Tag: Bitcoin

John McAfee Fires Shots at the RBI over Cryptocurrency Ban

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Renowned cybersecurity pioneer John McAfee has recently called for a boycott of the Reserve Bank of India (RBI) and the financial institutions dealing with it over a recent decision by the central bank that forces banks to cease and desist from dealing with cryptocurrency traders.

The move by the RBI has created a lot of chaos and panic especially because of India’s technology ecosystem that has been riding the cryptocurrency wave for quite some time now. Most of the reactions have cited concerns pertaining to how the country’s rapid movement towards development will be hindered from here on out.

It is important to note that the ban is not an all-inclusive decree that Indian cryptocurrency investors will be in violation of the law for dealing in crypto. In fact, there are many other options that digital currency traders can users and they include crypto-to-crypto, peer-to-peer, offshore exchanges as well as international bank accounts. As such, while the decree that financial institutions should stop offering services to crypto investors is indeed a setback, it does not mean that it will be the end of all cryptocurrency trading in India.

The Indian media is culpable for the panic, fear, uncertainty, and doubt that is now rife in the country – as expected, they erroneously reported that the RBI had imposed a country-wide ban on cryptocurrency trading among investors.

McAfee Is Not Amused

On July 6, John McAfee posted an intriguing tweet that fired off at the Reserve Bank of India and urged all financial institutions to dissociate themselves with the central bank. He further warned that he would call for a boycott against the financial institutions that steal deal with the RBI.

“The Reserve Bank of India (RBI) initiated this atrocity out of fear and won through the existing centralized power structure. I’m calling for a boycott of any financial institution that does business with RBI. We must stand together and act,” read McAfee’s tweet.

In his tweet which comes in the wake of the recent verdict by the Indian Supreme Court to uphold the RBI crypto ban, McAfee spoke out against these developments. Knowing McAfee, he will remain at the forefront of these protests, at least until the ban is either lifted or a reasonable consensus is reached.

From the looks of things, there are many ways this could play out but it will all depend on how both sides of the divide will play their cards. Recent reports revealed that prior to the ban, the RBI did not carefully and explicitly review the pro and cons of cryptocurrencies in the country. Already, the central bank’s officials have begun reviewing a draft that focuses on cryptocurrencies and associated regulations that would be required to ensure its survival. The said draft was prepared by the Secretary of the Department of Economic Affairs, Subhash Chandra Garg. Maybe there is still hope for crypto in India after all.

Indian Supreme Court Upholds RBI’s Cryptocurrency Ban

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On April 5, India’ central bank, the Reserve Bank of India (RBI) issued a circular that was addressed to all regulated financial institutions including banks prohibiting them from offering their services to crypto-related business. The policy further mandated the financial institutions to stop allowing their own retail clients from purchasing cryptocurrencies through their banking accounts. A three-month deadline was set for the policy and therefore the ban should effectively take effect as from Thursday, July 5.

As expected, the move by the RBI to ban cryptocurrencies has caused quite a stir across India’s nascent but rapidly growing cryptocurrency community with a number of crypto exchanges opting to take up the issue through the courts. The Supreme Court just happens to be one of the many courts where petitions challenging the ban were filed – most of the petitions cited the RBI’s policies as being “arbitrary, unfair and unconstitutional.”

The move was led by the Internet and Mobile Association of India which counts cryptocurrency exchanges as its members. The organization fast-tracked the legal challenge against the RBI ban and they finally got to be heard on the morning of June 3.

Unfortunately, the Indian Supreme Court led by Chief Justice Dipak Misra chose to side with the arguments of the RBI and therefore the cryptocurrency ban is still in effect and so is the July 5 deadline.

“This a win for the RBI and a big blow to virtual currency exchanges and traders. In our earlier request to the RBI as well, we had asked it to extend the deadline by a month after the July 20 hearing. However, now that the ban will continue, the banking route for the exchanges and its users will be completely choked,” said Rashmi Deshpande, an associate from legal firm Khaitan & Co who are involved in the petition.

Is This the End for Crypto Exchanges in India?

