Category: Altcoin

UK MPs Launch Inquiry into Cryptocurrencies and Blockchain

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The United Kingdom Treasury yesterday announced that it would be launching an inquiry into bitcoin and other cryptocurrencies as well as the underlying blockchain technology. The investigation will involve MPs who will be investigating whether bitcoin and altcoin technologies pose a risk to central banking – the investigation is largely considered to be a forewarning for an inevitable attempt to crackdown on cryptocurrencies. Whichever way this will play out is another story altogether.

The probe expects to draw out a distinct conclusion that outlines both the benefits and the risks that come with cryptocurrencies – this will be prerequisite to talks on how it should be regulated in the long run.

To put everything into perspective, the chair of the Treasury Committee, Nicky Morgan pointed out that “People are becoming increasingly aware of cryptocurrencies such as bitcoin, but they may not be aware that they are currently unregulated in the UK, and there is no protection for individual investors.”

The Treasury Committee’s probe follows the great deal of attention that cryptocurrencies, especially bitcoin, have been attracting in the past year. The situation seems to have gotten out of hand with the increased volatility of some of the cryptocurrencies’ prices fluctuating wildly in very short periods of time and experts failing to agree on the causes or even on predictions for the future prices or value for said cryptocurrencies. The Treasury Committee, therefore, intends to study how overseas governments have gone about the issue and pick out a few points from them.

South Korea, for instance, recently introduced new regulations that restricted people from anonymous cryptocurrency trading in a bid to protect investors in the country from scams. This particular move seems to be the focal point of the Treasury Committee’s yet to be unveiled regulation-based effort with Ms. Morgan clarifying that ‘the inquiry will explore how to achieve a balance between regulating digital currencies to provide adequate protection for consumers and businesses whilst not stifling innovation.’

“We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment,” Ms. Morgan continued.

Telegram Raises an Initial $850 Million for Its ICO

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According to a document filed with the U.S. Securities Exchange and Exchange Commission (SEC) after being signed by Telegram CEO and co-creator Pavel Durov, Telegram’s billion-dollar initial coin offering (ICO) has already amassed a whopping $850 million in the pre-sale stage. The figure was initially expected to get to about $600 million and was to be raised entirely from venture capital firms. As a result, not only has the company reached and surpassed its first milestone by a significantly huge margin but it has also gained a lot more confidence from the venture capitalists it intended to appeal to.

The document that was filed, a “Notice of Exempt Offering of Securities”, that was filed by Pavel and Nikolai Durov with the US Securities and Exchange Commission (SEC) on February the 13th reported that the $850 million that had been raised under the SEC exemption Rule 506(c) from 81 venture capitalist investors would be for “the development of the TON Blockchain, the development, and maintenance of Telegram Messenger.”

The SEC filing offers a type of securities that is referred to as the “Purchase Agreements for Cryptocurrency” and are filed under the Rule 506(c) exemption. This means that citizens of the United States who invest must be accredited investors, that is, they have to either be worth over a million dollars or have an annual income of about not less than $200,000 in order for the tokens they are investing in not to be registered as securities with the SEC. The investors, in this case, reportedly bought rights to Telegram’s TON internal cryptocurrency known as “Grams” – these will be distributed once the platform is launched next year.

What This Means for the Company

The $850 million raised by the messaging company is the highest amount ever accumulated from a pre-sale – the closest comparisons are from previously completed ICOs by Filecoin and Tezos, which raised $257 million and $232 million respectively. In many ways, this affirms Telegram’s popularity within the crypto community and things are about to get even better as the company plans to use the funds to extend its services to include such offering as VPN solutions, cloud file storage as well as peer-to-peer micropayment transactions.

Considering the huge overshoot of the initial funding, there are a couple of questions that have arisen with regards to how it might affect the proposed public sale that is set to begin in March. However, everything seems to point to the public sale proceeding as planned although it is quite apparent that it might end up being heavily oversubscribed.

Could Bitcoin’s Bounce Back to $10,000 Bring New Buyers?

