The Three Cs of Joseph Lubin: Construct, Contribute, ConsenSys


Canadian entrepreneur and software engineer Joseph Lubin helped spearhead the development of the open-source smart contract blockchain platform that came to be known as Ethereum. Lubin has long believed that this technology could serve “as an organizing principle for earth, the world, the planet.”

As one of the wealthiest and most influential public figures in the industry, Lubin founded ConsenSys, a company that develops Ethereum-based products and tools to increase adoption of Ethereum applications around the world, taking the view that the decentralized future is already here — just unevenly distributed.

Early life and career

Joe Lubin was born in 1964 in Toronto, Canada, with his father engaged in dental practice, while his mother worked as a real estate agent. In the early 1980s, Lubin began his study at Princeton University in electrical engineering and computer science. Following graduation in 1987, he spent three years working at Princeton’s Robotics and Expert Systems Laboratory as a manager, devoting himself to the exploration of the machine vision, artificial neural networks, autonomous road vehicle, 3D graphics and robotics.

The circumstances were such that in Princeton, Lubin was a roommate of Michael Novogratz , who studied economics and subsequently became a Wall Street veteran and a longstanding advocate of digital currency. Lubin spent the 1990s and 2000s in close quarters with the financial world, developing software for Goldman Sachs’ private wealth management division as the vice president of technology. He later established a hedge fund.

Lubin was among those who believed that the 2008 global financial crisis would plunge the global economy into an extended recession that would take “20+ years for the snake to digest this elephant of debt.” Indeed, the crisis reportedly resulted in a decline in the net worth of American households by nearly $17 trillion in inflation-adjusted terms, as well as a doubled rate of unemployment, with about 7.5 million jobs lost between 2007 and 2009.

Years later, in reference to the financial crisis of 2008, Lubin recalled: “Many people were disenchanted, disillusioned. So, when the Bitcoin white paper came along, it really captured the imagination of many people.”

As the financial instability afflicting the whole world seemed to have no end, monetary systems appeared to Lubin as though they were approaching the end of a life mired in corruption. Speaking at the Ethereal Summit in May 2017, Lubin said:

“It was folly to trust all those structures that we implicitly felt had our best interests at heart. I felt we were living in a global society and economy that was figuratively, literally and morally bankrupt.”

In the recession years, Lubin decided to transition from the world of finance and eventually made a turn to the music business in 2012 by founding music management company SyNerG Music. However, the real turning point in Lubin’s career happened two years after the company’s launch.

Joe Lubin meets Ethereum

Lubin was already thoroughly familiar with blockchain technology by the time he came across Ethereum, a public, open-source, blockchain-based distributed computing platform designed to create decentralized applications.

Fascinated with the idea and purported opportunity to transform the existing financial system by removing the third party, Lubin continued exploring the space until he stumbled upon the first version of the Ethereum white paper in the beginning of 2014, written by 19-year-old Russian-Canadian Vitalik Buterin.

The Ethereum blockchain network was claimed to outperform Bitcoin in a number of ways, enabling the deployment of smart contracts and the development of decentralized applications without control or involvement of a third party. Moreover, Ether (ETH) transactions were confirmed in seconds, while Bitcoin’s took minutes.

“Vitalik’s paper was the best that I had read,” Lubin eventually said. He became committed to supporting the Ethereum project and did not waste any time meeting Buterin. Lubin later recalled

“In November 2013, Vitalik Buterin wrote the first version of the Ethereum White Paper. On January 1, 2014, I spoke with Vitalik about it and received a copy. It sketched a set of mechanisms that would enable the concrete development of that comprehensive vision that many of us glimpsed when we had that initial Bitcoin moment. That was my Ethereal moment.”

Thus, Lubin, who is in his mid-50s, joined the team of Ethereum developers and promoters as a co-founder and the chief operating officer. The further development of Ethereum was funded through an online crowdsale — which raised over $18 million — in the summer of 2014, for which Lubin and Ethereum’s other co-founder, Anthony Di Iorio, reportedly provided up to 95% of the funding.

In 2014, Lubin also held the position of chief operating officer at Ethereum Switzerland GmbH, a company that supported the development of the Ethereum platform, and he co-founded the Ethereum Foundation, a Toronto-based nonprofit organization whose objective is to promote and support Ethereum platform and base layer research, among other things.

However, not long after Lubin joined the Ethereum founding team, things became complicated. That same year, Lubin and Buterin differed in their views concerning the motives and methods of carrying out business: Lubin saw the future of the project in the building of a commercial ecosystem around Ethereum, while Buterin continued to focus on the technology.

