The Number of Bitcoin Owners Continues to Grow – Crypto Weekly Update

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This week, the total market capitalization exceeded 859 billion EUR. The decrease at the 7-day interval is 4.76%. Bitcoin decreased by 7.56% during the week to a current value of over 19,400 EUR. Bitcoin dominance is 43.1%.

Source: Coinmarketcap

The Number of Bitcoin Owners Continues to Grow

One of the biggest advantages of Bitcoin and blockchain technology is transparency. It makes it possible to track various metrics related to network activity to help investors in their investment decisions. One of the metrics often sought by investors is wealth distribution – an analysis of addresses based on the amount of bitcoins held.

Earlier this week, a very interesting trend was noted in the metrics of bitcoins distribution. The number of addresses with balance greater than 1 bitcoin rose by 13,091 just in the last week. Moreover, the total number of such addresses has reached new ATH at 865,000. This phenomenon signals that a number of investors have decided to expand their exposure to Bitcoin during the price correction.

Christian Ander, the founder of the Swedish Bitcoin exchange BT.CX told Cointelegraph that „this is good for the ecosystem that it’s growing from the ground up because want the economy to be bottom up.” His statement is related to the fact that the distribution of bitcoins among more and more users gives it a chance for wider adoption and fewer price fluctuations. If the number of small and medium-sized investors increases globally, the likelihood that the amount of whales that can manipulate the market will gradually decrease.

In addition, there has also been a sharp increase in the number of addresses holding more than 0.01 BTC over the past week, suggesting that retail investors are accumulating Bitcoin in a significant way at current price levels. On the other hand, the number of addresses holding more than 100 BTC has decreased by 136, indicating that some of the larger investors decided to get rid of some of their bitcoin during the downturns. Source

Deloitte Joins Forces With NYDIG

Deloitte, a global audit, tax, and financial advisory services giant is launching a new initiative to promote the global adoption of Bitcoin during the cryptocurrency market slump.

In the new initiative, Deloitte is joining forces with crypto company New York Digital Investment Group (NYDIG) to jointly help small, medium and large businesses with the implementation and adoption of digital assets. In their joint statement, the two firms say that businesses from different parts of the world are increasingly looking for ways to access digital assets. Thus, the alliance between Deloitte and NYDIG will aim to accelerate bitcoin adoption in companies while ensuring regulatory compliance.

According to a joint announcement on Monday, NYDIG and Deloitte are launching a strategic alliance to create a centralized approach for clients looking to adopt bitcoin products and services, which include things like loyalty and rewards programs, paying a portion of wages in bitcoin or various other employee benefits.

“The future of financial services will center around the use of digital assets, and we are focused on advising our clients on ways to engage in a regulated and compliant way,“ said Richard Rosenthal, Deloitte’s digital assets banking regulatory practice lead and principal. Source

Circle Launches Euro Stablecoin

Circle, the company behind the issuance of the second largest stablecoin on the market, USDC, is launching a new fiat reserve-backed stablecoin called Euro Coin.

The new Euro Coin, whose value will be pegged to the euro at a 1:1 ratio, will be launched on the Ethereum blockchain network as an ERC-20 token later this month, with support for other networks likely to be available in the coming months.

Circle said in an accompanying press release that the Euro Coin is fully backed by euro-denominated reserves, which are „conservatively held in the custody of leading financial institutions in accordance within the U.S. regulatory perimeter.“

Circle CEO Jeremy Allaire said on Twitter that the Euro Coin will be issued under the same regulatory rules and will be as safe, liquid and transparent as the USDC stablecoin. According to his tweet, the Euro Coin expands opportunities for payments, finance, international trades and broader use cases for digital asset markets. Source

Cardano Delays Vasil Hard Fork

Input Output Hong Kong (IOHK), the blockchain company behind the Cardano blockchain, has released a report earlier this week announcing a one-month delay to the long-awaited Vasil upgrade.

The Vasil upgrade is set to provide a “massive performance improvement to Cardano” and its smart contract capabilities, according to Cardano co-founder Charles Hoskinson. The update was originally scheduled to take place on June 29, but according to news, it will most likely take place during the last week of July.

In a Monday blog post, IOHK’s head of delivery and project Nigel Hemsley noted that the Input Output Global (IOG) team working on the update „is extremely close to finalizing the core work,“ but there are still seven bugs that remain unresolved and require work. Fortunately, none of them are categorized as “severe”.

The hard fork, named after Bulgarian mathematician Vasil Dabov, is one of the most complex development programs to date, according to the developers. It is expected to dramatically improve the scalability of the network, which should boost adoption and increase interest in using Cardano. Source

Terraform Labs Employees Can’t Leave South Korea

According to a Monday report by the JTBC news channel, top employees of Terraform Labs have been banned from leaving South Korea.

The Financial and Securities Crimes Investigation Unit in the southern Seoul district, which is in charge of the investigation into the collapse of stablecoin UST and cryptocurrency LUNA, blocked certain key Terraform Labs employees from leaving Korea to stop them from abruptly fleeing the country amid the ongoing investigation

Daniel Hong, a former Terraform Labs developer, independently confirmed the JTBC report on Twitter on Monday, adding that he could not leave the country because „the Korean government has imposed an exit ban for all ex-Terraform Labs employees.“

According to multiple reports, the special unit is investigating Terraform Labs and its co-founders Do Kwon and Daniel Shin in connection with several allegations, including tax evasion and possible money laundering. Source

Fed Raises Interest Rates

The Federal Reserve raised its benchmark interest rate by 75 basis points last week in an effort to combat the ever-growing threat of double-digit inflation.

The 75 basis point rate hike is the most aggressive interest rate increase since 1994, and it is the third rate hike this year. As a result, the key interest rate in the US is currently in the range of 1.5-1.75%.

“Clearly, today’s 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common,” Powell said. He added, though, that he expects the July meeting to see an increase of 50 or 75 basis points, depending on the path of inflation.

The Fed is expected to continue its aggressive policy in the coming months, with estimates suggesting that the interest rate could move up to a range of 3.25% to 3.5% by the end of the year. Source

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Bitcoin Has Reached its New Low for This Year

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This week, the total market capitalization exceeded 902 billion EUR. The decrease at the 7-day interval is 22.41%. Bitcoin decreased by 29.3% during the week to a current value of over 20,100 EUR. Bitcoin dominance is 44.4%.

Source: Coinmarketcap

Bitcoin Has Reached its New Low for This Year

The cryptocurrency market plunged into a massive sell-off earlier this week. Tensions in global financial markets as well as macroeconomic uncertainty wiped several hundred billion dollars of wealth from the market in the past 72 hours.

Bitcoin, the most popular cryptocurrency, has seen a loss of -24% in the last three days, and its value has plummeted to $20,100, its lowest price since December 2020. The sell-off has not escaped the market number two Ethereum, which has plunged as much as 29% in the last three days and is slowly approaching the psychologically important price support at $1,000.

The trigger for the sell-off not only in the cryptocurrency market, but also in the stock market, was negative news and ongoing concerns about rising inflation. Based on last week’s data, the Consumer Price Index in the United States accelerated to 8.6% YOY in May from 8.3% in April, while experts were expecting inflation to be around 8.3%. Investors are now worried that belt-tightening in the form of anti-inflationary policy by the Fed may be even more aggressive, which does not play into the hands of risk assets.

Investors have less and less appetite for risk in uncertainty and are therefore shifting their capital into safer forms of investment, such as bonds. This has been reflected in recent days, for example, in the rise in yield on 10-year Treasury rate, which has risen from 3.04% to 3.40% over the past five days.

In the current situation in the cryptocurrency market, the market can be expected to be volatile for some time to come and volatility will be higher than it has been in recent weeks. However, the downturns in the financial markets offer investors a unique opportunity to create or expand their investment portfolio. Source

Celsius in Troubles

The current difficult situation on the cryptocurrency market was not helped by the latest news regarding the lending platform Celsius, which suspended all withdrawals from its platform last Sunday.

