Hodler’s Digest, June 18-24: Square Receives the Illusive BitLicense, Bithumb Hacked in this Week of Crypto Ups and Downs

Crypto markets are inching their way back up this week, despite the $30 mln Bithumb hack and the Bank of International Settlements dismissing Bitcoin’s value

Top Stories This Week

Leading South Korean Crypto Exchange Bithumb Hacked For $30 Mln In Crypto

Bithumb, which has fallen from 6th to 10th place for cryptocurrency exchanges worldwide by trading volume, has had about $30 million worth of cryptocurrencies stolen in an apparent hack. Bithumb has temporarily suspended all deposits and payments, noting that they are moving all assets to a cold wallet and will compensate victims of the hack. The Korean Ministry has since launched a probe into the causes of the Bithumb hack, and Bithumb has promised to reimburse all users.

Mt. Gox Trustees End Bitcoin Sell Offs, Enter Civil Rehabilitation Proceedings

The now-defunct Bitcoin exchange Mt. Gox has now officially entered civil rehabilitation proceedings. As part of the civil rehabilitation, the bankruptcy proceedings have been halted, with the main trustee now ending any further selling of Bitcoins as victims will receive their compensation in BTC rather than fiat

Future Presidential Candidate John McAfee to Stop ICO Twitter Promotion

Crypto enthusiast John McAfee of McAfee Anti-Virus Software and the McAfee Redemption Token will no longer be promoting or working with ICOs due to “threats” from the U.S. Securities and Exchange Commission. The future crypto-friendly presidential candidate had reported earlier this year that he charged $105,000 per tweet, so this announcement could mark a significant loss of income. The SEC has declined to comment on McAfee’s claims.

Goldman Sachs CEO Thinks Crypto Adoption Could Mirror That of Paper Fiat

Lloyd Blankfein, the CEO of Goldman Sachs, said in an interview that the adoption of cryptocurrencies like Bitcoin could occur similarly to how the adoption of paper money replaced gold and silver coins. According to Blankfein, paper money and crypto are alike in that neither has intrinsic value. In other Goldman Sachs news this week, the bank group’s COO revealed that they are looking into crypto trading derivatives.

New Stablecoin Project Closes $5 Mln Seed Round Backed By Peter Thiel, Coinbase

The developmental-stage stablecoin, “Reserve,” closed their intentionally small seed round this week for a crypto asset that would lock up other crypto assets in a smart contract to provide the backing and stabilization the Reserve token. The project, backed by Peter Thiel, Coinbase, Distributed Global, GSR.IO, and 40 hours, differentiates itself from other stablecoins by using crypto assets outside ecosystem to maintain a peg.

Most Memorable Quotations

“Due to SEC threats, I am no longer working with ICOs nor am I recommending them, and those doing ICOs can all look forward to arrest. It is unjust but it is reality,” — crypto enthusiast John McAfee, who had charged $105,000 per promotional crypto tweet

“If you think about it, Bitcoin investors — people like myself, and possibly you and others, who invest in Bitcoin — what we’re really doing is we’re saying, “Let me put $1000 into this Bitcoin machine, and I will send it to my future 10 years later,” — Bobby Lee, co-founder of Chinese crypto exchange BTCC and board member at the Bitcoin Foundation

“I’ve been in this space for seven to eight years now and I’ve seen bear markets last three to four years now. So, this one could be a three to four year market or it could recover tomorrow,” — Charlie Lee, founder of Litecoin

Laws And Taxes

US Federal Employees Must Report Crypto Holdings Under New Ethics Guidelines

U.S. federal employees will have to report their cryptocurrencies holdings if they equal more than $1,000 or made more than $200 during the reporting period, according to new guidelines from the Office of Government Ethics. These rules will apply to about 2 million employees from the Department of Homeland Security, the Justice Department, Veterans Affairs, and the Army. However, the notice does state that crypto is not a “real currency” or “legal tender,” and will be treated as “other forms of securities.”

Uruguay Created Fintech Committee To Develop Crypto Regulatory Guidelines

The Uruguayan Chamber of Fintech has announced the creation of a special committee to develop a framework for crypto regulation and promote innovation to support the country’s financial system. The fintech chamber is inviting organizations, entrepreneurs, and government officials to collaborate on creating cryptocurrency standards.

Adoption

Square Receives NYC BitLicense, Cash App Opens BTC Trading To NYC Users

Financial services provider Square has received the New York BitLicense, opening up the Bitcoin trading option for New York-based users of its Cash App. The announcement means that Cash App users in every state except for Georgia and Hawaii now have the option to buy and sell Bitcoin.

Winklevii Receive Patent For Crypto-Based Exchange-Traded Product System

Crypto entrepreneurs Tyler and Cameron Winklevoss have won a patent for a system that proves crypto-based exchange-traded products (ETPs). The patent represents systems, methods, and program products for ETPs that hold digital assets like Bitcoin and other cryptocurrencies.

Two Major Russian Banks Test Crypto Investment Portfolio For Retail Investors

Russia’s Sberbank and Alfa-Bank are to begin testing crypto-based investment options for retailer investors as part of the Russian central bank’s “regulatory sandbox.” The crypto products will be based on “digital financial assets” and will include six cryptocurrencies including BTC, BCH, ETH, and LTC as part of an investment portfolio.

Free Speech Non-Profit Adds Crypto Donation Options, Immediately Receives 1,000 ETH

The Freedom of the Press Foundation (FPF), a nonprofit aimed at supporting free speech in the media, has begun accepting Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and ZCash. On the first day of the addition of a donate crypto option, the nonprofit received a 1,000 ETH (around $542,000 at the time) donation from decentralized message routing network Mainframe.