The schism resulted in the formation of Lubin’s new company, ConsenSys, which develops software primarily for the Ethereum blockchain system.

New beginnings with ConsenSys

Lubin’s new, blockchain-focused organization eventually united developers, businessmen, programmers, journalists, lawyers and other industry enthusiasts in a bid to create and promote blockchain infrastructure and peer-to-peer applications. The organization was founded in 2014 and is currently headquartered in New York.

The ConsenSys incubator is engaged in multiple blockchain-related projects, including the creation, management and trading of fractional ownership shares in real estate assets, development of peer-to-peer trading, engaging in prediction markets, and providing cryptographic tool for managing and signing documents, among many other functions. ConsenSys’ technology has also been recognized by and collaborated on by philanthropic organizations such as the World Wildlife Fund and Oxfam.

Lubin estimated that ConsenSys is probably 65% focused on public mainnet, although everything the company does is applicable in a private permissions context as well. 

In late 2018 and throughout 2019, ConsenSys — now the world’s leading DApps development firm — was hit by a series of upheavals. In December 2018, Lubin was rumored to have made significant cuts to the company’s staff, letting go up to 50% to 60% of its workforce counting 1,200.

Later, ConsenSys asserted that the staff cuts were a “natural movement,” mainly affected support employees, and did not exceed 13% of the company’s headcount. In the spring of 2019, ConsenSys saw a major restructuring of its various operations to bolster its market presence as it sought $200 million in funding.

Finally, ConsenSys confirmed to Cointelegraph in December of last year that local offices in India and the Philippines would be shut down and that 11 employees were being laid off.

A new blow was delivered in July 2019, when the founder of ConsenSys-incubated startup Token Foundry, Harrison Hines, filed a lawsuit against Lubin in connection with a “breach of contract, conversion, quantum meruit, unjust enrichment, fraud, declaratory judgment and unpaid profits arising from the defendants’ acts in connection with the business known as Token Foundry.” Hines intended to collect over $13 million.

Discussing ConsenSys’ corporate structure, Lubin once said:

“It’s been several different ConsenSyses since the start. For roughly four years we were working to be a big part of opening up an ecosystem, and now there are lots of entities pouring into the ecosystem, and we have to up our game and compete. It no longer is sufficient to show up and do something cool; now we have to do something excellent.”

Despite reported difficulties, ConsenSys has continued actively investing in startups and initiatives engaged in developing blockchain-based applications that it considers to be promising, as well as projects like MetaMask that facilitate the entire Ethereum ecosystem. In mid-October last year, the company selected seven new Ethereum-based projects to support, committing a total of $175,000 in funding. 

At the time, the company’s head of experiential marketing Yadira Blocker said: “In Wave 1, we saw a lot of applications but they weren’t super strong. In Wave 2, we started to see more credible teams and more unique ideas come to the table.” As part of Wave 3, ConsenSys chose Ethereum software client Lighthouse and mobile decentralized applications constructor Alice. On Feb. 11, 2020, it came to light that JP Morgan was considering merging its in-house blockchain unit, Quorum, with ConsenSys.

Still, the most anticipated development for the current year is likely the release of Ethereum 2.0.

Ethereum 2.0, public blockchains and geopolitical views

Ethereum 2.0, also called Serenity, is a major network upgrade on the Ethereum blockchain that is designed to shift its current proof-of-work consensus algorithm to proof-of-stake. The upgrade is expected to bring a number of extreme developments, such as realization of a new scalability paradigm called sharding and the introduction of a more efficient Ethereum Virtual Machine capable of executing high-performance smart contracts.

Lubin stipulated that the development of Ethereum 2.0 would bring a drastic scalability to the ecosystem, making the Ethereum blockchain about 1,000 times more scalable. The upgrade is geared to be used by software developers, with the subsequent deployment of their products based on the Ethereum blockchain by their customers — from governments and enterprises to journalism and music platforms.

Lubin seems to be stunned with the idea that the decentralized future may actually be closer that one might think. “The decentralized future is already here; it’s just unevenly distributed. Lots of people who understand the space well are already living to some extent in the decentralized future,” he said.

Speaking at the Deconomy conference last spring, Lubin argued that “closed platforms promote corruption and inefficiency,” further adding:

“As we tokenize the world, well-resourced financial houses and traders will spare no effort to manipulate markets for gain or political advantage. We don’t want the liquid deep token markets of the next generation economy to be similarly vulnerable. We must not choose anything other than a maximally decentralized base as the foundational settlement layer of the global economy.”

