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Coinbase Migrates Tezos Bakery From US to Ireland With 60 Seconds of Downtime

Coinbase reports that it migrated its Tezos (XTZ) staking bakery from the United States to Ireland while incurring just one minute of downtime on March 31.

Since launching its staking service for XTZ in 2019, the exchange has come to operate the largest validator in the Tezos network.

Regulatory needs of Tezos ETP provider sparks Coinbase bakery migration

The Irish migration of Coinbase Custody’s Tezos Bakery was necessitated by the regulatory needs of Swiss digital asset product provider Amun.

In 2019, Amun launched the first Tezos-based exchange-traded product on the SIX Swiss Exchange. Coinbase provides both custody and baking services to Amun. Changes to Amun’s regulatory framework reportedly required that their staking activities occur within the European Union.

Balancing security against downtime

Coinbase states that it initially identified two strategies for migrating staking to Ireland.

The first was to stop its validator in the US before deploying the Irish validator — which, despite requiring approximately one hour in downtime, would keep security risks minimal.

The second option considered would have seen Coinbase begin its Irish validator before ceasing the process in the US — opening the exercise to significant security risks should both validators operate simultaneously.

Coinbase decouples the validator’s endorser

In the end, however, the exchange determined that the best course of action was to decouple the validator’s endorser from its node to “perform an almost downtime-free migration.” The firm explained:

“A Tezos validator has two main components: the baker, which produces new blocks that include transactions in the digital ledger, and the endorser, which votes on blocks that other validators produce […] Large Tezos validators typically only produce or bake new blocks every few minutes or hours, but they need to vote or endorse almost every minute.”

After successfully decoupling and migrating the endorser during a single minute of downtown, Coinbase found that it was voting or endorsing blocks from Ireland while producing new blocks in the US.

Coinbase later found a two-hour window suited to migrating the baker — completing the migration.

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cryptowavesxyz · 4 years

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Libra Rival Celo Announces $700,000 in Grant Funding for 13 Startups

Open-source payments network Celo has announced its first round of development grant recipients.

A press release shared with Cointelegraph states that Celo has awarded $700,000 in grants to 13 different companies who are looking to build on top of the network, contribute to the development of the Celo platform, or foster the Celo community.

The project has already received more than 50 grants proposals from teams based in 16 different countries and will continue to accept proposals until May 19.

Celo Awards $700,000 to 13 developers in first round of grant funding

Celo states that the chosen grant recipients “provide building blocks to help strengthen the Celo protocol, provide more access to the financially underserved, and develop programs to help educate and nurture the Celo community.”

The recipients building products and services on Celo include eSolidar — a charity marketplace platform, Philippine-based digital gift card platform Beam & Co, Brazilian crypto-powered platform for small paid tasks LoveCrypto, payments platform Pay with Mon, and bill remittance platform SaldoMX.

The Blockchain for Social Impact Coalition — a nonprofit for incubating Ethereum and blockchain-based solutions to address the United Nations’ Sustainable Development Goals — is also a recipient of funding from Celo.

The largest cohort of recipients are startups “building blocks to strengthen and scale the Celo platform” — which include Chorus One, Forbole, Gitcoin, Stake.fish, Figment, Gauntlet and Chainsafe.

Grants intended to foster Celo community and ecosystem

Celo announced its community grant program on Dec. 17, 2019, encouraging all “developers, designers, dreamers, and doers committed to building an open financial system” to apply.

The grants sought to foster development in governance and validator tools, on and off-ramps for payments and point-of-sale systems, smart contracts, and community education, in addition to innovative new use cases for the platform.

Libra members join Celo to hedge bets

On March 11, the Celo Foundation revealed the 50 founding members of its “Alliance for Prosperity,” including major tech, investment, payments, and cryptocurrency firms.

Among the alliance are several Libra Association members, including Andreessen Horowitz, Coinbase Ventures, Anchorage Mercy Corps, and Bison Trails.

During April 2019, Celo raised $30 million from noted blockchain investors Polychain Capital and Andreessen Horowitz.

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cryptowavesxyz · 4 years

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DeFi Cannibalizes Ethereum Block Space

Data published by Ganesh Swami, the co-founder of Ethereum (ETH) analysis firm, Covalent, indicates that decentralized finance, or DeFi, transactions are representing an increasing share of Ethereum block space at the expense of ETH transfers.

Swami analyzed the gas costs incurred by Ethereum transactions over time in order to estimate the share of network activity represented by ETH transfers, simple ERC-20 transactions, and the complex interactions with smart contracts usually associated withDeFI protocols — as each transactional category incurring progressively larger gas fees.

DeFi transactions ‘cannibalize’ Ethereum block space

Swami identifies what “seems to be a natural ceiling to the total gas consumed across all types of transactions,” indicating “the intense demand for block space of Ethereum” and the network’s “lack of scalability,” adding:

“In an ideal scalable world, all types of transactions have room to grow. But on Ethereum today, for one kind of transaction to grow, it has to cannibalize the others.”

