Říj 09

Ethereum 2.0 Critics Call The Entire Network “a Scam”

While the deadline for the gradual launch of Ethereum 2.0 is just around the corner, critics express concerns over potential risks and even call Ethereum a scam.


Skeptics Feel Misled Over Network’s Scalability

Ethereum started as an ambitious idea of a global platform to host decentralized applications (Dapps) and smart contracts. While there are many projects and Dapps on Ethereum, the network might not be capable of supporting potential mainstream Dapps with millions of users.

For example, when the blockchain game CryptoKitties reached its culmination, the transaction fees on Ethereum rose to 0.02 ETH, or $20. Besides the increasing fees, there are concerns that the network wouldn’t provide the same performance during mass adoption of Dapps.

In other words, there is a scalability issue with Ethereum that has to be addressed, and this is exactly what the network’s development team wants to do by switching to Ethereum 2.0 through iteration.

But wait a minute – hasn’t Ethereum been advertised as a scalable blockchain network right from the beginning? This is the critics’ main concern, especially for those from the “Bitcoin” side. Bitcoin core developer Peter Todd went as far as to say that Ethereum has always been a scam.

Todd continued.

The most common type of scam in the crypto space has been claiming that things scale when they don’t, and that things are trustless when they aren’t. ETH 1.0 has done both types of scam. They’re the hardest challenges; fertile ground for lying

His comments attracted supportive remarks from Gabor Gurbacs, digital asset strategist at investment manager VanEck:

For Ethereum Supporters, Iteration is Inherent

On the other side of the line, Ethereum developers and supporters don’t see anything wrong with upgrading to another blockchain. They regard iteration as a natural process that should solve the challenges of the first version of the network. Even those who understood right from the beginning that Ethereum wasn’t scalable don’t consider these marketing statements as false.

Ethereum co-founder Vitalik Buterin claims he has been talking about advancing to a more capable network since 2014.

He added:

You can literally find speeches I made every year since 2014 ranting about how all existing blockchains are inadequate and we need to make them better. And somehow this gets spun as ‘we were making a platform we knew was doomed from the start’

When responding to Dapp developers who expressed concerns of developing on a platform that is about to be depreciated, Buterin tweeted:

All in all, the debate is really fierce, and no-one seems to be backing off.

Do you think Ethereum is a scam? Share your thoughts in the comments section!


Images via Shutterstock, Twitter @VitalikButerin @Peterktodd @Gaborgurbacs

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Zář 27

Coinbase Celebrates One Year of USDC Stablecoin

The stablecoin USDC has established itself pretty well within the crypto ecosystem, with its first completed year. USDC was launched in September 2016 and quickly gained ground as one of the more influential dollar-pegged coins.


USDC Stablecoin Marks Fastest Growth Pace

Over the past year, USDC reached a total supply of 421,469,737 coins, becoming the second-largest dollar-pegged asset after Tether (USDT). The minting of USDC is also strictly controlled and reflects only real-world fund inflows. USDC has continued growing despite the occasional token burn, as the asset also works like a fiat off-ramp.

“USDC has established itself as the second most popular stablecoin in the world; it has unparalleled support from more than 100 companies across the global crypto ecosystem, and it’s the first stablecoin to reach $1 billion in issuance in less than a year,” commented the Centre consortium.

The Circle, Inc. fin-tech company and Coinbase used their joint efforts to rapidly grow the supply of USDC. USDC started off with a supply of roughly 24 million coins. Over the past year, the supply has fluctuated and fell significantly during the bear market in late 2018. Later, USDC reached peak supply above 450 million coins.

Fighting for Market Share

USD Coin, as the asset is also known, now participates in 169 trading pairs. It fuels Binance trades as part of its basket stablecoin market. USDC also links both Western and Asian exchanges, being accepted by most major market operators.

Still, USDC takes up just 0.83 of the entire stablecoin market, where USDT is still the leader. TrueUSD (TUSD) and Paxos Standard (PAX) take up a larger market share, but USDC is also evolving. USDC was one of the first stablecoins to add customer screening, or KYC, to avoid fueling terrorism financing.