If you have been following the crypto industry in India, you may have noticed that it is quite likely that this might truly be the end of cryptocurrency exchanges in the country. There is all talk of total control of crypto being eventually handed to the RBI, something that, if goes through, will lead to the digital currencies being declared as completely illegal assets.

Furthermore, some top government officials have hinted at a number of regulatory or legal developments that are currently in the works and have the potential of turning everything around.

“We have prepared a draft (on virtual currencies) that entails what parts of this businesses should be banned and what should be preserved. This should be discussed by the first week of July and we should wrap this up within in the first fortnight of July,” Subnash Chandra Garg, the Secretary of the Department of Economic Affairs said.

While we cannot be certain about what the future truly holds for crypto, the Supreme Court’s decision is most certainly bad news for the Indian crypto market especially considering how deep-rooted blockchain technology is in India.

Facebook Reverses Ban on Crypto Ads for Approved Vendors

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Barely six months after a somewhat successful attempt at banning the proliferation of deceptive cryptocurrency advertising on the popular social media platform, Facebook has decided to lift some of these restrictions. The ban on cryptocurrency adverts by Facebook come officially on January 30 as part of a customer protection initiative that was meant specifically to keep naïve users of the platform from falling victim to crypto-related scams that have been rife in the online space.

 “We’ve created a new policy that prohibits ads that promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings, and cryptocurrency,” Facebook’s Product Management Director, Rob Leathern said at the time.

In the wake of Facebook’s crypto ad ban, other leading tech companies and advertisers such as Twitter, Google and Snapchat also joined in and implemented their own bans on cryptocurrency ads while citing the same reasons that Facebook did.

Did It Work?

Unfortunately, the ban did not turn out to be as effective as Facebook had hoped – crafty cryptocurrency advertisers were still able to sneak their promotions onto the social media platform by modifying or changing the spellings of common crypto-related keywords. However, it is worth mentioning that the ban did indeed see to a significant reduction in the number of crypto ads.

Unfortunately, again, while the ban helped in barring con artists from advertising, it also barred legitimate cryptocurrency business like Gemini and Coinbase from advertising their products. This is perhaps the main reason why Facebook has moved to loosen their restriction on cryptocurrency adverts albeit with a few conditions.

The Terms

In an official blog post on Tuesday, June 19, Facebook’s Rob Leather once again made the announcement that the social media platform has loosened the restriction they laid out earlier this year in January but they have also included measures to ensure the allowed ads are from legitimate crypto businesses.

“In the last few months, we’ve looked at the best way to refine this policy — to allow some ads while also working to ensure that they’re safe. So starting June 26, we’ll be updating our policy to allow ads that promote cryptocurrency and related content from pre-approved advertisers. But we’ll continue to prohibit ads that promote binary options and initial coin offerings,” the blog post reads.

Even though Facebook argues that it has loosened the ban to allow legitimate cryptocurrency business to keep advertising their services, there has been speculation stemming from rumors that the social media behemoth has been developing its own blockchain and could eventually launch its own digital currency.

In a way, this was confirmed by an announcement from Mark Zuckerberg which followed shortly after and stated that the company was looking into digital assets and the decentralized technologies behind them as a potential fix for some of Facebook’s problems.

Chinese Bitcoin Miner Manufacturer Seeking to Go Public

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Bitcoin recently slumped below $6,000 reaching its lowest value in a little over eight months. This has sparked a number of reactions as investors and other members of the digital coin’s community debate over allegations of price manipulation.

Bitcoin’s woes do not stop there though. The Chinese government also recently issued a blanket ban on cryptocurrency trading followed by a restriction on bitcoin miners. Is this enough to stop bitcoin’s rise?

Well, amid all the talk of bitcoin’s price drops, the blanket ban, and theories of its ultimate downfall, Ebang Communication, one of China’s largest bitcoin mining chip makers, has opted to ignore all the buzz as it seeks to go public on the Hong Kong Stock Exchange (HKEX). According to a Reuters report, EBang Communications filed an application for an initial public offering (IPO) with the HKEX on June 25. However, the application is still a draft and thus the valuation of the Zheijang-based company is still definitively clear.