When looking at the relative proportion of transactions represented by each of the three categories, the data shows a steady increase in the number of complex transactions at the expense of ETH and ERC-20 transfers — with complex transfers growing from roughly 5% of network activity at the start of 2017 to hover between 20% and 30% in recent months.

Relative share of gas fees for each transactional category on Ethereum: Covalent

The graph also illustrates the rise and fall of initial coin offerings, with ERC-20 transfer accounting for 20% of network activity during early 2017. ERC-20 transactions would hover between 10% and 15% throughout the rest of 2017, before sliding as low as 5% by mid-2018.

After a short bounce back up to 10% during the later months of 2018, ERC-20 transactions have consistently fallen — with ERC-20 transfers currently representing less than 5% of Ethereum network activity.

Covalent predicts upcoming ‘flippening’ within Ethereum

Swami predicts that complex transactions will continue to represent a growing percentage of network activity as an increasing number of decentralized organizations (DAOs), games, and other applications for non-fungible tokens (NFTs) launch on Ethereum.

As such, the analyst expects the trend will soon drive a ‘flippening’ in which complex transactions overtake ETH transfers.

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cryptowavesxyz · 4 years

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During Coronavirus Pandemic, IRS Cuts Taxpayers Some Much Needed Slack

Crypto communities and the United States Internal Revenue Service haven’t exactly had a love fest over the last five years. It started in 2014, when the IRS said crypto was property, and it hasn’t got much better since. In addition to sending those 10,000 “beware” letters and trying to get crypto exchanges to turn over customer lists, the IRS has even gone so far as to alter the most hallowed tax form, Form 1040, to ask a crypto-specific question.

However, the IRS is actually making a big effort to cut all taxpayers — and that includes the crypto community too — some much needed slack during this unprecedented time. It started when the head of the IRS, Commissioner Chuck Rettig, announced the “People First Initiative.” Need to pay your taxes in installments? The IRS will help and has a well-worn process for working out installment payments.

What if you have an existing installment agreement, but can’t make your payments right now? The IRS says installment payments due between April 1 and July 15 are suspended. It says this also applies in the case of direct deposit installment agreements, so you can suspend payments during this period. It says it will not default any installment agreements during this period. How about an offer in compromise, also known as an OIC?

As with installment agreements, the IRS allows some people to pay a part of what they owe and have the rest written off by the IRS. It is based on ability to pay and other factors, and there is an established procedure to go through to try to get the IRS to accept your proposal. The IRS is giving people more time to submit materials.

Haven’t filed a return? The IRS says over 1 million households that haven’t filed tax returns during the last three years are owed refunds, so fill out those returns! Once delinquent returns are filed, taxpayers who owe money should consider an installment agreement or an OIC.

Tax liens and levies are also generally being suspended during this period. A Notice of Federal Tax Lien is normally sent out almost automatically when the IRS is owed taxes, serving as a way to insure by public notice that it will eventually get paid. A levy, on the other hand, involves the IRS actually collecting owed taxes by allowing it to take funds directly from a bank account upon deposit. The fact that the IRS is trying to ease up on both during this time is significant. Even new passport debt certifications when delinquent tax debts exceed $50,000 are on hold too.

New tax audits are on hold too. One exception is when the IRS needs to act right away to protect the government’s interest in preserving the applicable statute of limitations. Usually, the statute of limitations is three years, but that’s not always the case: Here are some rules everyone should know. The IRS will continue to take steps where necessary to protect all applicable statutes of limitations. The IRS may ask taxpayers to extend the statute, or when needed, will issue notices of deficiency.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Robert W. Wood is a tax lawyer representing clients worldwide from the office of Wood LLP in San Francisco. He is the author of numerous tax books and writes frequently about taxes for Forbes, Tax Notes and other publications.

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cryptowavesxyz · 4 years

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Russia Postpones Its Crypto Law Again, Now Blaming Coronavirus

After facing multiple delays, the adoption of Russia’s major cryptocurrency law will be postponed again, now due to the coronavirus.

Anatoly Aksakov, chairman of the Russian State Duma Committee on Financial Markets, says that the country’s crypto law — the bill “On Digital Financial Assets” — is now finalized but won’t be adopted before the end of the spring 2020.

Russian authorities have been arguing about crypto regulation since January 2018

According to a March 31 report by Russian news agency RBC, Aksakov has admitted that previous delays in the bill’s adoption were caused by disagreement on the new asset type between local authorities. Aksakov, who is also chairman of National Banking Council at Russia’s central bank, reportedly elaborated that the central bank opposed legalization of crypto while the State Duma advocated some crypto initiatives.

However, the long-awaited law is being postponed for another reason now. As Russia shifts its focus to priority actions against the COVID-19 pandemic, all legislative processes have slowed down, Aksakov reportedly noted. As reported by Cointelegraph, the bill has seen a number of delays after first being introduced in January 2018.

