still be many orders of magnitude slower than one single centralized exchange.”
Explaining why, Ardoino added that the issue with on-chain settlement “is just the speed of light.” When nodes across the globe have to agree on a single block, no networking improvement can beat the performance given by, for example, co-locating trading infrastructure in the exchange’s data centers. These performance limitations could be a serious hindrance to professional traders, especially high-frequency trading companies.
Dan Matuszewski, co-founder of trading firm CMS Holdings, recounted his experience of using DEXs on Twitter: “First off the experience sucks, in no way will you convince me it doesn’t suck, I won’t have it.” Elaborating on the point, he said that DEXs are expensive and the terms of a transaction are not clear until after it settles. “I could be paying 5% bid offer [spread] and have little idea,” he added, though he noted that in the current environment, it’s “not that big a deal.” The relatively slow speed of execution, on the other hand, was not a major issue for him.
Nevertheless, Matuszewski told Cointelegraph that DEXs are not currently suitable for professional traders. “It’s for small ticket hobby traders to punt around on,” he said.
A further issue is front-running. Due to the completely transparent nature of the blockchain, a class of front-running bots exists to place favorable trades in the window between the submission of a transaction and its inclusion in a block. While they are generally used for arbitrage, this approach may also be used to take advantage of upcoming market moves.
A November 2019 study published in Cryptoeconomic Systems analyzed the effectiveness of Uniswap as a price oracle. While the conclusion was largely positive, the researchers relied on the presence of arbitrage agents who would be motivated by profit to bring its price in-line with the rest of the market. Mikhail Melnik, a developer at DEX aggregator 1inch, told Cointelegraph: “Current AMMs will definitely be ineffective without arbitrageurs, because arbitrage is being used as a price discovery mechanism.”
Thus, the most popular DEXs today cannot be useful without the presence of markets based on order books, which currently are largely centralized. Furthermore, the arbitrage mechanism results in the issue of impermanent loss, which siphons a significant portion of the profits away from liquidity providers.
Some of the issues in AMM exchanges can be resolved without fundamental alterations. Solutions to fix impermanent loss are currently deployed by Bancor V2 and Mooniswap, the DEX developed by 1inch. Both attempt to limit arbitrageurs’ profits, with the former using price oracles and the latter a virtual balance that smoothens price changes over a five-minute period. According to 1inch, its solution has the added benefit of making front-running essentially impossible.
In terms of performance, Uniswap’s founder, Hayden Adams, sees the launch of smart-contract-enabled Optimistic Rollups on the Ethereum network as a way to improve throughput. The layer-two solution would create a generalized environment where Solidity smart contracts are executed outside of the blockchain. Uniswap could then be deployed in this environment with minimal changes to the code.
However, some have noted that Optimistic Rollups could worsen the front-running issue by only letting the operators see the transactions in advance. This would fundamentally defeat the goal of minimizing the need to trust operators, which is the core prerogative of generalized layer-two solutions.
There are currently few solutions to address the usability issues outlined by Matuszewski, though it’s possible that higher liquidity and specialized tools could help make these exchanges less expensive and more deterministic. Nevertheless, the lack of true price discovery is likely to remain. Melnik offered a potential solution:
“It is possible that some AMM designs that use oracles for these [price discovery] purposes will appear, but in my opinion, using oracles [...] significantly worsens the problems with front-running.”
However, this would not remove the reliance on traditional exchange mechanisms.
Noncustody as the next iteration
According to Ardoino, “The solution is always in hybrids.” In his view, the future of decentralized exchanges will feature full on-chain custody and clearing — the act of updating the accounts of two parties following a trade. But the settlement, or the actual order matching, will not be done on-chain, he added:
“You can have open-source matching engines that are not on-chain but are running on a thousand different nodes and they have their own small books, and aggregated they can represent a bigger book.”
Such an approach would maintain on-chain custody and keep off-chain — yet peer-to-peer — matching engines, solving the performance issues without losing out on the decentralization. “This is the type of resiliency where we need to be headed rather than trying to create everything on a single blockchain,” Ardoino concluded. Though the matching engines are not peer-to-peer, such solutions are already being deployed by platforms such as Loopring and DeversiFi.
Loopring relies on zkRollups, a layer-two technology where the computational workload is offloaded to an operator that has to submit zero-knowledge proofs that state its changes are valid. In Loopring’s specific solution, the data is submitted to the mainnet in compressed batches. Finestone claimed that this makes it “a centralized exchange that simply cannot do anything evil or mishandle user funds.”
However, this puts some limitations on the performance of the exchange, as according to Finestone, Loopring can process 2,100 trades per second. While that is much higher than on-chain DEXs, it is still well below the performance of a fully centralized exchange. DeversiFi has higher performance at 9,000 transactions, but it stores the data off-chain in a “Data Availability Committee.” Both exchanges are noncustodial, though in DeversiFi’s case, users would need to rely on the committee instead of blockchain data to retrieve their funds.
Anton Bukov, chief technology officer of 1inch, pointed to similar solutions such as zkSync to combat latency and lack of performance. All layer-two systems are still largely in their infancy, and it’s likely that throughput could be improved in the future. The matching engine is not a bottleneck in this case, as Finestone revealed that Loopring uses conventional cloud computing providers such as Amazon Web Services and Google Cloud Platform. Some proposed DEXs such as Serum and Vega are still implementing on-chain matching, but they use higher-performance blockchains.
Can decentralized exchanges become the standard?
Given the fundamental price discovery limitation of AMMs, they cannot become the primary trading venues for cryptocurrencies. On-chain settlement is currently a major bottleneck, but even massive scaling improvements are unlikely to be enough for all traders.
Noncustodial but centrally operated exchanges fix many of the issues with existing DEXs, but for now, they appear to fall short of the performance levels required to replace their centralized counterparts. They also could, theoretically, front-run their users, which is similar to centralized venues in that regard, as Finestone noted. Compared with Optimistic Rollups, however, the operators are usually the exchanges themselves, which incentivizes them to not engage in foul play.
Finestone also believes that centralized exchanges will always remain useful, “mainly [for] those that desire ’legacy-style’ convenience of asset ownership, as well as wherever fiat is heavily interacted with.” In his view, an end state for DEXs would have them process two-thirds of the overall volume. Therefore, it’s possible that different types of centralized exchanges and decentralized exchanges could fill their own separate niches as the sector evolves further.
In the EU, getting laws right on Libra could be the best way to speed up a digital euro from the European Central Bank.
While Facebook’s Libra project might have shaken the United States government the most, the aftershocks were felt all over the world. The European Union was no exception: The publication of the first Libra white paper in 2019 led to the acknowledgment that the EU was not prepared for what appeared to be the first global stablecoin that would have a direct effect on the European financial market, retail payments and its overall economy.
In the words of both the European Council and the European Commission (the EU’s supreme political body and executive arm, respectively), “No global ’stablecoin’ arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.”
Why regulate stablecoins?
A stablecoin, as the most common definition goes, is a crypto asset backed by another asset. Due to the relative stability of its price, which is directly linked to the value of the pool of assets it is backed by, stablecoins can serve as both a store of value and a means of payment.
The main concerns shared by public institutions around the globe about stablecoins relate to money laundering, terrorist financing and other forms of illicit funding, tax compliance and sound governance rules — including stability mechanisms and operational resilience, as well as consumer and investor protection, data protection and fair competition.
Global stablecoins pose further challenges and risks to monetary policy and financial stability, as well as to the international monetary system as a whole.
At the same time, global stablecoin projects are not going anywhere, as they come in response to the significant challenges faced by current payment services. Most notably, cross-border payments are slow, expensive and often opaque, especially for retail payments such as remittances. Even today, there are nearly 2 billion people globally who are unbanked or underserved by financial services.
European crypto regulations at a standstill
Fast-forward to the turbulent summer of 2020, and we have seen the pressure for legal clarity around stablecoins growing bigger, with the European Central Bank calling for a “robust regulatory framework” so that the risks can be addressed before any such operations take place. Various member states — most notably, Germany — have also voiced their eagerness for the adoption of EU-wide rules governing cryptocurrency markets in the region.
Any delay in regulatory clarity has implications beyond the development of a specific project like Libra. Its absence poses a risk to any innovation coming from the private sector, especially in a fragmented legal landscape like the EU where forum-shopping can still be an issue. Curbing innovation is the last thing the EU would want right now, as it already feels international pressure coming from the United States and China.
Digital euro on the horizon
In parallel to the EU-wide crypto regulation discussions, central banks throughout Europe have started research into launching their own central bank digital currencies, or CBDCs. Pilot projects have been kick-started and task forces launched at the central banks of Sweden, France, the Netherlands, Lithuania and England, among others.
Most notably, that list also includes the European Central Bank — the central bank responsible for managing the euro and framing and implementing EU-wide economic and monetary policy. However, the ECB is not in a hurry with its digital euro project, which aims to be adopted by the general public for retail payments. According to its public statements, the ECB hasn’t even decided on the exact approach it’s going to take to develop it.
The argument is that there isn’t an actual need for the wider adoption of digital payment methods in the EU, as despite some exceptions, cash is still widely used across Europe, making the current payment systems appear efficient. The rough estimate is that the ECB’s retail CBDC project will take more than five years to complete. In comparison, the revamped Libra project is expected to launch by the end of 2020 or in the first half of 2021.
Are stablecoins and a digital euro really that different?
The main issue for actors from both the public and private sectors is that, in essence, they are trying to achieve the same thing by using different means: issuing either stablecoins or CBDCs. The Libra project and the ECB are both looking for ways to exercise control over retail digital payments, especially where cross-border retail transfers are concerned.
The most recent version of the Libra white paper envisions the existence of a two-tiered stablecoin system: a multicurrency stablecoin (the Libra Coin) and single-currency stablecoins that are backed by the currency they represent (LibraUSD, LibraEUR, LibraGBP, etc.). The single-currency stablecoins will be supported by a reserve of cash and cash equivalents as well as short-term government securities denominated in that currency (around 20% in bank deposits and 80% in government bonds).
Therefore, the ECB can consider Libra both a competitor and an ally. The risk is that by launching first, Libra’s euro-backed stablecoin will be Europe’s de facto first retail digital euro, but it won’t have to rely on traditional EU financial institutions for its mass appeal and fast adoption. As a result, the Libra Association would gain disproportionate control over online and mobile payments, using the preexisting networks of its current and future member companies and organizations.
What can Europe learn from China?
However, this doesn’t mean that the news is entirely bad for the ECB’s issuance of a retail digital currency — Libra could also be an ally that would allow for the broader adoption of a retail digital euro. The updated Libra whitepaper hints at that possibility, foreseeing a future in which CBDCs can directly integrate with the Libra network, effectively removing the need for Libra to manage the associated fiat reserves, thus reducing credit and custody risk.
This means that when the ECB develops a digital euro, it could replace Libra’s euro reserve within the existing Libra digital payment infrastructure. This would partially solve the issuance problem that many central banks are grappling with — namely that private banks across Europe can decline the distribution and use of a CBDC.
In this way, the EU would have a two-tier method, similar to what is planned for the distribution of China’s digital currency. The two-tier model, as is the case with China’s CBDC, depends on both commercial banks and private actors to circulate the digital currency. Commercial banks would play the role of conversion agencies, helping convert cash in circulation into the CBDC and vice versa, making them an integral part of the broader distribution process.
