Crypto Guides, Knowledge & Insights

Michael Saylor says Bitcoin Mining Council required to combat ‘hostile’ narrative

MicroStrategy CEO, Michael Saylor has explained the details and thinking behind the formation of the Bitcoin Mining Council.　　The council was formed on May 25 after Saylor brokered a successful meeting between Elon Musk and several top North American Bitcoin mining firms. The miners involved will provide current and planned renewable usage transparency, and will lobby other mining operations across the globe to do so as well.　　Speaking at the virtual Consensus 2021 conference, Saylor emphasized that the council was formed out of the need to provide greater transparency on the Bitcoin mining industry, and promote sustainable initiatives moving forward:　　“The only reason we had the meeting is because we wanted to ensure the success of a decentralized cryptocurrency, and the source of decentralization is energy usage,” Saylor said.　　“It turns out that Bitcoin miners dont actually have a good forum for communicating how they generate their energy. We dont have a standard model for Bitcoin energy usage right now, and we dont have a future forecast model that we commonly use.”　　However the Bitcoin Mining Council has proven controversial in some quarters with comparisons to the oil production cartel OPEC. Podcaster Marty Bent, the co-founder of Great American Mining, which utilizes wasted gas from

2021-05-26Deep Dive

The importance of block sizes, and the rise of off-chain solutions

A number of blockchain projects have exploded in popularity in recent months, but their block sizes have stayed the same. Whats the answer to this looming scalability crisis？　　The cryptocurrency sector has undergone a seismic shift in recent years as retail investors and publicly listed companies make their way into the space.　　Globally, estimates suggest that the number of crypto users surged by about 190% between 2018 and 2020.　　Record-breaking inflows into the market have also taken the number of active addresses on the Bitcoin network, as well as trading volumes, to all-time highs this year.　　On the face of it, all of this should be cause for celebration — and it is. But here‘s the problem: While Bitcoin’s network is enjoying a surge in demand, it could be argued that the blockchain‘s infrastructure isn’t keeping up.　　Bitcoin‘s block size of 1MB means that this blockchain can only handle about five transactions per second on average. Extrapolate this to a 24-hour period, and you’re looking at about 86,400 transactions. Despite this networks immense achievements, this makes it mathematically impossible for the blockchain to fuel global payments in its current form.　　All of this has caused BTC transaction fees to surge — and according to some estimates

2021-05-26Deep Dive

Zimbabwe's Biggest Bank Looks at Methods to 'Leverage Cryptocurrencies'

One of Zimbabwe‘s biggest financial institutions, CBZ Holdings says it is looking at ways it could “leverage cryptocurrencies and other emerging digital innovations.” According to the financial institution’s chairperson, Marc Holtzman, CBZ “is open-minded about new innovations, as these could open up new opportunities going forward.”　　Innovations Opening up New Markets　　Speaking in an interview with a local publication, Holtzman also acknowledges that innovations such as “cryptocurrencies, or rather blockchain more broadly, fintechs, bigtechs and techfins” are all serving “specific gaps.” Revealing his organizations stance on such innovations, the chairman said:　　Our view is that these innovations have the potential to strengthen the way we do business, the way we serve our customers, as well as open up new market opportunities.　　Holtzman adds that such opportunities “can be pursued through collaboration and cooperation with the same fintechs.” Consequently, the chairperson says CBZ will be embracing “an open innovation strategy in which we work with and through these fintechs in areas such as mobile money and mobile wallets.”　　Potential Risks　　Nevertheless, the CBZ boss does acknowledge the potential risks that will arise as a result of embracing these innovations. Still, he insists the Reserve Bank of Zimbabwe (RBZ)‘s fintech regulatory sandbox—which guides banks’ participation in these innovations