Celsius Network is a centralized platform that offers returns on various cryptocurrencies including Bitcoin, Ethereum or many other crypto assets. In a way, the platform resembles a kind of „crypto bank“ but functions more like a hedge fund. 

The whole system of the platform works very simply. Users deposit their crypto assets on the platform, and based on their assets, they can earn interest of up to 10% APY. The platform on-lends the assets it receives to other entities and institutions at a higher interest rate. 

The suspension of withdrawals immediately triggered speculation as to whether Celsius was sufficiently liquid and able to meet its obligations to clients. The power of blockchain technology lies precisely in its transparency, which allows companies‘ clients to directly monitor open positions.

Members of the crypto community immediately drew attention to one of Celsius‘ open positions on the Oasis platform, where Celsius borrowed a huge amount of DAI stablecoin in exchange for crypto collateral. With the price of Bitcoin falling, the position was fast approaching liquidation, which would mean that the company’s collateral could be „liquidated“ when the Bitcoin price fell even further.

Fortunately, over the past two days, Celsius has repeatedly added collateral to the WBTC-A vault 25977 position, moving its liquidation price from the original $22,000 to the current $14,000. Thus, Celsius continues to keep its position open, allowing it to gradually pay back its DAI loan and increase their Collateralization Ratio.

How the situation will develop further is still questionable. However, Celsius has significantly damaged its reputation by suspending withdrawals, and if withdrawals are resumed, a huge outflow of capital from the platform to users‘ private wallets can be expected. Source

Ethereum Launches Proof-of-Stake on Testnet

On Wednesday, June 8, a long-awaited transition from the  Proof-of-Work algorithm to a new model called Proof-of-Stake was made in an Ethereum testnet called Ropsten.

The Ropsten testnet is considered to be the oldest and most popular testnet on the Ethereum blockchain, allowing developers to test and optimize the blockchain before putting various improvements on the mainnet. Ropsten is almost identical to the mainnet, with the key difference that no “real” funds are at risk if any technical issues occur.

Several leading decentralized applications responded immediately to the launch of the new consensus algorithm on the testnet and decided to deploy their applications on the Ropsten, in order to support development and also to test the performance of their applications on the new PoS model. 

Ethereum network developers are also planning to transition PoS to two other public test networks, Sepolia and Goerli, in the near future for optimization and testing before putting Proof-of-Stake on the main network. Source

Survey: 90% of Americans Plan to Buy Crypto in 2022

Despite several bearish signals in the cryptocurrency market, the majority of people remain positive and see the downturns in the cryptocurrency market as the new opportunity.

The latest survey from Bank of America, the largest commercial bank in the US in terms of deposits and one of the largest companies of its kind in the world, showed that the majority of retail investors plan to buy cryptocurrencies later this year.

The survey, conducted in early June on a sample of 1,000 respondents, found that 90% of respondents were preparing to buy cryptocurrencies within the next six months. The survey further noted that the number of users who owned cryptocurrencies was similar to the number who wanted to buy.

According to Bank of America, 30% of respondents said they had no intentions of selling their cryptocurrencies during the next six months despite the massive decline that the crypto market has suffered.

Another interesting statistic is that 39% of respondents noted that they used cryptocurrencies as a means of payment for online purchases. This number is a positive surprise, as most investors see cryptocurrencies as just an investment or speculation tool. However, the survey shows that the popularity of crypto-to-fiat products continues to grow. Source

Gary Gensler Worries About New Crypto Bill

In last week’s market overview, we informed you about a bipartisan bill that was introduced in the Senate of the United States, aimed to create a regulatory framework for cryptocurrencies in the US.

One of the requirements in the bill was that priority oversight of the cryptocurrency market would no longer be conducted by the US Securities and Exchange Commission (SEC), but that oversight of the cryptocurrency market would fall under the US Commodity Futures Trading Commission (CFTC).

However, SEC chairman, Gary Gensler, is not very enthusiastic about this proposal. Gensler is concerned that the bill could weaken investor protections in traditional financial markets.

At Tuesday’s CFO Network Summit, The Wall Street Journal asked Gensler what he thought of the new bill. „We don’t want to undermine the protections we have in a $100 trillion capital market. We don’t want our current stock exchanges, mutual funds, or public companies to, sort of inadvertently by a stroke of a pen, say ‘you know what, I want to be non-compliant as well, I want to be outside of this regime that I think has been quite a benefit to investors and economic growth over the last 90 years,“ said Gensler.

At the summit, Gensler said the SEC wasn’t looking to extend its jurisdiction and that some cryptocurrencies are already under the jurisdiction of the agency since they qualify as being a security. Senators mostly agreed with Gensler’s view that some altcoins would likely be considered securities, while Bitcoin and Ethereum should be classified as commodities. Source

Interesting Fact: Microstrategy and Tesla at a Loss

The two largest companies, Microstrategy and Tesla, which have added Bitcoin to their balance sheets over the past few years, are in unrealized loss at current price levels.

According to data from Bitcointreasuries.net, Microstrategy, led by Michael Saylor, spent a total of $3,965,863,658 to purchase 129,218 BTC. Although the company has been in profit most of the time on its bitcoin investments, recent events and price corrections in the cryptocurrency market have caused the value of bitcoins under Microstrategy’s management to currently stand at just $2,689,427,156, which means that the company is at an unrealized loss of nearly $1.3 billion on its investments. However, Michael Saylor has declared that his company will continue to pursue its bitcoin policy.

Tesla is in a similar position, having surprised the general public with its purchase of 43,200 bitcoins worth $1.5 billion in February 2021. However, the current value of bitcoins under Tesla’s management is only $899 million, 5which means Tesla is at an unrealized loss of $600 million on its investment. Source

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Institutional Interest in Cryptocurrencies is Trending Again – Crypto Weekly Update

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This week, the total market capitalization exceeded 1.16 trillion EUR. The increase at the 7-day interval is 0.86%. Bitcoin decreased by 0.4% during the week to a current value of over 28,200 EUR. Bitcoin dominance is 46.5%.

Source: Coinmarketcap

Institutional Interest in Cryptocurrencies is Trending Again

A recent report from CoinShares, which tracks various funds focused on investing in digital assets, shows that many institutions are showing renewed interest in allocating their capital to cryptocurrencies at current price levels.

According to the report, institutional investors poured 99.5 million dollars into crypto funds over the past week, marking the second consecutive week in which the funds have seen net positive capital inflows.

Funds based on the most popular cryptocurrency, Bitcoin, fared best during the past week, with inflows of $125.9 million. Bitcoin-based funds have seen net inflows of $506.2 million year-to-date.

However, the second largest cryptocurrency Ethereum did not fare too well during last week. Institutional investors withdrew $32.3 million from funds, with Ethereum-based funds seeing net capital outflows of as much as $357 million year-to-date.

Multi-asset funds and Solana cryptocurrency-based funds also saw modest capital inflows last week, gaining $4.3 million and $0.1 million, respectively.

Thanks to Fumbi, cryptocurrency investing can also be carried out by institutions operating in Slovakia. The Fumbi Business Account allows companies to conveniently purchase cryptocurrencies and, with our comprehensive solution and multi-layered security, store them securely. Simply choose from our range of cryptocurrencies and we’ll take care of the rest. Source

A Bill to Regulate Cryptocurrencies in the US

The long-awaited bill regarding the regulation of cryptocurrencies in the United States, called as „Responsible Financial Innovation Act“, which aims to create an effective regulatory framework for cryptocurrencies, was introduced in the United States Senate on Tuesday.

The bipartisan bill, coming from Republican Senator Cynthia Lummis and Democratic Representative Kirsten Gillibrand, addresses various challenges related to cryptocurrencies, including the oversight of the cryptocurrency market, the regulation of stablecoins, and the tax treatment of digital assets.

