Crypto Guides, Knowledge & Insights

Bank of Japan governor slams Bitcoin, questions its usage in settlements

Bank of Japan governor Haruhiko Kuroda questioned Bitcoins use case during an interview yesterday, business news outlet Bloomberg reported.　　The bank is currently testing a ‘digital yen,’ the digital version of its fiat currency, but remains shaky on the topic of cryptocurrencies.　　“Most of the trading is speculative and volatility is extraordinarily high,” Kuroda said, questioning the use of Bitcoin as a means of investment compared to traditional financial assets. “Its barely used as a means of settlement,” he added.　　The comments are similar to those echoed by Federal Reserve Chair Jerome Powell from earlier this year when he said the crypto market is largely a vehicle for speculation.　　Stablecoins but no Bitcoin　　The Bank of Japan has largely allowed public usage of cryptocurrencies and has generally been favorable towards crypto businesses like exchange services and wallets.　　Over $1 billion was traded on local exchanges yesterday alone, as per data from CoinGecko, with Bitcoin, Ethereum, and MonaCoin considered crowd favorites.　　But the bank has largely shifted its focus on stablecoins—digital currencies pegged on a 1:1 basis with fiat currency, such as the US dollar—in the past year. Reports suggest the digital yen is already undergoing limited testing in a sandbox environment, accentuated by the ongoing coronavirus panic

2021-05-28Deep Dive

Vitalik Doubles Down on Proof-of-Stake: It Could Solve Bitcoin’s Problems

Competitors are milking Elon Musk‘s misconceptions about Bitcoin’s energy consumption for all their worth. The general public and legacy media won‘t shut up about this previously resolved can of worms. And when Vitalik Buterin, co-founder of Ethereum, received the question, he didn’t hesitate. Fortune quotes Buterin going all-in for Proof-Of-Stake, his consensus mechanism of choice:　　“Proof-of-stake is a solution to the [environmental issues] of Bitcoin—which needs far less resources to maintain,” Buterin said at the StartmeupHK virtual festival in Hong Kong.　　When pressed with Ethereum still being under a Proof-Of-Work consensus mechanism, Buterin said that the Ethereum network will reduce its emissions “by a factor of 100, or even 10,000” once they switch it to PoS. When pressed for a date, Buterin said:　　“[We thought] it would take one year to [implement] POS… but it actually [has] taken around six years” due to the complexity of building such a model.　　ETH price chart on Coinbase | Source: ETH/USD on TradingView.com　　Brief Definitions Of PoW And PoS　　This is not the time or the place for a complete guide, but, basically:　　Under a Proof-Of-Work consensus mechanism, the miners compete by solving complex cryptographic puzzles and the winner gets to validate a block of transactions and add it to

2021-05-28Deep Dive

NFT volume has more than tripled — even amid price crash — as Meme.com raises $5M

The NFT sector has seen exponential growth, tripling in transactions since January and pushing through the market crash this month.　　The popularity of non-fungible tokens, or NFTs, shows little sign of slowing down, despite the extraordinary marketwide crash that wiped more than $1 trillion off the crypto market cap.　　According to a report by decentralized app marketplace DappRadar, the average number of NFT sales rose almost 300%, from 21,815 per day in January, to 82,373 in May (so far). This number rose even higher as crypto prices started to plummet on May 12, with sales surging to almost 94,000 NFT transactions a day.　　The crypto market crash, which created a widespread panic as almost 1 million leverage trades got liquidated, also resulted in serious congestion and exorbitant transaction fees across the Ethereum network.　　These surging gas fees didnt deter NFT traders, however, with many turning to other marketplaces on alternate blockchains like the Atomic Market on the EOSIO blockchain. Its daily transaction volume of 20,296 accounts is higher than any other NFT marketplace (excluding NBA Top Shot).　　Top 5 NFT Marketplace transactions over time. Source: DappRadar　　Although the number of trades has increased, the value per trade took a hit immediately as crypto prices started to

