Fumbi - Weekly crypto news (25.)
Published: 22. 06. 2019 ·
Every week Fumbi.network brings you a recap of the most valuable crypto-news from fields of Technology, Legal & Politics, Business, and Media. So stay tuned and buckle up for some good reading.
Markets Update: Digital Currency Economy Surpasses $300 Billion. Digital currency prices have spiked considerably in the last 24 hours and bitcoin core (BTC) stopped short about $70 in an attempt to cross the $10K price zone. Most cryptocurrencies are up between 2-8% on Friday, June 21 and the entire cryptoconomy surpassed $300 billion. Six days ago news.Bitcoin.com reported on the surge that took place after a majority of cryptocurrency prices pulled back the week prior. This Friday, just before the weekend, on June 21 digital currency prices have spiked considerably and the entire market valuation of the 2000+ coins in existence has gained more than $25 billion. During the early morning trading sessions on Friday, BTC’s fiat value touched a high of $9,921 on Bitstamp but has since retreated to prices between $9,700 and $9,875. news.bitcoin.com
What Is Libra?
Facebook has been in the news quite often over the past few years — and usually for all the wrong reasons. The social media giant has been lambasted over its privacy practices, its seemingly anti-consumer stance and even an apparent investor revolt in which shareholders voted (albeit symbolically) to remove Mark Zuckerberg from the board of directors. However, the company’s most recent announcement that it is launching a digital currency appears to be finally turning the tide for Facebook. The new coin, dubbed Libra, is a stable coin of sorts, though it functions much differently than currencies like tether. Additionally, Facebook has built a blockchain to support Libra. Facebook intends for the new cryptocurrency to be a replacement for paper money and even credit cards, in many cases. The goal is to create a more efficient payment system that holders can use immediately and directly from their apps. This includes transferring money to friends or family (much like Venmo, but without many of the restrictions), paying merchants for services, and acting as a replacement for cash in underbanked areas. One of the company’s biggest stated goals is for Libra to function as currency for migrant workers, unbanked populations in the developing world and more. By creating a simple system that offers similar fungibility to cash, Libra can help people keep their funds safe and accessible, even without banks. While it definitely seems promising, there are questions about exactly how Libra will operate, as well as who will oversee its management. However, industry insiders and observers have hailed this as a positive development for a niche sector desperately in need of mainstream appeal. In many ways, Libra is similar to other cryptocurrencies and especially stablecoins. It is built on a native blockchain and backed by a reserve of several currencies meant to mitigate the impact of price volatility. On the other hand, the new digital currency is different enough from other coins to warrant a closer look, especially now that the team has released its testnet and accompanying white paper. According to the project’s leadership, the idea for Libra is to operate more as digital cash than the traditional speculative function most cryptocurrencies serve. To this end, Libra is designed to be easier to transact with and to offer faster throughput along with quicker validation times. Despite the similarity to fiat-pegged stablecoins, Libra is an alternative that is fundamentally and technically different — too different, some believe. First, Libra is a blockchain without the blocks, or the chains. While the Libra blockchain is technically structured like many others, it functions quite differently, relying on validators with permissioned access rather than nodes on the chain. The white paper itself states, “There is no concept of a block of transactions in the ledger history,” with data assigned to validators sequentially (by number) instead of in groups. In short, instead of operating like a traditional distributed ledger (in clusters of data), the Libra blockchain uses a single data structure that records all transactions and states over time. It is also worth noting that currently, the validator network is made up of 27 companies — including major names like Visa, MasterCard, PayPal, eBay, Uber and Vodafone — which have each pledged $10 million for Libra’s development, and the foundation plans to have up to 100 validators in total. Libra is based on a new programming language called Move, which will eventually be used for smart contracts, and therefore full applications on the Libra “blockchain.” This is a more complex procedure than the standard forking method most blockchains utilize, as it requires a ground-up approach. However, due to Libra’s goals and technical complexity, working on a proprietary framework makes future