SegWit, Explained | Cointelegraph


SegWit is associated with Bitcoin and its core principles, so its strengths and weaknesses will vary depending on who is observing it.

SegWit’s ability to give blocks more weight, or transaction density, relies on the idea that some blockchain data will be kept off the original chain, which is instead used as a sort of reference or index. Some believe that offloading data from the blockchain is already a failure, as it’s like admitting that blockchain alone can’t function. 

From this perspective, SegWit itself is a weakness infecting Bitcoin, and that’s why rather than implement SegWit, a piece of the community hard forked into a new blockchain called Bitcoin Cash in 2017.

Bitcoin Cash is essentially legacy Bitcoin before SegWit, and its scaling strategy is simply to increase the block size and keep all data on-chain. This is a decentralization strategy opposite that of the Bitcoin Core group, which sees SegWit as the first stack atop a multilayered blockchain. 

There are countless more ideas that riff off Bitcoin or Bitcoin Cash, or take a new tack. SegWit is simply one step in what the largest developer group of the largest cryptocurrency believes is the right path.

Cointelegraph News

Crypto News From the Spanish-Speaking World: Sept. 22-28 in Review

Spanish-speaking countries made headlines this week, with cryptocurrency and blockchain-related developments on both the governmental and enterprise level. The Congress of the Republic of Peru spoke about the potential of blockchain tech, blockchain firm Aeternity revealed the development of a network that enables the management of the supply chain of medical cannabis, Venezuela’s central bank explored the possibilities of holding crypto in its coffers, and a subsidiary of Argentinian smart contract platform RSK purchased Latin America’s social media giant Taringa.

Here is the past week of crypto and blockchain news in review, as originally reported by Cointelegraph en Español.

The Congress of the Republic of Peru shows interest in blockchain technology

On Sept. 23, Congressman Francesco Petrozzi, president of the Science, Innovation and Technology Commission, spoke with Marco Esparza Montejo, the COO of Blockchain Life Solutions, about the potential of blockchain technology and the fourth industrial revolution applied in everyday reality.

Esparza proposed the creation of an equivalent Blockchain Supervision at the Congress that would trace bad practices, propose funds to develop initiatives, put them in value and produce associated regulatory frameworks, among other things. He also proposed introducing digital training at schools, which includes not only learning to program but also seeing how it impacts on life.

Esparza said that, together with Petrozzi, they see the chance to establish a quality certificate: “What we are looking for with the congressman is to create our own certificate of quality digital affidavit.”

Uruguay: Aeternity presents a blockchain-based system to track marijuana cultivation

On Sept. 24, decentralized application-focused blockchain Aeternity entered into an agreement with Medicinal Cannabis Uruguay to build a blockchain-based network that enables the management of the entire supply chain of the medical cannabis produced by the company. 

The proposed system will consist of sensors installed along all the fields that will be connected on the Internet to record any action that is done within any particular plant.

Venezuelan Central Bank is Considering Holding Bitcoin and Ether

Venezuela’s central bank began exploring the possibilities of holding Bitcoin (BTC) and Ether (ETH) in its coffers, according to anonymous sources who reportedly have direct insights into the matter.

The state-run oil and gas company, Petroleos de Venezuela SA (PSDV), requested that the central bank look into the matter after the oil producer ran into difficulties receiving payments from international clients due to U.S. sanctions against Venezuelan President Nicolas Maduro’s current regime.

Spanish Facebook Rival Taringa Is Sold to Smart Contract Dev RSK

A subsidiary of Argentinian smart contract platform RSK, IOVlabs purchased Latin America’s social media giant Taringa, gaining exposure to 30 million users.

Taringa will purportedly reward users for active participation in its communities with IOVLabs’ RIF token (RIF), a crypto token operating on the RSK Smart Bitcoin platform. At press time, RIF’s market cap amounts to over $57 million, while the token’s price is up about 0.11% over the past 24 hours, according to Coin360.

Source Cointelegraph

ConsenSys and WWF Roll Out Platform for Transparency in Philanthropy

ConsenSys, a blockchain startup founded by Ethereum’s (ETH) co-founder Joseph Lubin, and the World Wildlife Fund (WWF) have jointly launched the Impactio platform to bring transparency into philanthropy.

Per an announcement made on Sept. 24, a new partnership between ConsenSys and the WWF resulted in an Ethereum blockchain-based platform dubbed Impactio designed to supervise and fund projects within nongovernmental organizations and standalone companies. The impetus behind the initiative is to trace how companies’ funds are spent within social impact projects.