Aksakov says that Russia’s crypto law will not hinder operation of local crypto exchanges

Aksakov reportedly added that Russia’s upcoming crypto law will provide a definition of cryptocurrencies and prohibit the use of crypto as payment. Additionally, the law will include the issuance and circulation of digital assets, the official reportedly noted. However, in mid-March, a legal executive at Russia’s central bank said that the bill would ban the issuance and circulation of cryptocurrencies.

Aksakov also emphasized that the new law won’t hinder operation of crypto exchanges in case they won’t be violating it. The official also highlighted that the bill “On Digital Financial Assets” won’t include regulations regarding cryptocurrency mining. However, Aksakov expressed confidence that profits from crypto mining should be taxed, noting that crypto mining is a “type of business that produces value.”

Aksakov’s latest remarks about the new delay in adopting Russia’s upcoming crypto law comes subsequent to Russia recording its biggest one-day rise in coronavirus cases for the sixth day in a row. As reported by Reuters, Moscow’s authorities have already ordered residents to self-isolate, while the nationwide lockdown is being considered.

On March 24, the Ministry of Economic Development of the Russian Federation reportedly released a draft law that would allow the testing of cryptocurrency and blockchain developments within a special regulatory sandbox.

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cryptowavesxyz · 4 years

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Cardano Releases Solution that Scales More Than Visa’s Payment Network

On March 25, Cardano launched its off-chain scalability protocol, Ouroboros Hydra, after 5 years of development.

An announcement sent to Cointelegraph claims that the protocol vastly increased scalability and low latency for the Cardano blockchain while using little storage on the network’s nodes. The solution also reportedly allows for applications such as micropayments, voting, insurance contracts, and other uses that require low fees or instant transactions.

According to a spokesperson of IOHK — the firm behind Cardano — Hydra is the result of a five-year European Union-funded collaborative research project, and could theoretically scale to a million transactions per second. Such a throughput is — according to him — in excess of the current generation of global payment systems.

In Hydra, each user who connects to the network generates 10 heads, which are throughput lanes for data and transactions. Because of that, the system reportedly gets faster and decreases its latency as it scales.

More scalable than Visa

Simulations made by the University of Edinburgh show that each Hydra head can handle around 1,000 transactions per second, but according to the announcement, the process can be further optimized. The announcement reads:

“With 1000 heads the network could theoretically scale to a million transactions per second – comfortably in excess of current global payment systems such as VISA.”

Furthermore, according to the announcement, Hydra approaches the theoretical maximum amount of transactions possible within the limitations of network speed, geographical distance, and the number of participants. The paper reads:

“Essentially, the bottleneck becomes the network connection between the participants, not the protocol.”

The IOHK spokesperson did not answer Cointelegraph’s inquiry by press time.

Scalability is blockchain’s holy grail

Director of Edinburgh University’s Blockchain Laboratory, Aggelos Kiayias, commented on the development:

“Solving the scalability question is the holy grail for the whole blockchain space. The time has come to apply a principled, evidence-based approach in designing and engineering blockchain scalability solutions and this research is a decisive step in this direction.”

Recent evidence suggests that the Ethereum Foundation gave up on its second-layer solution, Plasma, without announcing it.

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cryptowavesxyz · 4 years

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Voatz Bug Bounty Kicked Off of HackerOne Platform

For the first time in its history, bug bounty and vulnerability disclosure platform HackerOne has kicked a company off its platform.

Blockchain-based voting platform Voatz has long touted its bug bounty program through HackerOne when asked about the security of its blockchain-enabled mobile voting app.

Founded in 2012, HackerOne connects businesses with pen testers and cybersecurity researchers. It has hosted over 1,800 customer programs, but the beleaguered Massachusetts-based company’s bug bounty is no longer one of them.

“As a platform, we work tirelessly to foster that mutually beneficial relationship between security teams and the researcher community,” HackerOne spokesperson Samantha Spielman told Cointelegraph, “We partner with organizations that prioritize acting in good faith towards the security researcher community and providing adequate access to researchers for testing. Because the Voatz program did not adhere to either of those requirements, we terminated our partnership in March 2020.”

In a statement, a Voatz spokesperson attributed HackerOne’s decision to boot them off the platform to “pressure from a small group of researchers” who “believe Voatz reported a researcher to the FBI.” In fact, Voatz reported the student to the jurisdiction which then reported it to the FBI.

Voatz faced criticism after a student security researcher was referred to the FBI over what the company says was an intrusion attempt—even though that research appears to have been protected by the safe harbor statement in the company’s bug bounty program. After the FBI referral made headlines, Voatz retroactively updated its HackerOne bug bounty program terms to narrow the scope of its safe harbor policy, making it unclear whether it even provided full legal protection.

“Trust is paramount throughout the bug bounty model between security teams, hackers and the platform. Once trust is broken, it’s hard to rebuild. While Voatz was able to surface and resolve vulnerabilities through their bug bounty program, the program was no longer productive for either party,” said Spielman.