2021-05-28Deep Dive

Carbon-neutral Bitcoin funds gain traction as investors seek greener crypto

Steps are being taken to ensure green Bitcoin options for investors, but this may only serve as a short-term solution to a long-term problem.　　Bitcoin (BTC) has been a hot topic of discussion lately even for those outside the core crypto community, but unfortunately, its not for the best of reasons. In particular, the amount of energy required to mine Bitcoin has created concerns for investors who were considering BTC as an option to diversify.　　According to the Cambridge Center for Alternative Finance, Bitcoin currently consumes around 110 terawatt-hours per year. A Harvard Business Review article further noted that this equates to 0.55% of global electricity production, which is roughly equivalent to that of a small county.　　Although this is the case, it‘s important to point out that any industry that adds value to society will likely have an environmental impact. Yet with the rise of global warming and other environmental concerns today, it’s become crucial for the crypto sector to recognize the amount of energy consumption required to mine Bitcoin. As this concern is brought to fruition, individuals within the cryptocurrency community can then come up with solutions to combat this challenge moving forward.　　Todays green solution: Carbon-neutral Bitcoin funds　　Influential executives and crypto

2021-05-28Deep Dive

Dfinity responds to Internet Computer decentralization and privacy concerns

Dfinity, the team behind the Internet Computer protocol, or ICP, has fired back at critics of its decentralization and privacy features in an “Ask Me Anything” on Reddit yesterday.　　The team sought to assure that the projects foundation does not have control over the majority of voting power, emphasizing that decentralization is a priority for the network as it moves forward.　　The project aims to replace the public internet with a distributed network of data centers, nodes, subnets and users coordinated through the Network Nervous System, or NNS. The NNS decides which nodes can join Dfinity‘s network, disciplines misbehaving nodes, and facilitates communications between the ICP’s various components and participants.　　However, the NNS has been the subject of criticism, with users expressing concerns regarding the centralization of voting power, the closed-course and patented code underpinning the protocol, a lack of transparency regarding data collection, and the single point of failure created by the NNS design.　　Some have expressed qualms about NNS voting rights accruing over time, fearing that the system guarantees Dfinitys foundation and its early backers will maintain centralized control over the network in the future.　　Responding to concerns about the projects lack of decentralization, Dfinity researcher, Jens Camenisch, said: “The end goal is

2021-05-28Deep Dive

PayPal & Robinhood Follow Revolut, Plan Crypto Withdrawals

Two major fintechs, PayPal and Robinhood are both looking set to follow in the footsteps of the likes of Revolut, with plans to allow crypto withdrawals to third-party wallets – a step that could see the platforms intensify their competition with crypto exchanges.　　Christine Brown, Robinhood Cryptos recently appointed Chief Operating Officer, told Decrypt that the feature was forthcoming, but stopped short of “setting a deadline,” adding that it was “a difficult tool to implement.”　　Brown was also quoted as explaining that traders need to be “coddled into learning that crypto transactions are irreversible,” as well as educated about the risks of the decentralized finance (DeFi) industry and the price of gas fees.　　She said:　　“We want to make sure that we build an experience – not just the technical foundation of sending and receiving coins, but the user experience around it – that is intuitive, that makes sense, and that reduces risk for our users.”　　Brown went on to claim that the next steps could see the platform turn into “a kind of financial super app,” similar to Coinbase, with staking and lending functions also in the pipelines.　　Meanwhile, PayPals blockchain, crypto and digital currencies business unit lead Jose Fernandez da Ponte, said during Coindesks

2021-05-28Deep Dive

How DeFi lending can restructure older financial systems

Since the inception of the worlds first cryptocurrency, Bitcoin, we have seen innovations of all kinds – from stablecoins to full-blown decentralized finance projects. While stablecoins brought stability to highly volatile cryptos, DeFi introduced new ways to generate income. One such popular method is lending.　　The onset of the pandemic has made people look for an investment option. DeFi lending presented the preposition of making money on crypto holdings without the traditional goalkeepers of loans. Instead of banks or other central entities, people could now choose a decentralized platform to borrow or lend loans. It resulted in the explosion of this new form of lending, with over $29 billion locked in different DeFi lending platforms.　　In this article, we explore some of these lending protocols and find out how they work:　　MakerDAO　　Developed by Rune Christensen in 2018, MakerDAO is an organization building technology for lending and a stablecoin on the Ethereum network. It allows users with cryptos to lend themselves capital in a stablecoin called DAI. The platform is the top lending protocol on DeFi pulse, with over $10.11 billion of assets locked.　　How It Works　　Anyone can lock up cryptos in a smart contract to create a certain amount of DAI. These DAIs can