What does Impactio solve?

Individuals and companies who utilize Impactio should submit their projects, providing clear objectives for aspects such as sustainability, inequality, emerging communities or the environment in accordance with the United Nations’ 17 Sustainable Development Goals.

After that, curators receive Impactio Tokens in a digital wallet, with the platform using a system based on ConsenSys’ research on Token Curated Registry (TCR) to curate and choose high-potential projects and subsequently present them to potential funders. The announcement further explains the TCR’s role in the process:

“It requires curators to stake their tokens to back a project, and for curators who wish to dispute that project to stake the same amount of tokens. If there are no other curators who object to the project, the project will be approved and surfaced for donors to decide on funding. If there are objections, curators can challenge the project by matching the tokens staked by the curator backing the project.”

According to Robby Greenfield, co-founder at ConsenSys Social Impact, “Many nonprofits struggle to show that they are using their funds effectively and how it aligns their funders’ goals.” Indeed, a law firm Nolo’s study revealed that 75% to 85% out of 220,000 nonprofit organizations improperly allocated their expenses.

Industry players embrace blockchain in philanthropy

As Francesco Nazari Fusetti, social entrepreneur and founder of Ethereum blockchain-based token AidCoin and full-service platform CharityStars, previously told Cointelegraph: “Charities must keep in touch with their donors all the way through the project, and keep updating them about the new milestones reached” in order to prove that a success story is true, as well as to ensure the work is sustainable. He added:

“Adding financials and proofs of payment definitely helps to create a success story, but only with crypto and blockchain we can aim to give full transparency about the use of funds.”

In early September, news broke that Rainforest Foundation US, a New York-based nonprofit NGO working in Central and South America, was hoping to support anti-deforestation efforts with crypto and blockchain tech.

Binance Charity, the philanthropic wing of major cryptocurrency exchange Binance, also began a campaign to help support victims of Hurricane Dorian.

Source Cointelegraph

Everything You Need to Know

Bitcoin (BTC) has a unique advantage: self custody, which the traditional financial system cannot compete with. It is important that the Bitcoin ecosystem maximizes this competitive advantage in order to compete with the legacy system.

Custodial solutions are important for financial markets, whether traditional or innovative, and have been historically limited for Bitcoin. But why do institutional investors need custodial services, and what are the unique challenges of Bitcoin custody?

Why institutional investors need custodial services

There are two main reasons why institutional investors need custodial services: reducing risk and regulatory compliance.

By separating the entity that stores assets from the entity that manages assets, financial institutions can specialize in what they are best at. This separation also reduces the risk that one employee can run off with all the money. Usually, custodians are long-standing financial institutions with a lot of reputational risk that prevents them from acting against their clients’ interests. 

In terms of regulations, the dominant regulatory bodies around the world — the United States Securities and Exchange Commission (SEC), the United Kingdom’s Financial Conduct Authority, the Monetary Authority of Singapore, etc. — all require institutional investors to keep customer funds with regulated custodians. Typically, regulated custodians are broker-deals or banks. 

Unique challenges of Bitcoin custody

Providing custody for traditional financial instruments is already challenging in its own right, and Bitcoin and other cryptocurrencies present an exceedingly complex task. Both retail investors and professionals face unique challenges in safely storing their Bitcoin. 

Challenges in Bitcoin custody

First off, cryptocurrencies are bearer assets, meaning that whoever has control of the asset, owns the asset. In other words, if you lose your Bitcoin or someone steals it, there are no options to get the money back. This is unlike a bank account or credit card, with which a bank can simply reverse a transaction. 

Most retail investors store their Bitcoin on exchanges or hot wallets that have a history of being hacked. This is not a suitable option for professional investors. Some of the smarter retail investors use hardware wallets that enable users’ Bitcoin private keys to be stored offline, which is significantly safer than an exchange. 

However, from an institutional investor perspective, a single USB hardware device is still too risky for managing client funds. What if an employee walks off with the hardware wallet and all the funds? Instead, the investor should seperate power so that no individual has the ability to go rogue. 

Crypto custody solutions

The crypto custody industry is growing quickly, but it is still young and inexperienced compared to traditional finance. In order for big financial institutions to consider investing in Bitcoin, the custody side needs to be addressed. On top of custody, investors also need insurance products that protect Bitcoin and other cryptocurrencies from theft. 