The first and very important requirement included in the bill is that the regulation of cryptocurrencies in the US should be covered primarily by the US Commodity Futures Trading Commission (CFTC) rather than the US Securities and Exchange Commission (SEC). The SEC is a well-known institution in the cryptocurrency field that is very keen to interfere in cryptocurrency-related activities and has long opposed the launch of a bitcoin spot ETF fund.

Part of the proposal is focused to exempt crypto transactions of up to $200 from income tax. In practice, this would mean that payments for coffee, lunch or ordinary purchases paid for with cryptocurrencies would be exempt from cryptocurrency tax, so that the originator of the transaction would not have to investigate the difference between the purchase price and the price at the time of sale and pay capital gain tax.

In addition, the bill also includes a study on the environmental impact of digital assets, the creation of an advisory committee on innovation or the development of guidelines for cybersecurity.

However, the vote and potential approval of this bill is still a matter for the future. The bill will first go through votes in the Senate Banking, Agriculture, Intelligence, and Financial Services Committees to make it to the final approval process. Source

Bitcoin Standard Can Be a Reality

The fact that institutions around the world are showing increasing interest in cryptocurrencies is no surprise. However, one global internet company has decided to implement a full Bitcoin standard.

Octagon Networks, a cybersecurity company with more than 20 employees, announced on its website on Monday that it has finished the process of converting its liquid assets and entire balance sheet into Bitcoin.

The group will also start accepting Bitcoin payments for all of our services, with a 50% discount when paid in Bitcoin.

Web portal Cointelegraph interviewed the Ethiopian co-founders of Octagon Networks, who explained that the adoption of bitcoin was driven largely by a belief in bitcoin and in the future of decentralized money that will not be managed by any central authority.

Octagon Network thus became the first cyber-sector institution with transition to the full Bitcoin standard. Source

Paypal to Allow Withdrawal of Cryptocurrencies

After two years of waiting, the online payment system Paypal will allow its users to send cryptocurrencies to external addresses.

Users who have purchased and hold Bitcoin and Ethereum cryptocurrencies on the platform will soon be able to transfer the cryptoassets to their private wallets. This is an important functionality that will allow investors to hold assets on their own software or hardware wallets.

“Starting today, PayPal supports the native transfer of cryptocurrencies between PayPal and other wallets and exchanges,” a PayPal representative said in a statement.

The cryptocurrency withdrawal will initially only be available to users in the United States and will launch within the next two weeks.

The company’s senior management is particularly bullish on crypto assets. PayPal began allowing users to buy, sell, and hold cryptocurrencies within the platform starting in 2020 in the US, bringing this functionality to UK users a few months later. Source

New York is Considering Bitcoin Mining Ban

Proof-of-Work cryptocurrency mining has been a very divisive topic in New York in recent years, with several environmental groups publicly speaking out and protesting against Bitcoin mining companies in the past.

It is widely acknowledged that the PoW consensus algorithm is the most secure and decentralized method reaching consensus, but it comes with the oft-repeated burden of its high energy consumption.

Last Friday, the New York State Senate passed a controversial bill to ban PoW cryptocurrency mining, which would completely restrict and ban all mining in the state. This proposal would have not only prevented the influx of new miners into the state, but also denied the renewal of licenses to those already operating in the state. The only exception would be companies that use 100% renewable resources for mining.

This Tuesday, however, New York State Leader Kathy Hochul said she has not yet committed to signing this bill into law. Instead, she noted that her team will be looking very closely at the proposal over the next few months. So it appears that Hochul does not want to rush into her decision, as New York’s Senate elections will be held on June 28. Source

Kazakhstan Plans to Launch Initiative to Investigate Cryptocurrencies

Kazakhstan has become one of the major players in the crypto industry in recent years, currently known as one of the leaders in cryptocurrency mining. However, that’s not all. Last summer, the government empowered local banks to offer customers the ability to purchase digital assets.

Galymzhan Pirmatov, the governor of the National Bank of Kazakhstan, said in his latest statement that the national bank is actively interested in the crypto industry and plans to launch an initiative to explore its potential in the near future.

“We are interested in the opportunities for innovation that these new technologies give us. Therefore, we will conduct these discussions so that our decisions do not negatively affect macro-stability and the interests of consumers of financial services.“ Said the Governor.

Asked whether digital assets urgently need to be put under the government’s supervision, the central banker answered, “it’s too early” for such a move. He disclosed that the authorities have yet to discuss the matter and decide how to address it.

In addition, Pirmatov revealed that Kazakhstan is actively working to launch a digital form of its national currency (CBDC). The National Bank is expected to announce the methodology behind the project by the end of June, while a final decision will follow in Q4, 2022. Source

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With Fumbi Credit, You Can React to Market Movements Even Quicker

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We are introducing another innovation that will further enhance your Fumbi experience and help you realise the enormous potential of the cryptocurrency market.

From now on, you can respond to market movements faster than ever before and seize the perfect moment to invest in Fumbi products. You can easily deposit funds into our latest addition – Fumbi Credit, at any time, and when you think that the right time has come to invest, you place an order and send your credit to any product. At the same time, thanks to the credit system, you can quickly transfer your funds between individual products without having to send funds to your bank account. Depositing and withdrawing euros to Fumbi Credit is free.

Market Potential

The cryptocurrency market has huge potential and is growing every year. While its capitalisation was just €670 billion at the beginning of 2021, it rose by 186% over the twelve months to a year-end level of €1.928 trillion.

The cryptocurrency market is volatile, and it’s something to be prepared for. When prices are lower may be the right time to buy more cryptocurrencies, and Fumbi Credit will allow you to respond quickly. It is also important not to rely on a single cryptocurrency and to invest in a broader, expertly compiled portfolio, such as our Fumbi Index Portfolio.

With Fumbi, Your Profits Can Be Even Higher

Our Fumbi Index Portfolio of over 20 top cryptocurrencies, managed by a sophisticated Fumbi Algorithm to replicate the growth of the entire market, has brought users up to twice as much profit in 2021 as investing in bitcoin alone. Bitcoin yielded investors a profit of 62.34%, while the Fumbi Index Portfolio achieved 146.23%. You, too, can now capitalise on the potential of the cryptocurrency market and invest in Fumbi products faster than ever before.


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* Deposit and withdrawal to Fumbi Credit in euros are free of charge. The use of funds from the Fumbi Credit for the purchase of cryptocurrencies in individual products is charged according to the price lists of the given products. You can see the current price list here.

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Litecoin – The Digital Silver

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In the following blog, we will introduce you to another cryptoasset from our dynamic portfolio – Litecoin. Litecoin is a constant member of our Fumbi Index Portfolio that came about as an alternative cryptocurrency with fast and cheap peer-to-peer transactions that are not controlled by any central authority.

Historical Development of Litecoin

The beginnings of Litecoin go back to 2011 when its founder Charlie Lee, a former Google engineer and MIT graduate, decided to create the first ‚successful‘ alternative cryptocurrency by copying and modifying Bitcoin’s source code.

Back when Litecoin was created, only eight altcoins existed, and seven of them were forks. Forks are projects that largely took over Bitcoin’s source code and made a few changes. Even though Litecoin wasn’t the first alternative cryptocurrency to copy and modify Bitcoin’s source code, it’s historically one of the most successful and well-known altcoins. Thus it earned the status of a „digital silver“.

The main idea behind Litecoin was to create an alternative that provides cheaper and faster transactions than Bitcoin to increase the effectiveness of the use of cryptocurrencies for regular transactions. Litecoin deviated from bitcoin to test new innovations and possibilities for the application of cryptocurrencies.

What is Litecoin?

Litecoin is a peer-to-peer cryptocurrency that allows for immediate payments to anyone anywhere in the world with almost zero expenses. Like Bitcoin, Litecoin is a decentralised cryptocurrency founded on a global payment network with open source code that isn’t controlled by any central organ.