Stablecoins have attracted the attention of regulators, including the European Central Bank and the IMF, as they are tools that could alter international payment systems. Within the cryptocurrency space, stablecoins have already established themselves, way ahead of Facebook’s Libra. USDC is one of the most successful examples of a fully transparent asset.

USDC has a daily turnover of around $200 million, still smaller in comparison to other stablecoins. USDC also has the advantage of being offered to merchants through the Coinbase payment system.

What do you think about stablecoins and USDC? Share your thoughts in the comments section below!


Images via Shutterstock, Twitter: @Coinbase

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Zář 18

ING Survey: Europe Still a Patchy Landscape of Crypto Adoption

European countries present a patchy landscape of cryptocurrency acceptance. Most consumers remain skeptical, but there is an emerging class of true believers, shows the latest ING survey, “From cash to crypto: a money revolution.”


True Believers and Enthusiasts Boost Adoption

The insurance giant went through another annual analysis of attitudes to cryptocurrencies. The research found out that outside of a small group of true believers and enthusiasts, Europeans are cautious about the promises of crypto coins. ING queried respondents in 15 countries, with close to 1,000 respondents in each country.

“The crypto type”, as ING names this group of respondents, is the most positive about the future of cryptocurrencies. But extreme enthusiasts are not the most knowledgeable about crypto assets. The researchers discovered that knowledge and understanding of crypto coins do not correlate with a positive attitude or expectations.

Respondents comfortable with crypto assets are already used to various forms of cashless payments. This is especially true of male respondents with relatively high incomes, ING discovered. But the general European consumer still prefers traditional modes of payment, including physical cash.

Turkey, Romania, and Poland hold the lead when it comes to positive attitudes about digital assets. In the case of Turkey, the country has shown strong adoption of multiple crypto schemes, as locals attempt to mitigate the crash of the lira exchange rate. In Turkey, 62% of respondents had a positive attitude to crypto assets.

Most Europeans Cautious About Cryptocurrencies

One of the curious discoveries was that Europeans were very cautious about sending money via social media. When queried about Facebook’s use as a platform for payments, as much as 60% of Europeans responded negatively. Even in crypto-friendly Turkey, the usage of Facebook or other social media for payments was viewed with relatively low approval rates, with 43% against.

Europeans get informed about digital coins mostly from online media, ING discovered. But there are multiple regional differences, as some countries have stronger online communities or news portals.

Given that Europe is one of the hotspots when it comes to crypto exchanges, the ING survey shows that the general population is still largely unaware of crypto assets, and still far from quick or mass adoption. The UK, which is the leading country for crypto exchanges, was not included in the survey.

The survey also excludes the notoriously crypto-friendly Baltic countries, where adoption and startups are relatively higher.

What do you think about cryptocurrency adoption in Europe? Share your thoughts in the comments section below!


Image via Shutterstock

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Zář 11

Tether Churns Printers Again; Mints 20 Million USDT

Tether, the issuer of the USDT dollar-pegged coin, is running the money printer again, increasing the supply to 4.088 billion USDT. After Bitcoin (BTC) price once again threatened to drop below $10,000, a USDT liquidity injection may boost prices.


New USDT Enters Markets

Tether once again grew the supply of USDT, after testing the waters with recent coin burns. But after BTC prices responded with significant drops, bots noticed new USDT hitting the markets. New coins came out of the minting wallet, and the Tether treasury moved funds into circulation.

The latest printing intervention made USDT the sixth biggest digital coin by market capitalization, with a daily turnover exceeding that of BTC. The latest USDT printings are happening both on the Omni layer, and the Ethereum network. In the future, more USDT will migrate as Ethereum tokens. ETH-based USDT has now grown to 1.63 billion, almost double since the start of 2019. Major exchanges are switching their USDT wallets to only operate with the new type of asset.

Crypto Yuan Arrives on Bitfinex

But these new USDT printings seem routine, compared to another move that may shake the crypto markets. Bitfinex immediately launched trading pairs for the brand-new Chinese yuan stablecoin. The asset, intended to capture trading demand from China, is an Ethereum-based token. There are only 20 million CNHt tokens minted as of September 11, 2019.