Nintendo’s Pokémon Comes To The Lightning Network

A Portuguese software engineers has created a platform —  “Poketoshi” — that allows users to play the popular Pokémon game on the Lightning Network (LN) along with live streaming video platform Twitch. Poketoshi uses a LN-enable virtual controller for entering gaming commands at the cost of 10 satoshis each, paid through the OpenNode payment processor, and users interact with the game via an online chatroom like in the “Twitch Plays Pokémon series.” The use of OpenNode can be seen as a playful way to test the Lightning protocol’s ability to processes a high volume of off-chain instant BTC payments.

Mergers, Acquisitions, And Partnerships

Malaysian Government Signs MOU With Korean Lab To Develop Halal Blockchain

IncuBlock, a South Korean blockchain lab, has signed a Memorandum of Understanding (MOU) with a Malaysian government advisory committee to create a blockchain tech platform and DApps that are permissible under Sharia law. Cryptocurrency’s status as either halal (permissible) or haram (not permissible) has been widely discussed, with one Indonesian fintech startup declaring Bitcoin “usually permissible” earlier this year.

U.S. Mobile Operator Sprint Partners With Blockchain Startup For 5G Car Platform

Spring, the U.S.’ fourth-largest mobile network operator, has partnered with blockchain startup NXM Labs for the launch of a blockchain-powered 5G connected car platform. Sprint will use the platform and its LTE network to give passengers mobile wifi and vehicle health monitoring as part of the blockchain, IoT security system that protect against hackers.

Chinese Official Partner With Tencent For China Blockchain Security Alliance

The Chinese government has partnered with tech giant Tencent for the creation of the China Blockchain Security Alliance, which aims to establish long terms mechanisms for supporting the country’s blockchain development and prevent illegal activities in the space. The alliance is made up of Tencent’s security arm, CTMA, and the China Blockchain Application Research Center, as well as 20 other public and private institutions ranging from government advisory agencies to network security firms and blockchain-related organizations.

Winners and losers

The crypto markets are continuing to fall, with Bitcoin now below $6,000, ETH close to $400, and total market cap around $238 billion.

The three altcoin gainers of this week are WaykiChain, Decentraland, and Tether. The three altcoin losers are Scry.info, Vechain, and Centrality.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

FUD Of The Week

Bank of International Settlements Derides Crypto Scalability

The Bank of International Settlements (BIS), a Swiss-based organization made up of 60 of the world’s central banks, said in a report that the shortcomings of cryptocurrency prevent it from becoming a medium of exchange in a global economy. According to the BIS, crypto’s scalability is too poor, their value is unstable, and there is a lack of trust in the finality of payments.

Self-Described “National” Turkish Cryptocurrency Revealed As Ponzi Scheme

A major shareholder of Turcoin, which was advertised as the country’s “national” cryptocurrency, told local media this week that the company that launched the coin “doesn’t have a single dollar in the bank.” While the company had wood investors with luxury parties attended by celebrities, payouts had stopped in early June 2018, prompting a criminal complaint. While the other partner of the company that originally launched Turcoin has allegedly disappeared, the major shareholder has said that he will return the money if the Turkish authorities unfreeze his bank account.

Twitter Questions EOS’s Decentralization After Block Producers Freeze Accounts, Twice

EOS block producers (BP) decided to freeze seven accounts this week that were associated with phishing scams, prompting backlash on Twitter from critics who see the move as violating the EOS constitution. As the EOS constitution has not yet been ratified, the BP’s overrode the EOS arbitration group’s decision not to freeze the funds during a two hour long conference call. Shortly after, BPs were then allegedly ordered by the EOS Core Arbitration Forum (ECFA) to freeze more 27 accounts several days later, with “logic and reasoning” to follow. Twitter has responded negatively, with crypto advocates decrying the ability for a small number of players to make a decision in a centralized manner.

Bank BBVA CEO Pessimistic About Blockchain’s Future, Calls The Tech Immature

CEO of Spanish bank BBVA, Carlos Torres, said this week that blockchain technology is not mature and faces the challenges of the volatility of cryptocurrencies and potential clashes with tax authorities and financial regulators. However, Torres did concede that the advantages of blockchain tech means that BBVA will need to be ready to use the technology when it matures and the regulators are ready for it.

CBOE Global Markets President Predicts Regulatory Reckoning For ICOs

According to Chris Concannon, the president of CBOE Global Markets, the crypto markets will soon see a crypto regulatory crackdown in two waves: the SEC will first classify ICOs as unregistered securities, rendering investors holding worthless, and then class-action lawsuits will overwhelm the companies behind the ICO projects. In Concannon’s opinion, ICO investors “should lay awake at night” in worry about the future regulatory reckoning.

Prediction Of The Week

Trading Analyst Predicts BTC Will Drop To $4,000 Then Bounce To $10,000 By Year End

Todd Gordon, the founder of TradingAnalsyis.com, said this week that Bitcoin will fall to $4,000 before than hitting $10,000 by the end of the year due to market volatility. According to Gordon, Bitcoin’s fall from the January high of $19,000 is “inconsequential” when one considers the gains of the coin since 2015.

Best Features

The Blockchain Can Fix the Internet

Manoush Zomorodi, host of the tech podcast “Note to Self,” explores the use of blockchain in protecting our online lives and rebuilding trust between citizens and institutions. According to Zomorodi, we are now as a “crossroads” of restoring the balance of power between the “builders and users,” and blockchain’s philosophy may be the key needed to make it happen.

Ethereum Killer? I looked under the EOS hood and here’s what I found

Hackernoon delves into a side-by-side comparison of EOS and Ethereum, concluding that although EOS “wins” in one category (contract features due to the possibility to implement C/C++ libraries), EOS still faces significant barriers in these early days for easy use.