Initially, Litecoin was a strong competitor of Bitcoin, mainly due to its fast and cheap transactions. However, because of the growing number of alternative cryptocurrencies, Litecoin’s popularity eventually started to decline.

Elemental Differences Between Bitcoin and Litecoin

Like Bitcoin, Litecoin uses a proof-of-work (PoW) mechanism to verify blockchain transactions. However, due to certain modifications, this system is considered a ‚lighter‘ and faster version of Bitcoin. 

The key difference between Litecoin and Bitcoin is that Litecoin uses a mining algorithm called Scrypt PoW, which allows for shorter transaction times. Bitcoin uses the SHA-256 PoW algorithm.

The Scrypt PoW mining algorithm initially focused on lowering the efficiency of specialised miming equipment but was ultimately unsuccessful. Though it’s still possible to mine Litecoin even with home mining equipment, the industry is dominated by large scale Litecoin miners.

Litecoin generates a new blog approximately every 2.5 minutes – about four times faster than bitcoin, which generates a new block around every 10 minutes. It’s directly proportional to the litecoin supply that is four times higher than bitcoin. While bitcoin’s limit is 21 million BTC, the litecoin is capped at 84 million LTC. The following table characterises the basic differences between Litecoin and Bitcoin:

Based on information from Litecoin.info

Litecoin Halving

New litecoins are created through the mining process when miners add new transactions into the blocks. The miner that manages to verify a block gets a certain amount of litecoins as a reward for their effort. The amount consists of a set number of new Litecoins and transactional fees included in the block. 

The Litecoin network’s base reward is halved every 840,000 mined blocks. Considering the average block mining speed of 2.5 minutes, approximately 210,000 blocks get mined per year. That means halving in the Litecoin network takes place about every four years.

The last halving within the Litecoin network happened on 5 August 2019, when the base block reward (so-called coinbase) got halved from 25 LCT to 12.5 LTC per block. Next halving is expected around 23 August 2023, when the block reward will drop from 12.5 LTC to 6.25 LTC.

The idea behind halving is a gradual decrease in the accumulation of litecoins. In traditional financial markets, the decreasing offer of an asset with a constant or growing demand leads to growth of value because the rarity of the asset is increasing. 

Litecoin SegWit

Segregated Witness is a blockchain protocol upgrade proposed as a solution for an issue with Bitcoin scaling. The need for a SegWit was caused by a 1MB block size limit on the bitcoin blockchain. With the increased use of the network, the blocks began to fill up fast, slowing transactions and increasing transaction fees.

Many miners initially criticised SegWit as a dangerous upgrade for the bitcoin blockchain. Some even believed it might cause a complete collapse of Bitcoin. Of course, every blockchain upgrade poses risks, such as an incorrect source code. If the code wasn’t properly checked and tested, it could disrupt the network. 

Litecoin was the first cryptocurrency that implemented SegWit within its platform. As a result, Litecoin proved that the code works as it’s supposed to. The SegWit implementation drew considerable attention to Litecoin in the crypto community. It even led to considerations of using Litecoin as a „canary network“ for Bitcoin where could be tested various improvements for Bitcoin’s future development. Either way, Litecoin provided invaluable help to the bitcoin community by showing that there is no need to be afraid of SegWit, and the upgrade works as it’s supposed to.

Lightning network

The 2017 Litecoin SegWit actualisation prepared an excellent soil for Lighting Network implementation on the Litecoin network. 

Lightning Network is an off-chain system of payment channels run by smart contracts and designed to simplify direct trade between users. 

The idea of Lightning Network is that the payment channels where transactions take place are outside of Litecoin’s main chain. That makes it possible to perform transactions between subjects that don’t trust each other without the necessity to stress the main network.

The payment channels are usually focused on smaller transactions, such as payments for a coffee or lunch. After opening a channel, for example, between the customer and the cafe, both parties can immediately exchange an unlimited amount with minimal transaction fees.

Opening a channel means a single transaction on the main chain. Then all transactions through the channel are recorded off-chain until one of the parties decides to close the channel. Closing the channel means uniting all off-chain transactions under a single transaction written into the blockchain.

Furthermore, the Lightning Network implementation introduced so-called Atomic Swaps that allow the trader to exchange bitcoin for an equivalent amount of Litecoins. This added considerably to the increase in interoperability of these two very similar networks.

Litecoin Goals

Litecoin is a form of digital money that both individuals and institutions can use to purchase assets and transfer resources between economic subjects. The main advantage of using litecoin is that subjects can perform cheap and fast transactions without the necessity of interaction with the provider, such as a bank or centralised payment gate. 

Presently, Litecoin isn’t receiving the attention it deserves. However, once cryptocurrencies reach a critical number of users and become a truly accepted payment method, maybe it will be Litecoin that becomes the standard cryptocurrency of a new digital sphere. 

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*Did you come across a term you didn’t understand? Don’t worry. You can find all essential terms regarding cryptocurrencies in our Fumbi Dictionary.

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Avalanche – The Internet of Finance

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Today we will introduce the basic attributes of the Avalanche protocol – a relatively new innovative blockchain platform whose main motto is extremely high scalability and speed of transaction verification without having to give up decentralisation or security.

History

The Avalanche protocol, along with AVAX, the network’s native token, was created by Ava Labs, founded by Cornell University professor Emin Gün Sirer and two computer science doctoral students, Kevin Sekniqi and Maofan „Ted“ Yin.

As early as 2002, E.G. Sirer, along with V. Vishnumurthy and S. Chandrakumar, worked to create a conceptual peer-to-peer virtual currency called Karma. The Karma digital currency was the first currency to use the Proof-of-Work system to issue new coins.

However, at that time, the PoW system was used only to issue new coins and was not used as a consensual network protocol. Karma was created shortly after the terrorist attacks of 11 September, so it was very difficult to raise funds for its development.

Over the years, however, Sirer has become a prominent and respected figure in the field of cryptocurrencies. For example, he published a research paper outlining the security vulnerabilities of the DAO platform. However, no one took his warnings seriously, which subsequently resulted in the hacking of the DAO platform, in which hackers stole a total of 3.6 million ETH. Additionally, he has proposed consensus adjustments for Bitcoin or Ethereum.

In 2018, he founded his own company, Ava Labs, and in 2019 created the Avalanche cryptocurrency itself. At the beginning of February 2019, the so-called „seed sale „was launched, i.e. the initial sale of tokens to private investors. In September 2020, the Avalanche Mainnet was officially launched.

What Is Avalanche?

Avalanche is an innovative blockchain ecosystem that has been designed to function as a secure, globally distributed and decentralised network. The developers themselves refer to the project as a „platform of platforms“. The protocol uniquely uses three different blockchains to create an interoperable and trustworthy environment on which developers can build. In addition, Avalanche offers payment solutions within the network itself using the native AVAX network token.

Avalanche was created to address several of the majority problems found in most blockchain networks today. The platform fights centralization and provides an alternative to networks such as Ethereum. Avalanche seeks to address the shortcomings of this network and provide even greater programmability and scalability.

Key Characteristics

Avalanche was created as a platform that allows anyone to create their own blockchain. The basic features of the protocol include:

  • Modularity – Avalanche allows anyone to use the network’s „building blocks“ to create their own, standardised blockchain optimised for a particular application. These newly created blockchains are interoperable and exist within a common blockchain network. Therefore, Avalanche is an ecosystem of blockchains and can be constantly expanded to meet the specific needs of developers.
  • Scalability and security Avalanche blockchain uses a Proof-of-Stake (PoS) consensus mechanism to ensure blockchain protection. This system works reliably thanks to a vast number of validators in the network, which ensures that the network is resistant to attacks and, at the same time, reliable and secure. Avalanche can process approximately 4,500 transactions per second, which is much more than all competing blockchains.
  • Performance – Avalanche has created a new set of protocols, called the „Snow family“, that allows all blockchains built within the Avalanche ecosystem to process thousands of transactions per second.
  • Sustainability – Avalanche uses an energy-efficient, eco-friendly, Proof-of-Stake consensus instead of the Proof-of-Work algorithm.
  • Smart contract support – Supports the creation of smart contracts in the Solidity programming language and the use of Etherea programming tools such as Remix, Metamask or Truffle.