development easier. Due to these unique twists in the traditional blockchain architecture, some experts argue that Libra isn’t quite a blockchain. According to SilaMoney Chief Technology Officer Alexander Lipton, for instance: “Libra is NOT a blockchain in the traditional sense, since it is lacking most, if not all necessary attributes; it has to be open, public, censorship-resistant, immutable, neutral, etc. which Libra is not, based on the whitepaper.” To make use of the storage and bandwidth, expect to pay Facebook — or the Libra Association — a fixed fee. The fee, along with the basket of assets being held in the Libra Reserve, is expected to be enough to cover Libra’s operational expenses, as well as to pay out dividends to holders. While some have argued that this model is unfeasible, others believe that even just the interest on the reserve funds could be enough to keep investors receiving dividends and cover operational overhead. Others have noted that no matter how its structured, Libra will still earn dividends. According to Alex Frenkel, GM at the Kin Ecosystem: “The white paper seems to indicate that Facebook won't get a cut through transactions, but that doesn't mean that they don't stand to substantially profit. Their focus on international remittances and similarities to modern banking structures show that the Libra Association could earn big dividends on the interest." Moreover, Libra promises some intriguing technical specifications. The blockchain will use a byzantine fault tolerance (BFT) consensus method, which helps expedite transactions due to lower verification thresholds and faster validation times. It also makes it much more resistant to bad-faith actors. Additionally, the permissioned and limited-access nature of the network reduces the overall load of managing nodes. Though the resulting product will be fast — at an estimated 1,000 transactions per second — the compromises made to get there are enough for the biggest blockchain advocates to cry foul. Industry guru Andreas Antonopolous, for example, said: “What Facebook, or any company like Facebook, is proposing is not a cryptocurrency. It doesn’t have any of the fundamental characteristics of cryptocurrency. It doesn’t stand on the five pillars of an open blockchain. These are open, public, neutral, censorship-resistant, and borderless. Facebook has left true decentralization by the wayside in exchange for broader industry appeal.” The issue of centralization weighs heavy on many of the new coin’s critics. For one, blockchain’s goal is to remove the need for central control and provide a more transparent transaction process. As Decred co-founder Jake Yocom-Piatt notes, “Libra goes against the central ideological underpinning of cryptocurrency — it’s not decentralized. Facebook has already garnered a reputation for questionable privacy practices.” The president and founder of the Saga Foundation, Ido Sadeh Man, added that, “If the control over the currency remains in the unelected hands of Facebook and its commercial partners alone, this might very well turn the dream into a nightmare for all of us.” On the other hand, Antoni Trenchev, co-founder and managing partner at Nexo, shared with Cointelegraph perhaps the most popular opinion among consumers: “We believe that Libra’s concept of minimal volatility will lower foreign exchange (FX) cost and facilitate even smoother cross-border trading capabilities and social inclusion. Libra will bring broad financial institutional support and will encourage mass adoption of cryptocurrencies in a variety of activities, notably in e-commerce, investments, social media interactions, the shared economy and beyond.” cointelegraph.com/news
The first stage of the Ethereum network’s transition to Ethereum 2.0 is expected to take place on January 3, 2020, as said in a bi-weekly call of Ethereum core developers on June 13. During the call, Ethereum researcher Justin Drake said that the dev team is working on code specifications for phase zero, confirming that codes are still expected to be released on June 30. Phase zero is the name of the first transition stage of the Ethereum network from a proof-of-work to a proof-of-stake consensus algorithm, which would pass block validation function from miners to special network validators. As mentioned by Drake in the recent call, phase zero is expected launch on Jan. 3, the day when the first block of the Bitcoin blockchain was created ten years ago. The researcher stated: “We still have quite a bit of time before the end of 2019, so I think looking at a target genesis date towards the end of 2019 could be realistic.” Drake also considered the issue of deposit contracts, suggesting to launch those ahead of the targeted genesis block to allow time for validators to make deposits. The developer said that the deposit contract ceremony will be held at Devcon, a Ethereum developers conference in October. According to Drake, such timing will enable developers to deliberate on the address of the deposit contract, as well as to avoid scam deposit contracts. Recently, major cryptocurrency exchange Binance published research claiming that the vast majority of Decentralized Finance (DeFi) application creators are built on the Ethereum blockchain. cointelegraph.com/news