Crypto-Keynesian Lunacy

Bitcoin developer Jimmy Song is back, this time defending last week’s article on the “truth” of smart contracts from what he calls his “Crypto-Keynesian” critics. In his response, Song lays out his refutations of a number of what he refers to as fallacies in his critics’ arguments: the assumption that aggregate numbers tell a true story, their faith in central planning, and their certainty that things will go as planned. Song’s response to this “lunacy” of believing success = money?: “The real innovation was and always has been Bitcoin”

Polkadot Developer Robert Habermeier Wins Prestigious Thiel Fellowship

Polkadot developer Robert Habermeier has become the latest cryptocurrency developer to win a prestigious fellowship from the Thiel Foundation, which was founded by PayPal co-founder and bitcoin bull Peter Thiel. Every year, the Thiel Foundation 20 to 25 entrepreneurs under the age of 23 and awards them $100,000 over a two-year period. The foundation encourages its fellows

The post Polkadot Developer Robert Habermeier Wins Prestigious Thiel Fellowship appeared first on CCN

Mike Butcher of TechCrunch: It Is up to the Industry to Get Its Own House in Order

Mike Butcher shares his views on the industry, why he decided to cover it and the importance of proper information.

This interview has been edited and condensed.

Mike Butcher, an editor-at-large of TechCrunch is a pioneer of the tech and journalism industries. He has also started covering the crypto industry and blockchain technology, as — in his words — “that is effectively going to be a new way to the future.”

He first heard about crypto back in 2011 and it was ‘Bitcoin that got [him] interested’ in the space.’

“I think it is sort of a general theme — decentralization. It is really fascinating, you know. We had Google, Apple, Facebook, Twitter, Amazon, effectively build centralized networks for the last 25 years of development of the internet and what we are doing now is we are looking for [the] decentralized players of the future. I mean, the fascinating ideas: for instance, you can create the decentralized Uber, which will be an incredible kind of move. And the exciting thing about it is how we will have brand new actors. There is more collaboration between all of these projects than in previous systems, so that is why it is so amazing.”

Catherine Ross: Does the crypto space really resemble the beginning of the tech market? There’s been a lot of comparison to the ‘dotcom’ bubble.’

Mike Butcher: Yeah, it is very similar to previous bubbles in many ways. What is different about this one is the amount of money that is in the space. Previously, in sort of mid-nineties [sic], in order to be able to work in the internet space, you had to raise proper, real money. And that was a different kind of era. But now, the money is effectively built into the bubble. And so that is why it is so fascinating and potentially dangerous for some people, given that there is such a lack of sophistication amongst people who want to be involved in this space — whether or not the’re investors or the people who want to be involved in the ICOs.

CR: Do you think the crypto industry is similar to the derivatives market?

MB: Well, there are some parallels out there.

CR: And do you think [crypto] will have the same fate?

MB: Well, I mean if you look at what is going to happen in the next year or so, crypto assets will probably eventually be regulated, like other kinds of assets — to some extent — depending on what they are. You’ve got some big players like Goldman Sachs becoming involved, launching their own [cryptocurrency] trading desk*. So, that is clearly going to happen, and you have got some sovereign funds becoming involved as well. I think that there’s the legitimacy coming, it is not there quite yet in some places. But it makes a lot of sense, if you think about it. You know, even [science fiction] writers have been talking about the idea of having global currencies, which are not the fiat currencies. We already have credit in things like Star Trek and Star Wars. So it is clearly the idea that the time has come.

Mike Butcher

Mike Butcher at BlockShow, Berlin 2018

In his speech at BlockShow in Berlin entitled ‘Disinformation Can Kill Crypto,’ Mike stressed the importance of creating the ‘trust’ toward the industry or “the public will return to centralized systems.”

CR: You talked about the danger of disinformation in the space, mentioning that it’s very important to build content platforms that people can trust. How do we achieve that?

MB: Well, I mean the way that the traditional financial media operates is that there is a separation of powers: between journalists who write content, news and advertising and commercial people. And they don’t talk to each other, right?

CR: Right!

MB: So, in fact, they are not allowed to talk to each other. And if they do talk to each other, that is a conflict of interests. The people who advertise on the website go through the commercial people by advertising, and they speak to the clients. When you write the content, you should not be talking to those people. You should be actually writing about what is going on, and then you are paid by the media organization. That is how journalism has evolved over the last two hundred years or so, roughly. And if the media outlet is abiding by those rules, the separation of powers between the advertising and editorials, and if journalists are not being paid to write about the companies, and if they are being paid generally as a salary to write about what the news is, then that is ok. But if there is any change in that, if journalists are being paid to write specific stories, then that is not allowed, that is wrong.

CR: That is not journalism.

MB: That is not journalism! And right, so, don’t read those guys! So, just don’t read them. I’ve been shown [that] you guys are abiding by those rules. And so the market is always in the crypto moving [sic] every day, it is kind of [a] pretty crazy world out there. And it is up to those journalists that bad actors don’t get any promotion. And, like I said, there is independence out there. One part of the problem, of course, is that journalists are not just a part of the media space anymore, you have all these Telegram groups, you have got all these WhatsApp groups, you have got online boards, or whatever it is, messaging services. That is where a lot of the problems develop. But I do think that the part of my talk [at Blockshow] was that if we do not pay attention to this, then decentralization and the blockchain technology will not be trusted. It won’t ever go mainstream because it will not be trusted by anybody. And so it is everybody’s job in the industry to promote good media, media that actually has the separation of powers in between advertising and editorial and that is independent. It is our job to do that and de-emphasize and detune the bad actors in the space.

CR: So what you mean is that you can read medium and any other blog articles, but you need to be very cautious about making an investment decision.

MB: Absolutely! I mean that is always out there, isn’t it? Checks and balances, always do your research. Even the most sophisticated investors today find it difficult to understand what is going on. And many of them are extremely cautious. Actually, they operate much more [cautiously] than the average person. So, and I think what’s going to happen is that, if more problems continue to happen, then regulators will come in, then there actually will be some heavy-handing regulation and some of the more innovating aspects of what has happened in the last few years might be stamped on, you know, it might change. So, it is up to the industry to get its own house in order.

Mike Butcher

Mike Butcher at BlockShow, Berlin 2018

CR: You have obviously visited a lot of events and have met a lot of people from the [crypto] industry. Is the crypto community somehow different from others?