Even so, the application itself confirms a May report that claimed the company was working with advisors on Hong Kong float and aimed at raising as much as $1 billion to fund its growth. The filing also includes a financial statement that state that Ebang Communications earned 925 million yuan ($45 million) in revenue last year – 2017 was indeed a great year for the company as the revenue was nearly eighteen times as much as what they got in 2016.

In addition to the revenue statistics, the filing further suggested that the proportion of the bitcoin miner manufacturer’s revenue was generated solely from the sale of the bitcoin miners has also gone up significantly year-on-year. To put this into perspective, the revenue generated from the sale of bitcoin miners rose from 31 percent in 2015 to 42 percent in 2016 and then to a staggering 94.6 percent in 2017.

Founded in 2010, Ebang Communications kicked off its operations as a manufacturer of hardware products for the telecommunication industry. The company opted to enter the cryptocurrency mining in 2016 when they launched the Ebit miners, a product that was intended to compete directly with two other Chinese bitcoin mining market leaders, Cannan Creative and Bitmain.

The company’s IPO application also came with some exciting news for bitcoin miners. As it turns out, Ebang is on the verge of releasing its next generation of bitcoin miners that will be equipped with the latest 7nm semiconductor chips. These next-generation 7nm chip have been in development since 2017 and were just recently launched by GMO, a Japanese tech conglomerate.

Reserve Bank of India Reveals Its Crypto-Ban Was Uninformed

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The Reserve Banks of India (RBI), India’s central bank, has been warning the citizens of India against the dangers of investing in crypto since 2013. The central bank followed through with two more major warnings in 2017 before it finally came down hard on the cryptocurrency industry earlier this year.

An April 5 this year, the RBI issued a somewhat controversial decree that required all regulated financial institutions to quit providing services to business dealing in cryptocurrencies – this was accompanied by a three-month compliance deadline. According to the bank, the move was primarily motivated by the need to protect consumers and prevent money laundering. At the same time, the RBI also announced that it would be forming a workgroup that would be tasked with the study of the feasibility of issuing a state-backed cryptocurrency.

As expected, not everyone agreed with the RBI and its decision especially because of the concern that the bank did not conduct proper research prior to issuing the decree. This concern was confirmed this week when the RBI revealed that had made no serious efforts to effectively and explicitly study and understand various aspects of cryptocurrencies before issuing the ban. Furthermore, the bank did not form an internal committee to investigate the purported risks that it associated with cryptocurrencies.

“The RBI specifically mentions that it conducted no research or consultation before the implementation of restriction in April. The RBI also responded that no committee was ever formed for analyzing the concept of blockchain before the decision,” said Sethi, a lawyer and founder of blockchainlawyer.in.

The most affected parties, in this case, were the Indian cryptocurrency exchanges and individual traders, most of whom believe that even though they are opposed to it, they actually did expect something like that to come up. It is becoming more common for governments to make spontaneous decisions on crypto without studying it first. For instance, Japan and Russia have tried to ban crypto but have been forced to soften their stances on the issue owing to the backlash, and India is certainly headed in the same direction.

What Next?

Multiple lawsuits were filed against the RBI and some of them are already taking root into how the future of crypto in the country will play out.

“This RBI response has cemented our case ahead of the hearing in SC. The grounds on which our writ petition has been filed is that the RBI has not done enough research to ban a business completely,” Rashmi Deshpande, one of the lawyers fighting out the case in India’s Supreme Court told local news outlet.

According to June 13 report by the Economic Times, the RBI has already softened its position and therefore going to lift sanctions and the ban on crypto thus allowing trading once again. Some other reports have conflicting information but one thing that is clear is that there is a lot of effort being made toward making sure the decision is reversed.

“The foremost reason we are fighting is because we know that banning is next to impossible and it will make things worse for everyone – for the Reserve Bank, for the government, for the tax department, and for the user. In addition, it will push India back in reference to blockchain adoption across the world. We always have an option to relocate to other countries to carry our business, but that’s not the solution. If we cannot convince our own government, we cannot expect other governments to support us,” says Kunal Barchha, one of the founders of Coinrecoil.