Because private actors, namely Alipay and WeChat Pay, already account for more than 90% of the mobile payments market in China, the launch of the Chinese CBDC can also be seen as a way for commercial banks to regain their market positions. Recent reports of antitrust probes against both Alipay and WeChat Pay indicate that this might just be the case, especially as the launch of China’s CBDC is approaching.
Public-private partnerships as a way forward?
The ECB has always considered the fragmentation of the EU banking system an issue. The issuance of a digital euro and the creation of an infrastructure that involves both central and commercial banks in its distribution might prove useful for overseeing the common monetary policy and price stability in the union. It will also ensure that the intermediary role of the existing banking sector will not be wiped out overnight as its fiat deposit systems become less competitive.
Depending on the issuing method, a CBDC can also serve as a way of boosting the competitiveness of preexisting financial service providers and commercial banks, as they will have a set role in its distribution.
At the same time, the broader adoption of the Libra euro is almost inevitable, as it will provide an easy-to-use payment method that will require nothing more than a mobile phone. It’s easy to imagine a scenario in which the Libra network takes a dominant position in EU mobile payments, especially as its network and use cases will be built around the existing product and service ecosystem of the Libra Association. That is, of course, if the Libra project is allowed to legally operate in the EU in the first place.
The above is an example of one possible future development that will include both stablecoins and CBDCs, effectively creating a type of EU-wide public-private partnership that would facilitate the faster adoption of digital currencies across Europe.
EU’s balanced crypto regulation is way overdue
Navigating the risks and opportunities of all the possible scenarios requires regulatory certainty for the parties involved. Libra might be the most obvious embodiment of both regulators’ and central banks’ worries when it comes to stablecoins, but it’s by no means the only one. In theory, every retail stablecoin project poses similar risks to economic stability, if not to the whole union then to specific member states or particular services.
At the same time, not regulating or over-regulating the EU cryptocurrency market, particularly the stablecoin market, has other negative side effects. Stifling innovation by restricting business opportunities is not something the EU should be doing in this economic climate.The balance might be tricky to achieve, but the EU doesn’t have much more time to get on the right track.
Sanctions could be coming to Belarus. Can the crypto-friendly country beat it with Bitcoin or Ethereum?
As the massive protests in Belarus continue after a controversial election that saw President Alexander Lukashenko extend his mandate, questions arose about how Belarus could deal with potential U.S. and European Union sanctions and how cryptos such as Bitcoin (BTC) and Ethereum (ETH) could help bypass them.
An article published by Russian outlet, RBC, suggested that using cryptocurrencies could not be an effective option for the Belarussian government to beat financial sanctions that may be imposed by the EU and Washington on Minsk. According to The Guardian, the EU is moving forward with sanctions against Belarus.
Valery Petrov, vice president of Market Development and Regulation for the Russian Association of the Crypto Industry and Blockchain, said in the article that the usage of cryptos is “a realistic option” to escape from sanctions. However, he clarifies, this is possible only “if it does not contradict external and internal legislation.”
Belarus has been showing a crypto-friendly attitude, as the recent developments in the sector across the country prove that the industry represents a significant business opportunity.
In May, Belarusian authorities said that they consider digital technology a top priority issue, and are preparing a digital economy resolution for the OSCE session in Berlin.
Belarus has also drafted a bill in July that addresses high tech IT spheres, including blockchain technology and cryptocurrency, among others, in the hope of attracting international investment in technology that were once forbidden or seen as too risky.
Petrov pointed to Venezuela and Iran’s case, as he says that the usage of cryptos to deal with economic crises or circumvent sanctions proves that cryptocurrencies are only a “palliative” solution.
Even other experts such as Nikita Zuboreb, a Russian analyst at crypto exchange, Bestchange, believes it could be only a “band-aid” solution for an economy that could be profoundly hurt by the sanctions.
However, he recalled that the IT infrastructure is “much more developed and prepared” than other countries and Lukashenko could still consider it an option.
Indian crypto exchange WazirX plans to attract current users and institutional investors with its market maker protocol.
One of the leading cryptocurrency exchanges in India, WazirX, today said they are gearing up to develop and launch their first decentralized finance product in partnership with the Matic network.
In an announcement shared with Cointelegraph, the company said they will launch an automated market maker (AMM) protocol. Nischal Shetty, the CEO of WazirX, shared that the product was currently under development, and they plan to launch a testnet version by the end of September this year.
An automated market maker protocol is a form of smart contract meant to replace order books used in traditional exchange marketplaces. They create a liquidity pool where tokens are automatically traded using an algorithm in a decentralized ecosystem.
Explaining the reason for choosing the Matic network, they emphasized that the network provided higher scalability and throughput than Ethereum.
Shetty said that through their new DeFi project, WazirX intends to attract the present users of the exchange and new institutional funds.
The end product of their new initiative is expected to bring users to participate in the liquidity pool in return for WRX tokens. It will also allow institutional funds to take advantage of DeFi liquidity to execute their trades, said the CEO.
To bring additional liquidity, Shetty said, WazirX will partner with multiple liquidity providers; however, he abstained from naming their potential partners.
As of now, the new DeFi product will be launched separately from the main WazirX exchange, but Shetty said they plan to work on “a deeper integration between the two” platforms.
Regarding the impact of uncertain crypto regulations on the project, Shetty said that he was “confident about positive crypto regulations coming in India.”
It is a notable step for the organization to work on a new crypto project as the project risks coming to a standstill with almost no users if the draconian blanket ban bill proposed in 2019 were to become a law in India.
Institutional adoption of blockchain can offer great benefits, as truly decentralized control often comes from the roots of centralization.
The power of blockchain technology to decentralize control of our financial economy is well documented. It is one of the cornerstones of the origins of the technology, with the genesis block of Satoshi Nakamoto’s Bitcoin (BTC) containing a reference to the 2008–2009 financial crisis: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."
The message, although never explicitly outlined by Bitcoin’s creator, is from the headline of a London Times article dated Jan. 3, 2009 that details banks being bailed out by the British government. Bitcoin, according to Nakamoto, is a means of reforming this corrupt and inefficient financial system to create a fairer, more democratic system of financial governance.
What, then, would Nakamoto say to the current state of the blockchain and crypto industry? Increasingly, it is institutions rather than individuals that appear to be garnering control of the means of production in the blockchain sector.
Facebook’s announcement of plans for its digital payments platform, Libra, was the initial public icebreaker for many last summer. However, the reality is that many governments and incumbent institutions from a range of sectors — including the likes of Walmart, JPMorgan Chase and PayPal — have been quietly building blockchain operations and capabilities for several years now.
The recent decision by the United States Office of the Comptroller of the Currency to allow nationally chartered banks in the U.S. to provide custody services for cryptocurrencies is another significant affirmation of the legitimacy of crypto, which is likely to spark a race among financial institutions to build or acquire secure custody solutions.
Such centralization appears to be at odds with the vision of the fair, democratic system of finance envisioned by Nakamoto and the original cypherpunks. Critics decry the end of the decentralized blockchain utopia as governments and institutions adopt the technology — but the situation is far more complex than such a black and white reading allows.
Rather than institutions being fundamentally antithetical to the democratic ideals of crypto, I would argue that they are actually essential to fulfilling such a vision. The entry of centralized institutions to the crypto economy cannot possibly represent in itself a blow to the values of crypto. While public trust in centralized institutions may be at a historical low in countries such as the U.S., such institutions are not by their nature inherently malevolent or corrupt. The same counterpoint applies to decentralized organizations: They do not make inherently trustworthy or morally responsible actors. Numerous scandals in the crypto industry involving wallet hacks, initial coin offering scams and dubious projects illustrate that often, this is anything but the case.
Institutional adoption of blockchain can offer tremendous benefits to the blockchain ecosystem as a whole: It is a key step in the evolution of the sector, which can significantly scale up adoption from a limited cohort of tech-savvy users (limited in terms of gender, age range and location) to truly global demographic spanning markets that the fractured crypto industry is incapable of reaching in its current form.
To be clear, decentralization and democratization is still the end goal here. Truly decentralized control often comes from the roots of centralization, and in order to reach this next phase in the sector, a period of centralization is first necessary.
The same path is evident in that of the internet. A considerably decentralized service during its nascent phase in the 1990s, today a centralized control of web services by the likes of Google and Amazon has brought worldwide adoption. Increasingly, with legislation targeting the protection of user data and a growing public appetite for limiting the influence of large technology firms, a shift in the balance of power from institutions to individuals appears to be taking place.
What will be key to a successful transition is bringing institutions into blockchain the right way. Interoperability should be a core component of such a transition. A diversity of protocols developed by different actors and institutions is a net positive for the market — but only if these protocols allow for some degree of system interoperability. By doing so, users and developers will be able to both innovate across protocols and choose new services to adopt with low barriers to entry.
A considered, measured approach to adoption by institutions, as has been occurring, will also ease the transition by consolidating blockchain use cases. The distributed ledger technology sector has to date been overly obsessed with exploring every wildly conceivable use case for the technology, from Akon’s crypto city to commodifying time itself.
Large enterprises and institutions will ensure that value-driven use cases become the standard for the technology rather than unnecessary, unfit importation into projects for the shallow purposes of raising capital or grabbing headlines. Already, concrete use cases are becoming more coherent, with payments an early candidate likely to succeed as exciting projects such as Libra, Celo and Polkadot are all firmly establishing themselves in the space.
Institutional delivery of blockchain technology to a mass audience will see a new type of user engaging in the technology: one with little awareness, or even interest, in the technology. Such adoption will be a barometer of true success for the technology. Blockchain is one of a number of emerging technologies that society has at its disposal. When we finally stop talking about blockchain as a noteworthy aspect of a service in itself, we will know it has become an established part of the technology mainstream.
Make no mistake: Institutional adoption of blockchain is here, and it’s here to stay. The question that remains is how we can ensure that this process of adoption preserves the democratic ethos of the technology for the masses.
Doing so will be a challenge, certainly, but one that the blockchain sector is more than capable of meeting.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Congressman Soto talks about the point where crypto education meets solid policy and what’s standing in the way.
“I remember watching the hearings before the Energy and Commerce Committee with Mark Zuckerberg, and it was clear that a lot of my colleagues didn't really know a lot about technology,” recalls U.S. Representative Darren Soto.
When Soto (D-FL) speaks about technology, it sounds personal. He references space launches at Cape Canaveral, which lies adjacent to his district, Florida’s 9th. It is, he mentions, also home to Disney World and Universal, which have made it a major hub for virtual reality as well as vacationers.
A co-chairman of the Blockchain Caucus and sponsor of several closely pieces of blockchain legislation, Soto is one of the main figures shaping crypto policy inside of Congress. But he is concerned that Congress’s lack of understanding of emerging technology is holding the U.S. back from building a competitive cryptocurrency sector.
Soto spoke with Cointelegraph regarding recent moves on Capitol Hill as well as his interests within the Blockchain Caucus and work with emerging technologies.
Blockchain Caucus pushes for greater crypto guidance from the IRS
Soto, along with several other members of Congress, recently wrote to the IRS asking the tax agency not to overestimate staking rewards when it comes time to collect taxes. Ultimately, the letter aims to get the agency to forgo taxing staking rewards until network validators actually try to sell their tokens.
Regarding the IRS letter, as well as a similar request for guidance in December, Soto said:
“We need to have increasingly greater guidance from the IRS so people know in advance what they're going to know, the consequences of their obligations for each transaction.”