MB: It depends. I mean, if you take blockchain projects, they remind me of early internet space with developers coming up with the fascinating new ideas, and you have got that sort of people much more involved in the crypto [industry]. As a currency side of things, it is sort of different from the traditional services. It’s a startup space where you have got, you know, the entrepreneur and the venture capitalist. But the two are merging. If you think about six months ago or a year ago, the ICO space took place really quickly.

CR: Indeed.

MB: Everyone was actually quite blindsided by how quickly it took off. Now what’s going on with private sales, private ICOs is that you have got more traditional investors becoming involved at the earliest phases of an ICO and a private sale. And actually sometimes even [a] public ICO is being cancelled. Or the public sale is changed in sort of different order, sort of [a] 50/50 relationship later on with the public sale.

If you want to build something, and if you want to be an entrepreneur, you don’t just make money from the ICO, […] you go build it.

MB: What you do is you bring another partner to help you build it. People who have networks and relationships you don’t have as an entrepreneur. And it does require professional investors, because they have the contacts, they have the know how, the knowledge. They have the partnership relationships and they have the experience about how to scale the company. All the staff [are] familiar with the start up space. So the worlds are gradually starting to merge.

CR: You’ve visited quite a lot crypto events recently. What is the best way to benefit from one?

MB: It is always the same — as at any conference. Just learn how to network, learn how to introduce yourself well. I mean, the best way to do these things is just to introduce yourself, but talk about the issues [that], you know, display your knowledge. As soon as somebody starts pitching you, well, it is kind of discouraging. I think it is more interesting to have a conversation first. Show up how clever you are first.

CR: Great advice. Thank you, Mike! And thanks for being here with us!

MB: My pleasure!

*On January 24, 2018 Lloyd Blankfein, Goldman Sachs CEO, told CNBC that the company has no plans to launch its own cryptocurrency trading desk.

John McAfee: “Get Real,” Bitcoin Keeps Growing

bitcoin fraud

John McAfee returned to social media after an absence caused by a life-threatening attack that left him unconscious for three days.

After explaining what happened, he spoke about the behavior of the cryptocurrency markets, calling for calm to people who have pessimistic opinions about low prices.

According to McAfee, it is essential to “get real” for a moment and contrast the overall behavior of Bitcoin over time:

For John McAfee, Bitcoin’s behavior is still bullish, which could make it possible to predict a recovery in its prices. Starting one year ago, Bitcoin prices increased by around 140%.

Previously, John McAfee made a short-term prediction, talking about a value of 15k by the end of June. This prediction is unlikely to be met unless some extraordinary event happens.

Although McAfee doesn’t usually talk about short-term predictions, he ventured to do so, mentioning that it was based on a mathematical model that was not wrong until then.

In addition to talking about the behavior of Bitcoin, the predictions about other altcoins still have a month to be fulfilled; however, the current market trend has taken a bearish course in the short term.

John McAfee: Investing in the Future

John McAfee has always distinguished between different types of traders. For him, the variations that Bitcoin may undergo in hours or days are not as important as the global adoption and long-term behavior of a blockchain and its token.

bitcoin fraud
John McAfee

This strategic vision of the future has made him one of the most influential personalities in the world of cryptocurrency. His controversial statements generate a lot of debate, but they tend to have a solid foundation.

McAfee’s forward-looking vision led him to predict that Bitcoin could be worth as much as $1 million. This may seem unlikely today, but it takes another perspective when compared to the exponential growth of 2017.

Current indicators show that the BTC is currently going through a defining moment, at least in the short term. While the RSI is giving signals for buying and accumulating, the MACD is not providing a clear signal that the trend is changing:

Graphs: Tradingview

 

Heikin Ashi candlesticks -used to reduce “noise” and determine possible trends- show at least a possible bearish behavior in the next few days; however, the trend is getting weaker, especially when comparing the graphs with other candles set at less than 4 hours.

McAfee is right to criticize the use of short-term analysis as a way to predict Bitcoin’s long-term behavior. It’s possible his prediction may have failed, although it may be that he just needs a little more time.

The post John McAfee: “Get Real,” Bitcoin Keeps Growing appeared first on Ethereum World News.

Bitcoin Rallies above $6,000 as BTC Market Dominance Reaches Two-Month High

Bitcoin has rallied above the $6,000 mark in the last few hours. This surge follows the previous price dip of a few hours ago. The top-ranked cryptocurrency had previously fallen to its lowest level in 2018. Despite the price struggles of BTC in June, its market dominance has increased steadily.

Bitcoin Back Above $6,000

In a little over 12 hours since the price of Bitcoin fell below $6k, it has surged back above the $6,000. This latest movement might be indicative of the selloff saturation that experts like Kelly have been reiterating in the last few days. On the flip side, it may be a false positive – a minor surge before another significant dip which may see BTC bottom out at an even lower price level.

At the time of writing this article, Bitcoin was hovering around the $6,200 mark, falling slightly to $6,190. BTC is up by more than one percent in the last 24 hours. June has been a difficult month for the top-ranked cryptocurrency. Numerous sharp dips have eroded whatever gains were previously recorded. Thus, BTC has been unable to embark on any sustained bull run.

Bitcoin’s struggles mirror that of the general cryptocurrency market in many respects. Ethereum, Ripple, Bitcoin Cash, EOS, and Litecoin have all dropped considerably. Dash continues to have a miserable 2018, declining by more than 300 percent since the start of the year. There have also been two significant cryptocurrency exchange hacks – Coinrail and Bithumb. Both platforms are South Korean-based.

BTC Market Dominance Reaches 42 Percent

Despite the BTC price decline in June, Bitcoin’s dominance over the cryptocurrency market has steadily been on the increase. Presently, Bitcoin accounts for 42 percent of the total virtual currency market capitalization. This figure represents a two-month high – BTC hasn’t recorded more than 40 percent market dominance since April 19, 2018.