How Does Avalanche Work?

Avalanche uses a triple blockchain strategy to simplify network development processes. All three blockchains are authenticated and secured via the Primary Network. The main protocol network is a type of subnet that verifies all built-in blockchains running on the Avalanche platform. An important part of the main protocol network are validators, who stake their tokens and thus participate in validating the system.

The triple blockchain system consists of:

  • Exchange chain (X-chain) – A decentralised blockchain designed to be easy to program. This network allows anyone to create various smart digital assets. These new assets can be, for example, stablecoins, utility tokens, NFTs, wrapped tokens, and others.
  • Platform chain (P-chain) – Blockchain responsible for the smooth operation of the network. It mainly serves to coordinate validators in the network, maintain and monitor active subnets, or create new subnets.
  • Contract Chain (C-chain) – Created to simplify development for developers coming from Ethereum’s environment. C-chain is a method of conversion chain that is compatible with all essential Ethereum tools. Users can seamlessly migrate their decentralised applications to this blockchain. The network supports popular Ethereum tools, such as MetaMask, Web3.js, Remix, or Embark.
Source: Avalanche Network

Avalanche Consensus Protocol

The Avalanche consensus protocol combines the best features of the Nakamoto consensus (robustness, decentralisation) and the classic consensus protocols (throughput, low latency or low memory requirements).

The basic feature of these protocols is high speed. Avalanche protocols reach an irreversible consensus in less than two seconds, faster than all currently available protocols. Avalanche allows you to process thousands of transactions per second (up to 4,500 TPS), which is throughput at the level of current payment systems.

The Avalanche Consensus Protocol operates on the principle of repeated random voting of sub-samples of validators. When any validator on the network sees a transaction that needs to be verified, it randomly selects a small subset of other validators to decide whether the transaction is valid. Each of the selected validators will have their own opinion on the validity of any transaction. Selected validators are weighted according to the amount of their deposit (staked AVAX tokens), while this methodology allows the protocol to theoretically extend the scalability to millions of participants.

When a sufficiently large portion of the subset of validators responds that the transaction is valid and should be accepted, the original validator will agree to accept the transaction. This validator now considers the particular transaction valid. If approached by another validator in the future (it will be part of a subset of validators), it will reply that the transaction is valid and should be accepted.

The same goes for a reversed scenario – if a large enough portion of the subset of validators responds that the transaction is invalid, then the original validator will decline the transaction and recommend all other future validators to decline the transaction as well. The protocols are memory-efficient and consume a minimum amount of electricity. 

Snowman Consensus Protocol

Snowman is an optimised protocol for reaching consensus on the network – it is highly efficient, scalable, and ideal for smart contracts. Snowman works on the principle of the Avalanche consensus protocol. It is used on the Platform chain (P-chain) and the Contact chain (C-chain).

Athereum

Athereum is a subnet of the Avalanche network, the „friendly fork“ of Ethereum, using the Avalanche consensus mechanism. The Athereum developers consider it a friendly experiment because they themselves are supporters of the Ethereum ecosystem. In this way, they try to help Ethereum solve its shortcomings.
It is the use of the above-mentioned Avalanche Consensus Protocol that allows this subnet to have high throughput and the ability to reach consensus on the network almost immediately. Athereum developers use the same development tools used in the Ethereum network (Web3js, MyEtherWallet, MetaMask). In addition, when a specific application operating on Ethereum is transferred to Avalanche, all existing ETH holders are entitled to ATH tokens (Athereum tokens) in equivalent value.

Source: The Coin Republic

Athereum’s intention is not to replace Ethereum but to provide an alternative environment for running decentralised applications with higher throughput and faster consensus. The intention is to inspire and motivate to increase research and development of decentralised applications as well as to optimise the Ethereum Virtual Machine (EVM) itself.

Native Network Token – AVAX

AVAX is the native token of the Avalanche network. Users use this token to receive rewards (staking) and pay fees. An important feature of this token is its limitations. Unlike most other POS consensus platforms, which have an unlimited supply and are constantly increasing it, Avalanche has a fixed limited supply of 720 million tokens.

The first 360 million tokens were issued at launch (the vast majority locked in vesting periods between 1-10 years). Another 360 million will be released through staking. As with bitcoin, staking rewards will decrease over time as the number of tokens in circulation grows.

In addition to the limited offer of AVAX tokens, as with Bitcoin, AVAX also differs in that it burns tokens for fees and all types of primary network operations – for example, burning transaction fees, network rental fees, or for creating subnets and individual blockchains.

Invest With Fumbi Today

If you are considering investing in cryptocurrencies, Fumbi is here for you. Our algorithm-managed portfolio accurately tracks the price movements of the entire crypto market.

Fumbi is the first of its kind to offer cryptocurrencies to the general public, even at small deposits. Investing in cryptocurrencies through Fumbi is very easy and minimises risks.

You can start with a deposit of as little as €50.

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Did you come across a term you didn’t understand? Don’t worry. You can find all essential terms regarding cryptocurrencies in our Fumbi Dictionary.

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Fumbi Index Portfolio Quarterly Update – June 2022

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A team of experts at Fumbi is constantly analysing current developments in the cryptocurrency market and working hard to bring you only the best. That is why, after another three months, we have updated the assets in our flagship product Fumbi Index Portfolio. We have added new assets with high technological and growth potential and removed those that no longer meet our criteria, and their activity has been lower in recent months.

Diversification of the Investment Portfolio Is the Key to Success

In the investment practice, diversification is considered the most optimal solution for reducing investment risk. Diversification is a method by which an investor distributes his capital among several assets as individual assets react differently to changes in market conditions.

In the case of volatile markets, including the cryptocurrency market, diversification is essential. Investing in only one cryptocurrency can generate 100% of profits but also 100% of losses. However, if you invest in a comprehensive portfolio, the risk of failure and loss of your funds is significantly lower.

Furthermore, an actively managed and diversified investment portfolio that mimics market developments provides investors with the opportunity to generate higher returns on multiple assets, as opposed to investing in a single asset, where the risk of loss is much higher.

At Fumbi, we provide you with the option of regular monthly investments in a dynamic, rebalanced investment portfolio through our Fumbi Index Portfolio product with a deposit of as little as €50.

Which Cryptocurrencies Did We Add to Our Portfolio? 

We carefully analyse the cryptocurrency market’s current situation for you daily to add new assets with high growth and innovation potential. During the June update, we added the following assets to our portfolio:

  • Maker (MKR) – Maker is a pioneer and currently the leading platform in decentralised finance (DeFi). Its decentralised autonomous organisations control Dai’s stablecoin and manage its risk parameters.

Which Cryptocurrencies Did We Remove From Our Portfolio?

The portfolio update also includes the elimination of cryptoassets that no longer meet our strict selection criteria. We have also decided to eliminate some cryptoassets due to low activity or market return in recent months.

The removed cryptocurrencies are:

  • Fantom (FTM)
  • Monero (XMR)

A few weeks ago, we also delisted the cryptocurrency Terra (LUNA) from our Fumbi Index Portfolio, which fell victim to a coordinated attack, and its price fell by more than 99%. Fumbi responded to this situation immediately by removing this asset from our product portfolio. If you’ve missed the situation with Luna and the stablecoin TerraUSD, you can read more about it in our blog post.

