Tag: Cryptocurrency

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.

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.

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.

Why Businesses Should Still Climb On-Board the Bitcoin Train

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Apparently, the world has gone cold on bitcoin ever since its meteoric rise in 2017 but all this has been subject to a lot of debate which makes arriving at a definite answer quite difficult. Considering the rising popularity of altcoins like Ripple’s XRP token and Ethereum, both of which have been trading at feverish rates, it may seem as if bitcoin is no longer the world’s most dominant digital currency. Well, not everyone is of a similar opinion and despite the hit that bitcoin might have taken in recent weeks, cryptocurrency experts have faith that it will eventually bounce back – Tom Lee, one of the crypto experts, believes that bitcoin could potentially double its price by the end of the year. In a CNBC interview, Lee pointed out that bitcoin’s recent price drop is nothing more than a “healthy consolidation” and that by the summer it would be trading at $20,000.

There will always be predictions and speculations emanating from both sides of the crypto divide but it is undeniable that bitcoin has etched out a spot as an established spending tool for very many people.

Bitcoin might have been around for a little less than a decade but this is an incredibly long time in “cryptocurrency time” – it is the oldest cryptocurrency and this means that it will always serve as a benchmark for its successors. However, it is not going away, at least not anytime soon. As such, businesses looking to appeal to the next generation of consumers should lean towards cryptocurrencies, more specifically bitcoin.

UK’s Bitcoin Spending

The United Kingdom seems to have been a trendsetter because it was already gearing up for crypto-powered spending long before bitcoin’s price boom last year. A 2015 Mining Pool study revealed that over 80 percent of Brit bitcoin owners felt that there were not enough places to spend the cryptocurrency at the time.

Also, while typical cryptocurrency traders and users are known to save their coins instead of spending them, Brits have always portrayed a willingness to spend theirs. As illustrated by these habits, bitcoin has evidently breached the mainstream market which implies that a business that invests in it would be making a very wise move.

Effectively targeting and appealing to bitcoin users both in the UK and the rest of the world means that the product has to be in line with market values as well as the underlying ethos. Practically speaking, it is also crucial that the product prices are set in accordance with the latest bitcoin value. The success of the business depends upon the way it will stay up to date with daily bitcoin charts that effectively keeps up with bitcoin’s insane market fluctuations and developing trends. Businesses can then use this information to tailor their prices to offer more attractive deals to their customers or at least an equivalent pricing deal.

One other area that business could take advantage of is the decentralization and anonymity features that all cryptocurrencies offer. Well, of course, total anonymity is still a long shot, but finding ways to reduce the amount of personal data required to make transactions would be very helpful for both the business and the customers. Since the bitcoin ecosystem already has these in place implementing it should not be that hard, should it?

A Review of Bitcoin’s and Crypto’s Rather Strange Week

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This week has been a pretty dull one for bitcoin especially with the dramatic price drops that unearthed some doubt about the hype that cryptocurrencies had created towards the end of 2017. It eventually recovered, but by doing so, it only reminded the world of how unpredictable decentralized digital currencies are. Furthermore, there have been reports that regulators are planning to toughen the market – this along with the reported evocations of the Great Depression in many ways made the week even more turbulent than expected.

Perhaps one of the biggest reasons for bitcoin’s price drop is the possibility of cryptocurrency trading being outlawed in some countries from various parts of the globe. One of the countries whose government has been hinting at such a move is South Korea. Earlier this week, Park Sang-ki, South Korea’s justice minister said that the country’s government had rather “great concerns” pertaining to digital currencies and was therefore “basically preparing a bill to ban cryptocurrency trading through exchanges”, especially because they think that crypto will make tax evasion easier.

While South Korea has since been seen to have softened its stance on the matter after a spokesperson of the Presidential Office said the possibility of a ban on crypto exchanges was simply “one of the measures prepared by the Ministry of Justice, but … not a measure that has been finalized”, investors are still panicking over the confusion caused by the uncertainty of how exactly the country intends to crack down on crypto.