Verified users will be able to make a direct switch between the Chinese yuan and CNHt, the newly minted asset. Bitfinex also limits certain jurisdictions from using the direct exchange. In theory, Tether, Inc. is launching an asset that could bypass Chinese capital controls, and Bitfinex is helping the process.

Tether also managed to create a digital yuan-denominated coin, even before the People’s Bank of China unrolled its long-awaited government-backed crypto coin.

Bitfinex has also slowly grown its influence, first by removing the $10,000 minimum deposit requirement, to attract a larger number of small-scale investors. The exchange also offers various tiers of verification, to gain access to assets or services.

But despite their expansion, Bitfinex and Tether, Inc. are still facing troubles. The New York Attorney General has extended its investigation, with the potential to discover multiple faults. Both companies showed evidence of working with New York-based clients, despite not qualifying for BitLicense, the local business license for crypto-related services.

What do you think about Tether and USDT? Share your thoughts in the comments section below!


Images via Shutterstock, Twitter: @whale_alert, @bitfinex

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Zář 07

Binance Coin Price Analysis: BNB Could Attempt Reversal To $26

Binance coin has created three lower lows between now and June as price action loses close to 50% of its value. Further downside is expected, however, signs of a reversal could be playing out.


BNB/USD 1 Hour Analysis

On the 1 hour chart for BNB/USDT, we can see at the end of August price levels crashed through $25 support as mentioned in my previous BNB analysis, since then price levels have bottomed around $21 and market price action creates an ascending channel. Both the 50 MA and 200 EMA are touching for the first time within the 1 hour visible chart range. RSI has also created three higher highs.

Volume has been gradually increasing since the 30th of August just before price action bottomed at $21. Volume levels will need to keep increasing to sustain the newly developed ascending channel which could result in Binance Coin testing breakout resistance at $24.5.

It’s likely BNB price levels will trade within the ascending channel over the next week, then create a new low. It’s important not to enter into a position until either price levels have breached the breakout point at $24.5, or clearly breaks down through the ascending channel support if you’re looking to short.


BNB/USD 8 Hour Analysis

On the 8 hour chart for BNB/USDT, we can see a clear falling wedge has formed. Stemming from the highs at $39 down to the current third lower low at $21. Falling wedges are inherently bullish, especially when forming off the back of an explosive move to the upside. Further downside within the falling wedge is likely. Key support to look out for below the current market price is $19.8.

Volume has begun to rise over the last few days in comparison to volume levels seen throughout August. In order for price levels to attempt a bullish breakout through the falling wedge, volume levels must return to levels seen in May through to July. Currently, the market price is trading right below the 0.236 Fibonacci level which is also at the same level whereby price action would break out through the falling wedge. Bullish breakout is only confirmed once both of these levels have been surpassed.

RSI turned oversold towards the end of August and now appears to be forming bullish momentum which aligns nicely with the ascending channel on the 1-hour chart.  However, there are almost no indications that this uptrend will be sustainable.

Do you think Binance Coin will break out through the falling wedge in a bullish fashion over the coming weeks? Please leave your thoughts in the comments below!


Images via Bitcoinist Image Library, BNB/USDT charts by TradingView

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Zář 07

Ethereum Hard Fork: How Important Is Backwards Compatibility?

The Ethereum Foundation has delayed the testnet launch of the Istanbul update until the start of October. But some are raising concerns about one of the Ethereum Improvement Proposals (EIPs) which will break certain smart contracts. So should technology be backward compatible ad infinitum?… or is a little disruption necessary in the name of progress?


Too Many EIPs Delay The Upgrade

The testnet activation of the latest update was originally due to happen on September 4th. However, the date has been pushed back to the start of October due to a large number of EIPs submitted for review. Developers eventually accepted six of these for inclusion in the Istanbul package, with a further eight in the following upgrade.

The testnet delay means that the mainnet activation will also occur a month later, in November after the DevCon developer conference.

Breaking Ethereum’s Contract

However, Parity developer, Wei Tang, has raised concerns about one of the improvement proposals, Ethereum Improvement Proposal 1884. This “will break at least a few deployed contracts,” he tweeted, continuing that “what worries me is that some participants on last AllCoreDevs seem to classify it as acceptable behavior.”