Institutional custody solutions

Professional investors need compliant cold storage and insurance from brand-name companies with a strong reputation. There are many native crypto solutions, but they don’t satisfy the biggest financial players.

Native custody options for crypto include Coinbase Custody, Xapo, Onchain Custodian and many more listed on the graphic above. These services have been successful so far, although the scope is limited, as smaller, progressive capital allocators leverage these services. However, most large institutions are still on the sidelines. 

Thankfully, marquee financial institutions are stepping into the custody space, such as Fidelity, which released its institutional custody solution in mid-2019. It’s too early to predict how this will impact the market, although a traditional financial institution custodying Bitcoin is a very promising sign.

Related: Insured Crypto Custody Services: Key to Institutional Investment Growth?

Bitcoin ETFs?

One hot topic in the crypto space is Bitcoin exchange-traded funds (ETFs). The assumption is that ETFs are an easier way to give investors exposure to Bitcoin. For example, if a Bitcoin ETF existed, anyone with an e-Trade, Fidelity or any other broker could easily purchase Bitcoin. 

So far, the U.S. has not approved a Bitcoin ETF, and one reason being that there aren’t any third-party custody solutions that the SEC trusts. However, Fidelity and the incoming wave of institutional custody could help get an ETF approved in the future.

Related: A Brief History of the SEC’s Reviews of Bitcoin ETF Proposals

The reality is that the crypto space is still a fledgling industry with many hurdles to overcome. Thankfully, an increasing number of people are leaving traditional finance to come build a parallel financial system with Bitcoin. A mature fiat onramp ecosystem with custody and insurance allows family offices and hedge funds the peace of mind and convenience to allocate some capital to Bitcoin. Will traditional finance acquire Bitcoin in a meaningful way? The truth has yet to be seen.

Personal custody: Be your own bank

Besides the institutional custody space, retail investors are also looking for improved ways to manage their Bitcoin holdings securely. The promise of being your own bank is very alluring. However, it requires taking on significant personal responsibility. 

In the early days, storing your Bitcoin private keys was quite challenging and only available to technically minded users. However, the custody options for retail investors have improved dramatically in recent years. 

There are a range of solutions ranging from hardcore cypherpunk storage to fully trusted “crypto banks” like Coinbase. It’s important that users are acquainted with the risks as well as the technical sophistication of their chosen custodian.

A node in every home

A popular narrative emerging in the Bitcoin space is the idea that every house will have its own Bitcoin node that trusted family and friends can reference. Each user would then have their own dedicated hardware wallet(s) to manage their private keys. While this sounds complicated, it simply means setting up a second hardware device next to the Wi-Fi router. 

This setup would enable users to fully validate all Bitcoin transactions while minimizing the technical challenges. In the future, all users could be fully self-sovereign with their finances if they choose to.

Multi-signature solutions

After setting up a home node, the next step to personal custody is setting up a multisignature account. This is not a requirement, but it dramatically increases security. 

Tech-savvy users can set up their own multisignature with tools like Glacier Protocol. However, most users will likely use a Bitcoin service that makes a multisig easier to use. For example, Casa has created both a home node as well as a multisignature solution called Keymaster, and are currently offering a free two-of-three multisig tool for users looking to start playing around with more advanced security models. Another option is Unchained Capital’s vault solution. Unchained is a semi-trusted Bitcoin bank that offers self-sovereign custody software as well as financial services such as lending. 

As a cryptocurrency investor, it’s important to identify your own security needs and pick the solution that best meets them.

While custody may not be a fun topic to discuss, it is a vital part of a successful financial system. Thankfully, we’re seeing an explosion of new custody services being offered to satisfy both retail and institutional investors. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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.

Rohan Barde is a research and innovation manager at Blockchain Zoo. He is a tech-passionate professional with more than five years of experience. A business administration background gave him a solid understanding of what businesses need. Currently, he is exploring how needs of modern business can be met with applications of machine learning, big data, artificial intelligence and blockchain technology.

Source Cointelegraph

The Story Behind the Explosive Growth of Crypto Funds

The explosive growth of crypto funds is a compelling story, especially when you consider that the concept has only been around for six years. Today, crypto funds have become the engine powering the thriving crypto industry. Compared to the 224 funds launched in 2017, 2018 showed unprecedented growth as 239 new crypto funds entered the fray. 

