Home Blog Page 67

Mastercard Expands Access to B2B Blockchain Payment Tools

0

Credit card giant Mastercard is pushing ahead with a set of blockchain payment tools first unveiled last year, opening them up to banks and merchants for wider use.

In a press release, the company announced today that it would first be working on business-to-business (B2B) transactions with the tech, as part of a bid to “address challenges of speed, transparency and costs in cross-border payments.”

Mastercard first revealed its blockchain work in October 2016, releasing systems aimed at smart contracts and payment settlement processes. At the time, blockchain lead Justin Pinkham said the company was looking for collaborators to work with the company’s platform.

Now, MasterCard is encouraging other firms to begin settling transactions through its blockchain APIs, which it says can ease some of the friction experienced during cross-border payments processes.

Ken Moore, Mastercard Labs’ executive vice president, said in a statement:

“By combining Mastercard blockchain technology with our settlement network and associated network rules, we have created a solution that is safe, secure, auditable and easy to scale.”

The company said it intends to combine its blockchain APIs with other services to allow partners to develop their own use cases and create unique transaction types.

Further, Mastercard also highlighted its efforts to seek intellectual property rights around its uses of the tech, as well as its work with the Enterprise Ethereum Alliance on use cases “well outside the scope of Mastercard’s traditional payments environment.”

For example, in a recently released patent application, the company indicated it was looking into a uniform payment settlement system, one that could utilize blockchain as a vehicle for B2B payments.

Money at Risk? Mobile Wallets Become New Battleground in Bitcoin Fork Debate

0

Mobile bitcoin wallets users might not realize it, but their money might be at a heightened risk this November.

While advertised as a tool bitcoin users can tap to achieve an experience more akin to a conventional financial product, mobile bitcoin wallets today send transactions to the bitcoin blockchain, though in a way that differs from the default wallet options. But come November this construction could cause turbulence, because that’s when the bitcoin protocol is aiming to undergo yet another major change to its software.

Following this summer’s activation of the code upgrade SegWit, a group of businesses are now seeking to trigger a hard fork to increase bitcoin’s block size and further expand its transaction capacity. The code, part of a larger upgrade called Segwit2x, could lead bitcoin to split into two (again), that is, if not everyone decides to support the upgrade.

Still, the difference is that, unlike bitcoin cash, Segwit2x’s developers are doing everything they can to keep all bitcoin users on the same blockchain.

Segwit2x lead developer Jeff Garzik told CoinDesk:

“The design goal of Segwit2x – just like [the latest] ethereum fork – is to upgrade bitcoin, not create a new currency.”

To do so, developers backing the project also have made a couple of key (if controversial) design decisions that have to do with maintaining compatibility with “simplified payment verification” wallets, the technical term for smartphone-based bitcoin wallet applications.

But developers argue that there are pros and cons of how they are trying to accomplish this.

For one, it might not exactly be safe for mobile wallet users to make transactions immediately after the hard fork is enacted.

Attack resistance or convenience?

The first design decision is omitting so-called “replay protection.”

A bit of a political term, it’s meant to describe what happens when a blockchain splits in two, as users suddenly have equal value on both blockchains. This means that when users move tokens on one blockchain, the tokens also move (or “replay”) on the other.

But this isn’t visible to people who might not know that they have money on two networks during a network split. Worse case: users might lose some of their money and not even notice.

“It becomes unpredictable what money you’re moving and when,” Bread Wallet CMO Aaron Lasher explained in conversation with CoinDesk.

Since not everyone agrees with the Segwit2x hard fork – some are even going as far as to write up manifestos in opposition – it’s likely to split into two competing networks, and this could be confusing for general users.

However, Segwit2x developers have a reason for leaving replay protection out: to keep Segwit2x compatible with SPV mobile wallets.

“‘Replay protection’, as you call it, splits the chain. It simply doesn’t make sense. You’d suddenly be breaking [more than 10 million] SPV clients that otherwise work just fine. It is a goal of Segwit2x to help avoid this,” BitGo CEO Mike Belshe wrote in an email debate between developers of the project.

In other words, replay protection would cause inconvenience for mobile wallet users who want to shift over to the Segwit2x blockchain, so Segwit2x developers don’t plan on adding it.