Scotland Hospital Opens Rehab Center for ‘Crypto Addicts’

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We have all witnessed, or at least heard of, cases of various forms of addiction right from the infamous drug addiction to alcohol addiction and even problem gambling. In essence, one can get addicted to almost anything, and perhaps we have always overlooked the fact that even crypto falls into the broad spectrum of these addiction hazards.

While the rest of the world – most of it, that is – has been indulging the blissful pursuit of a crypto future, a hospital in Scotland has decided that it is about time that the issue of ‘cryptocurrency addiction’ (yes, it is a thing) is taken seriously. Castle Craig Hospital, the largest addiction treatment facility in Scotland, has recently established a residential treatment course to help ‘crypto addicts’ recover from obsessive cryptocurrency trading and get back to normal life.

The launch of the crypto rehab center was mostly influenced by requests by people asking the hospital to treat problems related to cryptocurrency. Clearly, this is starting to get out of hand and thus it needs to be addressed as quickly as possible.

Are You a Cryptocurrency Addict?

Are you among those people who have their eyes fixed on Coinmarketcap all day long waiting for the right moment to buy or sell cryptocurrencies? Do you have trading accounts on a bizarrely large number of crypto exchanges? Are you spending large amounts of money crypto? Do you keep trading even after losing money hoping to gain it back?  Do you scoff at people who do not know what HODL, bull, bear, whale, ATH, FUD, and FOMO mean?

If your answer to most of these questions is yes then I am sorry to tell you that you definitely have a problem, at least according to behavioral scientists. There is currently no mention of cryptocurrency addiction on scientific literature but the experts have noted that the trading in crypto can become a behavioral addiction just like problem gambling.

“The high risk, fluctuating cryptocurrency market appeals to the problem gambler,” says Chris Burn, a gambling therapist at Castle Craig Hospital. “It provides excitement and an escape from reality. Bitcoin, for example, has been heavily traded and huge gains and losses were made. It’s a classic bubble situation.”

Some Agree, Some Do Not

Since there was no literature to study, the only source of information was the cryptocurrency trading community itself. Niko da Costa Gomez, a frequent crypto trader who has been making more profits than losses in his crypto investments, says that the idea of cryptocurrency addiction is not one that he would subscribe to. He does not “think anyone is really addicted to trading cryptocurrency unless they are very rich.”

Manav Singhal, the chief executive of Velix.ID, a blockchain startup, is also unconvinced that cryptocurrency is a valid issue. In fact, the CEO is one of those traders who keep trading even though he has been making continuous losses.

“I think profits and losses are just a part of the trading, and it is no different than trading any other kinds of securities,” goes his rather philosophical answer. “Gambling addicts are just that — gambling addicts. They can choose any addiction they want, and it can be cryptocurrencies, but that doesn’t mean that a majority of cryptocurrency traders are addicts. There’re many reasons that make you trade cryptocurrencies frequently, given how fast things are changing in the industry. I am not signing up for any rehabilitation any time soon.”

These sentiments are shared by most, if not all, cryptocurrency traders and this points to one very prominent issue in any addiction – no one admits the problem in the first place.

 Bitcoin’s Lightning Network Could Soon Receive Major Update

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The Lightning Network is perhaps one of the biggest advancements in the Bitcoin ecosystem. As we have witnessed over the past few months, the network has facilitated thousands of new payment channels which points to the fact that it is indeed a significant step forward towards the mass adoption and mainstream use of cryptocurrencies.

A couple of months ago, the Lightning Network did not seem to be as promising as it is now – only 89 channels existed as of January 19th. This, to some people, was an indication of the unfeasibility if the scaling solution while a few others considered it be the lack of adoption due to the unfinished state of the technology at the time. However, as of May 24, the number of channels in the Lightning Network had grown to over 6,600 direct connections. Though in comparison to the mainstream financial sector this is rather small, it certainly proves that there is genuine interest in the initiative.