TRON Announces MainNet Upgrade Designed to Enhance Security and Convenience. Odyssey, the mainnet for the blockchain-based platform TRON, will be upgraded to version 3.6 soon, according to an official blog post by the TRON Foundation on June 18. The TRON network aims to be a platform for creating entertainment-focused decentralized applications (DApps). As stated in the post, developers can create DApps on both the TRON protocol as well as the Tron Virtual Machine. Odyssey version 3.6 will reportedly contain new features designed to make DApp creation easier, as well as provide network protection from bad actors. As per the report, goals for the update included the following: “Implement a more lightweight built-in event server, providing convenience for DApp developers to customize their own event service when they choose to switch on this feature. Enhance protocol data check to prevent malicious data on the chain”. The update also features some routine improvements to other areas of the blockchain, such as improved security and stability. The post also notes that the TRON public chain can perform tens of thousands of transactions per second (TPS). According to its website, TRON consistently performs 2,000 transactions per second, dwarfing a purported Ethereum (ETH) network TPS of 25 and a Bitcoin (BTC) network TPS of 3-6. As previously reported by Cointelegraph, Tron CEO Justin Sun advertised Odyssey version 3.1 as having superior speed to BTC and ETH. Sun announced his projections on Twitter, saying: “TRON will be 200x faster vs. ETH, 100x cheaper vs. EOS. dApp developers & users, this one is for you!” cointelegraph.com/news
II. Legal & Politics
The Financial Action Task Force adopted its new rules on crypto assets and published its updated Guidance on Virtual Assets and Virtual Asset Service Providers Friday. Under these new measures, crypto service providers will be required to implement the same requirements as traditional financial institutions. The Financial Action Task Force (FATF), an independent inter-governmental body that develops and promotes policies to protect the global financial system against threats such as money laundering and terrorist financing, wrapped up its Plenary Week Friday in Orlando, Florida. At the closing of the event, the FATF announced that it had adopted and issued “an Interpretive Note to Recommendation 15 on New Technologies,” which clarifies the amendments to the international standards relating to crypto assets and describes how countries must comply with relevant recommendations. U.S. Secretary of the Treasury Steven T. Mnuchin delivered the closing speech to the plenary. He said: „The Interpretive Note adopted this week includes virtual asset standards that are binding to all countries … Under these new measures, virtual asset service providers will be required to implement the same AML/CFT requirements as traditional financial institutions.“ news.bitcoin.com
Federal Reserve members held discussions with Facebook over the company’s Libra project. According to Federal Reserve Chairman Jay Powell during today’s press conference, monetary policy makers are not worried that Libra will replace fiat money. He said: “I think we’re a long way from that…Digital currencies are in their infancy. So essentially, [I’m] not too concerned about central banks no longer being able to carry out a monetary policy because of digital currencies or cryptocurrencies.” Meanwhile, regulating Facebook’s Libra is not on the agenda because the Fed doesn’t have specific authority to do so. “We don’t have plenary authority over cryptocurrencies as such. They play into our world through consumer protection and money laundering…But I would say through international forums we have significant input into the payment system and as you know play an important role in the payment system in the United States.” Powell noted the risk/reward dynamics of crypto: “There are potential benefits here; there are also potential risks, particularly of a currency that could potentially have large application.” The Fed Chair also echoed recent comments by BOE Governor Mark Carney, saying: We will wind up having quite high expectations from a sort of a safety and soundness regulatory standpoint if they do decide to go forward with something.” Powell acknowledged that the Fed regularly meets with private sector companies about fintech plans, and it isn’t the only agency that Facebook met with: “Facebook, I believe, has made quite broad rounds around the world with regulators, supervisors, and lots of people to discuss their plans and that certainly includes us. That’s something we’re looking at. We meet with a broad range of private sector firms all the time on financial technology and there’s just a tremendous amount of innovation going on out there.” Earlier today, the Fed revealed that interest rates would remain unchanged. www.ccn.com