Many of the top ten cryptocurrencies seem to have declined more than Bitcoin in the last two months. Litecoin and Ripple are among two of the worst performing altcoins in the top ten bracket. If this trend continues, Bitcoin could break the 50 percent dominance barrier. The last time BTC held 50 percent market dominance was in mid-December 2017.

Bitcoin Has Abandoned its Fundamental Principles

Meanwhile, in a related, development, macroeconomist, Peter Tchir believes Bitcoin “has lost its way.” Writing for Forbes, the experienced trader and strategist said that Bitcoin seems to have lost sight of its core fundamentals. As a result, the adoption rate has plummeted, thus leading to the price struggles noticed in 2018.

According to Tchir, many of the factors that drove people to own Bitcoin in 2017 have either slowed down or have been eroded completely. Tchir believes that apart from being a store of value, BTC has failed to live up to its promise as an efficient medium of exchange and an anonymous way to store wealth.

However, Tchir asserted that BTC can recover its lost luster, saying:

BTC can regain some of its lost mojo, but I think Bitcoin in particular needs to assert its value proposition.  What it is worth over time, is a function of what value it provides its users and owners, and I for one, am struggling to see the benefits of re-entering the market.

Do you think this is the start of a sustained BTC rally or are there more price dips up ahead? How high do you think BTC’s dominance of the market will reach? Let us know your views in the comment section below.

Image courtesy of CoinMarketCap and Twitter (@Dataveteran).

The post Bitcoin Rallies above $6,000 as BTC Market Dominance Reaches Two-Month High appeared first on Ethereum World News.

China’s Latest Government-Backed Crypto Rankings Put EOS 1st, BTC 17th

The second round of China’s state-backed monthly crypto ratings has placed EOS in 1st place, with Ethereum 2nd and Bitcoin 17th.

The second round of China’s state-backed monthly ratings of cryptocurrencies and blockchain projects has been released, Cena News reported June 21.

Dubbed the “Global Public Chain Technology Evaluation Index,” this latest round was announced at the Shanghai Science Hall on June 20, and ranks EOS 1st, Ethereum (ETH) 2nd, and Bitcoin (BTC) 17th, out of a total of 30 analyzed cryptocurrencies.

China’s monthly “Global Public Chain Technology Evaluation Index” is published by the China Center for Information Industry Development (CCID) of the Ministry of Industry and Information Technology, and is said to be compiled by “first-rate domestic experts and scholars,” according to the original Index press release.

EOS’ top ranking is attributed to the “outstanding technical advantages in transaction confirmation efficiency, network throughput, and transaction costs” of the protocol.

While conceding the EOS Mainnet’s recent mishaps – since going live June 15, the network has faced technical issues, and criticism for freezing some accounts – the evaluation nonetheless judges the project to be “highly active in technological innovation,” a “new generation public blockchain” that is “currently most regarded by the industry.”

The Index has been portrayed as a monthly “independent analysis,” which evaluates global blockchain projects on the basis of their technological capability, usefulness and innovation. It was first announced in May to compensate for what the Chinese government considers to be the “lack of completely independent assessment” for crypto and blockchain projects.

As an in-depth Cointelegraph report earlier this month outlined, China has been putting its weight behind blockchain technology even as it pursues a severe line against cryptocurrencies and Initial Coin Offerings (ICO).

CCID has said that the new monthly Index demonstrates “the confidence of the Chinese government” in blockchain, and will serve as a “guide” for the country’s technological vanguard.

Last month, an initiative backed by the country’s IT Ministry resulted in the formation of a specialist committee dedicated to cementing “nationwide”  blockchain standards by the end of 2019.

In the most recent high-profile case, China’s President Xi Jinping included blockchain as an example of a “new generation” of technologies that are accelerating “breakthroughs” in “reconstructing the global innovation map and reshaping the global economic structure.”

Tulips, Bubbles, Obituaries: Peering Through the FUD About Crypto

From comparisons to Tulip Mania to outright obituaries, Bitcoin and various cryptocurrencies have battled with FUD from the media.

In the short space of nine years, Bitcoin has thrust cryptocurrencies into mainstream consciousness by shaking up the financial world.

Since its inception in 2009, the preeminent cryptocurrency has thrown a spanner in the works of traditional banking and financial institutions and has paved the way for the creation of a plethora of industry-shaping virtual currencies and blockchain-based innovations.

With that being said, it’s been far from smooth sailing for Bitcoin or any other cryptocurrency. Dramatic highs and soul-shattering lows have been part and parcel of the past nine years.

The volatility of cryptocurrencies has created more than a few detractors and we’ve seen a number of headlines exclaiming the ‘death’ of Bitcoin and cryptocurrencies in general.

These obituaries have come from a wide variety of industry experts and commentators. While they’re almost always subjective, they portray a negative, fear-mongering mentality that detracts from the technological breakthroughs that have been sparked by blockchain technology.

Let’s take a look at some of the instances that have led to mainstream media outlets signalling the death of Bitcoin and examine where the industry is at midway through 2018.

HEADLINES

A brief history of Bitcoin deaths

It’s not difficult to find articles slamming Bitcoin and cryptocurrencies — just look at 99bitcoins.com, which has a compendium of Bitcoin obituaries that has now surpassed the 300 mark.

The earliest headline heralding the end of Bitcoin, according to the website, is an article entitled ‘Why Bitcoin can’t be a currency’ published in a blog entitled The Underground Economist in 2010. In essence, the writer pointed to Bitcoin’s constantly fluctuating value as the main reason why it shouldn’t be considered a currency.

“While Bitcoin has managed to bootstrap itself on a limited scale, it lacks any mechanism for dealing with fluctuations in demand. Increasing demand for Bitcoin will cause prices in terms of Bitcoin to drop (deflation), while decreasing demand will cause them to rise (inflation).”

Since then, the number of headlines suggesting that Bitcoin was doomed to fail has increased year on year. In 2017, there were a total of 118 Bitcoin obituaries articles.