There is a good reason for investor panic since even if the total ban on crypto exchanges does not come to pass, South Korea can still impose new regulations that could hugely impact the market – like bans on anonymous crypto trading accounts and underage investors, for instance. In a similar scenario, last September, the Chinese government shut down domestic changes and according to more recent reports, there are even going an extra mile to cut off access to all online crypto platforms and services operating from within or outside its borders.

Even Europe is Bursting Bitcoin’s Bubble

Financial watchdogs in Europe have begun to tighten the screws on cryptocurrencies as well in a bid to ease up the pressure of the price boom that is considered by many European economists to be nothing more than a bubble. Europe’s financial regulators watched cautiously as the price of bitcoin soared to nearly $20,000 last year. In the process, other cryptocurrencies also received a much-needed boost.

However, Europeans have hopped off of the back seat and they are now joining other policymakers from various parts of the globe in warning investors of the possibility that the crypto bubble could pop. French and German politicians, for instance, recently revealed plans to present a joint proposal that calls for the regulation of cryptocurrencies at March’s G20 summit.

Former PokerStars Duo Launch Esports Betting Platform

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Lars Lien and Mike Stevens who are both former PokerStars ambassadors recently joined forces to launch a crypto-based Esports betting platform. The platform which is due to go live any time this year is going to be a Bitcoin-based startup where punters will be allowed to wager on professional Esports events. Furthermore, the platform that has been dubbed Luckbox.com, will allow users to make deposits using both in-game items and various cryptocurrencies, something that both Lien and Stevens believe will go a long way in opening up markets that are currently experiencing restrictions as far as payment services are concerned.

While a global roll-out is the ultimate goal of this endeavor, Lien and Stevens are hoping to obtain a license in the Isle of Man for the platform before they begin preparing to extend to other parts of the world. Soon, Luckbox.com will be launching an Initial Coin Offering (ICO) and the platform is already being aggressively marketed in various parts of the world including Africa. As of now, the two have raised 483.5 Bitcoin form strategic contributors and the ICO they are planning is intended to generate the remaining finances that they require to launch.

The Initial Coin Offering will revolve around the sale of a utility token that will be used on Luckbox.com and also traded by accredited investors to hold a ‘profit share’ token that will entitle the holder to about 20% of the company’s annual net income.

Luckbox.com will be issuing two tokens to its users once it goes live. The first is LuckCash which is a utility token for the platform and the second is LuckProfits which, like we mentioned earlier, gives the holder contractual rights to a share of the company’s net profits.

Lien and Stevens are among many other entrepreneurs who have seen the huge potential in emerging markets such as Esports. There is generally a whole lot to look forward to in this regard, that is, the development of smart contracts will lower transaction costs, and dispel the dependency on traditional bank accounts.

Mining Fees Surge as China Intensifies Crackdown on Bitcoin

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This week, the Chinese government intensified its efforts to stop bitcoin mining by calling for all the task forces to “actively guide” in the closure of bitcoin mining operations. According to a Wall Street Journal report, the notice by Chinese authorities called for an “orderly exit with no specific deadline. The report further stated that the reason for the intensification of China’s efforts against bitcoin mining was because it “consumes a large amount of electricity and also encourages a spirit of speculation in virtual currencies.” On the same note, the Chinese authorities believe that bitcoin mining is among a host of activities that are not particularly in line with the needs of the real economy.

Chinese government officials have been asked to wield a policy ax on bitcoin which implies that they will be required to cite or promulgate regulations to limit aspects of bitcoin mining such as land use, electricity consumption, environmental regulation and tax collection.

The Role of China in the World of Bitcoin

To put the importance of China in the bitcoin ecosystem into perspective, we can take a look at the last month of 2017 when China accounted for 80% of all the bitcoins mined in the world. These impressive percentages are mostly attributed to the numerous advantages that the country offers to bitcoin manners including cheap electricity as well as centralized mining operations, both of which are key sustainers of the price of bitcoin.

Will Global Bitcoin Mining Operations Take a Hit?

Regardless of all the perks of operating within China, bitcoin mining operations will not have a lot of trouble once the crackdown begins.

In fact, a number of renowned bitcoin mining operations have already exited China and moved to other areas that offer nearly the same advantages that China offered.  A great example is Bitmain, which is considered to be the largest bitcoin mining pool in the world, that recently set up shop in Inner Mongolia.