Four Important Tips to Help You Manage Your Investments Effectively

  • Set your investment goal – Keep in mind that investing in cryptocurrencies is not a way to make a quick fortune. It is important to perceive investing in cryptocurrencies instead as a long-distance run. Therefore, it is essential to set your own investment goals, which you will firmly follow. For example, when investing in cryptocurrencies, it is a good idea to plan an entry (buying) point and an exit point (the point at which you will sell assets) and stick to these points. Investing with a predetermined goal can help you manage price fluctuations in the market more easily.
  • Emotions aside – The lack of knowledge and investment experience causes many investors to sell their investment portfolios in panic under the influence of emotions, even when their investment is down. Don’t let emotions influence your investment decisions. Being a successful investor does not mean getting rich in a day but building wealth based on rational and systematic investment. You can read more about how to respond to market movements in this article.
  • Avoid the FOMO effect – FOMO is an effect caused by the fear of missing out on a once-in-a-lifetime investment opportunity. Investing under the influence of the FOMO effect can force you to buy cryptocurrencies that you would normally ignore. The same is true of the sharp rise in cryptocurrencies, where the fear of missing out will cause you to buy cryptocurrency at its peak. Avoid the FOMO effect and instead invest regularly and long-term.
  • Long-term investing is the way – Investors should not enter the market just because of quick profits or short-term speculation. The ever-evolving cryptocurrency technology is still under development, but with increasing adoption, more and more investors from traditional financial markets can be expected to be interested in cryptocurrencies.

How Do We Select Cryptocurrencies?

At Fumbi, we follow strict rules for selecting cryptocurrencies that enter our portfolio. In addition to formal criteria related to liquidity, market capitalisation or custody, assets must have strong fundamentals in three categories, which we identify as key to the market: payment systems, decentralised finance, and Web 3.

You can read more about constructing our portfolio in this article.

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JP Morgan Predicts Bitcoin Price Growth – Crypto Weekly Update

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This week, the total market capitalization exceeded 1.15 trillion EUR. The decrease at the 7-day interval is 1.71%. Bitcoin decreased by 0.52% during the week to a current value of over 28 000 EUR. Bitcoin dominance is 46.1%.

Source: Coinmarketcap

JP Morgan Predicts Bitcoin Price Growth

The latest report from one of the largest investment banks in the world shows that JP Morgan expects Bitcoin price to increase to its fair value in the short-term horizon.

According to the report, Bitcoin is trading at a discount of up to 28% at the current price level, as the investment giant set bitcoin’s fair value at $38,000, based on its analysis. The figure was based on the premise that BTC is around four times more volatile than gold. Meanwhile, it increased its long-term price target to $150,000 from $146,000.

Moreover, the bank believes BTC could recover stronger than other beaten-down assets because it had fallen far deeper amid the correction period.

JP Morgan further states in its report that cryptocurrencies are now among their preferred alternative assets over real estate in the ranking of alternative investments. However, these assets do not fall into the same category as stocks and bonds.

With bitcoin down more than 60% from its ATH last November and the total capitalization of the crypto market down from $3 trillion to $1.3 trillion, the bank sees an opportunity in this fast-growing asset class. Source

Back Above $30,000

After weeks of bleak price correction, Bitcoin finally started to show signs of recovery and capital inflows from investors during this week.

On Monday, the leading cryptocurrency surpassed the $30,000 price level, which market analysts consider a critical psychological threshold. Currently, the volatility of bitcoin and altcoins is highly correlated with the stock market, which amid rising macroeconomic uncertainty, is experiencing similar declines as the crypto market. Silicon Valley technology stocks have been among the hardest hit this year, with giants like Amazon and Tesla posting heavy double-digit losses (34.8% and 36.6%, respectively).

Although Bitcoin has had a couple of really tough and uncertain weeks, it rose over 5% as global stocks and U.S. futures rallied. European and Asia-Pacific stocks surged as traders have started to place bets on Fed adopting a less aggressive tightening policy over the coming months.

Nevertheless, Bitcoin is still a long way from its all-time high reached in November 2021, when it traded for an astronomical $69,000. The cryptocurrency market now has a long and uneasy road ahead, but patience is key to success in investing. Source

Russia’s Central Bank is Considering Using Bitcoin

First Deputy Governor of the Russian Central Bank, Ksenia Yudaeva, said in a statement to Russian media on Tuesday that the bank is open to the idea of using cryptocurrencies for cross-border settlements.

“In principle, we do not object to the use of cryptocurrency in international transactions,” Yudaeva said. Yudaeva then went on to clarify that the Central Bank still believed cryptocurrencies created “great risks” for Russian citizens and Russia’s financial infrastructure.

The Central Bank’s announcement comes as legislators prepare a new version of a digital currency law. Government departments and lawmakers have struggled to reach a consensus on the acceptance and usage of cryptocurrencies within the Russian Federation since the beginning of the war with Ukraine and the ensuing sanctions.

This statement is not the first attempt regarding the use of cryptocurrencies in the Russian Federation. A few weeks ago, the Minister of Industry and Trade Denis Manturov stated that crypto payments in Russia will be legalized sooner or later. In addition, Ivan Chebeskov, the Ministry of Finance’s Financial Policy Department, also stated last week that the ministry was actively discussing using cryptocurrencies for international settlements. Source

Terra Launches New Chain

Over the past week, supporters of the Terra blockchain project voted to launch a new „Terra 2.0“ chain without the algorithmic stablecoin UST.

The proposal labeled „Proposal 1623 – Terra Builders Alliance: Rebirth Terra Network“ garnered the support of 65.5% of the community, while only 13.5% were opposed, and 21% abstained. The proposal aimed to create a new network, rename the original blockchain to „Terra Classic“, and change the ticker of the native token from LUNA to LUNC. The proposal also included the redistribution of new LUNA tokens between LUNC and UST holders based on different redistribution terms and the linear release of tokens.

The new Terra chain was launched on Saturday, 28 May at 8:00 CET. However, only 21% of the total supply has entered circulation so far, with the rest to be released linearly over the next 4-5 years. Source

Bitcoin Network Difficulty has Significantly Dropped

Less than a month ago, the Bitcoin network witnessed a crucial moment in which the Network Difficulty parameter reached an all-time high of 31.251 trillion units.

The difficulty parameter measures how hard it is to mine a Bitcoin block, or how hard it is to find a hash below a certain target value. If the difficulty parameter grows, it means that more computing power is needed to mine new blocks, which ultimately makes the network more secure.

The last adjustment of this parameter, which is regularly updated once in 2016 blocks, has brought slightly negative news. As of May 26, 2022, this parameter has fallen by as much as 4.33%, from 31.251 trillion to 29.897 trillion, breaking a 10-month streak of growth in the network difficulty.

Despite a decline of more than 4%, the Bitcoin network is still the most secure blockchain network in the entire crypto space. The more secure the network is, the less likely it is that one entity could take control of the network. If someone controlled 51% of the network’s total computing power, they could carry out a so-called double-spending attack. Source

Curiosity: The SEC Continues to Reject Spot ETFs

The U.S. Securities and Exchange Commission (SEC) continues its streak of denying applications related to the launch of the first bitcoin spot ETF.

The latest entity to be rejected was hedge fund One River Digital, which was denied a rule change by the SEC that would have allowed the company to list a fund called the „One River Carbon Neutral Bitcoin Trust“ on the NYSE’s New York Stock Exchange.

The SEC said that in considering the proposed rule change, One River used „the same standard that the company has used in its previous applications relating to the listing of bitcoin-based commodity trust.“ According to the SEC, the proposed rule change does not comply with the U.S. Commission’s fraud prevention rules.

Thus, whether investors will ever see a spot ETF remains questionable. However, companies such as Fidelity Investments, Global X, New York Digital Investment Group and Grayscale will continue to fight for the launch of a spot ETF in the United States, according to their statements. Source

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eBay Launches Its Own NFT Collection – Crypto Weekly Update

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This week, the total market capitalization exceeded 1.17 trillion EUR. The decrease at the 7-day interval is 0.84%. Bitcoin decreased by 0.51% during the week to a current value of over 27,700 EUR. Bitcoin dominance is 45.1%.