Independent security researcher and avid bug bounty hunter Jack Cable said that Voatz was slow to even confirm the two bug bounty reports he filed. In one instance, he found a vulnerability—Voatz storing private keys from Stack Overflow on its app—that Voatz said had no role in its election process. However, a security audit by Trail of Bits suggested it was in use in certain functionality and was listed as a high-security bug.

“There are a lot of cases where they tried to downplay the severity of something or weren’t too clear about whether it was even a vulnerability. Overall, it was just not a very productive experience,” Cable said.

Cable also found his IP address blocked when testing the app, though he says it is unclear whether this was automated. “There were a couple times when I was testing and I was no longer able to even on their staging environment because my IP address was blocked,” he said.

MIT researchers who identified serious security flaws with Voatz found many vulnerabilities that would have been outside of the scope of the bug bounty program, had they gone through it. Instead, they went through CISA. “We wanted the research to speak for itself, and had legal concerns about Voatz’s unprofessional response to prior independent security research, as has been documented in multiple news outlets,” the researchers wrote in an FAQ.

Cable pointed to Voatz’s “general hostility to security research as a whole.” Voatz denied security vulnerabilities described in an MIT report, even after it was confirmed by Trail of Bits, the auditing firm it hired. “On one hand, they’re saying, ‘come tell us about the vulnerabilities you find.’ But then when people actually find vulnerabilities, they deny that they even exist,” he said.

“They’re clearly not receptive to security research. HackerOne has a responsibility to protect not only its customers, but also hackers on its platform as soon as the company starts crossing that line. I think HackerOne had to act, so I’m glad that they did in this case.”

Voatz said it plans to announce a comprehensive bug bounty program in the coming days.

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HIVE Blockchain Acquires Bitcoin Mining Facility for $2.8M

HIVE Blockchain Technologies, a Canadian publicly-traded ether (ETH) mining firm, has announced on March 30 the acquisition of a dedicated cryptocurrency mining operation with access to 30 megawatts of low-cost green power.

The transaction was valued at CAD $4 million (USD $2.8 M). The facility, leased by Cryptologic Corp, is located in Lachute, Quebec.

The firm intends to expand its total available power capacity globally to approximately 50MW, whose mining activities in Europe are focused on the Ethereum network, while Bitcoin miners will be supported in Quebec’s facility.

Giving priority to the green power

According to Frank Holmes, interim executive chairman of HIVE:

“The acquisition provides us with an advanced, operating Bitcoin mining facility ready to transition to next generation mining hardware with access to some of the lowest cost electricity on the planet. The cost of US$95,000 per MW is less than half the industry standard build cost per MW.”

HIVE hopes to add flexibility for future expansion plans. The firm already has a presence in Sweden.

As detailed by the Canadian firm, the facility offers about $0.04 / kWh in electricity costs, and the electrical infrastructure expects to provide triple redundancy systems for power and internet connectivity, operational staff, and approximately 14,000 Bitmain S9 miners that are currently installed.

Speaking with Cointelegraph, Holmes highlighted some reasons behind expanding into Quebec:

“A blend of factors makes Quebec a very attractive location for us: geographical diversification, competitive green energy costs, the cost of skilled labor and VAT costs. The acquisition provides us direct control of our destiny, including significant capacity for expansion and flexibility for our future operations. And of course, the positive outlook for blockchain adoption is a reason for our expansion.”

HIVE’s interim executive chairman clarifies that the facility operatesentirely onrenewable hydroelectricity, thus maintaining 100% green energy. Also, he added that their GPU-based resources provide flexibility to identify and focus computing resources on existing and new cryptocurrencies as they become more profitable to mine.

Ether mining expansion in Sweden

The news comes after HIVE Blockchain Technologies announced on March 6, the two-phase expansion of its Ether mining operations by more than 20% at the company’s facility in Sweden.

In an interview with Cointelegraph, Holmes commented on the company’s intentions to improve the profitability of the Iceland facility, as they have done in Sweden.

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Singapore Grants Crypto License Exemptions to Ripple, Coinbase and Binance

While Singapore recently adopted specific cryptocurrency legislation — the Payment Services Act (PSA) — in January 2020, it turns out that some crypto firms like Ripple, Coinbase and Binance have been exempt from the law since the beginning of the year.

The Monetary Authority of Singapore (MAS), the country’s central bank and major financial regulatory authority, exempted a number of major payment services from holding a financial license under the PSA.

According to a statement released on March 24, the listed companies are allowed to continue to provide specific payment services without holding a PSA license for a limited period of time.

Ripple, Coinbase and Binance were granted six months of exemption

As such, local subsidiaries of major crypto companies like Ripple, Coinbase and Binance are officially authorized to provide digital payment token service in Singapore starting from January 2020. According to the MAS, Ripple Labs Singapore, Coinbase Singapore and Binance Asia Services can provide services without a PSA license until July 28, 2020.