2021-05-28Deep Dive

TEXAS LAW CREATES LEGAL CLARITY FOR BITCOIN

State lawmakers in Austin, Texas have achieved a milestone in Bitcoin regulation as the state Senate passed House Bill 4474 this morning. The “Virtual Currency Bill” is now on its way to Governor Greg Abbotts desk to be signed into law. Advocates of the bill expect swift action from the governor, who tweeted this March, “Count me in as a crypto law proposal supporter. It is increasingly being used for transactions and is beginning to go mainstream as an investment. Texas should lead on this.”　　The new law creates much-needed legal clarity for Texas companies involved with bitcoin and digital assets. H.B 4474 amends Texas‘s Uniform Commercial Code to include a definition of “virtual currency” and ensures that key business laws apply to cryptocurrencies. In an article for the National Law Review, Daryl Roberston and Patrick Boot write, “The Virtual Currency Bill...provides a clear and concise framework for establishing ’control‘ over virtual currency…and clarifies that control can be established regardless of whether the power to control is shared with another person, a critical element in order for banks and other non-bank financial institutions to effectively provide custody services for virtual currencies.” Robertson and Boot further note/state that “the surgical approach taken

2021-05-28Deep Dive

A Second Ethereum ETF Is Seeking SEC Approval

WisdomTree, an asset manager with a focus on investment products, has filed for an Ethereum ETF.　　ETFs, or exchange-traded funds, track the performance of an underlying asset or group of assets. They‘re a good option for traders who don’t want to deal with the risks of actually holding the underlying investment, and would rather just treat it like a regular stock.　　Companies like WisdomTree see crypto as a good use case, since blockchain tech is notoriously difficult to navigate: wallets can be confusing, transaction fees are expensive, and tax obligations are unclear. An Ethereum ETF would make things easier for investors who arent quite ready to hold ETH but want to get in on the market.　　WisdomTree is the second firm to file for an Ethereum ETF, after VanEck. According to its S-1 filing, shares would be listed on Cboes BZX exchange.　　Brazil and Canada recently got their first Bitcoin ETFs. Bitcoin fans in the US have been clamoring for a crypto ETF for years, but the SEC has yet to approve one. Bitcoin ETF applicants havent been able to convince the SEC that the crypto market is free of manipulation and safe enough for mainstream retail investors.　　It‘s not for lack of trying—plenty of

2021-05-28Deep Dive

Skrill Releases Consumer Survey, Shows Cryptocurrency Use On The Rise

Skrill, a digital payments platform, recently released a consumer survey that uncovered trends on the surge in crypto adoption and popularity.　　According to the study, 38% of respondents have disclosed that they are open to cryptocurrency investments, or have already done so, while 84% have been exposed to at least one cryptocurrency, with 64% of respondents knowing what Bitcoin is.　　“Cryptocurrency adoption has rapidly increased to heights nobody could have imagined even two years ago,” shared Rossen Yordanov, SVP for Skrill and Neteller at Paysafe, which handles both brands.　　The survey was carried out between March and April 2021 by Sapio Research, a B2B and consumer market research agency, with respondent demographics based in the U.S., U.K., Canada, Germany, Italy, Austria and Bulgaria across 8,111 participants.　　According to the study, 20% of the respondents previously held or have owned Bitcoin. Ownership was shown to be higher among respondents from the U.S. and Bulgaria, with 24% and 36% rates, respectively. The study also showed that aside from Bitcoin, the most popular cryptocurrencies included Bitcoin Cash (31% of consumers), Ethereum (22%) and Litecoin (19%). Ownership rates distributed among these cryptocurrencies was likewise in the same trend, with Bitcoin Cash (9%), Ethereum (8%), and Litecoin (7%) each

2021-05-28Deep Dive

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