Souce: Coinmarketcap

eBay Launches Its Own NFT Collection

US multinational e-commerce company eBay is the latest company to enter the NFT business. The global market leader in online marketplace sales, which connects millions of buyers and sellers worldwide, has announced the launch of a series of exclusive NFTs through a strategic partnership with OneOf, a platform that targets NFT communities in the music, sports and healthy lifestyle industries.

“Through our partnership with OneOf, eBay is now making coveted NFTs more accessible to a new generation of collectors everywhere,” said Dawn Block, the Vice President of Collectibles, Electronics and Home at eBay.

The NFT collection of 13 limited-edition digital collectibles, dubbed “Genesis,” will have four tiers – green, gold, platinum, and diamond. The first-ever NFT collection from eBay will feature 3D and animated visualizations of iconic athletes who have appeared on Sports Illustrated covers over the years. The first NFTs to go on sale Monday were those of legendary Canadian hockey player Wayne Gretzky.

„Forty years ago I was grateful to be on the cover of Sports Illustrated, it was a monumental moment in my life,“ said Wayne Gretzky. „I’m honored to bring this collectible to my hockey fans who have followed my career for decades.“

eBay has thus officially joined the ever-growing number of companies that want to implement NFT in their platforms. For example, Instagram recently announced that it would begin testing NFT with select creators in the United States. Spotify is also a major player in this field, confirming last week that it is testing a new feature that will allow artists to promote their NFTs on profiles. Source 

Bitcoin Extends Record Streak of Weekly Losses

The most popular cryptocurrency, Bitcoin, has set a new historical record, which, however, will go down in history as „negative“. Bitcoin has already formed the eighth red weekly candle (1W Candle) in a row. This means that the price of bitcoin has closed the week at a lower level than at the beginning of the week for the eighth time in a row.

This year’s negative streak began in late March at $46,900, around the time Terra announced plans to buy $10 billion in bitcoin to back its UST stablecoin. The steps taken by the Federal Reserve (Fed) to tighten monetary policy and the collapse of Terra’s platform have caused bitcoin to plummet by nearly 38% since March 28. The market situation was not helped much by the quarterly reports of Block or Coinbase, which saw a significant drop in revenue during the first quarter.

Other coins have been slammed as well. Besides LUNA’s collapse, Ethereum and Cardano went down by 33% and 41%, respectively.

The previous record for weekly red candles was set back in 2014 when bitcoin recorded six red weekly candles in a row. Back then, its price steadily declined from $507 on August 25 to $323 on October 6.

Market cycles are very important for investors in all financial markets. Market cycles can tell investors when to invest aggressively and when to switch to a defensive strategy. Market downturns are an ideal time for additional asset accumulation and investment portfolio expansion, as the long-term trend in financial markets has historically proven to be upward. Source

Shift in ETH 2.0 Development

Developers on the Ethereum network are close to reaching another major milestone. According to published information, the Ropsten testnet will undergo an update in the first half of June that will ensure the testnet’s transition to the Proof-of-Stake (POS) consensus algorithm.

Last month, the developers working on The Merge, an upgrade to the Ethereum network to switch it from a Proof-of-Work (POW) to POS consensus model, began testing how the switch would work on a shadow fork. Two days later, things seemed less rosy as Ethereum Foundation developer Tim Beiko said on Twitter that the upgrade had been pushed to the second half of 2022.

The transition from the consensus POW algorithm to POS will mean the end of POW mining on the Ethereum network. Mining is the process through which new ETH coins are put into circulation and transactions are verified.

The new model will replace miners with so-called validators, who do not guarantee the security and uniqueness of transactions with computing power but directly with their staked ETH coins. The migration of the network to the new consensus model is expected to reduce the energy costs of running the blockchain by up to 99.9%, as well as reduce the issuance of new ETH into circulation. Source

ECB Survey Shows Interesting Results

The European Central Bank (ECB) released the results of a survey on cryptocurrencies on Tuesday in an effort to gauge the ownership sentiment among residents from six eurozone countries.

Participants were aged between 18 and 70 from the Netherlands, Spain, Italy, Germany, Belgium and France. The results show that around 10% of respondents own cryptocurrencies. Of this group, only 6% of respondents reported owning more than €30,000 worth of digital assets, while up to 37% of respondents reported owning more than €999 worth of cryptoassets.

Across all countries, investors from the TOP 20% of the income-richest population had the highest share of cryptocurrency ownership compared to other income groups.

The survey was included in a new report published by the ECB the same day regarding the growing adoption of crypto assets despite their risk factors. As cited by the ECB, 56% of respondents in a recent Fidelity survey said they had some exposure to cryptoassets, up from 45% in 2020.

Increased availability of crypto-based derivatives and securities on regulated exchanges, such as futures, exchange-traded notes, exchange-traded funds, and OTC-traded trusts, have contributed to the momentum. Source

Stablecoin USDT Passed the Audit

The most popular stablecoin on the market, USDT, has passed a successful audit. In a Thursday blog post, Tether announced that the USDT stablecoin is „fully backed“ by reserves. The release of the audit results comes just as stablecoins are being targeted for criticism, in an attempt to assuage the fears of users of the USDT stablecoin, whose price briefly depegged from the value of one dollar on May 12.

According to the stablecoin issuer, its commercial paper holdings over Q1 2022 decreased 17% from roughly $24 billion to $20 billion, with an additional 20% reduction to be reflected in the firm’s next quarterly report.

On the other hand, Tether increased its equity investments in money market funds and US Treasury bills by 13% in the first quarter, from roughly $34.5 billion to $39 billion.

In total, the company has reported $82 billion in reserves to cover stablecoin, with USDT’s current market capitalization at $73 billion. This means that Tether has enough cash to cover every single USDT in circulation.

As part of an $18.5 million settlement with the New York Attorney General’s Office in February 2021, in which authorities alleged that the firm misrepresented the extent to which its USDT stablecoins were backed by fiat collateral, Tether is required to publish reserve-related reports on a quarterly basis. Source

Interesting Fact: Bitcoin Pizza Day

The crypto community around the world celebrated one of the most important days in bitcoin history this Sunday.

May 22nd is forever etched in history as „Bitcoin Pizza Day“. On this very day twelve years ago, László Hanyecz, an American programmer born in Hungary, ordered two pizzas for a whopping 10,000 bitcoins. Historically, this is the first-ever commercial transaction in which someone purchased goods using cryptocurrency.

„I’ll pay 10,000 #bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some leftover for the next day. If anyone is interested please let me know.” Hanyecz wrote on Tuesday, May 18, on the Bitcoin.org forum.

Even so, he didn’t end up getting his pizza until Saturday. By Friday, some were even led to reach out about Hanyecz’s health, with user BitcoinFX asking if he was “getting hungry.” The price per bitcoin at the time was $0.004

Hanyecz has stated several times that he has no regrets about exchanging pizzas for bitcoins. With his transaction, Lászlo confirmed that bitcoin has all the important characteristics of traditional currencies and can be used to easily pay for goods and services. Source 

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Algorand – Carbon Neutral Blockchain

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Kryptoměny
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The following article will introduce you to another cryptoasset from our dynamic portfolio – Algorand. The algorithm is a decentralised blockchain platform whose main goal is to solve the lingering problem of the blockchain trilemma.

History of Algorand

The idea to create a decentralised Algorand platform originated in 2017. It came from Silvio Micali, a professor at the Massachusetts Institute of Technology (MIT) and one of the winners of the prestigious annual Turing Award from the Computer Association for technical contributions to the world of computer science.

Silvio Micali has been involved in cryptography since the 1980s. He is one of the co-inventors of zero-knowledge proofs, pseudo-random generation, and verifiable random functions, which are currently at the core of many modern blockchain platforms, including Cardano, Dfinity, and Elrond.