Hard fork decisions

Mobile wallets are the subject of debate in another area as well.

Many providers of this wallet option, such as Electrum and Bread Wallet, rely on SPV. This does away with need to hold a full copy of the blockchain, making the data far easier to store on storage-strapped cellphones.

But, they have some drawbacks. (Coinkite co-founder CEO Rodolfo Novak went as far as to quip that “the ‘V’ in SPV stands for Victim.”)

As implemented today, SPV wallets will automatically follow whatever version of bitcoin has the most miners backing it. So, if bitcoin splits into two, and Segwit2x attracts more computing power than the legacy bitcoin chain, then all of the SPV wallets will follow along. That’s by design.

But some mobile wallet providers aren’t so happy about this, as it’s hard to explain to users what’s happening.

“It’s really tough for us because we are so direly affected,” said Lasher.

This also has the potential to lead to some technical problems. If there are two bitcoins, mobile wallet software might get confused about which chain to follow, especially if miners switch between blockchains over time (as happened in the aftermath of the bitcoin cash fork).

“It could confuse SPV clients and result in clients switching back and forth between chains, making them lose money depending on which chain has more work at what point,” Chaincode engineer Matt Corallo said.

Novak painted another scenario.

“With SVP you don’t know if the node you are connected to is lying to you. For example, a Segwit2x node can spoof as a [bitcoin] node [on the other chain], this means that without replay protection your wallet may spend the funds in the wrong chain and lose them on the correct chain,” Novak told CoinDesk.

Overall, developers paint an assortment of “if-then” scenarios. Lasher admitted as much, noting that it’s unclear which ones will actually play out.

“It’s really this decision tree of many, many things that can happen. And all of them are on the scale of somewhat annoying to downright dangerous,” he said, adding that Bread Wallet plans to encourage users to stop making transactions during the hard fork, “if they can manage.”

A solution?

But with disarray at the application layer, protocol developers have been arguing about how best to handle what might come.

Bitcoin contributor James Hilliard, well-known for helping to prevent a bitcoin split earlier this year, suggested a change to the Segwit2x codebase that he argues would give mobile wallets more control over the which bitcoin they ultimately land on.

Again, though, Segwit2x developers argue that this change would make it more difficult for users to transition to a blockchain with a block size increase – something they believe many users want to do, so that they can make cheaper transactions. (Garzik argued that is the most “neutral” metric for determining which chain SPV wallets should follow.)

But, again, others believe that this will confuse users and perhaps even lead those that are unaware of the situation to lose money.

Some developers even agree that there needs to be a block-size parameter increase, but simply disagree with some of Segwit2x’s design decisions.

As such, the statements highlight that, while often portrayed as black and white, the scaling argument still has its shades of gray.

Lasher concluded:

“There might be some merits to a block-size increase. But we don’t agree with the current way it’s being pushed through.”

Why IMF Wants to Enter Crypto Market With its Own Coin

0

Christine Lagarde, IMF Managing Director, has had many positive things to say about the potential of digital currencies and their disruptive model, but she has now added that the IMF would not rule out creating its own version of it.

Recently, Russia entered the decentralized digital currency space with its ‘CryptoRuble’ and it could be that organisations, as well as states, see the value of digital currencies, but ones that they can control and issue.

About to see massive disruptions

The IMF head has said before that she pictures her organisation playing a crucial role in regulating cryptocurrencies globally, but in a positive manner as she seems to be on the side of Bitcoin.

Lagarde is of the opinion that Global financial institutions are taking risks by not watching and understanding emerging financial tech products, and that are already starting to shake up the financial services and global payments system.

“I think that we are about to see massive disruptions,” Lagarde said at the IMF Annual Meeting in Washington D.C.

IMF to develop its own

Remarking on something that the IMF has already created, comparing it to digital currencies, Lagarde said that the IMF would not rule out developing its own cryptocurrency in the future.

She pointed to the IMF’s Special Drawing Right (SDR), a currency the IMF created to serve as an international reserve asset, that could incorporate technology similar to cryptocurrencies.

“What we will be looking into is how this currency, the special drawing right, can actually use the technology to be more efficient and less costly,” she said.