Even though the lightning network is just beginning to make waves in the bitcoin ecosystem, its developers are already planning to re-architect the technology. But why? Well, while the network has been touted as a significant boost to bitcoin’s capacity, it requires its users to store a significant amount of data that makes it rather difficult to download and run. To solve this problem, the lightning developers, including ‘Lightning Labs co-founder ‘Laolu’ Osuntokun and Blockstream’s Christian Decker and Rusty Russell, have recently published a new proposal which imagines a simplified alternative way of making off-chain transactions – this will be known as eltoo.

The new proposal is also intended not only to condense the amount of data that the network’s users are required to store but to also keep the users’ digital currencies safe – all the data that is currently stored poses a series problem, in that, in case a user accidentally broadcasts older data, they might end up losing money.

Eltoo, the proposed upgrade, on the other hand, only stores the most recent off-chain transaction data. This solves the well-known “information asymmetry” problem. Decker has been very keen on pursuing the project since he has been affected by the problem himself.

“This actually happened to me,” he said. “I had an old lightning node on my laptop. I restored it. I didn’t know I didn’t have the newest state. The guy closed the connection because they knew it was an old state! Because he could steal it. Which he did, by the way.”

“With eltoo, we reduce the risk of funds being swept away. We remove this toxic information,” he added.

He also pointed out that the proposal’s name is a joke of sorts – ‘eltoo’ is the phonetic spelling of “L2” that stands for “layer-two”, which is what people call technologies like the Lighting Network which take transactions off-chain.

Alibaba to Venture into Blockchain, Not Bitcoin

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According to Alibaba founder, Jack Ma, blockchain technology is not a bubble, but bitcoin is. Speaking at the 2nd World Intelligence Conference in Tianjin on Wednesday, May 16, the leader of the Chinese e-commerce giant said that he has been researching blockchain for years and as a result, he strongly believes that the technology has the potential to address issues of data privacy and security in a vast number of different fields.

The company’s interest in blockchain technology does not come as surprise especially due to its prioritization of security. Jack Ma’s stance on bitcoin albeit understandable is rather surprising especially because it would offer a fresh approach to the company’s trading volume that sums up to trillions of transactions. Ma, however, clarified that he thought that the emerging blockchain technology was being overlooked in favor of bitcoin by speculators who view the decentralized digital currency as a “huge gold mine.” Again, understandable.

“Honestly, I know very little about it, and I am totally confused: and even if it works, the whole international rules and laws on trade on finance is going to completely change. I don’t think we are ready for that. So I think I’m focusing on the Alipay and focused on RMB, U.S. Dollars and Euros, and that’s fair … We have a team specifically to study that and also we have a team blockchain technology. We’ve spent a lot of efforts on blockchain technology at Alibaba, but Bitcoin, I say not for me. I don’t know,” Ma said during the conference. “But now that the blockchain is hot, there are people buying and selling blockchains … There is no bubble for blockchain, but there’s a bitcoin bubble … Personally, I’m quite bullish about blockchain.”

Alibaba seems to be quite serious about investing in blockchain technology – last year, for instance, the New York-listed Alibaba ranked first in the world for blockchain patent applications as revealed by data compiled by IPRdaily. Alibaba had 43 published blockchain patent applications in 2017. Blockchain has been lauded by a number of businessmen and if anything is to go by it should be a clear indication of the direction it will eventually take.

Huawei Phones to Offer Easier Access to Bitcoin Wallets

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Even though Chinese authorities have been cracking down on crypto trading platforms and Initial coin Offerings (ICOs), owning cryptocurrencies in the country has not been outlawed. Now according to a report by Bloomberg, Huawei, which is arguably one of the largest telecommunication manufacturers in the world, is enabling easier access to Bitcoin for its users.