Digital and Token Taxonomy Acts
The Blockchain Caucus is a relatively new entity. Its members don’t present legislation internally, instead relying on their other committee assignments to move laws forward. With cryptocurrencies, that’s a tricky proposition because as a subject it doesn’t fall neatly within a single committee’s purview, nor even within a single regulator’s.
The need to navigate a complicated system of financial and technological governance, Soto said, is the reasoning behind both the Token Taxonomy Act and the Digital Taxonomy Act, on which he is co-sponsor and sponsor, respectively:
“There's a lot of committees with some part of this, which is why we put together our Token Taxonomy Act as well as our Digital Taxonomy Act, because we have to cover all those areas and really create a new setup. And that's the goal: to establish jurisdictions and create a new digital asset, because cryptocurrency — because it has so many facets — is unlike any financial definitions we already have under existing law many of the statutes passed decades ago if not a hundred years ago.”
The two pieces of legislation are something of a one-two punch. The Token Taxonomy Act would put definitions on which tokens actually represent investment contracts and fall under the purview of the Securities and Exchange Commission. The Digital Taxonomy Act looks to put the Federal Trade Commission in charge of deceptive practices related to the exchange of the decentralized tokens that don’t qualify as securities.
Both bills have been in-process with their committees since last April, however. Relative to the speed at which non-emergency legislation makes its way through Congress these days, that’s not terribly surprising, but it’s also a long time to monitor them. While Soto foresees new progress on both later this year, he is anxious for their passage to lead to a more robust American cryptocurrency industry:
“We're not there yet, which is what the Digital Taxonomy Act and Token Taxonomy Act are about. I continue to be concerned about many startup cryptocurrency firms having to spend half their money on legal. And I say that as a commercial attorney. That's not going to sustain us in the long term.”
Education and regulation: “Ignorance is our main opposition”
In addition to pressuring agencies like the IRS to put out guidance, the Blockchain Caucus focuses on educating other areas of Congress, where members are less engaged with technologies including cryptocurrencies. And how’s progress on that?
“Well, slowly but surely, we're doing it. It's going to be a slog. I think we all realize that our opposition is not partisan in nature. It's basically educating the members. Ignorance is our main opposition right now.”
High-profile encounters between crypto and lawmakers like last summer’s controversy over Facebook’s proposed Libra stablecoin serve as teachable moments, but often education gets sidetracked by other political concerns. In that case, Soto noted that:
“The Libra controversy really was more about Congress's friction and frustrations with Facebook than it was about cryptocurrency itself, although there are people who get scared about having parallel currencies. But I remind everybody, we have gold, we have other countries, currencies, silver, commodities stocks. There are multiple different parallel currencies and units of value out there.”
Lawmakers’ rising hostility to tech
Soto referred back further, to hearings in 2018 with Mark Zuckerberg before the Energy and Commerce Committee — of which Soto was and remains a member. That hearing, as well as one before the Senate the day before, focused on Facebook’s use of user data.
In many ways, those hearings were part of a broader sea change that has seen Congress increasingly suspicious and even antagonistic towards technology. To be fair, Big Tech has spent a long time pulling shady business with impunity. But as for Soto, he’s worried that many members lack the knowledge to put together best practices for governing technology. Speaking on the broader mission of the Blockchain Caucus:
“We have made a concerted effort over the past couple of years to get involved in technology generally, whether it's artificial intelligence, commercial space flight, Internet privacy or cryptocurrency, quantum computing.”
Interesting to note is that the Blockchain Caucus only dates to 2018, and much of the caucus’ leadership are themselves relatively recent elects to the house — Soto, for example, began his first term in 2017. When contrasted with the surrounding Congressional culture, it seems to have some of the punchiness and enterprise usually associated with start-ups.
Warren Buffett’s Berkshire Hathaway sold bank stocks to buy a gold mining company, which will indirectly boost the price of Bitcoin, investors say.
Berkshire Hathaway, the $503 billion conglomerate led by Warren Buffett, sold Goldman Sachs for a Canadian gold company Barrick Gold. Max Keiser, the founder of Heisenberg Capital and an early Bitcoin investor, says it could help buoy BTC to $50,000.
The quarterly shareholder filing of Berkshire Hathaway shows Buffett trimmed his position on most major banks, Fortune reported on Aug. 15. The firm sold a substantially large portion of its shares in JPMorgan Chase, Wells Fargo and PNG.
What Buffett’s decision to enter a gold position over banks shows about Bitcoin
Buffett’s decision to completely close Berkshire’s position on Goldman Sachs follows the bank’s second-ever highest quarterly trading revenue of $13.3 billion. It suggests Buffett is not comfortable in betting big on the banking industry in the long-term.
Instead, Buffett purchased a single stock in Barrick Gold, whose stock has reflected that of gold in most of 2020. The firm is a gold mining company based in Canada, which recorded a 45% increase year-to-date. Following Berkshire’s investment, the stock rose by 8.11% in after-hours trading.
Max Keiser, an avid Bitcoin investor who has invested in companies like Kraken and Bitfinex, believes Buffett’s gold investment could benefit Bitcoin. He said the positive sentiment around gold implies a higher valuation for Bitcoin, which some consider as “digital gold.” Keiser said:
“Global $100 trillion fund management biz is less than 1% invested in Gold. With Buffett now moving into Gold. Expect global allocation of 5% AU min. Implies $5,000 Gold. Expect a 1% BTC global allocation ($1 trillion). This implies $50,000 for Bitcoin Expect PTJ ups to 10%.”
The weekly price chart of Bitcoin. Source: TradingView.com
A former L/S equities portfolio manager and Ikigai Fund founder Travis Kling echoed a similar sentiment. Referring to Buffett’s skeptical statement in 1998 around gold saying it doesn’t have utility, Kling said:
“Today it was announced Berkshire Hathaway just bought its first gold stock ever. The reasons are self-apparent at this point. Just in case you’re wondering what the coming years are going to look like for Bitcoin, this was Buffett on gold in 1998.”
BTC has shown some correlation with the precious metal as of late
Although Bitcoin has outperformed gold since April, the price trend between gold and BTC has shown some correlation. Data from Skew show the two assets have increased in tandem throughout the past four months.
The correlation between Bitcoin and gold. Source: Skew.com
The simultaneous rally of Bitcoin and gold since the global market crash in late March hints that more investors are starting to consider BTC as a store of value.
Most recently, MicroStrategy, a $1.4 billion intelligence conglomerate, purchased $250 million worth of Bitcoin. The firm said BTC would act as the company’s primary treasury asset, acknowledging Bitcoin as a store of value and a potential safe-haven asset.
The latest wave of incoming blockchain-enabled games promise AAA experiences for gamers, potentially exposing 2.5 billion people to crypto.
Regular readers will no doubt be aware of the high expectations currently being placed on the shoulders of blockchain gaming. For advocates of blockchain technology, there is the hope that tapping into the estimated 2.5 billion gamers worldwide will provide a huge leap toward mainstream adoption.
Blockchain and distributed ledger technology continue to make inroads into all kinds of industries as an increasing number of people discover and gain an understanding of the benefits that it can bring. From supply chain efficiencies through certification of authenticity and provenance to the immutable nature of information stored on a blockchain, the technology is already seeing ever-increasing interest.
In the last month alone, there have been announcements from firms associated with global brand names like Coca Cola, international shipping giants working with the Port of Rotterdam, and national governments such as the Philippines regarding blockchain technology implementations. However, this impressive growth is still somewhat organic in nature despite the promotion of the technology by industry leaders and political advocates such as Chinese President Xi Jinping. It also does little to increase blockchain and cryptocurrency awareness among the general public.
The theory is that getting blockchain in front of a potential third of the world’s population, many of whom are already comfortable with in-game payments and currencies, could be the push that finally takes the technology mainstream. This may well feed back into increased adoption of cryptocurrency from gamers who are exposed to the underlying technology through blockchain gaming.
What blockchain can do for gaming
Some believe that the integration of blockchain technology has the ability to revolutionize the gaming industry. Known for its progressive nature, the gaming industry has been fairly quick to get on board, as Binance CEO Changpeng Zhao said in a press release shared with Cointelegraph:
“The potential of blockchain and cryptocurrencies reaches far beyond the financial sector. Given the readiness of the gaming industry in its continuous evolution, especially in new technologies. […] Blockchain is becoming an essential part of game development and is set to change the global gaming industry.”
Blockchain brings a number of benefits to gaming, some of which are inherent blockchain attributes that apply to many industries. The transparency of blockchain technology can bring provably fair gameplay. Its security, meanwhile, can guard against fraudulent play or hacking. But perhaps the biggest evolution that blockchain has brought to gaming came with the development of nonfungible tokens.
Essentially, NFTs allow players to own their in-game items, characters and abilities and then trade these items with other players. CryptoKitties was the first game to implement NFTs, but the link between cryptocurrency and trading in-game items goes back way further than that.
At one point, Mt. Gox became the biggest Bitcoin (BTC) exchange in the world, but it fell victim to one of the most infamous Bitcoin exchange hacks of all time. However, the website first started as a card-trading platform and got its name from “Magic: The Gathering Online” (eXchange). One could say that the path of gaming and blockchain technology has come full circle.
Time to roll up the sleeves
So far, Cointelegraph’s coverage of blockchain gaming has been focused on venture capital investments in gaming platforms, NFT pre-sales for forthcoming games, and technologies springing up to support the industry, such as decentralized exchanges for NFTs and platforms enabling developers to easily implement blockchain tech.
While there have been a few game reviews, these have generally been of sample games to show how the technology has been implemented. But if bringing gamers to blockchain technology can increase mass adoption, then Cointelegraph is ready to install the latest graphics drivers and start the grinding. This means expanding the gaming coverage to include the exciting developments in the space from the gamers’ perspective, with one eye firmly on the blockchain technology, of course.
As a little teaser, here are just a handful of the games that will be looked at.
Age of Rust
Age of Rust is a first-person, post-apocalyptic, sci-fi adventure developed by SpacePirate Games. Featuring drop-dead gorgeous graphics, it combines exploration, stealth, combat and puzzles galore, some of which form an in-game treasure hunt with a prize fund worth 20 BTC.
While some puzzles are of the standard “move-the-block-to-reach-hidden-switch” type, others will require specific crypto-items in combination with one’s cognitive powers to solve. These can be collected in-game, traded, bought and sold. As part of the EnjinVerse, an ever-growing collection of games that allows in-game items to be shared, some of the items can be discovered within other games using the platform.
The game is blockchain to its core, and SpacePirate Games founder and CEO Chris LoVerme told Cointelegraph that: “One the reasons why we decided to build the game is to start to break down the walls that exist between gamers and crypto-based platforms.” The early beta release of the game is scheduled for this fall.
Neon District is a cyberpunk-themed role-playing game and the flagship release from developer Blockade. As players battle through enemies in a sci-fi dystopian environment, they collect unique items and abilities, all of which are represented as NFTs that can be bought, sold and traded with other gamers.
As Cointelegraph reported, the game has gone through a number of unfortunate delays, the latest of which was last month when the company announced a move to Ethereum layer two solution Matic after its original platform went AWOL.
However, there are plans to release Neon District experiences on web and mobile later this year, with a full release of Season One on Steam slated for 2021. Rest assured, Cointelegraph will be there to beta test this one when it becomes available.
Infinite Fleet, the highly-touted, massively-multiplayer online space strategy game from Samson Mow’s Pixelmatic, has been making headlines recently through various successful funding rounds.