These obituaries are any articles that predict the demise of Bitcoin, based on assumptions or quotes from a wide range of commentators. This includes mentions of fraud, ponzi schemes and money laundering and frankly anything that is negative enough to cast aspersions on the future of Bitcoin.

While the sheer number of articles that have predicted the death of Bitcoin may be humorous, a glance down the list of headlines from various publications tells a different story altogether.

Small scale blogs like the one that is credited for the first Bitcoin death article have a limited reach and aren’t likely to have a profound effect on the sentiment of a large group of people.

However, as the number of these articles increases, so too has the caliber and profile of the publications producing this content.

Bitcoin and Ethereum obituaries - year on year

Mainstream mania

CNBC has covered cryptocurrencies extensively over the last few years, with content that is fairly objective in terms widespread coverage of both positive and negative sentiments towards the industry,

With that being said, CNBC has been the source of numerous interviews quoting various sources that have labelled Bitcoin a bubble and ponzi scheme, while speculating on how it would crash.

The most telling example of this was JPMorgan CEO Jamie Dimon comparing Bitcoin to the Dutch Tulip Mania before predicting it would blow up on CNBC. Perhaps more telling was the effect Dimon’s statements had on Bitcoin’s value, which fell after the American executive’s comments:

“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed. Currencies have legal support. It will blow up.”

In November 2017, Bloomberg published an article that speculated on a number of different factors that could potentially derail Bitcoin as it headed to that $20,000 high in December.

The article quoted several sources that point to the number of altcoins, regulations, cyber attacks and the launch of derivatives as pitfalls to Bitcoin’s rise in price and popularity.

Bubble talk

The Guardian published an editorial in November 2017 that labelled Bitcoin’s price as a bubble, and pointed to the costs of mining, slammed the endorsements by celebrities and made strong statements about Bitcoin’s primary use as means to buy drugs and pay ransoms online.

Forbes contributor Jay Adkisson wrote an op-ed which went on to describe the way Bitcoin is currently sold as a scam. The writer boiled down Bitcoin to a core existence as a number, without an intrinsic value.

He went on to suggest that cryptocurrencies lack ‘uniqueness,’ pointing to the sheer number of cryptocurrencies in existence.

The Telegraph also published a number of articles last year, drumming up ‘bubble’ rhetoric as the 2017 wound to a close. Abhishek Parajuli took a mighty swipe in his own op-ed on the platform, citing wild volatility, poor utility as a medium exchange as well as slow transaction speeds:

“So, hype aside, Bitcoins are lottery tickets. They have no underlying utility. When the music stops, those left holding them will be burned.”

Wall Street Journal contributor James Mackintosh weighed in on the value of Bitcoin in mid-September 2017. In essence, the writer delved into the notion of Bitcoin having become digital gold as a store of value.

Going on to assumptions of an economist — as well as a comparison to the price of actual gold — the Wall Street Journal contributor suggested a very poor chance of Bitcoin replacing gold as a store of value.

While these articles can be well-researched and compelling in their presentation, it’s hard to find a single one that provided compelling evidence that Bitcoin would fail altogether. Some accurately predicted price corrections, but those touting the death of cryptocurrencies are still to be proven right.

ETH and the rest

While Bitcoin has undoubtedly received a far greater amount of negative press in the last nine years, it is not alone.

Ethereum, the second biggest cryptocurrency by market capitalization, has also been in the crosshairs of doomsayers since its launch in 2015. Digiconomist has also compiled a list of Ethereum obituaries, which is up to 16 since 2015.

The first of these articles was published on a blog called WallStreetTechnologist run by self-described former Wall Street technologist Jerry David. Written in December 2015, David was of the opinion that Ethereum would fail to launch its platform due a number of factors:

“Too ambitious of goal[s], too complex a system to get it done, and too much money squandered on someone who has little business experience.”

Fast-forward three years and Ethereum has quashed all of those concerns emphatically. However, the journey has been fraught with some hairy moments.

In June 2016, following the launch of DAO, cyber-criminals figured out an exploit that allowed the theft of 3.6 million ETH tokens, worth around $60 million at the time. As ArsTechnica reported, the attack truly threatened Ethereum’s continual existence.

Close to a year later, a hacker exploited a flaw in Ethereum-based platform Parity which resulted in $34 million worth of ETH being stolen. The platform was somewhat saved by ‘white hat hackers,’ that drained other Parity account funds to safeguard against the initial hacker stealing more ETH.

This then led website Nulltx laying part of the blame for the Parity multisignature bug on Ethereum itself.

“Smart contracts, which are often seen as the cornerstone of everything Ethereum has to offer, are simply not secure. They weren’t on day one and they still aren’t today. While everything may seem in order most of the time, the Parity multisignature bug shows how easy it is sometimes to manipulate these contracts for financial gain or just to annoy others.”

While these events were sure to draw negative criticism, Ethereum has had to deal with a far smaller amount of obituary-style reviews.

The third largest cryptocurrency by market value, Ripple, has also faced some harsh criticism. Bloomberg slated the company for trying to get XRP listed on various exchanges by paying financial incentives for doing so.

In January, MIT’s Technology Review said investors jumped on the Ripple bandwagon, in the hopes that it would become the ‘next’ Bitcoin. The article suggests that the surge of investment into the blockchain-based cross-border payment system was hyped up and that the project could still fail in the long term.

EOS, the fifth biggest cryptocurrency by market cap, has received its fair share of disparaging coverage in the lead up to its launch in June.

As Cointelegraph reported in it’s review, the blockchain-based operating system faced criticism for the token-swap that was required after a year-long ICO, as well as it’s delegated Proof-of-Stake system.

Ethereum founder Vitalik Buterin and EOS CTO Dan Larimer had extensive online debates arguing for their respective consensus protocols, which put a spotlight on both blockchain platforms.