Senate Banking Committee Sets Hearing on Facebook’s Crypto for July 16. The Banking Committee of the United States Senate will hear testimony on Facebook’s Libra cryptocurrency project on July 16, economic news site MarketWatch reports on June 19. The social media giant released the white paper for its Libra token yesterday. The stablecoin, will operate on a native eponymous blockchain, and will be backed by a basket of reserve assets “designed to give it intrinsic value” and mitigate volatility fluctuations. Following the release of the project, U.S. regulators expressed their concern about the project’s possible effects on financial stability. Rep. Maxine Waters, chairwoman of the United States House of Representatives’ Financial Services Committee demanded that Facebook halt the project’s development while regulators investigate the project: “Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.” On July 16, the Banking Committee will reportedly hold a hearing entitled "Examining Facebook's Proposed Digital Currency and Data Privacy Considerations." Government officials in other countries have also expressed their doubts and concerns with the new project. French Minister of the Economy and Finance Bruno Le Maire said that the government intends to “ask for guarantees” from Facebook in regard to Libra. Earlier today, Cointelegraph reported that the Chairman of the Russian State Duma Committee on Financial Market Anatoly Aksakov said that the country would not legalize the use of Libra. cointelegraph.com/news
France Creates G7 Taskforce to Examine Facebook’s Libra, Crypto Regulation. A G7 taskforce is being created to examine how central banks can regulate cryptocurrencies such as Facebook’s libra, Reuters reported on June 21. Francois Villeroy de Galhau, the governor of France’s central bank, said: “We want to combine being open to innovation with firmness on regulation. This is in everyone’s interest.” Although Paris has said it is not against Facebook creating a financial instrument, it vehemently opposes libra becoming a sovereign currency. Concerns have been raised over how to ensure cryptocurrencies comply with anti-money laundering laws, consumer protection rules and other regulatory matters. The G7 taskforce is going to be led by Benoit Coeure, who sits on the board of the European Central Bank. Global reaction to libra has been mixed. Jerome Powell, the head of the United States Federal Reserve, has said he recognizes potential benefits and risks to the new project. Meanwhile, the chairwoman of the U.S. Financial Services Committee has urged the social network to halt development until an investigation can take place. On June 18, discussing libra, Bank of England governor Mark Carney said he believes his central bank “will wind up having quite high expectations from a safety and soundness and regulatory standpoint.”
19% of World Population Bought Crypto Before 2019. A new survey by Moscow-based cybersecurity firm Kaspersky Lab introduced on June 17th revealed that 19% of people globally have purchased cryptocurrency. The survey, titled “The Kaspersky Cryptocurrency Report 2019,” was carried out in October and November 2018, with a total of 13,434 respondents in 22 countries. According to the report, 81% of the global population has never purchased cryptocurrencies, while only 10% of respondents said they “fully understand how cryptocurrencies work.” Meanwhile, just 14% of those who haven’t ever used cryptocurrencies would like to do so in the future, the report notes. Among major reasons why global crypto investors have stopped using cryptocurrencies, majority of respondents cited its “too high” volatility, implying that the need of stability before they are prepared to use them. While volatility factor accounted for 31%, other important reasons included loss of money in the bear market, as well as a belief that crypto “is not profitable anymore,” with both factors equally amounted to 23% among the respondents. With that, 22% of respondents claimed that they stopped using cryptos because they are not backed with real assets. Additionally, hacks and fraud vulnerabilities weren’t the biggest reasons for global crypto users becoming disillusioned, with the respondents citing those factors accounted for only 19% and 15%, respectively. In a press release accompanying the report, Kaspersky team noted that the adoption of crypto industry by global consumers have been slowing down due to lack a proper understanding of how cryptocurrencies work. Previously, another survey found that almost 12% of American crypto crypto holders are long-term investors. cointelegraph.com/news