Lubin admitted that he would like to see more participation from China in the Ethereum ecosystem, and that he hopes China’s central bank digital currency, or CBDC, would allow for interoperability with public permissionless blockchains, including Ethereum.

Lubin also noted that he expects that China will continue to undermine the status of the United States dollar as the world reserve currency. But he also believes that China’s CBDC will only have a minor impact in this regard. He pointed out the efforts of Russia and China to conduct business without using the U.S. dollar, and concluded:

“There are lots of reasons why American influence is shrinking and will probably continue to shrink. That may not be a bad thing but in some ways, it’ll be a bad thing. China’s particular cryptocurrency I don’t think is a major factor.”

“In the last year or so it’s become clear that what I’ve been saying for a long time, that our global financial and economic systems are essentially bankrupt, and the central bankers have been kicking the can down the road for a long time, and now that yield curves are flattening we may not have enough dry powder in the central banks to kick the can down the road and this recession could be really problematic. So I’ve been talking about potential cascading collapses if certain contagions happen,” said Lubin.

As Ajit Tripathi, former partner at ConsenSys, said: “Joe has something about him, he is an inspirational figure, he has this ability to excite people about this future.”

Joseph Lubin is ranked #7 in the first-ever Cointelegraph Top 100 in crypto and blockchain.





Source Cointelegraph

The Mind Behind the “World Computer”: Ethereum’s Vitalik Buterin


Cryptocurrencies and blockchain technology were meant to liberate the oppressed, bank the unbanked and democratize countries with opaque authoritarian governments. Whether or not the crypto sector has actually achieved these goals remains a topic of debate, but it is fair to say that a surprising number of crypto startups, initial coin offerings and blockchain companies have either missed the mark or proven to be outright scams.

But Ethereum co-founder Vitalik Buterin has been unassailable in his mission to build the “World Computer.” Since piecing together a revolutionary white paper in 2013, the soft-spoken genius behind the Ethereum project and Ether (ETH) cryptocurrency has been a steady advocate for the democratizing capacity of decentralized networks.

Born on Jan. 31, 1991, Buterin lived the first six years of his life in the Russian city of Kolomna — roughly 62 miles away from Moscow — before he and his parents relocated to Canada in search of better employment opportunities. Buterin performed well in school, attending The Abelard School in Toronto and displaying an uncanny aptitude for mathematics and science. Buterin finished one year at the University of Waterloo before dropping out in 2013, as his passion for blockchain technology could not wait for finishing his studies.

Although Buterin had been an active participant in the Bitcoin community since 2011, as a co-founder of Bitcoin Magazine, he is better known as the man responsible for the seminal Ethereum white paper.

As an active participant and contributor to numerous Bitcoin communities, Buterin frequently proposed building a more fluid version of the Bitcoin core network that would support the swift creation of decentralized apps without functionality-layering procedures. Eventually, after a succession of failed proposals, Buterin decided to develop a new blockchain with built-in support for smart contracts; and the rest is history.

Ethereum in the post-ICO era

Initial coin offerings, made possible in large part by the ERC-20 token standard, came to the end of their era after the 2017 hype. The Ethereum project at times seemed to have lost its way, and both average observers and Ether advocates will likely agree that the development team is more focused on network upgrades and hard forks than stabilizing the value of the altcoin. For some speculators, that could be a negative, but most of Ethereum’s true believers would say the explicit desire to focus on the network’s functionality instead of Ether’s price is a net positive in the long term.

Recently, the network successfully implemented the Istanbul hard fork — the eighth to date — and the developers still intend for the network to shift to ETH 2.0, dubbed Serenity, in 2020.

Buterin provides a steady hand

What sets Vitalik Buterin apart from some of his peers is his approach to decentralization and his desire to preserve democratic principles in the crypto space. According to Buterin, the future of cryptocurrency is “diverse and pluralist,” and during times when the network’s decentralization has come under question, Buterin has stepped in to espouse the value of ensuring that all perspectives are heard and the collective desire is acted upon.

In August 2018, Buterin told Forbes: 

“Recently, I am spending a lot of time working on the proof-of-stake and sharding protocols. This is what the Ethereum research community is focusing on more than anything else at this point. We think that proof-of-stake and scaling are both really important and there has been a lot of progress on improving the algorithms and the development of multiple limitations over the last couple of months. I’ve also been looking at the economic analysis of transaction fees and how transaction fee algorithms can be improved to basically cut fees down and make the protocol alignment centers better and more efficient.”