The IMF is looking to make its way into the crypto space, and with their hopes of regulating it, Lagarde says it makes sense simply due to the cross border nature of it.

“My hope is that we can participate in that process because I see that as a very cross-border process,” she added.

Abkhazia Will Create Own Crypto, Abandon ‘Normal Money’

0

The unrecognized breakaway republic of Abkhazia is issuing its own cryptocurrency and could “abandon normal money in several years.”

The little-known country, formerly part of Soviet Georgia before a bloody independence war in the 1990s, is still not considered real by the international community.

With the help of Blockchain and continuing support from Russia, however, Abkhazia’s economy minister Adgur Ardzinba confirmed the ambitious plans at a Moscow conference last week.

Abkhazia, which relies heavily on Russian funding, is looking to use Abkhazian Republic Coin (ARC) to aid investment, and offer transparent municipal financial operations.

The cost, according to a presentation in Moscow, is around $1 bln, local news outlet Meduza reports.

“This is a serious project which can completely change [local] industry,” conference organizer Evgeniy Galiakhmetov told the audience.

“You really will be able to participate in the growth of the country. Build infrastructure projects, accept and pay for products and services with the help of cryptocurrency.”

Cointelegraph previously reported on plans by fellow unrecognized Moscow-centric republic Transnistria to develop a Bitcoin mining presence with similar financial aid.

Breakaway authorities in Eastern Ukraine are similarly aiming to utilize Blockchain at government level, to circumvent both bureaucracy and international pressure.

Dedicated events such as a Blockchain conference were designed to raise awareness among local and Russian authorities.

USV’s Fred Wilson Dismisses Bitcoin Crash Prediction, Explains Optimal Crypto Holdings for Investors

0

Prominent venture capitalist and Union Square Ventures co-founder Fred Wilson, who previously stated banks are oblivious to bitcoin’s best feature, recently published a blog post in which he explains how much each type of investor should put into cryptocurrencies, in a response to news that led people to believe he stated investors should have 10-20% of their net worth in crypto assets.

He pointed to a tweet he had to correct, showing how things could be misinterpreted.

Interesting viewpoint: @fredwilson believes  could represent 10-20% of the allocation strategy for an informed investor https://twitter.com/fore_thought/status/912711179486875648 

That’s wrong. I said 10-20% for “true believers”. I think something like 5% for sophisticated investors might make sense

 

Wilson, who first got into bitcoin in 2013, decided to get the record straight, and started by clarifying that he has “about five percent” of his net worth in crypto assets, across various vehicles. These include token funds, USV funds, direct holding, and more. According to him, the portfolio is “likely much more diversified than most folks could do on their own.”

To Wilson, the amount he has in crypto assets is on the high end of what the average person should have. He stated:

“I think that’s likely at the high end of what the average person should have, but I also think its not a ridiculous number for the average person to have.”

He compared the figure with the allocation some put onto venture capital, knowing it’s a risky asset with a potential for outsized returns. Wilson added that the largest allocation he’s seen to venture capital from a big endowment or pension fund is of 10%.

The 10-20% rumor that circulated was the amount he believes “true believes” in cryptocurrencies and blockchain technology should invest. To some true believers, as he points out, that would still be a conservative number, as some could get to 80-100% of what they have.

According to Fred Wilson, here’s how much each type of investor should put into cryptocurrencies: a young, aggressive risk taker should get 10% of his net worth in crypto assets, while a sophisticated investor, who might not be such a risk taker, should go with 5%:

Conservative, everyday investors, who are willing to take on some risk, should go with 3%, and investors at their retirement age shouldn’t invest in cryptocurrencies. Wilson’s motivation to publish the blog post was to “set the record straight.” Per his own words, seeing people tweet out advice he didn’t give makes him nervous.

Credit Suisse Banker: ‘The Sky’s the Limit’ for Blockchain Technology

0

As major banks reject the notion of bitcoin, many are turning their attention to the use of the blockchain.

According to an investment banker from European bank Credit Suisse, the ‘sky’s the limit’ for the technology.

James Disney, Credit Suisse’s global head of software investment banking, said that it takes 20 to 30 days to close and settle private equity transactions. Yet, with the blockchain this could be reduced to minutes.