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Yesterday (Thursday, February 15th), bitcoin rose above the $10,000 mark, surpassing a critical level thanks to stronger trader sentiment. On the CoinDesk Bitcoin Price Index (BPI), the digital currency soared to as high as $10,218. This consequentially made the bitcoin market, which is the largest digital currency market by capitalization, go up by more than 70 percent after a recent low of less than $6,000.

“Hitting $10k demonstrates the renewed energy in the crypto market, as it shakes off some of the volatility from the start of the year,” stated Iqbal Gandham, the UK Managing Director of eToro, a social trading platform.

In general, the cryptocurrency market has experienced wide-spread fluctuations in the last couple of months following speculations and rumors of a number of regulatory developments pertaining to how these digital assets are going to be handled. However, in sentiment driven markets, such as the bitcoin’s, key price levels changes like the bitcoin’s rise to $10,000 appears to attract new buyers who in turn help the price. Bitcoin’s recovery can also be attributed to statements from certain regulators which have gone a long way to alleviate fears of possible severe crackdowns which is a huge motivational factor for new buyers.

For the UK-based eToro social trading platform, user growth decelerated towards the end of January. This was at about the same time that bitcoin’s price started taking some rather significant hits. The rate of withdrawals, on the other hand, has not increased which implies that users were not selling out their bitcoin and that the demand for new customers could have contributed to the previous gains.

Investors Still Down $60 Billion in 2018

While bitcoin’s recovery should be a slice of hope for everyone in the community, investors who bought into the cryptocurrency at the beginning of the year will still have to brave a stormy period. The digital currency kicked off the year at $14,000, down from the $20,000 all-time high of December 2017. As such, since the year began, its market cap is still down by approximately $60 billion.

 

Cryptocurrency Mining Creates Huge Energy Demand in Iceland

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This year Iceland is likely to use more energy in mining digital currencies than what it will use to power homes in the country. Considering the large amounts of electric energy required by computers to mine the precious bitcoins, many prominent cryptocurrency mining companies have found Iceland to be the perfect spot for their operations thanks to the countries abundant geothermal and hydroelectric power plants. With this development, the current energy consumption by virtual currency mining companies is expected to double to 100 megawatts this year which is significantly higher than what all the island nation’s households will use collectively.

There are other factors that have attracted miners to the country. The first is that the companies do not need to pay taxes but given the buzz that their power consumption has been attracting, this will definitely not last long. Other important attractions for cryptocurrency mining companies is the natural cooling available for computer servers as well as the quite competitive prices for the available renewable energy. Obviously, this soaring demand for energy is a culmination of the equally soaring cost of digital currencies and Iceland seems to be the go-to place for companies that are seeking to optimize costs or get away from oppressive laws such as the ones in China following the crackdown on mining companies and ICOs.

As mentioned earlier, mining companies being exempted from taxes does not sit well with everyone in the country. Smari McCarthy, a lawmaker for Iceland’s Pirate Party has made the first step by proposing that the profits amassed by bitcoin miners should be taxed.

“Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government,” McCarthy said. “These companies are not doing that and we might want to ask ourselves whether they should. We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation. That can’t be good.”

Why It Is Not Yet Time to Give Up on Bitcoin and Crypto

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Bitcoin and the crypto-world as a whole are in a frenzy that has undoubtedly attracted a lot of speculation as to whether they are still worth pursuing. Bitcoin’s price, for instance, has been quite elusive – the cryptocurrency has already significantly plunged in value from an initial high of over $17,000 to just about $8,000. These fluctuations have been enough to make a number of interested parties throw in the towel. Well, that is probably a wise option especially if one cannot sustain this kind of endeavor, both financially and mentally. However, if you consider the bigger picture, it is quite evident that many more factors contribute to the complex cryptocurrency ecosystem. These range from regulation, comments from prominent people and even mere talk about regulation, all of which certainly affect prices in one way or the other.

The wild ride that the bitcoin community has been taken through is undoubtedly a justifiable reason for speculation. Apparently, most of the issues that are affecting the price of bitcoin are necessary developments that are expected to make it stable in the long run. So, why do you need to hold on a little?

Fraud Is Being Stamped Out!