Buterin further explained that cryptocurrency needs to be easy enough to use that one could “walk into a convenience store, get a card, pay $5 and get $5, minus some small fee of like Bitcoin, Bitcoin Cash, Ether, etc and start using it.”

What’s in store for 2020?

Now that 2020 is underway, the general focus within the crypto space has shifted to the upcoming Bitcoin reward halving as well as the maneuvering of large institutional investors into cryptocurrencies. Rather than obsessing over Etheruem’s valuation in its Bitcoin and USD pairings, Buterin is deeply focused on pushing the network toward its transition to Ethereum 2.0.

If implemented successfully, many in the sector believe the network upgrade will have a significant impact on the entire sector, including other networks like Tron, Cardano, EOS and Ontology — all of which claim to be superior to Ethereum.

Ethereum’s status as the most popular smart contract platform underlies the significance of the upcoming Ethereum 2.0 upgrade. Proof of the network’s popularity is shown by the frequent overloads, where transaction times slow to a snail’s crawl and transaction fees rise to the point of rendering the network’s use less than sensible.

This congestion shows that demand for the network is steady, and if Ethereum 2.0 successfully launches, the network would be in even higher demand. According to Buterin, Ethereum 2.0 would stand as a serious competitor to other networks, and once fully implemented, transaction times could drop from minutes to approximately three seconds.

As Buterin said during the first sharding workshop in Taipei in 2018:

“Ethereum 1.0 is a couple of peoples’ scrappy attempt to build the world computer; Ethereum 2.0 will actually be the world computer.”

Vitalik Buterin is ranked #5 in the first-ever Cointelegraph Top 100 in crypto and blockchain.





Source Cointelegraph

Bitcoin Price Falls to $9.6K Amid Bloody Sunday for XRP, ETH, Altcoins


Bitcoin (BTC) price has fallen further dropping about $300 in less than one hour on Sunday, Feb. 16, though paring some losses since with a bounce from $9,600 to $9,790 at press time.

Crypto market 1-day price chart. Source: Coin360

Crypto market 1-day price chart. Source: Coin360

Bad weekend for Bitcoin price bulls

Most other cryptocurrencies fared much worse, however, as evidenced by Bitcoin’s market dominance rising one percent from yesterday to 63.2%.

The bad weekend for the bulls began on Saturday after losing the $10,000 level. Today, BTC/USD tumbled further and bounced off a key resistance level at around $9,600, which also happens to be the 20-day moving average or 20-MA.

So what’s next for Bitcoin? The $9,850 level need to be reclaimed, according to regular Cointelegraph Markets analyst filbfilb, in order to avoid dropping further to $9.4-$9.5K and $8.8K support areas.

BTC/USD 1-day chart. Source: Tradingview

BTC/USD 1-day chart. Source: Tradingview

Worth noting is that the weekend drop has left a so-called Bitcoin futures “gap” at $10,495, the price at which CME BTC futures trading closed on Friday. As Cointelegraph reported numerous times before, the phenomenon of these gaps being filled upon resumption of trading — typically within a few days — has not gone unnoticed.

Meanwhile, the Fear and Greed Index has dropped from 64 to 59, which still means that the market sentiment is currently “greed” and suggesting that the multi-week rally above $10,300 is due for a correction.

Altcoins red across the board

Bitcoin’s 40% gains year to date have seen many altcoins posting ever bigger gains. However, the opposite appears to also be true as the losses for altcoins tend to be bigger as well.

Ether (ETH) is down almost 6% in the past 24 hours, while EOS, XRP and Bitcoin SV (BSV) saw heavier losses with -9.13%, 7.83% and 11.93%, respectively. Tezos (XTZ) is down 5.8% and Tone (TRX) tumbled by almost 10%.

One notable exception, however, is Chainlink (LINK), one of the best performing cryptocurrencies in 2020. LINK has dropped slightly but has already recovered and now up 6% on the day, according to data from Coin360.

“Well, we get the retracement,” commented regular Cointelegraph Markets contributor  Michaël van de Poppe. He continued:

“Retracement is harsh on some of those altcoins, but it’s also providing opportunities. Doubt we’ll see $9,400 though.”

At press time, Bitcoin’s market dominance stands at 63.2% with the cryptocurrency market capitalization dropping over 2% on the day to $282 billion.