However, many have projected that the number will drop in 2019. Yet, according to proprietary research by Crypto Fund Research, there are reasons to believe that the crypto fund industry will continue to make strides, even as the crypto market recovers from a grueling bearish run.

As expected, the rise of crypto funds has directly impacted the crypto space, with several talking points trailing its emergence as a crucial part of the crypto economy. 

Crypto funds are typically crypto hedge funds or venture capital funds

According to the same research, the 812 crypto funds presently operating across the world comprises of 369 crypto hedge funds and 421 venture capital funds, while the remaining are either crypto exchange-traded funds (ETFs) or private equity funds. One could argue that the influx of venture capitalist funds has translated to more funding options for blockchain startups, as it is now a common trend for traditional VC firms to launch blockchain funds.

While this is a given, the growing and maturing blockchain/crypto landscape has attracted private equity funds to crypto investment funds. On the part of crypto hedge funds, it’s a matter of maximizing all the investment opportunities made available by the volatile nature of the crypto market. And so, they mostly function as hybrid funds that invest in Initial Coin Offerings (ICOs) and cryptocurrencies. As such, they employ long-term investment strategies with longer lockup periods — similar to how venture capitalists operate.

Crypto funds

Crypto funds are not as big as their traditional counterpart

Although crypto funds are on the rise, a PwC and Elwood joint 2019 report shows that over 60% of existing crypto funds have assets under management (AUM) that is less than $10 million. Therefore, this means that many crypto funds are small-scale firms with fewer than five employees. However, top crypto funds which have more than $50 million in AUM do exist, and only two funds have AUM that is worth $1 billion and above.

Crypto fund assets under management (AUM)

As impressive as these stats are, they do not even come close to the value of assets that traditional hedge funds control. All crypto fund assets combined represent a meager 1% of hedge funds assets.

Crypto funds outperform Bitcoin

It is not every day you see hedge funds outperforming their benchmarks. A reality that holds in the traditional asset markets is redundant in the digital assets market, as crypto funds continue to perform beyond expectations. The Crypto Fund Research Cryptocurrency Fund Index (CFR Crypto index), which tracks over 40 crypto funds, managed to outperform the 100% increase experienced in the Bitcoin market from January 2017 to June 2019, gaining more than 1400% during the same period.

Related: Biggest Crypto Hedge Funds and What They Tell About the Market

Crypto Fund Index vs. Bitcoin

The data from CFR Crypto index is more impressive when considering that crypto funds lagged behind many of the single digital assets performance in 2017 and overtook the market at a time when many feared the worst — the bear market. Nonetheless, this does not mean that investors did not lose money, rather that crypto funds returning -46% in 2018 compared to the -76% return of Bitcoin is, in itself, a success.

Crypto funds and bear market 

The gruesome effect of 2018’s bear market — after the leading cryptocurrency’s price hit record highs at around $20,000 per coin — would have crippled the development of the crypto space if not for the unwavering optimism of crypto funds. Venture capitalists and crypto hedge funds utilized this period to pick out interesting blockchain projects and fund them. There is no doubt that without this funding, developments would have stalled.

Crypto fund launches by year

Experience is one factor that should determine the profitability of investment funds, right? This belief is less potent in the hedge fund industry according to a recent Loyola Marymount University (LMU) report showing that hedge funds’ performance dipped as they aged. The research stated that the average age of conventional hedge funds is 52 months, and returns in the first year of operation are more than triple that of the fifth year. For crypto funds in the CFR index, their median age is 16 months. Applying the information garnered in the LMU report, one could argue that crypto fund managers are currently in their prime, and this has helped them generate fantastic returns.

America is still home to a large percentage of crypto funds

According to PwC and Elwood’s joint 2019 crypto fund report, 64% of crypto funds are based in the United States. Other countries that boast a booming crypto fund space are the Cayman Island, the United Kingdom, Singapore, Liechtenstein, Luxembourg and Australia. It seems that crypto funds generally prefer cities, which house traditional hedge funds. 