Other cryptocurrencies also face plenty of pessimistic forecasts. For instance, Altcoinobituaries is a website that tracks the market value of a number of cryptocurrencies, with foreboding messages of their looming demise.

HEADLINES

2018 – Crypto still fighting

Following a dramatic high in December 2017, Bitcoin has faced a tough six months of volatility amid the uncertainty of regulations and mitigating factors around the world.

As of June 2018, 69 of these doomsday Bitcoin posts have been published, as per 99bitcoins’ list. A number of headlines have continued to label the cryptocurrency as a bubble, citing various sources predicting its demise.

Nobel Prize-winning economist Robert Shiller followed in Dimon’s footsteps, comparing Bitcoin to ‘tulip mania’ in an interview with CNBC in January:

“It has no value at all unless there is some common consensus that it has value. Other things like gold would at least have some value if people didn’t see it as an investment. It reminds me of the Tulip Mania in Holland in the 1640s, and so the question is did that collapse? We still pay for tulips even now and sometimes they get expensive. [Bitcoin] might totally collapse and be forgotten and I think that’s a good likely outcome but it could linger on for a good long time, it could be here in 100 years.”

The MIT Technology Review published an article in April which explored three different ways that the cryptocurrency could ultimately be brought to its knees — namely a government takeover, Facebook takeover or the creation of millions of tokens that eventually make Bitcoin irrelevant.

Reuters quoted Bank of England governor Mark Carney in a review which suggested that Bitcoin ‘failed’ as a currency. Carney told London Regent University students in February that the cryptocurrencies shortcomings were plain to see:

“It has pretty much failed thus far on the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange,”

Around the same time, a Forbes headline reading ‘Is Bitcoin Heading to Zero’ explored a number of reasons why Bitcoin had seen such a dramatic drop in value. The article was centred around the shortcomings of Bitcoin in relation to Ethereum — mainly transaction fees and governance issues.

The writer cited PHD economist Eli Dourado’s work on Ethereum, which highlighted the far cheaper transaction costs on the Ethereum blockchain. Furthermore, the governance of Bitcoin and its ongoing development was also cited as a point of concern:

“Bitcoin has been unable to seriously address its on-chain scaling problems. Its community has alienated, marginalized, and purged dissenting voices, notably Mike Hearn, Gavin Andresen, and Jeff Garzik. Its core development team has been captured by an ideological faction committed to only off-chain scaling in the name of decentralization. This faction has undermined consensus scaling agreements and trashed the reputation of anyone who points out any of the above.”

More recently, famed investor Warren Buffett went as far as calling Bitcoin ‘rat poison’ in an interview with CNBC:

“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”

These headlines have certainly not been kind to Bitcoin and cryptocurrencies in general. Taking advantage of the profile of some commentators, markets have been continually bombarded by doomsday prophecies and speculative remarks.

Dealing with it

The reality of life is that many things are completely out of our control. This is particularly true when it comes to the type of information and news we are subjected to on a daily basis.

As Cointelegraph reported in March, cryptocurrency has forced its way into the minds of the masses. This has even led to some of the biggest TV show hosts, from Ellen Degeneres to John Oliver, giving satirical, bizarre and possibly damaging accounts of what Bitcoin and cryptocurrencies actually are.

What these TV superstars prove is that the industry is too big not to notice, but is still misunderstood and met with plenty of apathy.

It may well be difficult for this tendency to mock and denigrate the cryptocurrency space to stop, but time will tell.

Nevertheless, mainstream media outlets — be it news or entertainment — will continue to mold the perception of millions of people when it comes to cryptocurrencies.

The spin, positive or negative, will be dependent on how the sector grows and addresses its own shortcomings in order to build trust and understanding in the global community.

CNBC’s Brian Kelly: Current Bear Trend ‘By No Means’ Funeral for Bitcoin

Bitcoin analyst Brian Kelly points out three major reasons why the current bear market is not a reason to hold a funeral for the cryptocurrency.

The current bear market is not a funeral for Bitcoin (BTC) “whatsoever,” CEO of BKCM LLC investment firm Brian Kelly said on CNBC’s Fast Money segment June 22.

To back up his statement, Kelly provided three key factors. First, he pointed out that the market sentiment is “approaching lows,” implying that a trend reversal is likely to follow.

Bitcoin, trading at $5,881 as of press time, has been in an almost continuous decline since hitting its all-time-high of $20,000 in December 2017.

Chart

Bitcoin price chart. Source: Cointelegraph Bitcoin Price Index

Despite that, Kelly called attention to the fact that Bitcoin is still trading at the same level as back in November 2017, whereas a year ago its value was 60 percent lower – around $2,500.

Next, Kelly mentioned the recent news that Japan’s Financial Services Agency has sent out business improvement orders to 6 domestic exchanges. He pointed out that while in the short run it’s going to be “a little tough,” in the long run it will help make the exchanges more “robust.”

Third, Kelly brought up the announcement by Mt. Gox to reimburse its customers and begin civil rehabilitation proceedings, following the $473 million hack in late 2013 and the resulting bankruptcy. Mt. Gox was considered to be the largest hack in the history of crypto, until this year’s $534 million Coincheck hack.

On June 5, Cointelegraph reported that Bitcoin has been declared “dead” for the 300th time, according to the 99Bitcoins “obituary list.” By press time, the cryptocurrency has “died” 315 times, with 69 “deaths” taking place this year alone.

Bitmain Dominates Bitcoin Mining Hashrate – Almost at 51 Percent

Blockchain Supported Bank

Bitmain has attained approximately 42 percent control of the Bitcoin network hashrate. This figure brings the company tantalizingly close to 51 percent mark where things could get interesting. Bitmain is the biggest manufacturer of BTC mining hardware, and they also own the largest Bitcoin mining pools in the market.

Bitmain Almost at 51 Percent Control

According to the figures released by BTC.com, Bitmain’s mining pools continue to dominate the network hashrate. The company owns the BTC.com and AntPool mining pools. During this past week, BTC.com and AntPool found 27.2 percent and 14.6 percent of all Bitcoin blocks. Thus, Bitmain effectively controlled 42 percent of the network hashrate in the last week.