Speaking with CNBC’s ‘Fast Money,’ Disney said:

If you add up all of our volume over the quarter, that’s hundreds of billions of dollars we’re able to free up and take out of the system to use for other purposes.

Credit Suisse has been experimenting with the distributed ledger to test the environment for future use.

New York City-based blockchain technology company Symbiont teamed up with Credit Suisse and a number of banks forming the R3-led consortium in 2016 to demonstrate how the technology can be used in the syndicated loan market.

The Swiss bank has also taken part in the completion of a smart contracts blockchain test. Over a four-month period from October 2016, a number of banks and financial firms tested a prototype developed by blockchain firm Axoni for over-the-counter (OTC) equity swaps.

Credit Suisse appear keen on developing the technology’s use further with a plenty of innovation going across the bank and in all regions, Disney said.

It has the potential to really streamline our operations, and that of all in financial services.

Talking about bitcoin, Disney said that it has become the first ‘killer app’ for blockchain. Comparing it to email as the first ‘killer app’ of the Internet, he believes that more innovation will develop with the blockchain through the years.

He added:

I think the sky’s the limit, really. We’re in the very, very early stages here.

Bitcoin Price Nears $10,000 in Zimbabwe Due to a Lack of Cash in the Country

0

According to TheNational.ae, bitcoin adoption in Zimbabwe is seemingly skyrocketing as the country’s economic situation looks bleak. So much so, that one bitcoin is trading at nearly $10,000 on the Golix.io exchange, while the global average is, at press time, of $5,642.00.

According to a local trader, bitcoin isn’t just being bought by individuals, but by businesses with bills to pay. The country adopted the U.S. dollar back in 2009 as its fiat currency, as the Zimbabwean dollar had lost nearly all its value.

At press time, LocalBitcoins Zimbabwe has people buying bitcoin at the global average, and some buying the cryptocurrency for cash for well over $10,000 in the country’s capital. Bitcoin, as every bitcoiner would expect, is helping people in the country survive times of economic uncertainty, as Zimbabwe has been embroiled in a crisis for years.

Why Bitcoin Is So Valuable in Zimbabwe

In the early 2000s, according to the publication, Zimbabwe’s president, Robert Mugabe, encouraged citizens to invade commercial farms mostly owned by UK descendants. Following these invasions, the country’s agriculture collapsed, which led to the Zimbabwe Reserve Bank to run out of money.

In the mid-2000s, the bank decided to print Zimbabwean dollars to pay the army, civil servants, and police. The mass printing of dollars, as one would expect, led to hyperinflation to the point in which a customer walked into a store to buy bread, only to find its price had tripled once he arrived – if it was even available.

The problem got so bad, people carried around piles of valueless cash, and soon started hoarding goods to use as a medium of exchange. Then in 2009 Mugabe gave in and replaced the Zimbabwean dollar for the U.S. dollar to get rid of hyperinflation.

It worked and prices stabilized, but since the Zimbabwe Reserve Bank can’t print U.S. dollars, the country now imports them to get them onto the financial system. Speaking to a local publication, the reserve bank’s governor John Mangudya stated:

“Yes, we import cash almost every week and we are now importing $10 million on a weekly basis. When we say we import cash, we say we import dollars because we said we want to continue using the dollar in this economy.”

Then, with nationalization intents, exports started collapsing and now, according to Bloomberg, banks ration dollars to as little as $20 per person, regardless of how much each individual has in its bank account. Some even sleep outside banks to guarantee notes won’t run out before they get them.

The country’s central bank, to fix the problem, started issuing so-called bond notes that supposedly have the same value as the U.S. dollar. Most don’t fall for that, as foreign suppliers reportedly refuse to accept them, and some businesses charge premiums of up to 50% to accept them.

According to economist Vince Musewe the problem in Zimbabwe today isn’t the lack of goods to purchase, but the lack of money to do it with – exactly the opposite of what it was when the country’s crisis initially started. He stated:

“Then, there was plenty of cash money, but no goods in the shops. Now, there are goods on the shelves but no money to buy them with.”

To escape the country’s crisis, Zimbabweans are now turning to a currency that won’t fail them like fiat currencies did: bitcoin.