Keep track of top crypto markets in real time here





Source Cointelegraph

Top 5 Cryptos This Week (Feb 16): LINK, HT, XTZ, ETH, NEO



Top 5 Cryptos This Week (Feb 16): LINK, HT, XTZ, ETH, NEO



Source Cointelegraph

Uptrend Broken? Bitcoin Tumbles Below $10K as Greed Hits 6-Month High


Bitcoin (BTC) has fallen below its landmark $10,000 price point after failing to break $10,500 resistance, mimicking a similar $300 drop earlier this week. 

Crypto market 1-day price chart. Source: Coin360

Crypto market 1-day price chart. Source: Coin360

Bitcoin drops to $9,800s

Coin360 and Cointelegraph Markets data show Bitcoin has fallen below the $10,000 big-even, to a press time price of $9,884. 

“Good response by the bulls but 10k needs reclaiming,” commented Cointelegraph Markets contributor filbfilb in his Telegram channel after BTC price initially rebounded back over the $10,000 mark. He continued: 

“We bounced off the 20 DMA, which is meant to act as support, but there is an argument the uptrend is broken. It is the weekend and it would leave us with a gap above. Hopefully, some of you got filled. I missed out on that by a few bucks. I’m going to wait and see what happens with the OBV on the 4 hour for now.”  

 

Meanwhile, another fellow analyst Michael van de Poppe was more upbeat saying that a pullback was expected, if not a healthy part of a bull market. 

“First of all: a retracement is still very healthy for this market, even if ETH goes to $240 and BTC to $9,500,” he wrote, adding: 

“Second of all: no, we’re not going to $3,000. Third of all: we’re still early.”

Crypto participants express greed 

Over the past few weeks, crypto’s largest asset has broken out of its multi-month downtrend, taking several swipes at its most recent price swing high near $10,500. After hovering between $10,500 and $10,100 for the last couple of days, unable to surge above $10,528, Bitcoin made a decisive downside move below $10,000. 

Coinciding with the drop, crypto’s Fear and Greed Index posted a reading of 64, indicating the market may have gotten a tad greedy and unrealistic with its expectations.

Source: Crypto Fear & Greed Index

Source: Crypto Fear & Greed Index

As crypto participants’ emotions became overextended, the Fear and Greed Index listed highs not seen since August 2019.

BTC’s recent rally also took many altcoins for a positive price ride as well, with coins such as Tezos (XTZ) and Ether (ETH) enjoying double-digit percentage gains. At press time, Bitcoin’s market dominance stands at 62.2% with the cryptocurrency market capitalization falling to $289 billion.

Keep track of top crypto markets in real time here





Source Cointelegraph

Ethereum Can Hit $440 But Indicator Warns Altcoin ‘Overbought’


Ether (ETH) price could continue its gains to hit $440 before resistance kicks in, one analyst has told mainstream media. 

Speaking to Bloomberg on Feb. 14, Edward Moya, senior market analyst at online forex broker Oanda Corp, warned that the largest altcoin’s huge gains in 2020 were now looking unstable. 

GSI flashes bearish for ETH

ETH/USD has more than doubled since Jan. 1, rising from $130 to press time levels of more than $270 — a seven-month high, data from Coin360 and Cointelegraph Markets shows. 

This month, it emerged that accredited investors in Grayscale’s Ethereum Trust were paying up to 300% premiums for tokens.

“It is eye-opening the little run it has put together,” Moya said. 

He added that he expects “strong resistance” to kick in at around $440 should bullish momentum continue. 

Continuing, Bloomberg highlighted Ether’s General Strength Indicator (GSI), a metric demonstrating whether an asset is overbought or underbought. 

Currently, GSI is flashing bearish — a score of 92 this week is far in excess of the minimum 70 which designates “overbought” status.

Ether GSI index and 1-year price chart

Ether GSI index and 1-year price chart. Source: Bloomberg

Altcoin investors reap gains

Ether is just one of the major altcoins which have seen major appreciation in recent weeks. As Cointelegraph reported, Tezos (XTZ) forms the standout for investors this month, while Neo (NEO), Cardano (ADA) and XRP have also performed strongly.

This “alt season” has caught many commentators by surprise — as 2020 began, it was Bitcoin (BTC) which showed the most potential. 

The largest cryptocurrency has gained over 40% year to date, topping out at $10,500 before encountering a resistance level of its own this week.





Source Cointelegraph

Five Signs That Ethereum Is Having Its Moment Right Now


Ether (ETH) has more than doubled in value so far this year, with strong fundamentals and increasing numbers of projects being built on the network. Here are five signs from this week that Ethereum’s time may have finally come.