Naturally, cryptocurrencies were bound to attract some negative attention, particularly from some fraudulent ICOs. The numbers are rather worrying in this sense considering that about 14 to 30 percent of existing ICOs are likely to be scams. The Securities and Exchange Commission has taken notice of the ICOs too and necessary steps have been taken by the chairman to warn investors about the risks involved. This is, obviously, a good thing but it has certainly contributed to the plunge in bitcoin’s price. Still, the bigger picture here is more important – once these regulations and protections become clear, it will actually allow bitcoin and other cryptocurrencies to thrive.

Facebook Pushes the Unfriend Button on Cryptocurrencies

You have to understand this if you are going to make an informed decision regarding crypto. First, in this age where social media is a force that influences almost everything in the world, crypto-fraudsters could definitely not let the opportunity cruise by. Advertisements about cryptocurrencies are quite common on the internet and a majority of them are actually used to bait unsuspecting victims who are lured in by the prospects of getting “crypto rich”.

Credit Cards Are Not Accepted

Big banks have made it quite clear that investors should never put their big bitcoin purchases on plastic. Citing the volatility and risk involved in such endeavors it is rather obvious that bitcoin investors should never contemplate risking money that they cannot afford to lose

All these steps have also been contributing to making exchanges safer since they are at the center of all this. Bitcoin and cryptocurrencies will rise again, but before it gets stable, buckle up for the storm that awaits.

Bitcoin Tumbles Below $8,000; Is the Bubble About to Burst?

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For the first time since 2017, bitcoin dropped below $8,000 yesterday and with the drop came a lot of speculation about what the future holds for the digital currency. According to CoinDesk, bitcoin plunged to $7,695.10 but recovered to $8,618 by mid-day – the bitcoin price index on CoinDesk tracks cryptocurrency prices from digital currency exchanges itBit, Bitfinex, and Coinbase.

The general takeaway from some economists and digital currency experts is that bitcoin is likely to weather yet another downturn. They believe that bitcoin can only continue to develop if it continues to be extremely volatile.

“Bitcoin is in trouble,” wrote Lukman Otunuga, a research analyst at foreign exchange broker Forextime. “Price action suggests that bears are clearly in control, with further losses on the cards as jitters over regulation erode investor appetite further.”

Bitcoin is, however, not the only digital currency that is experiencing a rough time. To put this into perspective, cryptocurrencies collectively lost over $100 billion in the last 24 hours. The price drops abruptly changed the mood and people’s perspectives as far as cryptocurrencies are concerned – the hype and overall excitement that was characteristic of the crypto – world, especially during this holiday’s season run-up, turned into a wave of uncertainty that swept through the space like wildfire.

Likely reasons for the price plunge include tougher regulatory scrutiny and imposed measures by governments in South Korea and China amidst concerns about tax evasion, money laundering as well as heavy speculation. Facebook’s ban on cryptocurrency and initial coin offering (ICOs) ads earlier this week is also partially responsible for the price drops – the company is however not changing their stand as they say the ban was influenced by the fact that such ads are “frequently associated with misleading or deceptive promotional practices.”

Also, according to CoinDesk, Ether coins on the Ethereum blockchain sank 15% to $880, Ripple coins slid 13% to 85 cents, and Litecoin tumbled 11% to $128.

Facebook Bans Advertisements on Cryptocurrencies and ICOs

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In every sense of the phrase, the cryptocurrency world is without a doubt the 21st-century rendition of what was referred to as the Wild West. That said, it should not come as a surprise that, like the Wild West, we will definitely get treated to the good, the bad, and, of course, the ugly. However, there has been so much of the bad and the ugly going around that regulators and Facebook have become fed up.

The social media platform recently unveiled a new advertising policy that will have huge impacts on how people interact and consume content pertaining to cryptocurrencies, initial coin offering (ICOs) as well as binary options. Narrowing down to the specifics, Facebook Product Management Director Rob Leathern clarified that the new policy is a move against advertisements that promote products and services “that are frequently associated with misleading or deceptive practices.”