Ethereum, Bitcoin Prices Stabilize After Day of Sideways Trading

0

Traders restored a bit of stability to the crypto markets on Friday following a day of sideways trading. The bitcoin price and ethereum price each declined a bit less than 1% for the day, and most major altcoins experienced similar minor declines. However, no top 10 cryptocurrency moved more than 3%, providing the market with one of its calmer day-over-day performances in recent memory.

bitcoin price

Chart from CoinMarketCap

Altogether, the cryptocurrency market cap shed about $1.4 billion on Friday. After beginning the day at $169.8 billion, the crypto market cap made several thrusts across the $170 billion threshold. Ultimately, however, it held below that threshold and has since tapered to $168.4 billion for a 24-hour decline of 0.9%.

bitcoin price

Chart from CoinMarketCap

Bitcoin Price Ticks Below $5,700

The bitcoin price had stormed back to $5,700 following an early week sell-off, but it was unable to hold above that mark on Friday. After spending most of the day fluctuating between $5,630 and $5,730, the bitcoin price ended up near the lower end of that range. At present, the bitcoin price is trading at a global average of $5,649, which represents a single-day decline of 0.7% and leaves bitcoin with a $94 billion market cap.

bitcoin price

Bitcoin Price Chart from CoinMarketCap

As CCN has reported, bitcoin’s early-week decline was reversed when traders began “buying the dip”, indicating that the flagship cryptocurrency has support above the $5,000 mark. However, the markets are a bit trepidatious to carry bitcoin above the $6,000 mark, likely due to lingering concerns over the contentious SegWit2x hard fork that is scheduled for November.

Ethereum Price Tapers to $305

The ethereum price also returned a minor decline of Friday, dropping 0.8% — or $3 — to $305. Many ethereum investors had expected the activation of the Byzantium hard fork to initiate a bullish ethereum price trend, but, thus far, the reverse has been true. Since rising to $348 immediately following the hard fork, the ethereum price has declined by more than 12%. This leaves ethereum with a $29.1 billion market cap.

ethereum price

Ethereum Price Chart from CoinMarketCap

However, while this short-term performance may disappoint some late-comers, ethereum has managed to remain above the psychologically-important $300 threshold, leaving the second-largest cryptocurrency in a nice position for a future advance.

Altcoins Take a Breather

The altcoin markets were uncharacteristically calm on Friday, even for a day when bitcoin and ethereum made little movement. Remarkably, no top 10 cryptocurrency experienced a single-day price movement substantially greater than 3%, and three had virtually no movement at all.

ethereum price

Altcoin Price Chart from CoinMarketCap

In a divergence from its weeklong downward trend, the ripple price posted the best performance of any top 10 cryptocurrency. It rose 3% following the release of a quarterly report on the XRP markets in which Ripple teased the announcement of future partnerships and reaffirmed its commitment to promoting XRP as a core component of Ripple adoption.

ripple price

Ripple Price Chart from CoinMarketCap

Bitcoin cash and litecoin each declined about 3%, reducing their prices to $325 and $59, respectively. The dash price dipped 1% to $291, and NEM fell 2% to drop its market cap back below $2 billion. Bitconnect, NEO, and monero rounded out the top 10 with movements of just a few pennies.

Bitcoin Price Hits $6,054, Factors Behind New-All Time High

0

Within the past 24 hours, the price of Bitcoin has surged from $5,600 to $6,054, by over $400 in a single day. Cryptocoinsnews previously reported that the major correction which the cryptocurrency market had endured on October 18 would place Bitcoin at a more favorable position to initiate a new rally.

“The recent correction of Ethereum, Ripple, Bitcoin, and other cryptocurrencies in the market would allow the global cryptocurrency market to stabilize and restructure, building a better platform to rebuild momentum and initiate strong rallies,” Cryptocoinsnews reported.

Two Major Factors Behind the Recent Bitcoin Rally

Prominent financial analysts including Holger Zschäpitz, the senior editor of the financial desk and market maniac at Welt, suggested that the US Bitcoin market is highly anticipating the debut of Bitcoin exchange-traded funds (ETFs) in regulated stock markets. Such optimistic developments around ETFs and public investment tools around Bitcoin has led to an increase in demand for Bitcoin, Welt noted.