The game will see players take control of a fleet of large spaceships protected by multiple small AI-controlled fighters. Featuring collaborative gameplay mixed with crypto incentives, Infinite Fleet unites gamers to defend against an invading alien threat. Moreover, Mow has described the game as: “The first proper video game to truly bring together gaming and crypto assets.” While the alpha test is still some way off, Cointelegraph will be getting involved and reviewing the game as soon as possible.
Hash Rush is a real-time strategy game where players must collect resources, build bases and manage armies. It features classic RTS mechanics, such as fog of war and an increasingly challenging opponent.
While an open beta version is currently available for anyone to download, the developer has prioritized gameplay for now, so blockchain features are still in development. However, the first elements of blockchain integration are promised to come online soon, and the eventual aim is to offer a “play-to-earn” model for those who want it.
The Sandbox has been around in one form or another since May 2012 when it was released on iOS. The latest 3D blockchain-enabled iteration has already been making news with its pre-sales of LAND packages and its recent native SAND token sale on the Binance Launchpad. It’s billed as a community-driven platform where creators can monetize the gaming experiences they create in an open-world sandbox environment.
The public beta of the game is slated to launch later this year, but in the meantime, Cointelegraph has been given access to the Game Maker Closed Alpha, a review of which will be landing on screens rather soon. Cointelegraph-themed gaming experiences will become available when the full game launches.
Samsung and Gemini’s joint efforts may help to overcome some of the roadblocks facing the global adoption of cryptocurrencies.
In a major new partnership, Samsung has announced that the Samsung Blockchain Wallet will be integrated with Gemini, a New York-based crypto exchange. This integration will allow owners of newer Samsung Galaxy phones to not only use their devices as cold storage wallets but to buy and sell crypto via the Gemini exchange as well.
Samsung is the global leader in the smartphone market, with 298.1 million units shipped and a 21.8% market share in 2019, according to tech analytic firm Canalys. Adding support for Gemini will lower the barrier to entry to cryptocurrency use for millions of people.
Previously, owners of Samsung Blockchain Wallet-compatible devices were able to store crypto on their phones, send and receive crypto, and use decentralized applications. However, with this latest addition, Samsung owners will now be able to buy and sell crypto via Gemini too, making it easier for those new to crypto to get their hands on their first tokens.
Both Samsung and Gemini hope that by streamlining the crypto acquisition process, they will be able to overcome some of the roadblocks that have led to the somewhat underwhelming adoption of cryptocurrencies. Tyler Winklevoss, CEO of Gemini, stated in a press release:
“Crypto is not just a technology, it is a movement. We are proud to be working with Samsung Blockchain to bring crypto’s promise of greater choice, independence, and opportunity to more individuals around the world.”
The rocky road to widespread crypto adoption
From Bitcoin’s (BTC) mysterious origins as the brainchild of the pseudonymous Satoshi Nakamoto to the sudden rise of crypto in 2017, cryptocurrency has experienced a wild ride over the past decade, with roadblocks at every turn.
At the beginning of its journey, cryptocurrency, like Bitcoin, was largely viewed as a means to conduct illicit affairs and, in some ways, that reputation has stuck around. From ordering drugs online to cryptojacking malware (malicious software that uses a computer’s resources to mine crypto), cryptocurrencies have earned something of a bad reputation.
Unfortunately, because cryptocurrency is accessed through computers, which are always vulnerable to cyberattacks, many people are also concerned about the security of their funds if they were to adopt crypto as their go-to currency. Although cryptocurrencies use complex cryptography to stay secure, and there are many ways to further improve the safety of your funds — such as switching from cloud storage to cold storage — many people may be slow to switch over to digital currencies out of fear of being hacked.
While these concerns haven’t stopped the growing public interest, it has made it more difficult to obtain crypto in some countries, hampering its ability to become a global currency. With several governments banning crypto outright and a lot of people not using a VPN to sidestep those bans, that reputation has put a dent in its user base — especially given that China, one of the largest consumer markets, is one of the countries making an active effort to suppress cryptocurrency.
What’s more, even when people are not worried about cryptocurrency and aren’t legally prohibited from acquiring tokens, many crypto exchanges are simply too complex for the average user to navigate. While there has been an uptick in user-friendly exchanges over the past few years, of which Gemini is one, this lack of easy-to-use exchanges may have significantly hindered the early adoption of cryptocurrencies.
Throughout all this turmoil, Samsung has been one of the largest proponents and supporters of cryptocurrency. In 2019, the company rolled out the Samsung Blockchain Wallet, which supports sending, receiving and storing ERC-20 tokens as well as using DApps built on Ethereum.
This was viewed as one of tech’s biggest moves toward crypto adoption, along with Facebook’s digital currency, Libra. However, without the ability to purchase cryptocurrencies on exchanges, there was still somewhat of a barrier to Samsung owners who didn’t already own crypto.
Samsung and Gemini partner to bring cryptocurrency to the masses
While the complex mathematics behind cryptocurrencies may be hard for consumers to grasp, the benefits of a global currency are not. With support for Gemini built into new Samsung Galaxy models, widespread adoption of cryptocurrency may be inching closer and closer.
Unlike some other crypto exchanges such as Binance, Bittrex or Poloniex, Gemini focuses on providing a streamlined and intuitive crypto buying and selling experience for its users instead of an environment designed for active trading. It’s comparable to Coinbase in its beginner-friendly nature and its focus on buy-and-hold investment strategies.
Gemini is also one of the few exchanges to be awarded a BitLicense, which is required to operate an exchange in the state of New York. This exposes Gemini to a potential market of over 19 million people that not all of its competitors have access to.
By natively supporting Gemini with Samsung’s existing cold storage wallets, the two companies are making it exceedingly easy for new blood to enter the crypto space and safely secure funds in cold storage. Jeanine Hightower-Sellitto, managing director of operations at Gemini, said:
"For millions of Samsung users across the U.S. and Canada, being able to store crypto directly on their phones lowers another barrier to entry."
While this alone likely won’t be enough to completely change the landscape of cryptocurrency, it sets the stage for other groundbreaking developments yet to come.
Although Samsung Pay continues to lag behind Apple Pay in market share, it still maintains a sizable user base that is expected to hit 100 million users this year. While Samsung Blockchain Wallet doesn’t currently integrate with Samsung Pay, it seems to be just a small step away from allowing Galaxy owners to exchange fiat for tokens, or vice versa, on Gemini and then immediately use them for everyday purchases.
With Samsung Pay so deeply integrated into the daily life of several Asian countries, the impacts of a development like this could be truly massive. Although such an integration is purely speculative at this point, the combined forces of Samsung and Gemini do seem to show that the future is bright for crypto.
Indeed, regardless of whether this recent partnership has an impact, it’s clear that blockchain and similar cryptographic technologies are here to stay. From cryptocurrency to DApps, these technologies are poised to change the world.
While the vision of cryptocurrency as a truly global currency is still far off in the future, these recent developments are drawing us ever closer.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Policymakers in Europe and the U.S. are pushing to use blockchain technology to ensure a safer, regulated cannabis market.
Interest in cannabidiol-based products has been on the rise, as recent statistics show that the global cannabis market is expected to have reached $42.7 billion in the next four years. Yet as hemp-derived cannabidiol, or CBD, products gain popularity, federal agencies are proceeding with caution around regulatory measures for cannabis products.
In order to address regulatory concerns, policymakers in different regions are looking toward using blockchain technology as a solution that can provide transparency into the complex cannabis supply chain.
Ensure CBD becomes a novel food in Europe
Most recently, the Cannabinoid Association of the Netherlands, which is a consortium of Dutch cannabidiol producers that serve as an advisor to the Dutch government, announced the launch of a blockchain-based traceability tool that would enable consumers to trace certain CBD products directly back to their source.
The CAN launched its blockchain initiative to help provide clarity around the European Union’s looming decision to classify CBD as a “novel food” or not. While European food standards agencies, including the United Kingdom’s, planned to allow CBD products to be sold at certain food retailers in 2021, the European Commission revised its 2015 Novel Food Regulation to say that CBD is not legally classified as a novel food.
So, while it remains unclear how CBD-based food products will be classified in the U.K. and throughout parts of Europe, the CAN’s blockchain tracing tool could demonstrate how a CBD regulatory environment might function and thrive in the United Kingdom.
Mark Reinders, the CEO of HempFlax and a co-founder of CAN, told Cointelegraph that the CBD industry is a lucrative market that attracts a wide array of participants. But in turn, bad actors selling low quality, false or even harmful products are also involved in the cannabis industry. According to Reinders, full traceability along every step of the hemp-derived CBD supply chain is the only way to ensure product quality and consumer protection:
“Blockchain applications can help to increase supply chain transparency by efficiently and cost-effectively tracing materials between parties. The immutable nature of blockchain also helps to avoid fraud and increase trust.”
As the CBD market begins to take shape in Europe, the U.K. and other parts of the world, Reinders noted that new levels of transparency must be adopted by CBD producers worldwide to prove that cannabis products are safe and meet regulations.
Roni Furlan, the founder of the nonprofit organization Novatrace, told Cointelegraph that CAN’s free traceability tool, known as CanCheck, ensures that the CBD supply chain is traced from seed to the final product by uploading production data to a distributed ledger node. He mentioned that supply chain participants can create new material batches; perform production and manufacturing processes; add certificate and lab test documentation; and transfer and receive materials between accounts:
“When a producer submits a request to certify a new batch of product material (bulk product), Novatrace verifies that all traceability data is complete and compiles a traceability certificate. CAN checks the traceability certificate and verifies that the production and lab report data comply to the industry standard. All products (product LOTs) made from the certified material may carry the quality mark logo.”
In addition to ensuring that products comply with regulatory standards, Furlan noted that consumers can access the CanCheck tool for free at cancheck.org. Individuals can scan a QR-code on a product, flyer in a store or paste a link from an online retailer to see which products have the CAN quality mark. Each product containing the CAN quality mark can be traced and verified to show accurate levels of CBD and tetrahydrocannabinol, or THC, the absence of contaminants and a full spectrum composition of the product.
Iris Freie, an advisor to the Dutch government on cannabinoid policy, told Cointelegraph that so far, Jacob Hooy CBD-products have been CAN certified and are fully traceable with three more brands being close to certification, noting that any producer that wishes to market its products within the Netherlands can apply for the quality mark. “We are looking for opportunities to cooperate with other associations in Europe, too, so that our industry standards may develop into European standards,” Freie remarked.
California rallies for cannabis supply chain tracing
California has also been pushing for government authorities to use blockchain technology to help define legal standards around cannabis. This shouldn’t come as a surprise, as California has been ranked as one of the largest legal cannabis markets in the world. However, an NPR article notes that California’s cannabis excise tax generated only $74.2 million during the second quarter of last year, falling short of estimated projections and suggesting that the country’s largest marijuana market may be struggling to take off.
Berkeley city council member Ben Bartlett told Cointelegraph that California government officials are currently advocating to adopt a blockchain-based track-and-trace methodology to ensure accurate record-keeping, better retention of taxation and standardization for the cannabis industry.
Bartlett helped to compose a report illustrating a blockchain roadmap for California. He mentioned that the document has been sent to the California governor and legislator for consideration, noting that there is an entire section dedicated to how blockchain technology can be used to manage the cannabis supply chain. Bartlett said:
“This will help standardize the cannabis industry, as we don’t have a clear picture of seed to sale and all the elements involved. Using blockchain would ensure that we are dealing with a product that is safe and recognized by state health standards. This is also a way to professionalize the emerging cannabis market.”