He goes on to say:

For software engineering, if you’re developing something that many people depends on, then backward compatibility is one of the top priorities for making any design decisions. This is especially important for blockchain, because a lot of money can be involved.

The technical details of the compatibility issues can be found on GitHub.

You Can’t Make An Omelette Without Breaking Eggs

While Tang’s concerns may seem valid, there is, of course, a counter-argument that obsessing over backward compatibility is counteractive to progress.

Tang makes the example of Microsoft’s Windows gaining popularity because of backward compatibility. Whilst it may have gained popularity in this period, it arguably fell into a technological black-hole.

Apple’s insistence on allowing old-tech to fall into obsolescence was (and still is) widely criticized. However, it took Microsoft years and many iterations of Windows before it caught up to the advances of Apple’s OS X, losing backward compatibility on the way.

If it were purely down to Microsoft, we would likely still be lugging around laptops with legacy VGA and serial ports. Slimline, slimline!

With concerns as to how much space is left on the Ethereum blockchain, clearly something must be done or technology could die. With stakes that high, surely a few broken contracts are a small price to pay?

What do you think about the disputed Ethereum Improvement Proposal? Comment below.


Image via Shutterstock

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Zář 01

Sunday Digest: Bitcoin Price, Libra-Killers and Craig Wright (again)

Obviously, it’s still just about the end of summer, so French air traffic controllers have decided to go on strike. Maybe there would be less annual havoc across Europe’s skies if they ‘paid them in Bitcoin’?


Bitcoin Price: Yet More Consolidation

So BTC has spent another week trading sideways in a band around $10k. Whilst the lack of breakout will undoubtedly be disappointing for some, the further solidification of support is welcome.

The week again started strongly, with a push on Monday taking price up to $10,600. We also saw the realized market cap (which adjusts for lost coins) breakthrough $100 billion for the first time ever.

The MACD indicator turned bearish for the first time this year, but we still had plenty of bullish sentiment from analysts. Bulls were accumulating, the order book looked bullish, and Max Keiser chipped in with a $25k prediction based on the fragile stock markets.

Institutional investors were becoming more bearish according to one report, but this could all change in the autumn with the Bakkt futures launch, and final Bitcoin-ETF decisions from the SEC.

All the while Monday’s gains had been slowly trickling away. Then Wednesday evening through Thursday saw a larger crash of 9% over the course of a few hours. Support at $9,400 held and we looked for potential reasons for the sudden drop.

Still, looking at longer-term trends, there are a lot of reasons to be positive. The uptrend for the year is still very much intact and will be even if price falls back to $6k levels. Although at least one analyst believes that bitcoin won’t retrace that level, claiming that $10k is the new $6k, and is just a stepping stone on the inexorable grind upwards for bitcoin price long-term.

Technicals were good, as hash rate hit an all-time high, while BTC price finished the week trading sideways at around $9,600.

The Race Is On To Beat Facebook’s Libra

The one thing that Facebook appears to have achieved with its announcement of the Libra ‘cryptocurrency’ is galvanizing the entire crypto-community to make it obsolete before it even launches.

It seems that everyone and their mum is now working on a stablecoin for online payments and money transfer. Telegram has long mooted its cryptocurrency, but recent reports suggest it is now imminent, along with a bunch of localised stablecoins from Binance.

Even the Chinese government is (or isn’t depending on who you believe) about to launch a Libra-killer.

Meanwhile, Facebook launched its bug bounty program for Libra. Anybody who finds 100 bugs will bag themselves a cool $1 million… and with Facebook, one would imagine that there will be enough bugs to go around.

News In Brief

Goldbug Peter Schiff couldn’t wait to gloat after bitcoin’s midweek price drop, claiming it had ‘failed [the] safe haven test again’. Obviously he didn’t mention the recent Reuters report saying that $50 million of forged bars had been flooding the gold market.

An XRP advocate has suggested that users fork the cryptocurrency to prevent Ripple from repeatedly dumping its ‘reserved’ share of the tokens for profit.