Institutional investors are now paying a 220% premium

Accredited investors are currently paying a 220% premium to buy Ether through Grayscale’s Ethereum Trust.

The price of a single share in the Ethereum Trust is currently trading for $81.50 even though one share represents Ether worth just $25.46. Yesterday the premium was even higher, at 312%.

The Grayscale Ethereum Trust has $154.5 million in assets under management and is aimed at institutional investors who are willing to pay a premium to avoid investing directly in cryptocurrency with its attendant custody and regulatory issues.

Some retail investors are also paying over the odds. Coinbase, a major fiat gateway used by  retail investors, has seen Ether trading at a $1 to $1.50 premium over non-fiat exchanges recently, which may indicate additional fiat coming into the market. 

Study finds Ether is a hedge and safe haven asset

The first study to examine Ether’s potential as a “hedge, diversifier or a safe haven asset” on an intraday basis has been released by San Jose State University. It examined the data between December 2017 and December 2018 and concludes that:

“Ethereum crypto-currency is a hedge against the U.S. stock and gold markets. Also, Ethereum tends to behave as a safe haven for gold markets. When currency markets are concerned, we document that Ethereum is a diversifier for the US Dollar.”

More research over longer time periods is needed to confirm the findings in other scenarios, but the news will be noticed by investors looking to diversify from stocks, gold or Bitcoin (BTC).

JPMorgan looks to merge blockchain division with Consensys

JPMorgan, the largest bank in the United States, is in talks to merge its Quorum blockchain division with development studio ConsenSys — founded by Ethereum co-founder, Joe Lubin.

The bank built its private Quorum blockchain using the Ethereum network. It is used for the Interbank Information Network of 365 banks, and was mooted as the backbone for the JPMorgan digital currency.   

If successful, the deal is likely to be announced within six months, with speculation it could see the bank investing further in the Ethereum ecosystem.

Ether price is at a seven month high

The Ether price has risen for seven weeks in a row to peak around $274 yesterday — the highest price since July last year.

The longest weekly winning streak for Ether was from January to March 2017. If the Ether price closes green this week and next, it’ll cap a record breaking run (even though it has risen far more sharply in the past).

The price rise has been accompanied by increased network usage. According to Glassnode data, the total daily gas usage has just hit the highest point since September last year. 

The number of active Ethereum addresses has grown by 21.5% over the past week, and transactions have increased by 13.2%.

DeFi tops $1 billion

The amount of funds staked in Decentralized Finance applications has just topped $1 billion for the first time (and is currently at $1.15 billion). Ether accounts for about 70% of the total, and Bitcoin’s Lightning Network is the only project in the top 20 not built on the Ethereum blockchain

Kain Warwick, founder of the third largest DeFi project, Synthetix told Cointelegraph that DeFi’s success has helped people understand Ethereum’s potential and the large number projects being built on the blockchain, which helped combat “mispricing in the market.”

“The idea that Ethereum is replicating these traditional financial applications on a decentralized platform has finally crossed the chasm and got to the point where people understand it,” he said.

“Once you start looking it becomes obvious just how much stuff is happening on Ethereum. When you compare it to something like Bitcoin it’s just orders of magnitude larger.”

Warwick quickly added that he’s also bullish on Bitcoin and thinks it’s a very valuable asset.

“But in terms of what is the thing facilitating all this activity that’s getting people excited about crypto again? It’s Ethereum. That’s where everything is happening. All of the cool projects and interesting applications are emerging out of Ethereum and it’s hard to see how that doesn’t drive awareness and this reassessment of the value proposition.”





Source Cointelegraph

IRS Does Not Consider Fortnite Money as Virtual Currency After All


The Internal Revenue Service (IRS) removed wording on its website that put game currencies as examples of a convertible virtual currency. This clarification is important as a new tax filing requirement obliges taxpayers to report whether they dealt with virtual currencies.

The move was first reported by Bloomberg Tax on Feb. 13. Official guidelines on the IRS website indicated Fortnite’s V-bucks and Roblox’s Robux as examples of virtual currencies. A screenshot captured by Bloomberg Tax shows a fairly detailed explanation of the concept, even mentioning blockchain alternatives such as the Directed Acyclic Graph (DAG).

Source: Bloomberg Tax

Poor examples of a virtual currency

The IRS definition of a virtual currency hinges on its ability to “operate like ‘real’ currency,” which means that it needs to be freely transferable between users and easy to exchange for fiat currency.