The Chinese telecommunication firm and renowned smartphone maker has partnered with BTC.com to roll out a bitcoin wallet for the tech giant’s proprietary app store, AppGallery. The BTC.com wallet will be the first of its kind to be offered in the Shenzen-based tech firm’s app store and will be pre-installed on all new Huawei and Honor phones – older phones will not be left out and will thus have the app rolled out to them in coming months as confirmed by BTC.com’s vice president of business operations Alejandro de la Torre.

“New users can access Bitcoin and Bitcoin Cash in a simple, secure and trusted environment. China is almost a ‘cashless economy’ today, accounting for almost 62% of all global mobile transactions. This dwarfs the estimated $49.3 billion in total mobile payment transactions in the United States in 2017, which highlights the amazing opportunity cryptocurrencies have in replacing fiat currency as the currency of choice for mobile payments. Huawei is leading the way in terms of adoption of blockchain technologies, and we’re excited to bring BTC.com to Huawei’s user base for the first time,” de la Torre said.

As it stands, the greatest impact of this new venture by both BTC.com and Huawei will be felt on the Chinese mobile phone market which Huawei own a huge chunk of. Furthermore, China has been a hotbed for cryptocurrencies despite the government’s aggressive stance trading in them and Initial Coin Offerings. As part of these control measures, the Chinese government has blocked Android’s Google Play Store and certain sections of Apple’s iTunes in order to limit access to such services as BTC.com. Still, as mentioned earlier, owning cryptocurrencies is not illegal in China and therefore Huawei and BTC.com can get away with this clever workaround.

“It’s a good opportunity to tap into the Chinese market. The use of cashless payments with apps is very big and the traditional banking system is lacking, so there’s a good use case for crypto payments to grow there,” de la Torre added.

Huawei’s move came as little less of a surprise particularly because of the company’s recent beefed up efforts towards the development of a blockchain.

“Cryptocurrencies have recently expanded the human understanding of digital economy at a large scale. From our leadership position in China, the tip of the spear of mobile payments, we expect to see massive growth in global cryptocurrency adoption habits in the near future,” said Dr. Jaime Gonzalo, vice president of Huawei Mobile Services.

Bitcoin Trading Is Coming to Goldman Sachs

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Bitcoin and other decentralized digital currencies seem to be back on track on the road towards to mainstream adoption thanks to recent developments such as the plans by Reddit to reinstate bitcoin as a payment option – more cryptocurrencies will be accompanying bitcoin when it returns as a mode of payment on Reddit. But that is not all. Now, Wall Street giant Goldman Sachs is taking the next leap into the crypto space according to a May 2 report from the New York Times.

The investment bank will soon begin trading bitcoin futures for its clients while at the same time offering its so-called non-deliverable forwards which is a derivative product that the bank will be bringing to cryptocurrency users. The non-deliverable forward will involve trading of bitcoin without physical exchange of the underlying asset. Instead, it will involve the exchange of the currency it is quoted on the settlement date for the forward.

Since most of the leading financial institutions have tried as much as possible to distance themselves from bitcoin and most, if not all, other cryptocurrencies, the move by Goldman Sachs is very likely to lend some legitimacy to digital currencies. Still, it will certainly spawn a number of new concerns for the investment bank as it is about to begin using its own money to trade with clients in a range of contracts all linked to bitcoin’s price. Thanks to this, the bank is still quite guarded.

While there has been both internal and external skepticism, there is nearly an equal measure of support for the bank’s initiative. Mathew Newton, an analyst at eToro, a cryptocurrency retailer believes that considering the way things have been in the crypto world in the past 18 months, the move by financial institutions to join in should not come as a surprise. According to the analyst, any forward-looking financial institution must endeavor to not only understand the technology behind cryptocurrencies but also acknowledge its huge potential.

“Despite some initial posturing, the reality is most big banks have already invested significant amounts in research and development into blockchain technology, and cryptocurrencies themselves. It will still take time for institutional investors to fully come around – and the fact that Goldman won’t be buying or selling actual coins suggest some skepticism remains – but there’s a growing acceptance that these assets are here to stay,” Newton said.

Goldman Sachs is likely to begin directly trading cryptocurrency once there is more regulatory certainty surrounding bitcoin and other decentralized digital currencies.