2021-05-26Deep Dive

Bank Indonesia on Track to Release Digital Rupiah

IN BRIEF　　Bank Indonesia moves to the pre-launch stage of their CBDC program.　　According to the Bank for International Settlements, 85% of central banks are actively researching CBDCs.　　Other Asian countries looking into CBDCs include Japan, South Korea, and China.　　Bank Indonesia is in the pre-launch stages of releasing a digital rupiah currency and is vetting platforms to see which will suit their needs the best.　　As the world sees an increase in digital transactions during the covid-19 pandemic, many countries are beginning to look closer at launching central bank digital currencies (CBDCs).　　According to research done by the Bank for International Settlement (BIS), more than 85% of central banks are actively researching CBDC, while 60% are testing technology and 14% have moved to start alpha testing these projects. Digital currencies are set to help to modernize these financial systems and significantly speed up international transactions.　　Today, Bank Indonesia (BI) became the latest of a long line of central banks to announce their move toward a national digital currency.　　As for Bank Indonesia, they have decided to make creating and launching the digital rupiah one of their main priorities, after seeing a spike in digital transactions. According to the statement, transaction frequency on digital banking platforms shot up

2021-05-26Deep Dive

Korea’s crypto market is among the strongest — and the strangest — in the world

On a day in which Bitcoin crashed briefly to $30,000 in a rampant bear market, the leading cryptocurrency never got anywhere close to that on Korean exchanges. The so-called “kimchi premium” saw to that, keeping the price of Bitcoin as much as $5,000 above its level on leading U.S. exchanges.　　The major reason for this kimchi premium is that Korea‘s exchanges are fairly isolated by a combination of the country’s strict capital control laws preventing funds from leaving the country, and the tax code and anti-money laundering (AML) regulations that make it difficult for foreigners to use Korean exchanges — even giants like Bithumb and Upbit — without local Korean bank accounts.　　Nor is that premium the only part of South Korea‘s crypto industry that sets it apart from the rest of the world. Among other things, the market’s isolation combined with the extraordinary stability of the Korean won has kept stablecoin usage low and the embrace of decentralized finance, or DeFi, well behind that of the rest of the world.　　Koreas Bitcoin boom　　Despite this isolation, Koreas embrace of Bitcoin in particular and cryptocurrency in general is very strong. In April, more than five million unique cryptocurrency users — about 10% of the

2021-05-26Deep Dive

Korean students say crypto trading gives them stress, causes insomnia

Blinded by the promise of fast cars, luxury hotels, and stacks of dollar bills, young Koreans turned to crypto trading as a means of building wealth but ended up with the exact opposite, reports local daily The Korea Times.　　Some young adults in the country have, in the past few years, turned to trading as they seek better opportunities in financial markets.　　Crypto trading stress　　A well-paying job remains a coveted dream for many, as beneath the shiny lights of Seoul‘s Hongdae district lies a bitter reality—a weak job market, little overall economic growth, and the influence of family-owned conglomerates called ’Chaebols.　　A DISPLAY SHOWING CRYPTO PRICES IN SEOUL, KOREA. (SOURCE: WSJ)　　But trading, as it turns out, comes with its own set of troubles, a local survey found. Stress, insomnia, and other related psychological issues are just some of the things that college-going crypto hopefuls are encountering as the infamously volatile crypto market shows its fangs.　　The survey—it interviewed 1,750 college students last week and found 23% actively invested in crypto—found out a staggering 68.3 percent of respondents ticked the ‘psychological side effects’ section, with over 33% stating they encountered ‘dramatic emotional ups and downs’ as the prices gyrated.　　A section of the respondents said they

2021-05-26Deep Dive

Can blockchain ever be part of the solution for tackling climate change?

Because of Bitcoin, blockchains impact on the climate has come into sharp focus. But can this technology actually be part of the solution for saving the environment？　　Elon Musk captured the world‘s attention when he declared that Tesla would no longer accept Bitcoin as a payment method, citing the blockchain’s environmental impact.　　Although this thrust the debate about cryptocurrencies and the climate into the spotlight, this has been an issue that has been rumbling on for many years.　　Bitcoin‘s proof-of-work consensus mechanism is exceedingly energy intensive, and it seems to be a problem that’s only getting worse — with vast data centers established as miners vie to get their hands on a supply of new coins that has dwindled further since the 2020 halving.　　The latest figures from Digiconomist suggest that Bitcoins annual carbon footprint is now comparable to the whole of Portugal. A single BTC transaction uses as much CO2 as completing 1.26 million Visa transactions… or watching 95,000 hours of YouTube. Worse still, this single transaction also uses as much electricity as the typical U.S. household gets through in 40 days. Just a few short weeks ago, this figure stood at about 28 days.　　Its a problem that‘s getting worse, not better. You