While the report mentions that California policymakers should accept blockchain-based verification and reporting mechanisms for the cannabis supply chain, the document further notes that policymakers should consider “authorizing participants in the cannabis supply chain to use payment mechanisms that implement stringent industry ‘Know Your Customer’ processes but also accommodate U.S. regulatory concerns.”
According to Bartlett, the blockchain roadmap is the first recommendation of its caliber to be sent to the California governor for review. “Even though cannabis has its own allies and issues in the government, it was important to include because we see it as beneficial for the economy as a whole,” he remarked.
How will governments react?
While steps are being taken by policymakers to use blockchain for a safer, more widely accepted cannabis industry, government officials will have the final say. Bartlett noted that government responses to California’s blockchain roadmap report should be received in the spring or fall of this year. He is hopeful the recommendations will be approved in an attempt to revitalize California’s economy.
Freie thinks every government will recognize the CanCheck tool as useful. However, its success depends on the United Nation’s vote in December on whether CBD will be regarded as a narcotic or novel food. Freie finished by saying: “Ideally, an EU-wide maximum THC concentration will be implemented in the future, too. Then it will be possible to create an industry standard that is applicable across the EU.”
Ethereum price surged to a two-year high at $445 and record open interest on ETH futures hints that the rally will continue.
Today the price of Ethereum’s Ether (ETH) hit a two-year high according to data from crypto trading terminal Crryptowatch. Despite the breakout to $445, open interest on ETH futures remains steady at a new record high of $1.5 billion.
ETH-USD 4-hour chart. Source: TradingView.com
The record high open interest on ETH futures hints that traders remain bullish and further gains could be seen over the coming days.
In recent months, Ethereum has seen strong momentum due to the explosive growth of the Decentralized Finance sector. The demand for Ether led to a sharp increase in gas (transaction fees) and this possibly added to demand for Ether.
On Aug 11, Santiment reported that Ether fees reached an all-time high in both ETH and USD terms. Since users have to purchase ETH to pay fees to miners, it could have acted as a catalyst for the rally. Researchers at Santiment wrote:
“On Tuesday, #Ethereum fees reached all-time high values in both $USD and $ETH. Since this record breaking statistic was hit, the #2 ranked market cap #crypto asset has risen +13% and sentiment has remained positive. This is an indication that although traders obviously prefer fees to be lower, the ramifications on people's willingness to transact via an asset they believe in (at least in the short-term) are fairly minimal.”
Following Ether’s breakout from a two-year range, traders generally anticipate a stronger uptrend ahead. A well-known trader called “Satoshi Flipper” said there is no hard resistance for ETH until $780. He said:
“2 years ETH spent in that range and we finally broke out No hard resistance until $780. This run has literally just started.”
Another pseudonymous trader known as “Byzantine General” said the open interest of Ethereum is still “massive.” He suggested that traders might still be anticipating a bigger price movement. He noted:
“ETH open interest is still absolutely massive. So that means... That... We haven't even seen ‘the’ big move yet?”
Total ETH Options Open Interest. Source: Skew.com
Typically, when a cryptocurrency sees a major price movement, the open interest drops. This is because large moves often lead to short and long squeezes on the asset which are then followed by a period of consolidation.
For Ether, however, the open interest has climbed to over $1.5 billion, according to data from Skew. Huobi and OKEx alone have $761 million worth of ETH futures contracts currently open.
What’s next after a two-year high
Buoyed by various factors, including DeFi, institutional adoption, and an overall improvement in market sentiment, Ether has surged 235% year-to-date. The Cryptowatch team said:
“Ethereum breaks up to a new 2-year high of $444. ETH is up 87% in the last 25-days, nearly 400% since its March low and 235% year-to-date.”
In the medium-term, traders expect the altcoin to test higher resistance levels, especially if the Ethereum blockchain continues to see high user activity with sentiment driven by ETH 2.0.
Charlie Lee: Litecoin maximalists don’t exist.
Charlie Lee told Cointelegraph this is their second attempt at the endeavour as the previous one failed: “We previously worked with LitePay on a debit card but that failed when LitePay went out of business.”
Lee also drew a distinction between this Litecoin-native debit card and other crypto cards that support the currency:
“There are other crypto debit cards available today that support Litecoin, but they only support funding with LTC. This card is natively LTC, so funds are kept in LTC until you swipe the card.”
Though Litecoiners can already sign up for the card, the service itself will not be made available for another few weeks. On a lighter note, Lee noted his opinion that there is no such thing as a “Litecoin maximalist”:
“I don't think that even exists. Most Litecoiners support and hold BTC also.”
Users will be able to make deposits in twelve of the most popular crypto currencies, including all major stablecoins. According to Lee, approximately 300 users have signed up so far. Meanwhile Litecoin has continuously stayed among top ten coins by market capitalization and has one of the biggest followings on social media.
The power of television is no joke.
Grayscale Investments had its best fundraising week in history following an ad blitz on a number of major television networks. According to the company’s CEO Barry Silbert, Grayscale netted $217 million in investments in the days following the campaign.
The firm’s Bitcoin Trust Fund was the biggest contributor to the success, adding 14,422.01411512 Bitcoin (BTC) at a value of $167,932,466, according to an SEC filing. The firm is currently holding 409,131 BTC, essentially removing it from circulation.
This story is developing and will be updated
New muscle from law enforcement investigating crypto suggests that government innovation may be slow but the government gets what it wants.
Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law.
DeFi has stolen the show lately. Spectacular rises and falls of unaudited tokens named after meme-able foods changing hands via ascendant liquidity pools have left many of us unimaginative observers mostly blinking.
In this area, I can offer no particularly hot takes beyond the line that keeps coming to me: “This does not end well.” Chalk it up to some midwestern assumption that money you make too quickly is never truly yours. But the situation with DeFi and yield farming resembles the ICO boom too closely for comfort. A fascinating technology very few understand attracts people who can earn a lot of money at the expense of other people wanting to earn a lot of money.
With the ICO boom, the SEC took a long time to put together the tools to grapple with billions of dollars changing hands, but grabble they have. Similarly, a Calvinist sense of inevitability tells me that the law will come, because the law wants to get paid. In that cheery spirit, we’re looking at a series of recent upgrades to government capabilities to track and punish illicit crypto usage.
US sets new standard for tracking down terrorist-bound crypto
In groundbreaking news for the future of illicit financing in crypto, the Justice Department announced the seizure of millions of dollars in crypto bound for Al-Qaeda, ISIS and the militant arm of Hamas.
It’s been obvious to anyone watching that federal agencies in the U.S. have been working hard to cope with crypto as a channel to fund terrorism for years. The association is often used as a means of dismissing crypto as a whole. However, it’s easy to see a number of philosophical parallels between modern terror and Bitcoin.
Al-Qaeda, for example, has spent decades developing a network of decentralized cells made up of pseudonymous operators that has proved incredibly resilient to better-armed established nations. Does that not remind you of Bitcoin nodes? Not to mention that these days, organizations like ISIS depend on crypto-favorites like Telegram and Signal to recruit and communicate, rather than the traditional satellite phone in the mountains.
A major moral distinction to interrupt such philosophizing is that Bitcoin doesn’t kill people, though, as with all money, plenty of people are prepared to kill to get Bitcoin.
The recent announcement of the investigation was clearly meant as a bombshell. It takes the Department of Justice, the Department of Homeland Security, the IRS and the FBI a very long time to work together on anything. This is the product of years. Major media outlets like the New York Times and the Washington Post were tagged in to get the story amplified right out the door. The DoJ meant to broadcast the message as far as possible: Look out, the Feds are coming.
The Russian Bear Never Sleeps
In related news from the other side of the world, Rosinfomonitoring, Russia’s illicit financing watchdog, is building a new analytics system to track blockchain transactions.
While recent developments around the world, especially from Chainalysis, Ciphertrace, and the younger Elliptic have done much to pull the veil off of the “anonymity” that governments so fear in networks like Bitcoin, Rosinfomonitoring’s plans apparently include tracking for privacy coins like Monero and Dash.
Despite widespread and growing interest in the area and questions as to how private some of these so-called privacy coins are, some have proved quicker at adapting their tech than the people looking to track it.
To public appearances, Russia is relatively late to the game. Nonetheless, despite not having the resources of the U.S. or China, the technological agility of Russian intelligence habitually exceeds expectations.
While government agencies continue to onboard crypto capabilities, there’s a major barrier that resources don’t always make up for. In the more security-sensitive areas of tech generally and cryptocurrencies specifically, there’s deep hostility towards working with the government. If you take privacy tokens, a lot of the people who understand them best are people who would least like to work with the government. On the flip side, in the U.S. at least, the intelligence community has a hard time squaring their security clearance processes with the hackers and cypherpunks they’d need to hire to stay competitive.
Another ICO bites the dust
The SEC is busting up another ICO from the boom era, in news that has become familiar.
The ICO in question — for Boon.Tech’s Boon Coins — netted only $5 million, and the enforcement action is not especially extreme. The SEC requires a return of those funds to investors, demands penalties of less than $1 million, and bars the project’s CEO from holding office at a publicly traded company ever.
So what does it matter? The order is part of what seems to be a continuing trend of the SEC’s improving knowledge of crypto jargon and technology, even in cases small enough where they were probably not expending a ton of the commission’s resources. Typically, ICO pursuits of this scale have depended on obvious thefts of funds — lambos showing up in the driveways of homes recently purchased by token operators using funds they can’t account for. This case is interesting in that it shows a rise in casual technological savvy.
Kelman Law goes through the patchwork of money transmitter licenses required in each of the United States.
Jerry Brito, executive director of non-profit lobbying group Coin Center, argues for the language of “permissioned” and “permissionless” networks.
Global payments processing system SWIFT evaluates what digitalization can do for know-your-customer identification requirements.
ETC’s bad month isn’t over yet.
ETC is facing delisting from OKEx in the wake of a 51% attack that cost the exchange $5.6 million.
According to a report recently released by OKEx, the perpetrators registered five accounts between June 26 and July 9, 2020, subsequently depositing 68,230.02 ZEC (worth more than $5 million) on their platform.
On July 31, the attackers exchanged their ZEC holdings for 807,260 ETC and withdrew it from the exchange.
The on-chain process of the initial 51% attack on Aug. 1. Source: community enthusiasts
On the same day, the attackers began creating a “shadow chain” using their newly acquired hashrate. At this point, the shadow chain was identical to the main ETC chain, but was unknown to the rest of the community. Then they deposited the ETC on OKEx, while simultaneously moving the same ETC on their shadow chain to wallet addresses that they controlled — effectively double spending the coins.
They traded their newly deposited ETC for ZEC on OKEx and withdrew the ZEC from the exchange. Then they broadcast their shadow chain to the network, which was already longer than the main chain.
According to the OKEx report, the problems were not communicated promptly by the ETC community:
“After what appeared to be inefficient communication with other participants in the larger crypto community — including exchanges like OKEx, wallets and ETC miners — the ETC community at this point made the decision to move to mining the now-broadcasted shadow chain, given that it was longer than the original mainnet.”
OKEx reimbursed its users in the aftermath of the attack, eating the entire $5.6 million loss. It has since temporarily suspended all ETC deposit and withdrawal activity, and plans to extend confirmation times for transactions on the troubled chain.
The exchange has said that they may delist ETC entirely, unless the community takes steps to improve the network’s security and stability:
“The exchange will consider delisting ETC, pending the results of the Ethereum Classic community's work to improve the security of its chain.”