A bank in Liechtenstein has surged in popularity recently due to its rollout of crypto-related services. Bank Frick has seen a 900 percent increase in web traffic since the launch. The tiny European nation of Liechtenstein is one of the continent's more crypto-friendly jurisdictions. Another bank based in the country, Union Service Bank, launched its own stablecoin and security token last year, and the country's national post office is also offering to exchange crypto. Binance also opened a new fiat-crypto exchange in the country back in 2018, as part of its continuing global expansion. Bank Frick has adopted a welcoming approach towards financial innovation, helped by the regulatory environment in Liechtenstein. Since March 2018, Bank Frick has offered customers the option to purchase crypto directly with fiat currency. It has also developed its own proprietary cold storage custody service for its clients' digital assets. A recent report claimed that these services increased its web traffic by 900 percent. According to BeinCrypto, this doesn't necessarily represent a significant increase, as traffic was already so low before. Web traffic on Bank Frick's site peaked at around 1250 visitors in a month recently, compared to just 200 per month before its crypto adoption. However, considering the relative size of the country, the figures do look a little better. 1250 visitors is a notable proportion of Liechtenstein's population of 40,000, and suggests that interest in crypto could grow significantly in the upcoming years. www.chepicap.com/en
Global accounting giant Accenture will sign a formal deal with Canada, the Netherlands and other parties to use blockchain in identifying travelers. The company’s managing director of capital markets, David Treat, confirmed the move at the Synchronize Europe conference in London on June 18, attended by a Cointelegraph correspondent. Part of its expanding activities in the blockchain sector, Accenture will team up with the Canadian and Dutch governments, as well as Air France-KLM, Air Canada and several airports under a new agreement. Treat will support the deal, called “Known Traveller Digital Identity,” which aims to tailor travellers’ experiences using biometric data, in around two weeks’ time. “If I’m able to take my user-controlled identity, decide that I actually want to share, so that I can get hyper-personalized service. I want to share aspects of my preferences, my identity with those players [...] in my journey, can I get a better service?” he explained during a presentation. The rollout of blockchain-based ID will effectively allow travellers to inform customs and border control of their biometrics, along an itinerary of their movements, in advance. The scheme originally surfaced in early 2018 around the World Economic Forum, with officials highlighting the need to coordinate traveller data. “Innovation is key to enhancing global competitiveness, mobility and productivity,” Canada’s Minister of Transport, Marc Garneau, commented at the time. He added: “Leveraging new technological advancements can support risk-based approaches to public safety and security, making air travel more efficient while improving the travel experience.” Blockchain has already found other inroads into aviation in particular, with both Air France-KLM and Accenture itself highlighting its potential. cointelegraph.com/news
Major global banking group HSBC has implemented tokenization technology into its receivables infrastructure for corporate clients in India, according to an announcement on June 18. The British multinational financial services company has reportedly launched its Digital Accounts Receivable Tool (HSBC DART), based on tokenization technology developed by Australian blockchain-powered Fintech company Identitii Ltd., the firm said in the announcement. According to the statement, HSBC DART was developed for HSBC’s Global Liquidity and Cash Management (GLCM) business and deploys Identitii’s approach to tokenization within HSBC’s existing infrastructure of receivables to enhance involved processes. The instrument is designed to automate the accounts receivable (AR) process for HSBC’s corporate customers and their network of buyers, enabling a secure communication layer between network participants and reducing manual work such as invoice payments documentation. Accounts receivable is the balance of money owed to a firm for services or goods provided or used but not yet paid by customers. In the announcement, Identity revealed HSBC’s plans to expand HSBC DART in new markets in Asia. Originally founded in 1865 in British Hong Kong, United Kingdom-based HSBC was the 7th largest bank in the world by 2018, and the largest in Europe, with total assets of about $2.6 trillion. In mid-March 2019, HSBC was reported to be seeking banking partners in South Korea to deploy the blockchain platform Voltron. Previously, HSBC reported that implementation of blockchain tech in its forex trade settlement reduced costs of operations by 25%. cointelegraph.com/news
These Are 2019's Biggest Cryptocurrency Winners and Losers so Far.