Spokesmen from Epic Games, Fortnite’s publisher, told Bloomberg that none of these apply to the game’s currency:

“V-Bucks cannot ‘be digitally traded between users,’ nor can they be ‘exchanged into, U.S. dollars, Euros, and other real or virtual currencies.’” 

Roblox representatives voiced a similar stance, noting however that Robucks can be exchanged for fiat money under specific circumstances. The transaction is automatically submitted to the IRS, the company added.

The revised guidelines only mention Bitcoin (BTC), striking off a previously existing reference to Ether (ETH) — which should fall under the definition.

Aggressive stance on crypto

The U.S. tax enforcement agency has recently made a strong move in its efforts to curb perceived tax evasion facilitated by crypto. Form 1040 now features a straightforward question:

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

Categorizing game money as a virtual currency would have led to millions of people having to answer “yes” to this question. There are generally few profits to be made from owning game currencies, however.

Given that lying on the form can cost up to $250,000 in fines, this measure was likely introduced to force cryptocurrency users to go through the effort of reporting their gains.

Doing so is likely to be quite complicated. For example, each crypto-to-crypto exchange is considered as a taxable event that has to be reported. Though some hoped that these fall under the definition of a “like-kind exchange,” an IRS official denied this. This definition would have meant that cryptocurrency gains are only taxed when converting to fiat currency.

Cryptocurrency taxation remains an unclear subject, with worldwide regulators having widely diverging approaches. As an example, France does not tax crypto-to-crypto transactions.

A new bill recently proposed in the U.S. Congress could ease the use of crypto for payments by exempting low value transactions from tax returns.





Source Cointelegraph

Ethereum Price (ETH) Has Surged 92% in 2020 With Targets Set on $300


For the second time in two weeks, Ether price (ETH) has notched a new 2020 high. This time the surge from $217.83 to $253.79 occurred as Bitcoin’s (BTC) price reversed course from $9,700s and rallied to a new high at $10,346.83. 

As Bitcoin rallied on Feb. 12, many altcoins pulled back in their BTC pairs but Ether succeeded in holding on to its gains and currently registers a 14.3% gain. 

Crypto market daily price chart

Crypto market daily price chart. Source: Coin360

Generally, investors are feeling bullish about the crypto market’s future prospects. But while Bitcoin appears set for continuation higher, news that the scammers behind the PlusToken crypto Ponzi scheme transferred 12,423 BTC to new wallet address is sure to raise an eyebrow with some investors.  

PeckShield Inc. co-founder and VP of research, Chiachih Wu said that the coins were likely deposited to a series of cold wallet addresses and Twitter user Sue Zhu explained that: 

“Plus Token coins are on the move again, but more importantly, are now being split into smaller amounts vs the single output transfers from a few hours ago.” 

While investors should try and not be too heavily impacted by random news from Twitter, in 2019 the PlusToken scammers regularly liquidated massive amounts of Bitcoin and Ether on spot exchanges, causing the price to drop significantly. 

2020 crypto market price chart

2020 crypto market price chart. Source: Coin360

All FUD aside, the market is in a strong bullish trend with large and small-cap cryptocurrencies producing impressive gains. Since the start of 2020, Bitcoin’s value has risen by 47.86%, Ether gained 92.39% and XRP has rebounded with a 53.29% gain. 

Ether price as % of Bitcoin price chart

Ether price as % of Bitcoin price chart. Source: Skew Analytics

Data from Skew Markets also shows that Ether’s price as a percentage of Bitcoin price recently rising to 2.3%, a high not seen since July 2019 when the percentage was around 2.5% and ETH traded for $364. 

Let’s take a look at the charts to see what might be next for Ether. 

Bulls are in the driver’s seat

The bulls continue to press Ether price higher allow the altcoin to reach the first take profit (TP) level at $240, which was the target focused on in the previous analysis. 

Traders are now focused on setting a higher high above $270 but the volume gap on the volume profile visible range (VPVR) shows that it’s entirely possible for Ether to rally to $280 on a high volume spike. Despite this possibility, a TP target has been set at $270. 

ETH USD daily chart

ETH USD daily chart. Source: TradingView

Traders will notice an impending golden cross between the 200-day and 50-day moving average on the daily time frame. Typically the 50-MA converging with the 200-MA is interpreted as a strong buy signal by investors. 

In the event that Ether is able to continue to $270, TP is at $300 which is right below a high volume node on the VPVR.