The MAS noted that the exemption will cease after the specified period or if the entity submits a licence application under the PSA.

BitGo and Gemini are also on the list

Some crypto companies were granted a longer exemption period. BitGo Singapore, a local subsidiary of one of the world’s biggest Bitcoin (BTC) payment processors, and Gemini Trust Company, a crypto exchange and custody service led by the Winklevoss twins, were given a 12-month exemption.

According to the MAS notice, the companies are allowed to provide account issuance services, domestic money transfer services, and inward cross-border money transfer services until Jan. 28, 2021.

Other crypto companies in the list include cryptocurrency exchange OKCoin, decentralized offline cryptocurrency sales network Pundi X and Cumberland, a cryptocurrency trading unit of DRW Holdings.

As reported by Cointelegraph, a number of local crypto businesses in Singapore have praised the PSA as a legal instrument that will attract crypto and blockchain-related business, not chase them away.

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Bitcoin & Stocks Rise as US Economy Grinds to a Halt — Furloughs Soar

Monday proved to be a surprisingly fruitful day for Bitcoin (BTC) price as the digital asset rallied 12.73% to $6,599 before pulling back to $6,380 a few hours later.

Despite gloomy news of the U.S. reaching 3,000 deaths from the Coronavirus and major retailers furloughing 500,000 workers, traditional markets also surged on Monday. The S&P 500 rallied 3.35% while the Dow and Nasdaq gained 3.19% and 3.62% respectively.

Crypto market daily price chart. Source: Coin360

As discussed in a recent analysis, the price of Bitcoin needed to reclaim the $6,200 level to avoid a revisit to $5,870. Retaking $6,200 placed the price above the descending trendline and the 23.6% Fibonacci retracement level.

BTC USDT 4-hour chart. Source: TradingView

Earlier in the day Cointelegraph contributor Michaël van de Poppe suggested that once above $6,200 the price could quickly rise to $6,600 and traders will note that today the price sliced through the volume gap from $6,250-$6,590 on the VPVR indicator.

Despite today’s impressive gain, van de Poppe believes that while below $6,900 Bitcoin price remains bearish and he expects the price to encounter stiff resistance once $6,600 is reached.

According to van de Poppe, both “bull/bear scenarios pivot around the $6,600 area” and he further explained that:

”The moment that the $6,600 area is rejected and the CME gap is closed, further downward pressure is expected to occur.”

BTC USDT daily chart. Source: TradingView

A push above $6,900 wouldn’t necessarily be the cure-all for Bitcoin’s bearish slant as there is a large high volume VPVR node at $7,200 and this level is expected to function as a strong resistance. Once above $7,200 traders will set their targets on the $8,000 where the 50 and 200-day moving averages are currently situated.

Bitcoin daily price chart. Source: Coin360

The majority of the top-10 altcoins also posted moderate gains as Bitcoin price surged toward $6,600. Ether (ETH) notched a 3.57% gain while Bitcoin SV (BSV) and Binance Coin (BNB) added 9.66% and 5.50% respectively.

The overall cryptocurrency market cap now stands at $180.7 billion and Bitcoin’s dominance rate is 65.2%.

Keep track of top crypto markets in real time here

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Jack Dorsey Wants Cash App to Distribute US Stimulus Package

The founder and CEO of Square Inc, Jack Dorsey, believes that his company’s crypto-friendly payments application Cash App can distribute America’s stimulus package more efficiently than the U.S. government.

On March 27, Dorsey responded to the tweet of a Cash App user suggesting that the payments application could be used to distribute the United States’ forthcoming $2 trillion stimulus package.

Square contacts U.S. Treasury regarding stimulus distribution

“People need help immediately,” Dorsey posted. “The technology exists to get money to most people today (even to those without bank accounts). Square and many of our peers can get it done. US government: let us help.”

According to anonymous sources cited by CNN Business on March 27, both Cash App and fellow payments platform Venmo have reached out to the U.S. Treasury to discuss how they can assist in disbursing the funds.

Distributing stimulus through banking system risks neglecting the unbanked

Speaking to Cointelegraph earlier this month, Catherine Coley, the CEO of Binance.US, warned that by using existing means of payment to distribute the stimulus package, the U.S. government may “neglect” those who lack access to financial services.

Coley warned that “the existing rails oftentimes neglect those that may not have bank accounts or may not be able to go and visit their brick and mortar bank in times like these crises.”

Electronic Transactions Association argues payment platforms can mitigate COVID-19 risks

On March 19, Jodie Kelley, the CEO of the trade body representing payments companies, the Electronic Transactions Association penned a letter to the Whitehouse warning of the impracticalities and risks associated with using the banking system to distribute the stimulus:

“Many Americans do not have a bank account at a traditional financial institution. Upon receipt of a stimulus check, they would need to rely on expensive cash checking services to access their money.”