Some other mining operations are moving to cooler climes and according to numerous reports, Canada seems to be one of the locations that will benefit from the migration of mining operations. Meanwhile, since the Chinese government did not issue any strict deadline pertaining to the “orderly exit,” the price of bitcoin will not experience any radical volatility.

Zuckerberg: Cryptocurrency Could Come to Facebook in Future

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Facebook founder, chairman, and CEO Mark Zuckerberg has posted his annual challenge – this is usually a review of major events of the previous year and an appraisal of what’s to come. This year, Zuckerberg ended the post with something that will be very exciting to members of the cryptocurrency world that also happen to be Facebook users. In 2018, Facebook could be venturing into blockchain in a bid to “take power from centralized systems” by innovatively utilizing the underlying resources that included encryption and cryptocurrency.

In Zuckerberg’s Thursday posting, he reaffirmed the company’s commitment towards correcting persistent problems that have been dogged the popular social network with the most daunting being misinformation, fake news and hate speech.

Could Crypto Solve These Problems?

“There are important counter-trends to this — encryption and cryptocurrency — that take power from centralized systems and put it back into people’s hands,” Zuckerberg wrote. “But they come with the risk of being harder to control. I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

Evidently, Zuckerberg’s endeavor seems to point to a debate that has raged on for a while now, that is, centralization versus decentralization. He pointed out that he and most of his tech counterparts got into technology because they believed it would be a decentralizing force which would give the people more power. However, the people themselves have lost faith in tech companies especially because of reports of tech-based companies that are co-conspirators with authorities who gather large amounts of personal information.

The Facebook CEO acknowledged this problem in his post and he believes that encryption and cryptocurrency have the potential to take back power from centralized systems and give it to the people. While it is not clear what exactly Facebook intends to do with the technology, its entry into the crypto world will be very dramatic. Numerous tech gurus have suggested that crypto and blockchain could have a revolutionary impact that will surpass its current utilization in decentralized digital currencies. For instance, it would be very useful as a decentralized data store that will free information from the influence of companies such as Facebook itself.

As far as we can tell, Facebook is very serious about this venture. The company’s vice president of messaging products, David Marcus, also recently joined the Coinbase.Inc. board late last year. The Facebook executive has been a follower of cryptocurrencies since 2012 and he was very impressed by how Coinbase started to democratize access the new asset class. The prospects of what is come are clearly very promising.

Alaskan Schoolgirl’s Bitcoin Project to Pay for Her College

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Bitcoin has earned a reputation for being what the current generation calls a digital gold mine. However, as much as this claim may be true, it is quite clear that the early adopters of bitcoin stand to benefit most from it. Regardless, it is not too late to get into the trade – this is where relevant and accurate educational efforts come in. Already governments in countries like Thailand have seen the inevitability of bitcoin’s growth in popularity and they are taking steps to provide citizens with correct information regarding the decentralized digital currency that has taken the world by storm.

In 2014, as part of a class project, an Alaskan schoolgirl distributed 30 papers wallets containing bitcoin to her classmates – something that at the time just seemed to be an attempt at wowing her classmates with the wonders of bitcoin. The girl reaped more than just an excellent grade from the science fair project as she also pocketed 3.5 BTC which is currently equivalent to a neat sum of dollar bills.

With the help of her pro-bitcoin parents and some bitcoin donated by members of r/bitcoin, she drew up an information stand that had information about what bitcoin is, how it works as well as how it can be used. This earned her the first place prize at the Interior Alaska Science Fair. As of 2014, bitcoin was equivalent to about $850 which therefore implies that the kids who were smart enough to retain their wallets are now thousands of dollars richer.

The girl’s mother is very proud and regularly provides updates on her daughter’s legacy with the latest one saying: “Little Alaska group of crypto kids talking about decentralized banking, forks, and the current issues with bitcoin now when they hang out. All from this little science project in 2014.”

Bitcoin education is becoming rather important – as important as teaching young people about money and allowing them to develop a sense of financial freedom. The story here may seem like a fairy tale especially because of the high price value of bitcoin at the moment but it is always important to incentivize the next generation to develop an interest in cryptocurrency. It is, after all, the future of currency.