Advertisers will no longer be allowed to promote cryptocurrency related products and services regardless of whether they are legitimate or not. Any advertiser that violates Facebook’s new policy will not only be banned on the core app but also in all of its other ad selling platforms such as its ad network, Instagram and Audience Network which puts advertisements on third-party apps.

On the same day that Facebook announced its new policy, there was also news of United States regulatory activity that targeted cryptocurrency issuers. This included a move by the Securities and Exchange Commission to shut down an ICO that is backed by former boxer Evander Holyfield. Little is known about the future of the regulatory measures that the authorities are now implementing. Facebook, on the hand, says that the decision is not permanent and that it will revisit the rules later when it perfects its ad detection and removal algorithms.

“This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across Facebook, Instagram, and its off-platform Audience Network, “ wrote Leathern. “We will revisit this policy and how we enforce it as our signals improve.”

Tides Get Rockier for Bitcoin

The move by Facebook and regulators in the United States did a number on bitcoin’s price – its price plummeted to below $10,000 just a few weeks after it climbed to a record high of $19,000. The wider crypto market took a hit as well with almost all of the top 50 altcoins experiencing price drops of over 10 percent.

Surprisingly though, the Facebook ban has been welcomed quite well on social media, especially by detractors of the crypto craze and supporters of decentralized digital currencies who want cryptocurrencies to be portrayed in a more legitimate fashion. There have also been speculations that claim that Facebook plans to launch its own digital currency to be used on the platform. Others think it is a play that intends to censor cryptocurrencies. Either way, it is about time that such measures were put in place to tone down the chaotic nature of the crypto world.

Great Times Ahead for Luckbox.com As It Heads to Token Sale

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Luckbox is the latest Esports betting venture that is upping its game with its very own initial coin offering (ICO). Regardless of the fact that Initial Coin Offerings have always been known to be quite stormy, the chief executive officer of the Isle of Man-based startup, Lars Lien is quite confident that the company will not back down from the token issuance endeavor. Being a pro in the gambling space, and having previously worked as part of PokerStars operational team, Lien definitely has a great deal of experience and expertise that will help steer the startup out of the choppy waters of ICOs.

Initially, Lien intended to persuade the PokerStars management to let the renowned casino operator branch out and provide a dedicated Esports offering but this particular opportunity flew out the window when a new owner came along. The primary cause for the dismissal of Lien’s proposal was, however, the emergence of newer and wider developments that had huge impacts on PokerStars as a whole.

“I wanted to build an Esports platform,” Lien says. “And it just so happens that my experience means I have helped to build something unique.”

His dream came true when he joined forces with Mike Stevens, a fellow PokerStars veteran, to finally realize his goals which also included a desire to recreate something that he refers to as the “Scheinberg ethic” of business. In essence, this implies that the two poker pros platform will strive to offer better services and use practices that rise above what regular sports betting operators have to offer. According to them, the Esports betting community is a totally different demographic and thus what Luckbox offers is intended to cater specifically to that population – Luckbox is, by all means, a social experience that features a variety of goals, unlockable achievements as well as nicely implemented social interaction capabilities.

The Token Effort

Already, there are a couple of Esports-only offerings available in the mainstream market with ESP.bet and Unikrn having the largest stakes – like Luckbox, both of them also have opted for the token route as a means of attracting more players and gaining liquidity. While it is definitely a bold move for Luckbox, the decision comes at a time when the whole ICO market is undergoing some major issues. For instance, bitcoin’s vicious fluctuations have had huge ramifications on token markets especially in cases where bitcoin is the buy-in currency.

As it stands, Luckbox has already drawn a larger number of users to buy into LuckCash, its utility coin, and raised about $1.8 million in bitcoin via a private sale. During the February sale, the startup hopes to double down and raised up to a further $20 million ahead of its much-anticipated product launch by the third quarter of 2018. Luckbox tokens were designed with a variety of great features that will leave most of the existing tokens in the dust.