Crypto funds by country

In the past, the small size of many crypto funds excluded them from the spotlight. However, things are changing, as the U.S. Securities and Exchange Commission (SEC) and other regulatory bodies across the world are establishing guidelines for ICOs and security tokens. And since crypto hedge funds are heavily linked with security tokens, it is looking more likely that they will be required to meet stiffer registration requirements. A telling factor is the case of Pantera Capital, which disclosed in December 2018 that it might pay refunds and fines for investing in ICOs that violate U.S. securities laws. SEC-registered crypto funds

A typical cryptocurrency fund could either be a hedge fund or a venture capital fund. Meanwhile, crypto funds are not as big as their traditional counterparts and are not so significant yet in the financial market. Nonetheless, on average, crypto hedge funds outperform Bitcoin, the leading cryptocurrency in the world. Crypto funds did good work in the bear market as the industry’s inexperience continues to propel its impressive run. To a large percentage of the world’s crypto funds, the U.S. remains to be home, and so, the regulatory uncertainties of this region is still a major talking point that needs to be clarified for future improvements of the industry.

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.

Constantin Kogan is a venture partner at BitBull Capital, a board member of ABOTMI and has been a cryptocurrency investor since 2012. He has 10+ years of experience in corporate leadership, technology and finance. He contributes to the digital asset space, sharing and value economies.

Cointelegraph News

Blockchain Adoption as a Cure for Cross-Border Trading

In August of 2019, both the United States and Thailand announced their plans to test blockchain applications for tracking and managing shipments. The U.S. Customs and Border Protection (CBP) is planning to test a blockchain application against their current system to determine how distributed ledger technology (DLT) can improve its existing processes. Thailand, on the other hand, plans to use IBM’s blockchain-based logistics platform Tradelens to improve customs processes such as data sharing.

Originally developed in a joint venture between IBM and logistics giant Maersk, Tradelens seeks to streamline processes in the global shipping industry by making the flow of information occur in real-time. The blockchain platform is reported to currently process about half of the world’s shipping data.

These moves highlight countries’ increasing interest in employing blockchain technology in their customs and border operations. The Tradelens website says its ecosystem comprises over 100 different organizations including carriers, ports, terminal operators, third-party logistics firms, and freight forwarders. More specifically, a map on the Tradelens website suggests that about 60 ports and terminals worldwide are directly integrated with TradeLens.

Blockchain for digitizing customs documents in the EU

Elsewhere, the Directorate-General for Taxation and Customs Union (TAXUD), which develops policies and operational systems for the European Customs Union, explored the applicability of blockchain in customs and taxation with a focus on utilizing blockchain as a notarization service.

The Union is looking into using blockchain to digitize ATA Carnet, an international customs document used in 87 countries for temporarily admitting goods duty-free. A pilot project conducted in collaboration with the International Chamber of Commerce World Chambers Federation (ICC WCF), was successfully tested in 2018. 

The ICC WCF, a body of the ICC that helps facilitate mutually beneficial partnerships between ICC members, has been working with different customs authorities to develop solutions for converting ATA Carnets into electronic documents.

Mutual recognition agreements and blockchain

About 80 countries around the world have developed authorized economic operator (AEO) programs and signed a mutual recognition agreement (MRA), all in an effort to streamline cargo security. Under such arrangements, individual countries identify and approve trustworthy logistics operators that pose a low risk in security and share the approval information with participating countries. 

This allows countries to piggyback on the security checks of other countries to make customs operations more efficient. However, a few problems have arisen with the program. 

  • There are information leakage risks associated with the conventional way of sharing AEO data by email. While a sender’s email server may be encrypted, there is no guarantee that the receiver’s is as well, and vice versa.
  • Data sharing is not real-time, but monthly or at an agreed-upon interval. This limits the speed at which information on new or suspended AEOs can reach all participants.

To avoid the aforementioned problems as well as achieve additional time and cost savings on security procedures, customs administrations in Mexico, Peru and Costa Rica are working with the Inter-American Development Bank to develop a blockchain application called Cadena.

Global Trade Connectivity Network and world wide interest in blockchain

A joint development by monetary authorities in Singapore and Hong Kong, the Global Trade Connectivity Network (GTCN) is a blockchain-based cross-border infrastructure for digitizing trade, finance-related data and documents between the two regions. The GTCN platform hopes to cut out the inefficiencies in a process that still relies heavily on paper, stamps and faxes. 

On the back of the world’s Gross Domestic Product (GDP) growing, total trade — the sum of exports and imports of goods and services — has been accounting for an ever increasing portion of the world’s GDP over the last few decades. World Bank data shows that nearly 58% of the world’s GDP came from cross-border trade in 2017, up from about 46.6% before the turn of the millennium. Trade as a percentage of the world’s GDP was just 24% in 1960.

Total trade as a percentage of the world's GDP, 1960—2017

The data suggests that imports and exports are growing in importance for economic activity. Consequently, airports, ports and other border crossing points around the world are busier than ever. However, as trade activities are increasing, so are the associated direct and indirect costs. 