The letter added that using “electronic payments options helps Americans reduce the chance of exposure to the virus by avoiding handling cash,” adding that digital distribution will also help maintain social distancing measures.

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Binance Academy Launches Blockchain Accelerator in China

Binance Academy, the educational arm of leading crypto exchange Binance, announced the establishment of a blockchain research institute in Shanghai on March 30.

The Lingang Blockchain Technology and Industry Research Institute is intended to operate as a think-tank and talent hub for distributed ledger technology (DLT) innovation in China.

Binance to integrate blockchain with other innovative technologies

To accelerate the application of DLT in China, Binance’s blockchain institute plans to integrate blockchain with other emerging technologies with an established foothold in the country — including artificial intelligence, big data, and internet-of-things.

The blockchain research institute is headed by Don Tapscott, who will also act as the honorary dean of the organization.

Tapscott describes DLT as representing “the second era of the Internet — the Internet of Value,” adding that blockchain technologies will drive the creation of “innovative and productive organizations.”

Binance’s Helen Hai, who is credited with spearheading the Lingang initiative, stated that the institute is “committed to building the blockchain industry, driving blockchain research, and cultivating top blockchain talent.”

Binance takes steps toward re-establishing in China

The institute’s launch comprises a tentative step toward the Binance re-entering China, with the exchange having shut down all Chinese operations in September 2017 amid China’s cryptocurrency crackdown.

In January, Binance Charity committed to purchasing $1.4 million in medical supplies that would be donated to more than 300 hospitals and medical organizations hardest hit by the COVID-19 pandemic.

In November 2019, rumors that Binance was seeking to establish an office ran rampantly across the crypto community — comprising the first indication that Binance may be seeking to re-establish itself in China after more than two years.

One month prior, Binance launched peer-to-peer trading services for Chinese Yuan pairings against Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).

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China’s Oldest Exchange OKCoin Readies for Move Into Japan

OKCoin, one of the oldest exchanges in China, is continuing its crypto exchange business expansion, announcing on March 30 that it has officially secured licensing in Japan.

OKCoin has been anticipating this day

Per its announcement, OKCoin Japan has completed its registration with the Kanto Local Finance Bureau. According to the firm, this makes OKCoin the first international exchange to obtain a cryptocurrency exchange license through the official application procedure in Japan.

OKCoin Japan said that ever since its establishment in September in 2017, it has been preparing itself to be in a position to achieve a business framework that can comply with Japanese law. OKCoin marketing manager added that:

“OKCoin wants to get recognition from the Japanese authority in terms of their own technologies, products, teams, compliance & regulation system and internal management system, etc., in this way, they finally get approved by the license.”

OKCoin has been expanding its global presence since 2013

OKCoin is now officially headquartered in San Francisco and has a number of offices worldwide including Malta.

OK Group has expanded its business bases in China, the United States, Europe, Malaysia and the Philippines since its establishment in 2013. With the expansion in Japan, the blockchain company is set to employ over 1,000 globally, OKCoin says.

Before OKCoin Japan’s exchange officially launches, users can now pre-register by visiting the firm’s main site to create an account. It will support the Japanese Yen and deal with major crypto assets, including BTC, ETH, ETC, LTC, and BCH.

As Cointelegraph reported previously, OKCoin added support for the Singaporean dollar earlier this month. It is the third fiat currency supported by OKCoin after the United States dollar and euro.

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Singapore Crypto Exchange Eyes US Expansion After Registering With FinCEN

While global cryptocurrency firms increasingly come to Singapore to benefit from its crypto-friendly ecosystem, some local firms are also expanding their operations beyond local jurisdiction.

Bitget, a Singapore-headquartered digital asset platform, has obtained regulatory approval from the United States Financial Crimes Enforcement Network (FinCEN), the primary regulator for money service businesses in the country.

MSB license is part of Bitget’s strategy to be compliant in “as many regions as possible”

According to public records, the FinCEN granted Bitget a Money Service Business License (MSB), authorizing the Singaporean company to act as a money transmitter or foreign exchange dealer in the U.S. with its office in Denver, Colorado. By acquiring the MSB license, Bitget joins major global crypto players like U.S. crypto wallet and exchange service Coinbase and Huobi exchange.

A Bitget spokesperson told Cointelegraph that the MSB is the company’s first step in entering the U.S. market. The exchange plans to apply with other U.S. regulators. The representative added that the MSB registration is part of Bitget’s global compliance strategy, as the firm is willing to be compliant in “as many regions as possible.”

Bitget says daily trading volume adds up to $1 billion

Founded in 2018 in Singapore, Bitget exchange currently has regional offices in Japan and South Korea, with its platform also maintaining operations in other locations like China and Russia.

While Bitget isn’t listed on popular trading volume trackers like Coin360 or CoinMarketCap to date, the Bitget spokesperson said that Bitget’s daily trading volume accounts for $1 billion so far, which would make it one of the largest exchanges in terms of trading volume.