At an ETC community meeting yesterday, a fiery debate ensued over Charles Hoskinson’s proposal for a decentralized treasury. During the same meeting, Hoskinson mentioned that the company he currently runs, IOHK, has developed a solution that would prevent a similar 51% attack in future.
At the meeting, many attendees voiced concerns that more exchange delistings will follow if the community does not take major steps to solve the existing security issues.
Traders have turned bullish on Ethereum again and the strong break above $400 could pull Bitcoin and other altcoins higher.
The correction in the U.S. dollar (DXY) and the possibility of further weakness due to continued money printing by the U.S. Federal Reserve could be one of the main reasons for the surge in institutions investing in Bitcoin (BTC).
Interestingly, about 40% of the Bitcoin accumulated over the past two years has not been moved, which suggests that investors are “HODLing” their purchases as they anticipate higher levels in the future.
Daily cryptocurrency market performance. Source: Coin360
Abra CEO Bill Barhydt believes that Bitcoin is witnessing a “pivotal moment” as a new asset class. Rumors suggest that the U.S. government could try to revive growth by stoking inflation. Hence, Barhydt considers that this is the best time for Bitcoin to stake a claim “as the defacto hard digital asset.”
Bitcoin bounced off the 20-day exponential moving average ($11,253) on Aug. 12, which shows that the bulls are aggressively buying the dips to this support.
BTC/USD daily chart. Source: TradingView
The price action of the past few days has formed an ascending triangle pattern, which will complete on a breakout and close (UTC time) above $12,113.50. The target objective of this set up is $13,702.55.
Both moving averages are sloping up and the relative strength index is in positive territory, which suggests that bulls have the upper hand.
This bullish view will be invalidated if the BTC/USD pair turns down from the current levels or the overhead resistance of $12,113.50 and breaks below the 20-day EMA.
Such a move will be the first sign of profit booking at higher levels. Below the 20-day EMA, a drop to $10,400 is possible. If this support holds, the pair might remain range-bound for a few days. The trend will turn negative on a break below the $10,400–$10,000 support zone.
Ether (ETH) surged above the downtrend line and the overhead resistance of $415.634 on Aug. 13, which shows that the uptrend has resumed.
ETH/USD daily chart. Source: TradingView
Both moving averages are sloping up and the RSI is in the overbought zone, suggesting advantage to the bulls. The next target on the upside is $480 and then $520.
This bullish view will be negated if the bears fake the current breakout and pull the ETH/USD pair down below $415.634. Such a move will indicate profit booking at higher levels and could result in a deeper pullback.
XRP has broken out of the falling wedge pattern, which is a bullish sign. If the bulls can scale the price above $0.307301, a rally to the $0.326113–$0.346727 resistance zone is likely. A breakout above this zone will signal a resumption of the uptrend.
XRP/USD daily chart. Source: TradingView
Above $0.346727, the next target to watch out for is $0.40. The uptrending moving averages and the RSI close to the overbought zone suggest that bulls have the upper hand.
Contrary to this assumption, if the XRP/USD pair turns down from $0.307301, the bears will make another attempt to sink the price below the 20-day EMA ($0.275). If they succeed, a deeper correction to the 61.8% Fibonacci retracement level of $0.244472 is likely.
Chainlink (LINK) broke above the 261.8% Fibonacci extension level of $17.4319 on Aug. 13 but the bulls could not sustain the price above it, which suggests some profit booking at higher levels.
LINK/USD daily chart. Source: TradingView
However, the LINK/USD pair has not given up much ground, which suggests that the majority of the bulls are still holding on to their positions as they expect the rally to continue. If the buyers can push the price above $18.3488, the rally can extend to $20.
On the other hand, selling could pick up momentum on a break below $15.9175. Below this level, a drop to the 38.2% Fibonacci retracement level of $13.9639 is possible.
If the pair bounces off this level, the bulls will again attempt to resume the uptrend but a break below this level could signal that the momentum has weakened.
Bitcoin Cash (BCH) has held the $280 support for the past few days, which suggests that the bulls are buying at these levels. However, unless the bulls push the price above the downtrend line, the bears will again try to break the $280 support.
BCH/USD daily chart. Source: TradingView
If the price again turns down from the downtrend line, it will form a bearish descending triangle pattern, which will complete on a breakdown and close (UTC time) below $280. The pattern target of this setup is $222.
However, if the bulls push the price above the downtrend line, a move to $325 and then to $353 is possible. A breakout of this resistance will signal the possible resumption of the uptrend.
Bitcoin SV (BSV) has held the $200 support but the rebound lacks strength, which shows a lack of urgency among the bulls to buy at these levels.
BSV/USD daily chart. Source: TradingView
The price has reached the downtrend line, which is likely to act as a stiff resistance. If the BSV/USD pair turns down from this resistance, the possibility of a break below $200 and the 50-day simple moving average ($192) increases. Below the level, the decline can extend to $160.
Currently, the 20-day EMA ($214) is flat and the RSI is close to the midpoint, which shows a balance between supply and demand. A breakout above the downtrend line and the $227 resistance will signal that bulls are making a comeback. Above this level, a retest of $260.86 is likely.
The bulls have successfully defended the breakout level of $51, which is a positive sign. If they can push Litecoin (LTC) above the descending channel, a move to $60 and then to $65.1573 is possible.
LTC/USD daily chart. Source: TradingView
A break above $65.1573 could result in a rally to $80. The LTC/USD pair is presently above the 20-day EMA ($55) and the RSI has risen to just under 60 level, which suggests a minor advantage to the bulls.
Contrary to this assumption, if the pair turns down from the current levels, then the bears will make another attempt to sink the price below $51. A break below the 50-day SMA ($48) will be a huge negative.
Cardano (ADA) is currently consolidating between the $0.13–$0.15 zone. The attempt by the bears to break below this zone on Aug. 12 was purchased aggressively by the bulls, which shows strong demand at lower levels.
ADA/USD daily chart. Source: TradingView
During this leg of the up move, twice the consolidations lasted for about 27 days or more. The current consolidation has completed 18 days and if history were to repeat itself, the price might remain stuck in the range for a few more days before a breakout or a breakdown happens.
The 20-day EMA ($0.137) has flattened out and the RSI is just above the midpoint, which also suggests a balance between the bulls and bears. The next trending move is likely to start after the ADA/USD pair closes (UTC time) above $0.15 or below $0.13.
Binance Coin (BNB) dipped below the 20-day EMA ($21.37) on Aug. 11, 12 and 13 but on all three days, the bears could not sustain the lower levels, which shows aggressive buying by the bulls.
BNB/USD daily chart. Source: TradingView
Today, the bulls have pushed the price above the downtrend line and are attempting to scale the overhead resistance of $22.93. If they succeed, a rally to $24.588 and then to $27.1905 is possible.
Both moving averages are rising and the RSI is in the positive territory, which suggests that bulls have the upper hand.
Contrary to this assumption, if the BNB/USD pair turns down from $22.93, the bears will make another attempt to break the 20-day EMA support.
Crypto.com Coin (CRO) is consolidating in an uptrend, which is a positive sign. Currently, the price is stuck between $0.154322 and $0.176596.
CRO/USD daily chart. Source: TradingView
The 20-day EMA ($0.16) is sloping up marginally and the RSI is close to the 60 level, which suggests that the momentum has weakened but the advantage is still with the bulls.
If the bulls can push the price above $0.176596, the uptrend is likely to resume with the next target at $0.20. Conversely, if the CRO/USD pair plummets below the support of the range, a drop to $0.13 is possible.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
Is it enough to meaningfully resist election fraud?
A new patent has been filed by the U.S. Postal Service, or USPS, which appears to use Blockchain technology to make mail-in voting a safe alternative to physical polling stations amid the COVID-19 pandemic. This news follows recent comments from President Donald Trump concerning the mail service's funding as part of his fight against mail-in voting.
"This development relates to a voting system that also incorporates the use of cryptographic elements, such as blockchains, as are used with cryptographic currencies, to track and secure the vote by mail system," said a patent filing, dated Aug. 13, 2020.
COVID-19 remains a global hot topic as the 2020 U.S. presidential elections draw near. Mail-in voting has also surfaced as a point of contention among members of the country's political parties. Trump opposes the movement, and has suggested withholding further USPS funding as a preventative measure, a CNBC article said.
Although mail-in voting allegedly opens the door for potential voter fraud, voters seek ease of access when recording their political preference in a multi-faceted battle. This has been made more complicated amidst the COVID-19 pandemic. "In some embodiments, a blockchain allows the tracking of the various types of necessary data in a way that is secure and allows others to easily confirm that data has not been altered," the patent detailed.
The patent laid out voting operations based on a blockchain, complete with ballot codes, electronic signatures and other intricate points, working in tandem with two databases. The patent also included various other frameworks and concepts around its central idea of blockchain-based voting.
The postal service's patent is not its first dive into blockchain. The USPS submitted a concept in 2018 which harnessed blockchain for identity authentication.
Cointelegraph reached out to the USPS for additional details. This article will be updated accordingly should a response come in.
Bitcoin and Tesla are the talk of the town throughout the USA.
All eyes are on Bitcoin (BTC), crypto's largest coin by market cap, and Tesla, a future-centric car company run by eccentric billionaire Elon Musk, thanks to a standout year for both assets.
Tradable equity in Tesla, under the ticker TSLA, has captured more of the American public's attention than any other investable asset, according to July figures from financial charting platform TradingView, posted on Aug. 13. Bitcoin held the spotlight as the second most popular asset charted on the platform.
TradingView also pointed out that Bitcoin interest is on the rise specifically in Washington, California and Oregon. "The west coast loves crypto the most," the article said. "Boeing was the third most viewed stock and American Airlines the 10th," the article added, detailing the airline sector — an industry that saw the brunt of COVID-19 restriction consequences.
Bitcoin and Tesla earned their spots in the limelight as both have rallied tremendously in price over 2020. Bitcoin hit a low near $3,800 back in March as COVID-19 fears were ramping up. The asset recovered fast, however, flying up past $12,000 in the following months, tallying a radical comeback.
Tesla CEO and SpaceX founder Elon Musk is no stranger to the crypto space, although he reportedly only owns 0.25 BTC as of May.
It’s a clash of the crypto titans.
Charles Hoskinson presented his idea for a decentralized treasury protocol to the Ethereum Classic (ETC) community during a Discord call on August 13. Hoskinson, who is the founder of Cardano (ADA) and one of the co-founders of Ethereum, strongly believes that setting up an independent source of funding for development and innovation can ensure the prosperity of ETC.
Hoskinson’s proposal to change ETC’s block reward allocation would mean that instead of rewards going entirely to the network’s miners, blocks would allocate a portion of every reward to a newly-created decentralized treasury. This treasury would then be used to finance future development of the ecosystem. IOHK, a company which Hoskinson runs, has also apparently developed a technology that would prevent future 51% attacks.
He contended that the best defense against such attacks is innovation, which he believes will attract more DApps and users. This would lead to the appreciation of ETC, which would in turn attract more miners, making such attacks improbable in the future. Not everyone was enthused by Hoskinson’s proposal, however. Some felt that a reduction in rewards would lead to a miner exodus, while others did not like the idea that initial projects might all be led by IOHK.