Direct costs include all costs related to border and customs procedures, while indirect costs refer to costs incurred through delays at the border. The World Trade Organization has associated high trade costs to “frictions” that exist at various stages of goods exchange. In fact, in one of its reports, the WTO claims that high trade costs “effectively nullify comparative advantage by rendering exports uncompetitive.”

A separate World Bank report shows instead that countries with a high Logistics Performance Index (LPI), which measures a country’s overall efficiency in logistics and trade facilitation, tend to have lower trade costs.

Correlation between LPI score and trade costs

LPI is widely used across the globe as a benchmark for the state of a country’s trade logistics and combines performance measures in the following six areas:

— Efficiency of customs and border clearance.

— Quality of trade and transport infrastructure.

— Ease of arranging competitively priced shipments.

— Competence and quality of logistics services.

— Ability to track shipments.

— Frequency of on-schedule deliveries.

Since the results of these measures have a real-life impact on trade costs, one can see blockchain potentially bringing improvements to at least three areas, particularly for customs and border clearance, shipment tracking and frequency of on-time delivery. 

In fact, the blockchain-based customs projects facilitate the provision of secure shipment data and documentation in real-time. This allows customs to operate faster and streamline their clearance processes.

The move by governments around the world to employ blockchain to improve cross-border trade marks a step toward paperless customs processes, which originally began with the digitization of information flows by making trade-related data and documents available and exchangeable electronically. For all the improvements they’ve brought to paper-heavy processes, traditional electronic data exchange systems still face the challenges of authenticity and the unavailability of real-time data exchange.

For instance, the Netherlands and China launched a five-year project in 2010 to test the applicability of electronic sanitary and phytosanitary (SPS) certificates. A World Economic Forum white paper titled “Paperless Trading: How Does It Impact the Trade System?” noted that concerns around the authenticity of the electronic documents arose. This necessitated the adoption of electronic signature systems and a whole new legal framework that recognized the electronic signature.

Still, the entire process requires longer procedures and the introduction of new types of intermediaries — e-signature providers, for instance. Moreover, low-income countries, the trade costs of which remain high compared to high-income countries as according to World Bank data, may not have the budget to implement several new systems for data and document digitization. They still need to invest in better customs infrastructure. 

Blockchain, on the other hand, if implemented in border protection, will ensure real-time availability and immutability of customs documents while saving considerable costs on excessive paperwork.

Source Cointelegraph

Crypto Markets Turn Green Following Tough Week, BTC Price Above $8,000

Saturday, Sept. 28 — All of the top-20 cryptocurrencies by market cap have entered the green zone, recovering from recent losses, with Bitcoin (BTC) hovering above the $8,000 mark, according to Coin360.

Cryptocurrency market daily overview. Source: Coin360

Cryptocurrency market daily overview. Source: Coin360

Over the past day, Bitcoin has been trading in a narrow corridor between $7,889 and $8,244, which mark the coin’s lowest and highest price points over the past 24 hours. At press time, BTC is trading at around $8,093, up around 1.6% on the day.

On its weekly charts, BTC is down by 20.4%, while its monthly losses amount to 18.16%.

Yesterday, Bitcoin’s Lightning Network developer Rusty Russel published a full disclosure of the network’s vulnerability discovered in August, accompanied by a solution. Russel pointed out that the vulnerability appeared while opening funding channels.

Bitcoin seven-day price chart. Source: Coin360

Bitcoin seven-day price chart. Source: Coin360

The second-largest crypto by market cap Ether (ETH) is currently trading at around $171,4, having gained 4.08% on the day at press time. ETH dipped to its lowest price point of the week at $161 on Sept. 24, reaching an intraweek high of $218 on Sept. 21.

Ether 7-day price chart. Source: Coin360​​​​​​​

Ether 7-day price chart. Source: Coin360

XRP has gained over 1% on the day and is trading at around $0.239 as of press time. The altcoin started the day near $0.234, gradually reaching its current price point. Over the week, the third-largest cryptocurrency by market cap registered losses of 17.9%, while its monthly losses are 6.79%.

XRP’s seven-day price chart. Source: Coin360

XRP’s seven-day price chart. Source: Coin360

Among other major gainers on the day, the charts show Tezos (XTZ), Algorand (ALGO), Chainlink (LINK), Binance Coin (BNB) and Bitcoin Cash (BCH), which have gained 6.53%, 3.56%, 4.7%, 3.7% and 3.42% respectively.