The second quarter of 2019 is coming to an end and for those who invested in cryptocurrencies this year, market prices are a whole lot higher than they were a year prior. Since the significant lows in December 2018, most digital currencies have captured remarkable gains. Throughout 2018, many crypto advocates and traders referred to the year as the ‘crypto winter’ after prices fell from their all-time highs to crucial lows. That entire year showed a bearish decline and there were a ton of bull traps along the way. However, in 2019 the story has changed entirely as a great majority of digital currencies have gained considerable value throughout the last two quarters. In fact, a bunch of coins, some of which are relatively unknown, have gained between 350-550% during the last six months. Binance coin (BNB) is the top contender this year after it gained 521% throughout Q1 and Q2. This is followed by chainlink (LINK 510%), ravencoin (RVN 379%), Ignis (IGNIS 357%) and litecoin (LTC 345%). However, even with these pronounced gains, litecoin, for example, is still down 64% from its all-time high (ATH). Other notable coins that took the lead this year as far as gains are concerned include holo (HOT), everex (EVX), monacoin (MONA), enjin (ENJ), ripio (RCN), and zcoin (XZC). All of the aforementioned cryptos have gained 169-282% this year alone. The top 10 digital assets by market capitalization have all gained at least 100% or more in the last two quarters. The next contender behind BNB and LTC in the top ten is eos (EOS), which has seen a 164% increase. This is followed by bitcoin cash (BCH +158%) which is the 24th best gainer this year. Trailing behind BCH is bitcoin core (BTC) which is up 150% year-to-date. The worst two gainers of 2019 in the top 10 market valuation positions are ripple (XRP 21%) and stellar (XLM 9%). Most of these coins besides ripple and stellar have outpaced traditional investments in commodities, stocks, precious metals, and barrels of oil. If you invested in a bundle of coins like the Coinbase bundle the exchange offered in September 2018, you would have seen some decent gains too. At the time, the trading platform offered a market-weighted sampling which included BTC, ETH, BCH, LTC, and ETC (+67.81%). Bitcoin core (BTC) is still 54% down from the ATH on December 17, 2017 and ripple (XRP) is down 89%. The third largest market valuation held by ethereum (ETH) is still down 81% since the coin’s ATH. This is followed by LTC (-64%), BCH (-81%), EOS (-70%), and XLM (-87%) as BNB and BSV were not around during those ATH prices. The worst performers of 2019’s first two quarters include a variety of unknown and well known digital assets. Counterparty (XCP) was the year’s biggest loser so far, down 77%. Other coins that haven’t done so well in 2019 include dentacoin (DCN -70%), salt (SALT -54%), substratum (SUB -50%), namecoin (NMC -49%), quarkchain (QKC -47%), hxro (HXRO -45%), and factom (FCT -42%). Other coins that lost heavily over the last two quarters consist of assets like waves, bitcoin private, electroneum, stratis, pivx, and spankchain. news.bitcoin.com
Big Four auditing firm PwC announced the release of a cryptocurrency auditing software solution in a press release published on June 19. Per the release, the tool newly added to PwC’s Halo auditing suite can be used to “provide assurance services for entities engaging in cryptocurrency transactions.” The firm claims that, with the new addition, the Halo suite permits PwC to provide independent evidence of private-public key pairing (to establish crypto asset ownership), and gather information about transactions and balances from blockchains. PwC further notes that it is already employing the new tool to support audits of clients involved with cryptocurrencies, and assisting companies for which the firm is not the auditor in implementing processes and controls necessary to obtain assurance reports from their auditors. Still, the company notes that the tool is not without its limitations: “Our ability to audit an entity engaged in cryptocurrency activities is very much influenced by our client’s control environment, and at this stage, by the breadth of tokens supported by our Halo software. These considerations will be key when determining whether we are comfortable to accept an audit engagement.” Lastly, it is specified in the announcement that the new addition to the Halo suite supports bitcoin (BTC), bitcoin cash (BCH), bitcoin gold (BTG), bitcoin diamond (BCD), litecoin (LTC), ether (ETH), OAX (ERC20 token) and XRP. As Cointelegraph reported at the time, PwC was the top recruiter for blockchain-related jobs on recruitment platform Indeed at the end of March. Also at the end of March, PwC competitor and big four auditing firm Deloitte announced that it was testing data management on the Ethereum blockchain with three Irish banks. cointelegraph.com/news