Blockstream’s Samson Mow called Ethereum a technological dead-end, much to the chagrin of the Ethereum community.

And Finally…

Always nice to finish with an update into (Dr) Craig Wright’s clownery.

The Craigster didn’t have much luck in his Florida court case with the estate of Dave Kleiman this week. The judge ordered that he must hand over half of his claimed 1 million BTC and half of all his intellectual property (which arguably may not be worth all that much).

‘Faketoshi’ stated that he now ‘had no choice’ but to do this, warning that the flood of $4 billion worth of bitcoin would likely tank the market. Few were convinced by his insistence that (as Satoshi) he could do this though. Peter McCormack, currently being sued for libel by Wright in a UK court, bet $10k that Wright would/could not move any of the coins in the next year.

What do you think of this week’s Bitcoin news roundup? Let us know your thoughts in the comment section below!


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Srp 22

‘Foolish’: Crypto Fund CEO Warns Against Bitcoin Maximalism Narrative

Cryptocurrency politics is focusing on Bitcoin at the expense of altcoins, but a flip could occur any time, an industry investor has warned.


Simpson: Don’t Pin All Your Hopes on Bitcoin

That was the conclusion from Arianna Simpson, founder and CEO of crypto and blockchain-focused investment fund Autonomous Partners.

In a discussion on social media August 22, Simpson said sentiment favored Bitcoin over altcoins now, but that status quo has changed multiple times and could do so again.

“The general crypto narrative seems to be drifting back to bitcoin maximalism,” she summarized.

…BTC has clearly outperformed most other cryptoassets by a wide margin YTD. Expecting that this will always be the case (or that holding only BTC is the right move) strikes me as foolish.

The comments come at a timely juncture in cryptocurrency’s history. As Bitcoinist reported, Bitcoin’s returns have vastly outperformed major altcoins in 2019. Unlike the previous bull run in 2017, alts have so far failed to rally, losing more and more value in BTC terms. 

Top five tokens such as Ethereum (ETH) and Ripple (XRP) continue to trade around 80% below their all-time highs. Against BTC, both are lower than ever.

Well-known traders have thus gone on record in recent weeks to announce the death of the altcoin market, possibly for good. Among them was Peter Brandt, who likened the lifelessness of alt markets to the dot com boom of the early 2000s.

Ethereum ‘Better Performing Investment’

Simpson’s opposing argument is thus even more conspicuous.

“Those who have been in this space for many years should recall that this is by no means the first time the pendulum has swung back and forth — in 2017 bitcoin was old news and it was all the shiny new (Layer 1 technologies) that were going to take over the world,” she continued.

“In reality, ETH was a better performing investment for many (even when considering the major correction of 2018!) than BTC was. So BTC remains king, but discounting everything else is silly.”

Her remarks will be music to the ears of long-suffering investors whose portfolios have failed to react to this year’s Bitcoin bull market. 

Pressure also continues to come from Bitcoin advocates, with developer Udi Wertheimer this week publicly chastising Ethereum participants in particular for the losses following 2017’s ICO craze. 

“It’s time for the ETH gang to wake up, smell the ashes, and take some responsibility,” he tweeted. 

“Their 2017 ‘blockchain everything’ narrative failed miserably and cost retail investors BILLIONS, dumped into scams supported by ETH naiveté.”

What do you think about the Bitcoin vs. altcoins debate? Let us know in the comments below!


Images via Shutterstock

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Srp 16

Coinbase Custody Acquires Xapo’s Institutional Business

Coinbase Custody today announced that it has acquired Xapo’s institutional business, making it the largest crypto-custodian in the world. The acquisition brings Assets Under Custody (AUC) to over $7 billion, servicing over 120 clients in 14 countries.


Innovation In Cryptocurrency Custody

Xapo is a long-respected name in the world of cryptocurrency custody solutions. It has led the industry in developing security techniques to meet the rigours of institutional clients.

In 2017 it hit the headlines for storing customers’ bitcoin in a fortified ex-military bunker in the Swiss Alps. By May 2018 it was holding around $10 billion in bitcoin for customers across five continents.