Total market capitalization of all cryptocurrencies is around $215.5 billion as of press time. The daily trading volume of all coins is $50.7 at press time.

On Sept. 27, in a letter addressed to European parliament member Eva Kaili, European Central Bank president Mario Draghi noted that the European System of Central Banks is closely monitoring developments in the cryptocurrency industry. Despite displaying a positive approach to new technologies, Draghi apparently thinks that stablecoins and cryptocurrency in general are not yet a substitute for fiat currency.

Keep track of top crypto markets in real time here

Source Cointelegraph

The Original Sins of Cryptocurrencies

The crypto industry is on its way from the epic early days, when it was a technological phenomenon exclusive to a limited group of techs, scientists and enthusiasts, to its final destination: a financial commodity intended for use by everyone. Of course, the journey has just begun, and it is riddled with potholes, traps and a high level of resistance.

The extent of the crypto revolution is total, disruptive, world-wide and irreversible. But its final destination is pretty neat: a screenshot of an average day on planet Earth by 2050 shows clearly showing human beings using a financial commodity called “cryptocurrency” through physical wallets residing on their smartphones and connecting everyone directly through a solid and shared ecosystem that is backed by traditional financial institutions (i.e., banks). The output will cast aside the old, centralized and controlled fiat system for a new, cheaper, decentralized, easier and faster structure, able to potentially connect everyone.

Try to remember how socializing was before the arrival of Facebook and other social networks, and you will have a fresh feeling of crypto’s potential reach. The world as we know it will never be the same.

The speculative sin

A few frictions are lagging crypto’s mass adoption process. The first one is certainly the financial speculation rooted to the early days and still thriving to this day. Financial speculation is an ideal way to make a large quantity of money in a short period of time, but in a high-risk environment and at the expense of somebody else. It remains an attractive option for speculative large traders, who will do anything in their power to maintain the crypto market’s current conditions, with major coins able to rise or fall by 1,800% in less than one year, as they did in 2017 when the leading cryptocurrency’s price hit record highs at around $20,000 per coin. 

But speculation is not the reason for which crypto was created. As perfectly outlined by Marc Andreessen, co-creator of two of the internet’s first browsers, Mosaic and Netscape, who outlined: “This is the distributed trust network that the Internet always needed and never had.” Or, to say it like Don and Alex Tapscott in their brilliant book, “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World,” cryptocurrencies are based on a new technology — blockchain — that is a “protocol that enables mere mortals to manufacture trust through clever code.” Don and Alex write:

“They have been created to ensure trusted transactions directly between two or more parties, authenticated by mass collaboration and powered by collective self-interests, rather than by large corporations motivated by profit.” 

In other words, crypto is intended to make currency transactions easy, cheap, sure, fast and available for everyone — and not to speculate on! And, most importantly, to be used and not merely stored somewhere. 

Traditional and crypto financial markets

The inclination is progressively torn by traditional financial institutions like banks. From one side, they are fiercely struggling against the crypto world, but from the other side, and under the deepest silence, they are fighting key positions. They are painfully following the era of crypto, aware that sooner or later it will become massive, yet slowing it down while occupying as much space in the industry as possible in preparation for the moment when large adoption comes about.

Related: What Does Mass Adoption Mean Relating to Crypto? Experts Answer

The market is becoming increasingly regulated, with the launch of derivative instruments by some of the more well-known and reliable exchanges, indexes and cryptocurrency lenders, while from the other end, institutional investors, financial public bodies and traditional investment funds are coming out of the woodwork.

Unfortunately, my analysis shows that the speculative phase is hard to die, as it is a fantastic opportunity for specialized traders to make a huge quantity of money in a very short time. That means a very dense resistance to changes, pulling in the opposite direction to where the crypto area is moving.

The role of the traditional banking system

The relationship between the bank system and the crypto environment is vague and heavy with conflict. The crypto ecosystem is potentially in a position to snap a good chunk from the bank. But from another perspective, the bank system is sitting on an astronomic market cap, is managing a breathtakingly high stockpile of financial assets, and is used by billions and backed by almost all governments. It’s a David and Goliath story. 

As the recent history of Bitcoin (BTC) invention has clearly taught us, all digital revolutions coming from the people are unstoppable. Bottom line: the powers that be can slow it down but they cannot stop it. And the strategy of the banking system is coming out: Make things hard for crypto during daylight, but work under the surface at night to grab as many positions as possible in the crypto area in order to control and occupy the space. 