Currently, the relative strength index (RSI) is rising to 84 which is in the overbought zone and the moving average convergence divergence, or MACD, continues to rise higher as the histogram shows an increase in momentum. 

On the shorter timeframe, we can see that purchasing volume continues to increase and the set up for Ether remains bullish. 

ETH USD 6-hour chart

ETH USD 6-hour chart. Source: TradingView

At some point traders will take profit, leading larger-cap cryptos like Bitcoin and Ether to lose some momentum over the short-term. Such a pause would likely lead Ether price to revisit the 23.6% Fibonacci retracement at $227. This point aligns with the support at $230, the Bollinger Band indicator’s moving average and a high volume node on the VPVR. 

Below this level, there appears to be strong support at $226 and $222. If the price drops below the lower Bollinger Band arm ($210.66) then a drop to the 61.8% Fibonacci retracement at $191.77 could occur but given the technical strength of Bitcoin and Ether’s recent moves, this seems an unlikely scenario. 

ETH/BTC mirrors the ETH/USD pair

ETHBTC daily chart

ETHBTC daily chart. Source: TradingView

The ETH/BTC pair has also been on a tear lately, with the 50 and 200-MA on the verge of a golden cross and the price looks ready to extend to 0.02530 satoshis. 

Similar to the ETH/USD pair, a pullback in Ether price would prompt traders to anticipate a bounce at the 23.6% Fibonacci retracement 0.02241 satoshis and below this the VPVR show strong interest and support at 0.02162 satoshis. 

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.





Source Cointelegraph

PlusToken Scam Moves $123M in Bitcoin Just as BTC Price Regains $10K


As Bitcoin (BTC) and Ether (ETH) price rallied to new 2020 highs on Feb. 11, a large transaction totaling nearly 12,000 BTC was moved from a wallet associated with the PlusToken Ponzi scheme. 

Twitter-based crypto transaction bot, WhaleAlert, noted that “12,000 #BTC (118,852,619 USD) transferred from unknown wallet to unknown wallet.” This transaction was later followed by a second transaction splitting the 12,000 BTC into smaller sums. 

According to PeckShield Inc. co-founder and VP of research, Chiachih Wu, a total of 12,423 BTC ($123 million) was moved into what Wu says appear to be cold wallet addresses.

Meanwhile, Twitter users Sue Zhu and ErgoBTC allege that the group behind the PlusToken scam is covertly moving a significant amount of Bitcoin from wallet addresses associated with the group. Zhu noted: 

“Plus Token coins are on the move again, but more importantly, are now being split into smaller amounts vs the single output transfers from a few hours ago.” 

 

As previously reported by Cointelegraph, the PlusToken Ponzi scheme was one of the largest scams in existence to rock the crypto sector. Initially, the project was presented as a  South Korea-based exchange offering a high-yield return on investment but eventually, the entire operation was exposed as a scam after several million participants found they were unable to withdraw their investment.

In the past, such movements were followed by suspected massive open market sales on cryptocurrency exchanges which led to sharp corrections in Bitcoin, Ether and many other altcoin prices. 

In 2019, Crypto Twitter researcher Ergo estimated that a major market sell-off was possibly driven by the PlusToken scammers liquidating 200,000 BTC on the open market. Ergo explained in November:

“If my numbers are correct, the 200k BTC estimates reported earlier this year were correct, and market impacts will continue for some time.”

Many analysts also believe that PlusToken sales are one of the primary catalysts for the 7-month long market downtrend that began after Bitcoin price reached $13,800 on June 26, 2019. 

Given that Bitcoin has not long escaped this 7-month downtrend when bears completely controlled the price, investors casting a wary gaze at today’s transfers are not overreacting as the move could eventually culminate with a repeat of previous bulk crypto sales. 

Adding further explanation to today’s transfers, Chiachih Wu said, “it seems a programmed transaction since all 7 new utxos are split into smaller parts (100-400 BTC) in the same block…will be gone soon.”

Crypto market 2020 price chart. Source: Coin360

Considering that in 2020 Bitcoin price is up by 42.9% and Ether has gained 82.89%, now seems like an opportune moment for the PlusToken scammers to capitalize on their ill-gotten gains.  

 

Bitcoin Transaction Data. Source: Blockchain.com

At the time of writing, both transactions have been confirmed and as the event gains traction in crypto media it will be interesting to see how investors and the price react to the possibility of some or all of the $123 million in Bitcoin being sold at market rate on cryptocurrency exchanges.





Source Cointelegraph