Earlier this month, billionaire technology investor and entrepreneur Mark Cuban revealed in an interview held at the Vanity Fair New Establishment Summit in Los Angeles that he has invested in Bitcoin through an exchange-traded fund (ETN) in the Nordic Nasdaq in Sweden. Bitcoin XBT, the leading Bitcoin ETN operator in Europe, has been processing investments in Bitcoin for high profile traders and accredited investors, who are restricted to investing in strictly regulated investment vehicles and asset.

Ark Invest, a cryptocurrency-focused hedge fund based in the US, has also been investing in Bitcoin on behalf of its clients through the Bitcoin Investment Trust (GBTC), a Bitcoin investment vehicle operated by Digital Currency Group (DCG)’s Grayscale Investments in US stock markets.

The emergence of Bitcoin ETFs in US stock markets and regulated exchanges would further increase the liquidity of Bitcoin and create a better ecosystem for institutional and retail traders to invest in Bitcoin. Hence, anticipating the entrance of institutional and retail investors, as Zschäpitz suggested, the market may have led another strong rally.

Already, some of the major Bitcoin and cryptocurrency exchanges in the US such as Coinbase and Gemini have been working on providing a more efficient infrastructure for retail traders. Gemini in specific has been cooperating with CBOE, the largest options exchnage in the US, to offer options contracts based on Bitcoin.

“Gemini’s key concerns in the cryptocurrency ecosystem have always been security, compliance, and regulatory oversight. By working with the team at CBOE, we are helping to make bitcoin and other cryptocurrencies increasingly accessible to both retail and institutional investors,” said Gemini CEO Tyler Winklevoss.

FOMO From Wall Street Investors and Traders

In an interview with FT, Ami Ben David, co-founder of venture capital fund Spice, stated that many high profile investors and traders in Wall Street has started to invest in Bitcoin due to FOMO, or fear of missing out.

“A year ago they didn’t know about it, six months ago they thought it was a scam and now they realise they simply just don’t understand it and are starting to get nervous and want to learn about it. There is definitely an element of FOMO. People have been told by their advisers, ‘Don’t touch it! It’s a bubble!’, and now they are upset they might have already missed it,” said David.

There exists a high probability that the recent surge in the price of Bitcoin dating back to the beginning of October was triggered by the entrance of large-scale traders and investors in major regions including the US and Japan. As Mike Novogratz, the billionaire hedge fund legend also emphasized, institutional investors have started to engage in Bitcoin and cryptocurrency trading.

Goldman Sachs Will Start Bank Money ‘Stampede’ Into Bitcoin: Ritholtz CEO

0

Ritholtz Wealth Management CEO Josh Brown has said the “stampede is coming” for Bitcoin from banks – as soon as next year.

In a piece on Reformed Broker, Brown, who is a legacy finance figure openly supportive of cryptocurrency, said Goldman Sachs is rumored to be the major institution to take Bitcoin mainstream with Wall Street.

“I mentioned a few weeks back that you can practically smell it in the air – the big money is coming into this space. I can’t imagine how that doesn’t blow the price up into the stratosphere,” he wrote.

GS going into Bitcoin

“The big rumor going around last night is that Goldman Sachs is going to launch market-making in crypto currency for their clients in the third quarter of 2018. I don’t know if that’s true or not, but multiple people who don’t know each other are saying it.”

As Wall Street members celebrated the 30-year anniversary of the 1987 Black Monday crashyesterday, Bitcoin is still treated with suspicion.

2017 has been awash with big names from legacy finance bashing cryptocurrency, with JPMorgan CEO Jamie Dimon causing especially large waves with his description of Bitcoin as a “fraud.”

Brown calls out Dimon, who has since said he would “not talk about Bitcoin anymore,” given his bank’s broad experiments with Blockchain technology.

Goldman, meanwhile, has taken a markedly more open approach to disruptive assets. CEO Lloyd Blankfein tweeted last month that he was “still thinking” about Bitcoin but was not ready to cast it off.

“…Folks also were skeptical when paper money displaced gold,” he added in a post which achieved considerable media propagation.