The spokesperson attributed Bitget’s absence from these volume trackers to their limited exposure to an English-speaking audience. Bitget’s three top markets are China, South Korea and Singapore. Bitget’s push into the U.S. market is part of its wider plan to enter English-speaking countries in Europe as well as Canada and India in 2020, the spokesperson said.

Bitget is among firms exempted from the Payment Services Act till July 2020

While Bitget has ambitious global compliance strategy plans, the exchange is compliant with authorities in its home jurisdiction. On March 24, the Monetary Authority of Singapore (MAS) listed Bitget among companies that are allowed to operate in the country without holding a license under the Payment Services Act (PSA), adopted in January 2020. Specifically, Bitget is allowed to provide digital token service till July 2020 alongside companies like Ripple, Coinbase and Binance, according to the MAS’s statement.

Bitget’s representative noted that the platform is currently in the process of the PSA license application, targeting June or July 2020 to receive the license.

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cryptowavesxyz · 4 years

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Capitulation? BTC Battered by Biggest Mining Difficulty Drop Since 2011

Bitcoin (BTC) currently sits at $6,370, a slight recovery from the March 27 pullback which saw the price drop nearly 9% in 4 hours. Despite showing some bullish signs, Bitcoin is still down nearly 30% since last Friday.

As previously reported by Cointelegraph, the crash may have been caused by the recent mining difficulty adjustment of nearly -16%. The difficulty adjustment is how the Bitcoin network adapts to the changing mining power on the network, keeping its issuance rate at a fairly steady level.

Cryptocurrency market performance since March 27th. Source: Coin360

The change in Bitcoin’s mining difficulty on March 26 was the biggest percentage drop the network has seen in 9 years and the adjustment makes Bitcoin production cheaper for all miners. It also aligns with previous correlations in difficulty drops and short-term losses for the price of BTC.

The recent nosedive is reminiscent of the previous price action occurring after the mining difficulty dropped by 7.10% on November 7, 2019. The price saw a 25.81% drop from $9,310.19 to $6,907.4 and this highlighted the strong correlation between the network’s hashrate and Bitcoin’s price action.

Bitcoin mining capitulation: A downward spiral

As explained in a recent report by Blockware Solutions, Bitcoin miners are one of the key players in the industry, collectively assuring the issuance of new coins and “distributing” them by selling each for fiat on exchanges. Miners are incentivized to liquidate their new coins to pay for operation costs like hosting and electricity. Every month, 54,000 BTC are mined which equals approximately $332 million at current prices.

While the mining difficulty seems like the catalyst for the subsequent price move, it is rather a consequence of Bitcoin mining operations shutting down and increasing sell pressure to stay afloat. Mining difficulty is regulated by the total network hash rate, which means that if a lot of miners leave the network, then the difficulty reduces drastically.

This is exactly what happened following the price crash witnessed on March 12 when the price dropped to a 2020 low of $3,775. Mining operations with lower profit margins due to inefficient equipment or higher electricity costs were forced to halt operations as mining became unprofitable. Any Bitcoin held by the mining company may need to be liquidated, further accentuating sell pressure.

Unprofitability caused these mining operations to shut down, which in turn caused the mining difficulty to decrease. The network hashrate had been growing throughout 2020, leading to higher production costs and leaving miners unprepared for the BTC crash earlier this month.

Bitcoin network hash rate, April 19, 2019–March30, 2020, Source: blockchain.com

Survival of the fittest: Bitcoin’s recovery

This mining capitulation process doesn’t end there. As Blockware Solutions reported, companies that are better prepared and have access to additional capital and higher profit margins are able to stay on the network even with reduced profits or temporary losses.

As less experienced or poorly funded miners are faced with bankruptcy and log off the network, the difficulty adjustments allow for the ones that hold on to enjoy lower costs of production following the difficulty adjustment which takes place every 14 days.

This, in turn, allows these operations to become more profitable and to enjoy less selling pressure from other operations. Matt D’Souza explained via Twitter:

“After shutting off, Bitcoin they were receiving is allocated to the more efficient, experienced miners with excellent margins who are positioned to accumulate a larger percentage of the newly minted Bitcoin rather than having to sell it — significantly reducing sell pressure”

This means that while the short-term effects of the Bitcoin mining difficulty adjustment may be negative, they are likely to correct over time as shown in the chart below.

Bitcoin Price and mining difficulty correlation from 2011 to date. Source: Blockware Solutions

Miners and traders in the market

The selling pressure created by miners may seem like a drop in the ocean when compared to volume on exchanges. However, one must remember that falsified trading volume and wash trading practices are still commonplace in the industry. Furthermore, volume on exchanges does not equate to selling pressure given that much of it is back and forth trading rather than the actual liquidation of Bitcoin as miners selling for fiat do.

A recent report by Chainalysis shows that nearly 90% of the Bitcoin flowing into exchanges comes from other exchanges as traders leverage arbitrage opportunities and move funds between markets.