When explaining the supposedly unfair advantage that ICO projects have over ETC, Hoskinson took a small swipe at Ethereum and Chainlink:
“ETC would be at a very different place, Ethereum had an unfair advantage. All those people who wanted to do cool stuff like the chainlinks and so forth, they did their ICOs. That's how they funded everything. Our ecosystem was much more principled. We didn't succumb to the ICO mania.”
It sounded for a moment as if Hoskinson was channeling Adam Back, who recently lambasted ICO projects, including Cardano. But things became truly heated when James Wo’s question was read by the moderator.
James Wo’s question.
Wo is the founder and CEO of Digital Finance Group — a crypto investment firm with $550 million in assets under management. His group has a vested interest in one of the biggest contributors to the ETC ecosystem, ETC Labs. From the tone of his question, Wo appeared to perceive Hoskinson’s proposal as a hostile takeover attempt.
Hoskinson jumped in before letting the moderator finish reading, directing his answer directly to Wo:
“Because I was here in the very beginning, James, and I put millions of dollars of my own money in. I understand that you put money in and that's why I say we should split it up. But I was here in the beginning. I put my brand and reputation on the line.”
When the moderator finished reading Wo’s question, Hoskinson continued:
“I was here in the beginning, in the beginning of Ethereum, in the beginning of Ethereum Classic; again, I put my own time and money in. I didn't ask for anything until I had a fully working client built with 100% new code.”
Terry Culver, the CEO of ETC Labs, jumped in to interrupt Hoskinson, but was silenced by the moderator.
The call lasted a total of 90 minutes, though some stayed on after the main participants left. Most seemed skeptical about miners accepting a decrease to the block reward.
There are multiple ways to approach digital payments, and Facebook wants to cover them all.
Despite regulators across the board giving a cold shoulder to Facebook’s ambitious plan to install a worldwide crypto-based payment system called Libra, the company’s enthusiasm for moving into the digital payments space is only mounting. Earlier this week, reports emerged that the social media hegemon has realigned its forces on this front, arranging all its payments-related subsidiaries into a single group called Facebook Financial.
David Marcus, co-creator of Libra and head of the Novi (formerly Calibra) project, will take command of the new division while continuing to directly oversee the crypto effort. Facebook CEO Mark Zuckerberg also tapped former Upwork CEO Stephane Kasriel to assist Marcus as vice president for payments in charge of Facebook Pay, the solution that the company is currently integrating into its family of products.
These organizational changes reflect further articulation of Facebook’s focus on enabling financial activity across its platforms, and they may also be indicative of some strategic prioritizations the company has made with regard to its various approaches to payments — including the Libra stablecoin.
In-app payments promise
Most people who post on Facebook or chat with friends on WhatsApp will switch to another app when they need to make a payment. Venmo is great for splitting a dinner check, PayPal often comes into play when one needs to pay a merchant at an online marketplace, while Google Pay and Apple Pay are go-to options for in-app payments and purchasing goods at stores.
In an online economy that thrives on monetizing user attention and retention, having people slip out of an app to perform a transaction amounts to wastefulness. A Bloomberg report on the formation of the payments division also documents the consolidating realization within Facebook that allowing users to transact on its apps will go a long way toward keeping people within the ecosystem. One direct consequence, this argument goes, will be the growing value of the ads that the company sells.
There is also evidence that Mark Zuckerberg has lately been increasingly excited about the messaging apps’ potential to spur commercial activity. A Facebook spokesperson reflected this sentiment to Cointelegraph:
“Payments and financial services have become increasingly more important for the world, and as a result, we need to increase our efforts around making payments and commerce easier for people. We want to empower people everywhere to send money to each other, buy and sell things online, and help businesses grow.”
Expansion by negotiation
In pursuing this vision, Facebook’s immediate priority is the ongoing rollout of Facebook Pay, the payments layer built into its social apps. The process is unfolding unevenly, as the company is developing custom approaches for every region, depending on where it stands with local regulators and in national markets.
Some of the key expansion vectors, for example, include enabling users in two major markets, Brazil and India, to transfer money within the widely popular WhatsApp messenger. In both cases, however, the push has been stalled by regulators.
These cases once again illustrate the crucial role of regulatory negotiations when it comes to expanding novel financial services across a variety of markets. Convincing legislators and watchdog organizations that the potential benefits of the proposed solution outweigh the security issues has been the centerpiece of the campaign to promote Libra, and it will remain the case with any other payments innovations.
Marcus is known for successfully facilitating financial services’ scaling and expansion efforts since his PayPal stint. His experience as Libra’s advocate in chief — which entailed endless rounds of negotiations with policymakers — has surely seasoned him even further. It’s only logical that Marcus’ experience is now equally indispensable for all of Facebook’s payments initiatives — especially given the obvious fact that Libra’s initial plan to blitzkrieg its way into becoming a dominant global financial infrastructure has failed.
The face of Kasriel, who will specifically oversee the operation of Facebook Pay, is less familiar to the crypto community. Most recently known as CEO of online staffing firm Upwork, he has vast experience in digital payments. From 2006 to 2008, he spearheaded PayPal’s operations in France where he crossed paths with Marcus. Kasriel then went on to serve in various leadership roles at eBay.
Interestingly, Facebook’s two French executives seem to share a memorable moment attesting to a common early interest in crypto. According to one report, Kasriel was the first person to whom Marcus sent a Bitcoin transaction in 2011.
Is Libra taking a back seat?
Naturally, with Marcus taking up a new commission, the question arises: Is Libra now less of a priority for Facebook? The company’s spokesperson told Cointelegraph that “There are no changes to our current plans with the formation of a new group,” further adding:
“We want to be able to give people the ability to make a payment however they choose — debit, credit or Libra digital currencies. We’re taking multiple approaches to payments, ranging from Facebook Pay and checkout, which are built on top of traditional payment infrastructure, and longer-term work around Libra with Novi, so that global payment infrastructure around the world can be more efficient, especially for things like transferring money across borders.”
Libra was never intended to be a financial layer inside Facebook’s ecosystem, but rather an open infrastructure where the social media company would have the edge in offering the premier wallet — Novi — to hold the digital currency. Leveraging the wallet proposition, Facebook could expect to fuel Libra’s expanding use and also benefit from it.
Sky Guo, CEO of smart contract platform Cypherium, commented to Cointelegraph that the projects seem likely to combine into a single offering, adding:
“Both are important strategical moves of Facebook. The two have different goals and use cases. However, we can expect that Facebook Pay will integrate Libra once it launches.”
A company with Facebook’s resources can be simultaneously upping its in-app payments game and actively pursuing the cryptocurrency effort. Libra and Novi, now categorized as the “longer-term work,” may have entered a less publicly visible stage of development, yet they can shake up the crypto space once again at any time.
Loyalty can be so rewarding.
Gamified shopping loyalty platform StormX will now let its users earn cashback in cryptocurrencies when shopping at Walmart.
According to an announcement shared with Cointelegraph on August 14, StormX users can now earn up to 4% cashback in crypto for purchases made at Walmart. Users who achieve a “Diamond” rank can earn up to 14%. StormX CEO Simon Yu said that he believes this Walmart partnership will bring new users to the service:
“As the only crypto cashback program for Walmart worldwide, we are confident that users will take advantage of the rewards program to earn their favorite cryptocurrency while shopping at their favorite retailer.”
Per the announcement, Walmart is the latest addition to StormX’s pool of more than 650 partners, which already includes outlets like Microsoft, eBay, Nike, Adidas, Target, Dell and Samsung. StormX says it has already distributed more than $2 million to its users.
In June, Walmart’s Chinese subsidiary partnered with VeChain, a blockchain-based supply chain management platform, to create a system that traces food products. At the beginning of March, Walmart also joined the Hyperledger blockchain initiative.
The NCSC has gone scorched earth on crypto scams.
Over the past four months, the National Cyber Security Centre, or NCSC, removed over 300,000 URLs pertaining to fake celebrity-endorsed investment opportunities. More than a half of these sites belonged to fraudulent cryptocurrency investment schemes.
Per an announcement published by the NCSC on August 14, an increasing number of these scams utilized fake endorsements from national celebrities, such as Ed Sheeran and Richard Branson. This raised red flags for authorities, prompting the launch of a massive retaliatory campaign.
Ciaran Martin, CEO of the NCSC, commented:
“These investment scams are a striking example of the kind of methods cyber criminals are now deploying to try to con people. We are exposing them today not only to raise public awareness but to show the criminals behind them that we know what they’re up to and are taking action to stop it.”
In Australia, a similar warning was issued by the Australian Securities and Investments Commission, or ASIC. They too asked people to remain cautious about celebrity-endorsed Bitcoin (BTC) scam sites.
Cointelegraph recently reported that the United Kingdom Advertising Standards Authority, or ASA, and the Internet Advertising Bureau, or IAB, have launched a new system to help detect and remove fraudulent online ads.
Bitcoin and cryptocurrencies as a whole remain bullish as $12,000 comes into view once more as the markets head into the weekend.
Bitcoin yet to clear $12,000 hurdle
Ethereum Gas prices skyrocket
Small-cap cryptos shine
Watch the Bitcoin and gold correlation
This week, the Bitcoin and cryptocurrency market roared into Monday like a lion only to end the week more like a lamb. Going into the weekend, let’s take a look at the major developments that have shaped the past week and what can be expected for the price of Bitcoin during the weekend.
Bitcoin yet to clear $12K hurdle
Bitcoin (BTC) price tested its year-to-date high, briefly surging past $12,000 only to fall back down into the same mid-$11,000 range it has been stuck in for the better part of the past couple weeks.
Ether (ETH) also surged, along with Gas fees, largely on the back of DeFi growth and speculation. But the big story was a previously unknown token that shot astronomically higher only to fall back to earth almost as quickly.
Moving over the $12,000 hurdle was always seen as the key to Bitcoin retesting all-time highs. Overcoming the gauntlet of resistance levels between the $12,000-14,000 level would be followed by a vacuum all the way to record highs, some analysts believe.
Heading into the week, Bitcoin made a run at the $12K key psychological barrier. But despite leveraged interest, the lack of follow-through resulted in Bitcoin falling back below it. In turn, the market was forced to try again, in part helped by flat to minor positive perpetual funding rates.
Gas prices skyrocket
Alongside the technical price rejection, it is worth noting that Ethereum transaction fees began to creep ever so higher and, in fact, over the subsequent day, the rise was such that transaction fees reached $6.04 on Wednesday night, the highest since 2015.
Ethereum network fees. Source: Etherscan
Various network upgrades are supposed to solve this issue or, at the very least, alleviate the immediate pressure, but these developments are believed to be months away.
Still, despite the aforementioned price swings, the in-vogue DeFi sector continued to grow from strength to strength and the total amount locked across the ecosystem remained largely unaffected by the swings in the secondary market.
In turn, this resilience and the appetite to take on risk to experiment with DeFi, AMM, and yield farming, as evidenced by the ongoing surge higher in the total amount of value locked across the DeFi ecosystem, pointed to strong dip-buying interest.
Total value locked in DeFi (USD). Source: DeFi Pulse
Strong dip-buying interest was subsequently confirmed over the following days when the initial unwind of bullish price expectations in the options market, as seen by the evolution of Bitcoin and Ethereum front-end options skew, was gradually retraced.
ETH 25d skew and implied volatility. Source: skew.com
What’s more, this was driven by the front-end of the futures curve, while the back end held largely steady. A much more significant development, rather than profit-taking, would result in a much more significant and broader market repricing.
Small-cap cryptos shine
However, while the media focused on yet another round of price swings by Bitcoin and ETH, the real movement was in small-cap tokens, which outperformed large-cap counterparts by a ratio of 3:1.