Micali designed Algorand in collaboration with an internationally recognised team of researchers, mathematicians, cryptographers, and economists to ensure the network’s true decentralisation while providing the maximum possible security and scalability.

The Algorand network was officially launched in June 2019, and its blockchain already contains more than 20.7 million verified blocks.

What is Algorand?

Algorand is a decentralised open-source blockchain infrastructure whose primary goal is to solve the so-called blockchain trilemma.

Blockchain trilemma is a concept solving the challenges that developers face when designing individual blockchains. The trilemma problem is that developers are forced to compromise in one of three essential areas when creating blockchains:

  • Decentralisation – the creation of an autonomous blockchain system that does not rely on any central point.
  • Security – the ability of a blockchain system to defend against attacks, bugs, and other unforeseen issues and function as expected from it.
  • Scalability – The ability of a blockchain network to handle an ever-increasing number of users without time constraints and rising fees.

Algorand is a network that seeks to achieve equilibrium in all of the above areas. Additionally, Algorand is designed as a network focused on fast payments and near-instant completion of transactions.

Key Features

Key features that have made Algorand popular among users include:

  • Low fees – Algorand fees are calculated based on the size of the transaction, and the user can choose to increase the fee if they want the transaction to be confirmed as soon as possible. However, there is no gas fees concept in Algorand, as is the case with other smart contract platforms. The minimum transaction fee is 0.001 ALGO ($0.0006)
  • Transparency – The whole Algorand code is open-source, so it is accessible to anyone, anytime, anywhere.
  • High throughput – On Algorand, blocks are produced on average every 4.5 seconds, with each block containing up to 5,000 transactions. Therefore, the network can process up to 1,000 transactions per second. At the present load, the network processes an average of 11.1 transactions per second, according to the algoexplorer.io web portal.
  • Finality – Transactions on the Algorand network are final as soon as they are confirmed in the block, so there is no need to wait for multiple network confirmations.

Consensus Protocol

According to the founder of the Algorand network, the problem with many current blockchains is that when using traditional consensus algorithms, blockchains must sacrifice at least one of the three key features for individual networks to work effectively. Silvio Micali and his team decided to solve this problem by inventing a new consensus protocol called Pure Proof-of-Stake (PPoS), which they subsequently implemented into the Algorand protocol.

PPOS is built on the basis of a two-phase block production process consisting of proposing and voting. The protocol in each block round uses the verifiable random function to select the block proposer and a group of voting commissions that approve the proposed block. The block proposer and the groups of voting commissions are selected at random from all ALGO token holders (i.e. the accounts on which the tokens are held). The probability of selection is directly proportional to the holder’s share of the total number of ALGO tokens.

The block proposal is followed by a voting process in which the network nodes check and confirm that there are no double or excessive spending transactions in the block. If the commission agrees that everything is fine, the block is added to the blockchain. If a problem occurs in the block or malicious activity is detected, the network goes through a recovery process in which the faulty block is dropped, and the process of selecting a new block proposer begins.

It is the simple process of restoration and discarding the wrong block that has often been the target of broader criticism. This is because the network does not use any mechanism to punish bad block proposers, as is common in other blockchain networks. Instead, the network goes through a simple recovery process that simply discards the faulty block. Although this system supports the speed and efficient scalability of the network, it does not penalise the designers of faulty blocks in any way.

Source: Binance

Staking in the case of Algorand works particularly efficiently. Basically, it is enough just to keep ALGO coins in your wallet, and the coins are automatically staked without the need to perform any further operations. The only specificity is that the user’s rewards become part of the total balance but do not automatically participate in the staking process.

Accumulated rewards become part of staking only if the user performs an operation with them – for example, once in a while, sends them to another address and back.

Smart Contracts in the Algorand Network

Decentralised finance is currently the fastest-growing sector of the global blockchain ecosystem. However, there is still room for improvement in sophisticated decentralised applications, which already allow easy sending and receiving of money and much more complex functions of loan return, insurance, or asset tokenisation.

Algorand belongs to protocols that have the functionality of smart contracts. Smart contracts in the Algorand network are contracts that can be controlled from any network node in the blockchain once deployed in the protocol. After the contract is deployed, its specification is transferred to a specific application which gets its ID assigned. A specific type of transaction then triggers applications called an Application Call Transaction.

Smart contracts are usually written in TEAL, the syntax of a programming language to specify a program that is eventually converted to bytecode to AVM. For easier understanding, in the case of the Ethereum network, smart contracts are written in Solidity language and converted into bytecode for execution via EVM (Ethereum Virtual Machine). However, it is also possible to write smart contracts in Algorand in Python using the PyTeal library or Reach, similar to JavaScript.

In the case of Algorand, the changes in the state of the network are recorded by the so-called Algorand Virtual Machine (AVM) that runs programs associated with transactions from individual network nodes.

Forkless Technology

The term fork characterises a situation in which one blockchain branches into two separate chains. In practice, branching can occur, for example, if part of the community does not want to receive new updates or when significant protocol changes are not backwards compatible with an older version of the software client. Additionally, a fork also occurs when two miners in the network mine a new block at almost the same time and the information about the extracted blocks has not yet managed to be distributed among all network nodes. To maintain the continuity of the blockchain, one of the branches always gets abandoned and the transactions that are part of it become invalid.

The PPoS consensus algorithm uses a collective voting mechanism to verify blocks, ensuring immediate finality of transactions and eliminating the possibility of foreclosure. In the Algorand network, it is never possible to add two blocks to a blockchain at once because only one block can always reach the required limit of votes from selected voting commissions. In practice, after each block is verified, users can be immediately sure that the block containing their transactions will be part of the blockchain forever. Thanks to this technology, there is no need to wait for several block confirmations for transactions in the Algorand network. In Bitcoin’s blockchain, it is often necessary to have at least three block confirmations before the resources are credited to the wallet.

Green Blockchain

In the ecosystem of cryptoassets, Algorand is considered to be one of the most effective and ecological blockchains. Since April 2021, the platform has even become carbon-negative, which means that it buys more carbon credits than its actual carbon emissions.

Obrázok, na ktorom je text, laserAutomaticky generovaný popis

Source: Twitter

Algorand Foundation

The mission of the Algorand Foundation is to create a decentralised and borderless global economy based on Algorand technology. The Algorand Foundation assists in this goal by taking responsibility for project tokenomics management and overseeing decentralised project management as well as a healthy and prosperous ecosystem.

An important part of the vision are also the so-called Algorand ambassadors. They help build local communities to spread knowledge and understanding about the development of this blockchain ecosystem around the world. The Algorand Foundation has created a global program for these ambassadors for their work in creating national and international communities. The foundation also rewards ambassadors for creating educational content for ecosystem development.

Algorand Ecosystem

The most popular projects from the Algorand ecosystem include:

  • AlgoFund – A project to support innovative and revolutionary projects built on the Algorand platform.
  • Kaafila – Decentralised media and education project based on Algorand technology and IPFS.
  • Openfabric -An ecosystem for creating and connecting artificial intelligence applications.
  • Folks Finance – A protocol aimed at providing decentralised loans, in which, among other things, it is possible to deposit free funds and collect interest in return.
  • CryptoTrees – CryptoTrees uses a carbon-neutral Algorand blockchain to plant trees and save forests around the world. Users can obtain tokens through games and initiatives while contributing to the fight against climate change.

Native Network Token – ALGO

The native currency of the Algorand network is the ALGO coin, which is the cornerstone of the entire infrastructure. Rewards in the Algorand network are distributed to all ALGO coin holders instead of only network validators collecting the rewards. This means that all ALGO coin holders can collect rewards of approximately 7.5% per year.

The maximum number of ALGO coins is fixed at 10 billion. There are currently 7.1 billion coins in circulation, with up to 2.5 billion coins owned by the Algorand Foundation and Algorand Inc.

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Juraj Forgacs

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