Excluding other exchanges, Mining pool operators (who are responsible for 92% of newly minted Bitcoins) have conducted 28% of the remaining on-chain transactions into exchanges since 2017. The Chainalysis report reads:

“When miners send to exchanges, they are adding new liquidity to the market. This increases the supply of Bitcoin available on the market, potentially lowering the price. Aside from Bitcoin received from other exchanges, mining pools are the most important source of Bitcoin flowing into exchanges, followed by hosted wallets and merchant services.”

Origin of Bitcoin received by exchanges, excluding transfers from other exchanges. Source: Chainalysis

The everchanging Bitcoin industry

While the information above makes a pretty good case for the correlation of the Bitcoin price and mining difficulty changes, there are many nuances that can disrupt this correlation. Take, for example, the sell pressure caused by holders in events like the Bitcoin crash earlier this month.

Moreover, miners’ behavior can also change over time as operations grow and explore other crypto-based investment opportunities like arbitrage, lending, staking and more.

As the mining industry matures, new players are likely to be drawn to mining, as is the case with Atlas Holding, a company that is leasing a New York-based power plant for a large-scale Bitcoin mining operation. When asked about industry developments that could point to a shift in these dynamics, D’Souza told Cointelegraph:

“If Bitcoin is further adopted in 10 years, mining will likely be more commoditized and institutionalized which will reduce volatility in the price of Bitcoin. Present commodities like gold, oil or soybeans have large, institutional suppliers while Bitcoin miners are the present suppliers.”

There’s a silver lining for miners

While Bitcoin’s crash on March 12 marked the end of some mining ventures and a giant drop in BTC’s hash rate, the network as a whole seems to be getting back to normal as difficulty adjusts downward, enabling the more efficient miners to gain more market share and thus, making the network more resilient in the long-term.

In the meantime, miners that have managed to stay afloat can mine with reduced difficulty and enjoy cheaper production costs due to reduced difficulty which will take nine more days to adjust to the hashrate growth. This may be short-lived as the upcoming Bitcoin halving will see production cut in half and may change the mining landscape going forward.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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cryptowavesxyz · 4 years

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Price Analysis Mar 30: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LEO

Bitcoin seems to be building up momentum for a breakout above $7,000 and many of the top-10 altcoins are following suit by posting moderate gains

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cryptowavesxyz · 4 years

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Riot Blockchain Cites COVID-19 Disruption Risks on SEC Form 10-K

Nasdaq-listed cryptocurrency mining firm, Riot Blockchain, filed its Form 10-K annual report to the United States Securities and Exchange Commission (SEC), March 25.

Among a long list of other potential risk factors to the business, the report assesses the potential disruptions due to the COVID-19 pandemic.

COVID-19 will affect cryptocurrency mining business

As part of the Form 10-K a company must include information about any significant risks to its business. Riot further subdivides these risks into several sections, although interestingly lists the risks from COVID-19 as a cryptocurrency-related risk, rather than a general risk:

“Our business will be adversely impacted by the effects of the novel Coronavirus (COVID-19). In addition to global macroeconomic effects, the novel Coronavirus (COVID-19) outbreak and any other related adverse public health developments will cause disruption to the activities of our international suppliers and, potentially, our mining activities.”

The report goes on to state that the company already has and will experience further disruptions to operations, due to quarantines, self isolation and other restrictions of movement, preventing employees from performing their jobs.

According to the report, Riot has six full-time employees, with activities relying on three consultants to manage and maintain mining rigs.

Biggest risk to third-party supply chain

While the risk of the new coronavirus to six employees and a warehouse full of Antminers may be limited, the effect on third-party offices and factories, border closures and supply chains could prove more drastic.

Riot cites the fact that replacements for obsolete mining rigs or spare parts to repair existing machines may no longer be available. However, as Cointelegraph reported, the company recently received 4,000 new S17 Antminer Pro machines, initially ordered at the end of last year.

Finally, the report states that a wider lockdown, including mandatory business closures, would adversely affect operations. Regulators have not designated cryptocurrency an essential industry.

Lowering expectations in advance?

COVID-19 is by far not the only risk cited by Riot in its annual report. In fact a full 18 pages of the 48-page document is devoted to risk factors.

The report also notes that the company is not profitable and has incurred losses since inception. It expects to continue incurring losses for the foreseeable future, which may increase as the company develops its business. Mining costs currently outpace mining revenues.

The report also cites previous failures of the company in the animal health and life-sciences industries, and suggests that there is no guarantee that its pivot to a cryptocurrency mining strategy will be any more successful.

Riot was one of a number of companies who took advantage of the cryptocurrency boom in 2017, by changing its name to include the word ‘blockchain’ to see its share price rocket from $8 to over $40.

It has since made cryptocurrency mining its core business, although it also launched a cryptocurrency exchange in 2019, which it has since given up on.

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