The fast-growing world of DeFi is not without its risks and as well documented by CoinTelegraph earlier in the week, Yam Finance, an experimental DeFi protocol, made major headlines.
The Yam protocol initially gained steam as the second purely decentralized DeFi project after Yearn Finance. It deployed a decentralized governance model that enabled YAM holders to have a say across the protocol. Within 24 hours, nearly $500 million worth of capital was locked in only for it to soon crash back down to zero after the discovery of a rebase bug.
Initially, Yam opened staking pools for Compound, Aave’s Lend, Chainlink’s Link, Wrapped ETH (WETH), YFI, Synthetix (SNX), Maker (MKR), and Uniswap V2 LP tokens.
But most of the tokens that were used in Yam staking pools crashed after the bug occurred. Despite the harsh lesson and reminder of the high risks that are involved, the market staged a strong recovery.
Bitcoin was able to gradually recover into the $11,500 zone, but the total value locked on DeFi tracked near record highs.
Watch the Bitcoin and gold correlation
On a macro level, the one-month correlation between Bitcoin and gold has begun to grow closer by the day, climbing all the way to 68% before a slight correction.
However, caution is warranted before extrapolating the thesis from the above, as the more prudent measure, the three-month correlation coefficient currently sits at 15%.
It is also worth noting that while gold has advanced past $2,000 per ounce in the wake of rising uncertainty surrounding the ongoing monetary policy easing stance by the Federal Reserve and other central banks, continued uncertainty will make the correlation worth keeping an eye on for the foreseeable future.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Diversity and inclusion are valued higher in the crypto space than in traditional finances, but there are some cultural obstacles we need to overcome.
When we talk about financial inclusion, we have to think about inclusion for whom, in what context, and what inclusion itself means. One of the common answers when thinking about who needs to be “financially included” is “most currently unbanked people, who should ideally have access to commercial banking systems.”
But it’s not as simple as just asking, “How do we get unbanked people into the banking system?” because the banking system can be exploitative, and newly banked customers often wind up being the least-important customers or paying the highest fees, among other issues. There are significant limitations on the extent to which current systems are the right solution for a lot of people’s actual needs.
So, we have to ask tough questions and understand what the critically important problems actually are, particularly as we proceed upward on the hierarchy of needs. I think we need to examine access to crypto in this context.
Gender cultural code as the reason
A question I think about a lot is: Whom do we as a society empower to take risks? Generally speaking, the answer is young-ish white men from certain (privileged) educational backgrounds — noting that whether or not they actually completed college is usually not considered relevant. These individuals have access to not only certain kinds of privilege, but they also have the ability (engendered by cultural and social habits and norms) to accommodate an enhanced level of risk. Obviously, it’s not the case that “every white man can take on risk,” but the disproportion is clear: Young white men are founding more companies more often, and a reason for that is that they are culturally oriented toward thinking that it’s okay to fail, and it’s okay to take risks. They have a confidence that is culturally ingrained in them.
When looking across non-white cultures, risk-takers are still predominantly male. We as a society empower men to take risks that we do not similarly empower women to take. There are a million reasons for this that are coded in gender, and it is something we have to acknowledge before we can effectively address it.
The good news is that in the United States, the way we’re raising girls now is very different from the way I was raised. I examine and pay a lot of attention to this as a parent, as I have three young daughters. My daughters are definitely getting very different messaging from the media, from books and from their teachers than I received. Even though I was raised in a progressive household when it comes to gender issues, these external cultural influences are very powerful, and it’s wonderful to see how much progress has been made. I am not going to say that the job is anywhere near done, because gender roles are still very coded into our culture and language, but there is cause for optimism.
Mathematicians and the coder identity
Another thing I’ve been thinking about a lot is STEM education — specifically, why girls leave math and computer science in droves. I’ve been reading up a lot recently on the fascinating idea of decolonizing mathematics. There’s a whole social justice movement about developing an identity as a mathematician or a computer scientist. Culturally in the U.S., or even more broadly speaking in Western cultures, there is no notion of an identity of a female person as a mathematician. It is familiarity with these kinds of concepts and mathematical fluency beyond arithmetics that eventually leads to familiarity with coding, which then paves the way to being interested in careers in coding and logic.
Part of it is really starting to ask questions like, What is the cultural identity as a coder and how is that culturally ingrained? We still suffer from this idea that it’s some loner who puts on headphones and drills in. That isn’t necessarily wrong; introverts often do tend to gravitate towards coding, and there’s no question that some of these things are personality traits (though I’m an extroverted woman who loved coding, for the record). But personality traits do not have to be gender-coded unless we make them so, at a societal level. We can choose what cultural context we create around mathematics and coding.
I love that my daughters now have access to books with protagonists who are girls of color who are scientists. Series like that didn’t exist when I was growing up, where the protagonist is basically a girl of color, deliberately positioned against the supposed black-and-white of who is and isn’t a scientist to eventually solve mysteries using science. Representation matters, at every level. If you see something, it becomes easier to imagine.
Now, to get an education about crypto, whether as an investment vehicle in terms of money or from a tech perspective — you pretty much have to have minimum connectivity, or internet access. The access needs to be robust and stable enough to provide hours and hours of time to become an expert in the field. Moreover, there needs to be a family structure that enables a member to dedicate their time and can cover expensive network costs to facilitate the endeavor. Ideally, there should be access to an institution with people who can teach you, whether through online activities like streaming or downloading, or through a community, or by having access to experts, or whatever it might be. You have to have a lot of support around such an undertaking.
In a three-part documentary called Inside Bill’s Brain, Bill Gates demolishes the premise of Malcolm Gladwell’s nonfiction book Outliers. Microsoft’s founder said he used to just go down to his parents’ garage with friends and tinker around with robotics as a kid because he had access to it. Therefore, a lot of onboarding in tech is about what gets put in your path. The learning curve and its hurdles in tech are a lot higher for someone who does not come from an environment where these technological options are presented to them.
The opportunities presented to each person determine the likelihood of their understanding something like crypto. It’s difficult to imagine the success of some people in the crypto and blockchain space, myself included, if they hadn’t, to some extent, serendipitously fallen into a certain kind of environment. Nowadays, the needed environment to learn about tech, specifically crypto and blockchain, is more common, but it’s still far more prevalent in some places than others.
There is a woman named Fareshteh Forough, an Afghan social activist, who is the CEO and founder of Code to Inspire, a coding school for girls in Afghanistan. It’s a great example of an inspiring woman who wanted to develop a community for coding and robotics for girls. The school’s programs aren’t taught as traditional education, but as a trade that women and girls can do from their own homes, without even having to go out in public. They make money for their families using their skills, thereby making their education and work status culturally acceptable. Forough basically decided not to try to fight patriarchal culture. She accepted elements of it and said, “Nevertheless, within this patriarchy, I can still create opportunities for women and girls to engage in these kinds of activities. I can train them and they can actually create a livelihood.”
Forough is also looking at where the money goes. To prevent women’s wages from being taken by their male relatives, she is empowering some of them via crypto so they can create their own accounts and have their own wallets. In this way, they can create a separate, private, account for themselves, as their relatives rarely understand how crypto works and aren’t able to track it down. This access can lead to more opportunities and empowerment.
When you examine context, you can’t just assume that everything is equal. Part of what the progressive race relations movement in the U.S. has been so good at doing is saying, “Look, there are real differences here.” It is not the same thing to be raised black in an urban center and white in a suburb, to take one often-cited example. Economic privilege, obviously, is critical to access as well, in addition to ability, gender, etc. Imagine you’re dealing with a lot of other things, like unequal education and/or the fact that you have to regularly combat discrimination for not fitting into a traditional gender role or for not being neurotypical; these affect how you move through the world.
I don’t think that I’m saying anything particularly radical, but I do think that these things are not talked about enough in the blockchain space or are talked about quietly, in quiet corners or on the women’s or LGBTQ+ panels at a conference, rather than much more openly like other issues. So, what I sometimes do is focus on financial inclusion as a proxy, because so much activity is happening around that conversation right now, and I can push people to at least acknowledge that there is an issue and be willing to speak about it.
I work for the World Economic Forum, so my official professional view is one of objectivity. And I think that, objectively, we have a huge problem with inclusion in our society! Again, I don’t think saying that is novel or radical, because it is, or should be, obvious and self-evident. Once you accept and internalize this reality, you can get to a place where you start kicking out ideas and thinking, How do I address that? But it can’t be addressed without understanding the context.
Cryptocurrency and financial inclusion
Crypto is fascinating for a zillion reasons, one being that it came about because there was a really interesting problem and someone wanted to solve that problem. I don’t think that Satoshi Nakomoto, who invented Bitcoin, was thinking about inclusion in any meaningful way - I think it was much more about government surveillance issues and financial stability — that kind of stuff. I think it was a nerdy, libertarian sort of approach. Back in 2009, we were at a time of increasing dissatisfaction with the government’s approach to a lot of different things, and I think crypto has become a critical response to that. But I think it’s pretty safe to say it wasn’t originally about helping poor or unbanked people.
Now, we’re at a point of maturity with this technology: an inflection point to build something that can actually address these social issues and be a tool to help democratize systems. We, as a community and as an ecosystem, need to make a choice about which side we are going to come down on regarding equality in conjunction with how we use these new forms of technology and for which purposes we implement them. We need to think about user rights, and decentralization, what its pros and cons are, and the other benefits of all these opportunities.
Each of us as individuals has a set of choices to make. To start changing the world, you don’t have to wait for the right protocol or the right app or company. To solve these problems, individuals have to make a decision on their own about what matters to them — rights, equality, inclusion and other issues — which leads them to think about this stuff every single day and embed these ideas into emerging tech by asking themselves: Why is decentralization exciting? Why is it important? What is it about the system that isn’t working? What are the systems that we are building as alternatives?
How do we ensure that we’re really considering the points of view of unspoken-for individuals specifically and not guessing or building or colonizing yet another environment, like we did with mathematics? Because that’s the default. It’s the easiest thing to do, and it’s what will happen if we don’t pay attention.
This article is from an interview held by Max Yakubowski with Sheila Warren. It has been condensed and edited.
The saga continues...
After the original Yam Finance protocol collapsed due to a single line of code, its developers are planning to relaunch the project on new, audited smart contracts.
The relaunch was announced shortly after it became clear that a last-ditch effort to save the protocol failed on Thursday.
Now, details on the upcoming transition have emerged. The migration will happen in two stages, and includes an initial Yam V2 contract that will store information on previous balances. Users will need to burn their V1 tokens and mint new tokens before an unspecified deadline. This transition contract will not be taking rebases into account, so the amount minted will depend on the underlying share of total supply of the tokens.
The transition contract will not have governance features, but will instead use off-chain signature-based voting to let the community express its desired path forward.
The most likely path is the deployment of fully audited V3 contracts, which will be the actual relaunch of Yam. No timelines were given on this yet, though the team said that specific information on audits will be provided in the coming days.
Once the contracts are deployed, the team will “strongly advocate” for rewarding all token holders who “acted to save the system.” It will be up to the community, however, to decide if the plan is worth pursuing and submit the appropriate governance proposal.
This could result in an interesting political conundrum for the nascent community, depending on what percentage of holders delegated their tokens to save the protocol. If they are a majority, they could force the decision through at the expense of the non-participating holders. If they are a minority, this decision would require altruism from the remaining holders.
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