Perhaps even more profound is the fact that Bitmain doesn’t utilize all of its hashpower BTC mining. The company also mines Bitcoin Cash, the most popular BTC fork. Both BTC and BCH use the same proof of work (PoW) algorithm. Thus, the same mining hardware can be used to mine both. However, one miner cannot mine both cryptocurrencies simultaneously. As a result, Bitmain shares its hashpower between both networks.

In the previous seven days, BTC.com and AntPool controlled 10.4 percent and 10.6 percent respectively, of the BCH hashrate. This means that Bitmain found approximately 21 percent of all Bitcoin Cash blocks discovered in the last one week.

Implications of Bitmain Gaining More Control

Assuming the company decided to apply all of its mining resources to the BTC network, its control of the blockchain’s hashrate would increase. This increase, however, wouldn’t be linear since the mining difficulty in BTC exceeds that of BCH by over 70 percent. Thus, only an additional three percent would be added to Bitmain’s control if it stopped sharing its hashpower between BTC and BCH, focusing only on Bitcoin. By so doing, Bitmain would control 45 percent of BTC’s network hashrate.

Bitmain controlling 51 percent of the BTC network hashrate has profound implications for the immutability of the cryptocurrency’s ledger. 51 percent control of a blockchain network, in theory, would enable the company to carry out double-spend attacks thus compromising the integrity of BTC transactions. Bitmain is unlikely to have any incentive to engage in such activities, but cybercriminals could hack the company and commandeer their operations.

To forestall such an occurrence, the company has always operated in small divisions with some pools having a semblance of independence from the company. For example, BTC.com is somewhat independent of Bitmain even though the company owns the BTC.com platform.

The Increasing Bitcoin Hashrate

Despite the steady decline in BTC prices since the start of the year, the network hashrate has moved in the other direction. In fact, BTC mining hash rate has tripled since December 2017, while the price of Bitcoin has dropped to approximately a third of its value within the same period.

With the drop in prices and the increasing hashrate, it is currently more difficult to mine Bitcoin than it was in December 2017. For smaller mining operations, the price drop is a significant problem that could render them unable to continue the business. If they close up shop and new miners don’t enter the market, there is the possibility of Bitmain grabbing control of a much larger share of the hashrate. Since Bitmain manufactures its hardware, it can most likely survive for much longer even in the face of increasing mining difficulty and reducing prices.

Bitcoin is currently down to its lowest level since the start of 2018. BTC prices fell below $6,000 for the first time in 2018 as the top-ranked crypto continues to struggle.

Should Bitcoin enthusiasts be concerned about a possible 51 percent control of the blockchain’s hashrate by Bitmain? Will the increasing hashrate and declining price levels force miners to quit? Let us know your views in the comment section below.

Image courtesy of BTC.com, Blockchain.info, and CoinMarketCap.

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Tether has $3 Billion Daily Volume 76% Higher Than Ethereum, Bad Market Condition

Tether, better known for its ticker USDT, is a cryptocurrency whose value is hedged to that of the US dollar. As of June, the daily trading volume of Tether remains above $3 billion, 7 percent higher than the volume of Ethereum.

Merely months ago, Ethereum had the second highest daily trading volume at around $3 billion, while the volume of bitcoin remained above $5 billion. Amidst the third worst correction in the history of the cryptocurrency market, the daily trading volume of bitcoin has fallen to $3.4 billion, while the volume of Ethereum has fallen to $1.7 billion.

Tether is a Good Indicator of the State of Cryptocurrency Market

On cryptocurrency-only exchanges like Binance, the world’s second largest cryptocurrency trading platform behind Coinbase, that do not support reserve currency or fiat currency pairs, traders primarily utilize USDT to hedge the value of major cryptocurrencies such as bitcoin, Ethereum, and tokens to the US dollar.

The daily trading volume of USDT can be considered as a direct representation of the volatility in the cryptocurrency market; if the volume of Tether is abnormally large in a downward trend, it signifies that traders are selling cryptocurrencies to USDT, and if the volume of Tether is unusually large in a bull market, it demonstrates that traders are selling their USDT reserves to acquire more cryptocurrencies.

As of late June, in consideration of the $3 billion daily trading volume of Tether and given that USDT is the second most traded cryptocurrency in the global market, it can be said that cryptocurrency holders are purchasing more USDT expecting the downward trend of the market to continue.

Willy Woo, a prominent cryptocurrency researcher and investor, previously stated in late May that bitcoin will likely experience a slow bleed out to the $5,500 region due to the lack of volume in the market and the overly strong hand of bears.

“I think we are gonna go to $5,500 – $5,700 next, I can’t see $7,000 holding. Most likely we’ll balance a bit, then we’ll slide through. Long timeframes here, looking into June for rough timing of this to play out at a best guess,” Woo said, adding that the price of bitcoin probably will not fall below the $5,000 mark.

“I don’t necessarily think we’ll fall through the $5,000s. Sure it’s a possibility but it doesn’t have to. It’s not a repeat, it’s not Mt Gox and Willybot pushing up price with faked orders, we aren’t detoxing from a scam bubble. Technically $5,000s is a very strong support band.”

Tether is Fine

Over the past few weeks, the rising volume and activity of Tether triggered investors to express concerns over the state of the market and the reliability of USDT.

This week, Washington-based law firm FSS composed of three former federal judges and former director of the FBI, revealed the audit results of USDT and concluded that billions of dollars stored in the bank accounts of Tether were verified.

“In conjunction with receiving the above balance information, FSS requested the Chief Financial Officer and the General Counsel of Tether to certify, by sworn statement, the amount of fully-backed USD Tethers that were in circulation as of the close of business on June 1st, 2018. The amount certified to FSS was $2,538,090,823.52 USD Tethers,” FSS said.

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