The final destination

From financial speculation to a stabilized financial market to finally becoming a financial commodity used by all. The point of arrival is probably the secret dream of the founders of the first cryptocurrency ever: to democratize and provide humanity access to a smarter, cheaper, decentralized and not-controlled means to exchange value between individuals, corporations and public bodies.

Related: Should Crypto Stay Decentralized or Are CBDCs Better? Experts Answer

As a recent survey shows, the average person at present doesn’t have any idea how to buy, sell or use cryptocurrencies. The majority of people don’t have the necessary skills to understand what an exchange is, how an external wallet works, or how to figure out all the needed technicalities to trade and store the most common cryptocurrencies. To them, the crypto area is still an unknown and scary world to be suspicious about.

Whoever will guide, hand-in-hand, billions of people through all of this — contributing to create the necessary environment and making the needed technology and hardware accessible — will not only make a true mark in human history, but will also develop the most profitable business in the world of all time. 

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.

Marco Beffa is a Dubai-based serial entrepreneur, CEO of a leading U.K.-based fintech company, part of the advisory board of a fully authorized European crypto investment fund, and a skilled cryptographic asset expert and strategist.

Cointelegraph News

Brooklyn Nets’ Spencer Dinwiddie Cannot Tokenize His $34M Contract

The National Basketball Association (NBA) notified Brooklyn Nets’ player Spencer Dinwiddie that he cannot tokenize his $34.4 million contract.

As The New York Times reported on Sept. 27, the NBA pointed out that Dinwiddie’s initiative goes against the collective bargaining agreement in a statement sent to the outlet. The statement reads:

“According to recent reports, Spencer Dinwiddie intends to sell investors a ‘tokenized security’ that will be backed by his player contract. The described arrangement is prohibited by the C.B.A., which provides that ‘no player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract.’”

Dinwiddie, on the other hand, told the outlet that he intended to better illustrate the investment scheme to league officials, hoping to change their minds. He commented on his initiative:

“What better way to be invested in a player as a fan than to have some level of skin in the game. […] With the way mine works, if I play well in that player option year and we split the profits up the first year of my new deal, it greatly appreciates the return on this investment vehicle.”

Heightened fan involvement

Per the report, by tokenizing the contract Dinwiddie would have allowed investors to bet — and capitalize — on his ability to play well enough to earn an even more lucrative contract after the second year of his deal. As Cointelegraph reported on Sept. 16, the plan was to enable investors to buy into his three-year $34 million playing contract with his team.

According to the Times, he intended to raise $4.95 million to $13.5 million by offering an Ethereum-based security token developed by his company Dream Fan Shares. He also reportedly intended to guarantee to investors a few percentage points in interest over the duration of the contract and to set the minimum investment to $150,000.

As Cointelegraph recently reported, Turkish Football Club Galatasaray Spor Kulübü plans to launch Ethereum-based fan tokens in partnership with blockchain sports fan startup Socios based on sports tokenization platform Chiliz.

Source Cointelegraph

Australian Startup to Offer 20% Payback on Fuel Purchases in Tokens

Australian startup Incent plans to offer a 20% payback in its INCNT token on fuel purchases at United Petrol stations for a limited time. 

Incent announced in a press release published on Sept. 26 that participants will have to sign up on its platform and sync their bank accounts in order to receive the tokens. The firm also claims that the crypto asset in question is “Australia’s first cryptocurrency for all purchases at United Petrol stations.”

A substitute for point-based loyalty programs

United Petrol reportedly owns over 450 stations across Australia. Per the press release, the system’s advantage over classical company-emitted points is that those tokens cannot be devalued or discontinued by the company and that there are no plastic cards or friction. Incent CEO Rob Wilson explained:

“Giving consumers something of real value rather than points that can expire or only be redeemed under strict conditions is one of Incent’s key differences. […] But it’s also what goes on under the bonnet that makes it truly compelling. Once a user has synced their bank account, rewards are issued automatically. […] Consumers can literally save as they spend, seamlessly.”

Lastly, the author of the release explains that any customer who signed up for the service and synced their bank account will automatically receive 20% of their fuel purchase price at United Petrol back into their Incent account as token rewards.

As Cointelegraph recently reported, 63% of American consumers perceive blockchain tokens to be an easy form of payment.

Source Cointelegraph