2021-05-26Deep Dive

Decentralization Under Threat As Biden Administration Considers Implementing Bitcoin ‘Guardrails’

The Biden administration is reportedly exploring the possibility of installing guardrails on cryptocurrency following a number of meetings in which the crypto space was the subject. Bitcoin and other digital currencies are under intense scrutiny at the moment, with the markets recent behavior garnering quite a lot of attention.　　The IRS has already moved to install new regulations requiring all cryptocurrency transactions exceeding $10,000 to be reported. And, according to a report from the Washington Post, officials from the Biden administration have been “studying potential gamps in oversight” as it pertains to cryptocurrencies and whether they can be used to finance terrorism and other illegal activities.　　Protection For Honest Buyers　　The report also claims that the White House and Treasury Department are throwing their weight behind a model that will pay particular attention to crypto possibly becoming an avenue for tax evasion. Potential measures to protect the average investor looking to purchase digital currency are also being discussed.　　Bitcoin, in particular, has come under pressure on several fronts in recent times. Elon Musk does not seem as big of a proponent as he was when it was revealed that Tesla had purchased $1.5 billion worth of the world‘s biggest cryptocurrency. The automobile manufacturers have

2021-05-26Deep Dive

Naver, Kakao, LG ‘Will Bid to Participate’ in South Korean CBDC Pilot

The Bank of Korea (BOK), South Korea‘s central bank, is set to pilot its prototype digital KRW beginning in August as the country increases the pace of its central bank digital currency (CBDC) adoption plans. And it looks as though three of the nation’s biggest tech giants are keen to take part.　　Both Naver, the nations biggest search engine and the founder of the Line chat app (the dominant platform in Japan) and the domestic chat app giant Kakao, are set to bid to take part, per a report from Money Today. The conglomerate LG also hopes to submit a bid.　　The media outlet claimed that a consortium comprising Navers financial arm, Naver Financial, and the blockchain firm Unchain were set to express their interest in joining the project, with a bidding process set to begin the weeks ahead.　　Kakaos e-pay arm Kakao Pay and its Ground X blockchain subsidiary will also likely submit a joint bid, as will a consortium comprising Shinhan Bank and the LG-run IT services provider LG CNS. Other likely bidders include the Shinhan rival KEB Hana Bank and the Center for Cryptocurrency & Blockchain Research at the POSCO-operated POSTECH tech university in Pohang.　　The central bank once again maintained

2021-05-26Deep Dive

Where Is the “Death” Threshold for Bitcoin? Is It Possible For It to Drop Under 30k?

As a digital asset class, Bitcoin has been both acclaimed and scrutinized for its characteristics. The high volatility is Bitcoin‘s primary feature by which many social interplays occur. As JP Morgan reported in a letter to investors, the increase in liquidity can be determinant for Bitcoin’s low volatility.　　While statements in the crypto space about Bitcoin‘s store of value and support from institutional investors create equilibrium between supply and demand, Bitcoin is still dependent on social opinion. Similar to the stock market tendencies, news affects the price of cryptocurrencies. Although Bitcoin has hooked onto a status of the “digital gold” trademarked volatility, it’s the biggest downfall after the price of Bitcoin plummeted nearly 50% from its previous all-time high.　　Is there support at 30k？　　Breakout news concerning Bitcoin and cryptocurrencies have remodeled the market retail and institutional sentiment towards crypto. According to Eugene Ng, head of business development at Gemini in Asia, stated “systematic algos have turned short” and expects to retest the lower support levels over the weekend. Additionally, Bitcoins dip fueled by rejecting news hurried investors to take profits off the table, as they fear a massive sell-off.　　Overlapping negative news regarding Bitcoin, starting with Elon Musk stating that Tesla will no

2021-05-26Deep Dive

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