Roger Ver Expands His Online Gambling Site to Accept BCH

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Renowned online casino operator and die-hard cryptocurrency champion, Roger Ver has upgraded his online gambling platform to allow wagers to be made using bitcoin cash (BCH). In September last year, Bitcoin.com, which is Ver’s cryptocurrency portal launched Bitcoin Games – an online casino that used the old Segwit Bitcoin token. Owing to its success, the platform is now branching out in a bid to offer the same services to more cryptocurrency users with its newly launched BCH-powered variation that has been named Bitcoin Cash Games and will feature significantly lower prices than those of its older counterpart.

Ver expressed his confidence in Bitcoin Cash as the core reason for his decision to branch out and venture into an online casino that supported the relatively young cryptocurrency.

In his official statement, he pointed out that “the BCH network and currency has proven itself to be reliable while also offering transaction fees ($0.01 or less) they are practically non-existent.”

This is where Bitcoin Cash has managed to best its older counterpart that is currently the market leader in the cryptocurrency world. So far, the bitcoin fork has managed to hold its ground quite well and it is already making waves in the gambling industry as well as in crypto-trading spaces.

Games offered at Bitcoin Cash Games include provable fair video poker, roulette, keno, blackjack, slots, dice, and craps, all of which feature a 99 percent expected return. The platform further has a referral program that allows players to earn themselves up to 25 percent of the platform’s house edge by enlisting new players.

No registration is required for non-US players using the platform since Ver and company are rather serious about anonymity. The only reason why the US is an exception is the government’s rather paranoid regulations – however, the games are still available to US customers in the form of free-play action.

Cryptocurrency Trading Still Thriving in China Despite Ban

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Last September, China stunned the cryptocurrency community when it announced a crackdown on ICOs after which it further gave all crypto exchanges in mainland China an ultimatum that required them to wind up their operations by October – seemingly a big blow that would potentially kill the nascent Chinese blockchain and cryptocurrency industry. Chinese bitcoin trading volumes had already dropped significantly since January 2017 and prior to the announcement especially because of the exchange fees Chinese exchanges were forced to raise and the AML protocols they were forced to implement by the authorities at the beginning of 2017. Regardless, the country remained a crucial market for cryptocurrency trading, and more specifically for bitcoin.
Surprisingly, the halting of Chinese crypto-exchange operations did not get in bitcoin’s way as its price skyrocketed just a couple of months later to reach an all-time high of around $20,000. At about the same time, three of China’s largest trading platforms, Huobi, BTCC, and OKCoin, all of which were ordered to shut down their businesses in September, relocated their businesses to Hong Kong with the intent to cater to the rapidly growing demand from investors in the city.
Relocating to friendlier jurisdictions seemed to be the best option for the businesses but they were also considering a number of options that included applying for licenses in Japan and setting up over-the-counter (OTC) shops in Hong Kong.

Enter OTCs

Cryptocurrency enthusiasts in mainland China are still able to trade domestically – the only difference is that instead of relying on exchanges to route their transactions, the transactions are negotiated on recently set up over-the-counter (OTC) trading platforms such as OKEx, Huobi, and OTCBTC. As you may have noticed, these OTC operations are forked the parent companies which were previously China’s, or even the world’s, largest crypto-exchange platforms.

Is There a Catch?

Of course, there is! Chinese crypto-junkies who still want to partake in trading activities have to put up with significantly inflated prices. For instance, when compared to traditional cryptocurrency exchanges, the prices on OTC platforms are higher by 10 to 20 percent. Case in point, when bitcoin was trading at $11,730 on Coinbase, the lowest bitcoin price on the Huobi OTC platform was $13,085. However, the government regulations are culpable for the premium that Chinese investors are forced to pay as a result of the limited supply of OTC coin. Still, wittier traders have taken advantage of the arbitrage opportunity to buy cryptocurrencies at cheaper prices from foreign exchanges after which they sell them back on the domestic OTC platforms at higher prices. There are risks like price volatility and slow transaction times involved but the traders are willing to put up with this.

On the OTC platforms, cryptocurrency trading is as easy as buying goods on eBay. All a buyer needs to do is to pick a currency they want to buy and then offers from multiple sellers appear. Buyers are allowed to link their bank accounts or use mobile payment services that are available in China.