CEO, Wences Casares, has long been a champion of Bitcoin, and Xapo’s mission is to make Bitcoin secure and accessible. Casares believes that any investor who doesn’t have at least a one percent position in Bitcoin is being irresponsible.

Coinbase’s Move Into Crypto-Custody

Coinbase Custody started trading a year ago, with a remit to provide secure cryptocurrency storage for institutional investors. According to marketing it combined the ‘battle tested’ cold-storage solutions employed by the Coinbase exchange, with an institutional-grade broker/dealer.

It quickly added a raft of additional crypto-assets to its original four of BTC, ETH, BCH, and LTC. However, there were questions as to whether institutions would immediately trust the offering. Certainly, while the bear market was in full swing, growth in AUC was slow.

It wasn’t until the bulls really started taking control again in May this year, that AUC crossed the $1 billion mark. But since then, growth has been steadier, and with this latest acquisition of Xapo’s institutional business, Coinbase Custody are claiming over $7 billion in held assets.

The Final Hurdle To Institutional Adoption?

There are many who think that crypto-custody is the final hurdle to institutional adoption of bitcoin and cryptocurrency. This area is certainly where a lot of resources are currently being deployed.

Bakkt is still waiting on approval from the New York authorities for its custody solution, before it can start offering its physically backed bitcoin futures products. Fidelity’s move into crypto-custodianship was supposed to remove one of the final barriers to institutional adoption back in March.

Even the South Koreans are getting in on the act, although technically, the legality of cryptocurrency in the country is still in question.

We are still waiting for the expected flood of institutional investors, but steps are certainly being made. Whether their eventual arrival will be a positive thing is another question entirely.

What do you make of this latest Coinbase acquisition? Add your thoughts below!


Images via Shutterstock

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Srp 14

Facebook Covert Audio Sharing Casts Doubt Over Libra Privacy

Facebook used third-party contractors to listen to user audio without telling them, in a move which raises questions about the third-party sponsors of its libra cryptocurrency.


Facebook Shared Messages With Third Parties

As Bloomberg reported on August 13, Facebook confirmed it had used middleman firms to transcribe audio messages from its Messenger app. 

The practice, which the company says it halted just last week, only involved users who had given their permission for audio collection in the app’s settings. However, Facebook did not disclose the data would be sent to third parties. 

“Much like Apple and Google, we paused human review of audio more than a week ago,” an official told Bloomberg, which reported contractors involved felt their work constituted a moral dilemma. 

The latest privacy shock is pertinent for cryptocurrency fans watching developments of Facebook’s in-house token and financial platform, Libra. 

As Bitcoinist reported, the project, while yet to launch, has the backing of some of the tech world’s biggest – and on occasion most notorious – names.

Large corporations such as PayPal have agreed to stump up $10 million to run a node for Libra, with critics already warning that a future Libra user could have their financial freedom entirely controlled by those nodes.

“…If 10 of the 28 initial validators (eg. Paypal, Visa, Mastercard, eBay, Facebook, plus 5 others) agree in a closed-door meeting that they want to reject your Libra transactions, they have the power to do so because they prevent a two-third majority from validating them,” angel investor Marc Bevand summarized in a review of Libra in June. 

Libra’s Data Honey Pot

With freedom, however, comes concerns about data protection. A power-sharing agreement involving all the world’s tech and finance heavyweights could spell disaster in the event of data mismanagement – or simply provoke anger if similar methods to Facebook’s own data collection habits become commonplace.

Nonetheless, commentators from both within and beyond the crypto industry have identified positive improvements Libra poses over central bank fiat money.

“To be fair, Libra is still probably somewhat of an improvement over the current financial system,” Bevand continued. 

“Today Paypal can unilateraly (sic) freeze your Paypal account. While in Libra you need at least 1/3rd of Libra members to collude and block your payments.”

Arthur Hayes, CEO of crypto derivatives giant BitMEX, echoed that perspective last month, bluntly describing PayPal’s own model as “fucked.”

In a world where Libra is ubiuquitous, he said in an interview, “all a bank is relegated to is a dumb node that holds fiat currency in electronic form at a central bank.”

What do you think would be Facebook’s privacy practises under Libra? Let us know in the comments below!


Images via Shutterstock

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