Crypto Guides, Knowledge & Insights

Why Cardano’s Hoskinson Called Proof-of-Work a Road to Nowhere

Cardano‘s inventor and IOG CEO Charles Hoskinson commented on Bitcoin’s hashrate dropped after a blackout struck some small counties in the province of Xinjiang.　　Major Bitcoin mining pools saw their hashrate crashed. As informed by Primitive Crypto founder partner Dovey Wan, F2Pool, AntPool, Poolin registered a drop of up to 33%.　　Although the hashrate has been quickly climbing back up in the past day, the incident has been used to highlight what some consider a “Bitcoin problem”. Hoskinson shared an article on the incident via his Twitter handle and said the following:　　“Proof of stake doesnt suffer from this problem wake up people! Nakamoto consensus is a road to nowhere.”　　In 2020, Cardano transitioned from a Proof-of-Work consensus algorithm to a Proof-of-Stake. This event initiated Cardanos Shelley era. Hoskinson said in a previous interview that the former has more advantages than the latter.　　Adding that currently there is a “great movement of value” from PoW to PoS like Ethereum 2.0, Polkadot, Cardano, and others, IOGs CEO predicted a “distribution of wealth” to these blockchains in 2021. Hoskinson added:　　“The issue is it can never get better by design. The more successful bitcoin gets, the higher the price goes; the higher the price goes, the more competition

2021-04-19Deep Dive

Crypto and Traditional Finance To Merge Via M&As

As Coinbase has already gone public, and eToro, Kraken are also planning to list their shares, we can also expect to see an increase in acquisition activity in the coming months.　　While it‘s expected that mergers and acquisitions are set to increase this year, what isn’t so clear is who will be initiating such moves. Will traditional finance (or fintech) companies be acquiring crypto firms, or will it be the other way around？　　Bridging both sectors　　It‘s worth pointing out that mergers and acquisitions have already been increasing quite rapidly within the cryptocurrency industry. According to PwC’s 3rd Global Crypto Mve seen all kinds of publicly traded companies in North America, from sports lottery businesses to tech support solution providers, either acquire or merge with crypto mining businesses,” he told Cryptonews.com.　　Colyer expects this trend to ramp up this year, while he also expects to “see more crypto players acquire traditional finance companies, especially as long as the bull market continues.”　　‘The only choice’　　Given that some crypto firms are now so large, big traditional finance corporations may be forced to acquire at least some of them, since the odds of building something equally successful in a shorter space of time are falling by the month.　　“Given

2021-04-19Deep Dive

ECB: Half of Europeans Think Blockchain Solves Counterfeit Digital Euros

The European Central Bank quizzed the public about its digital euro. Half of the respondents think blockchain could deal with counterfeits and resolve technical glitches.　　The European Central Bank published this week the results of a public consultation on a digital euro. Half of the respondents, most of whom are German men, said that blockchain would resolve counterfeiting and technical glitches, and most want a digital euro that respects their privacy.　　The results aren‘t binding, but still “provide valuable input to the Eurosystem’s reflections on a digital euro.”　　During the three-month consultation, which opened in October 2020, 8,221 respondents— 6% of whom are professionals (read: lobbyists) and the other 94% mere citizens—weighed in on their preferences for the design of a digital euro.　　Blockchain for the digital euro？　　A digital euro would be a central bank digital currency (CBDC)—a digital version of the ECB‘s fiat currency. Governments are interested in CBDC because they make it easier to analyze financial transactions and cheaper to disburse money in times of crisis. CBDCs aren’t necessarily based on blockchain, but they can be.　　Despite much hubbub, few central banks have launched CBDCs. Small economies, like Cambodia and Bermuda, have launched them. China, currently trialling its own digital yuan, leads the

2021-04-19Deep Dive

All Hands on Deck for IOTA’s Chrysalis 2.0, This Is What You Need to Know

IOTA is ready for a major milestone with the launch of the Chrysalis phase 2 also know as the final stage for IOTA 1.5. The bridge network between IOTA and the Coordicide event which will lead it to full decentralization, Chrysalis will roll out on April 28th, 2021.　　After this date, IOTAs current mainnet will become the “legacy mainnet”. According to an IOTA Foundation official post, the infrastructure that will replace the current mainnet is already in place. The organization said:　　With Chrysalis just around the corner, the team is heads down in the final bits and pieces to make everything as smooth as possible both on April 21 and April 28. Tests are being run on multiple instances of infrastructure to test all the migration scenarios.　　Classifying Chrysalis phase 2 as a “new beginning for the IOTA protocol”, the Foundation said they are testing the migration on Firefly with the help of internal and external testers. Since August 2020, the organization and IOTA developers have been developing the new components for phase 2.　　In that regard, the team of developers has released several versions for the Pollen testnet. This component will introduce mana, a reputation system that will help boost IOTA security.　　Software node

2021-04-19Deep Dive

Why NFTs Aren’t Just for Art and Collectibles

Are non-fungible tokens (NFTs) one-trick ponies？ Theyve certainly taken the art and digital collectible world by storm, raising millions of dollars for a handful of high-profile artists and (mostly) the NBA, but what else can they do？　　Well, given that the NFT is essentially a technical standard for creating and identifying unique digital objects, its use potentially extends far beyond the digital art and collectibles world. From tickets to insurance certificates and domain names, whenever an object can be represented digitally, NFTs can play a role.　　Of course, whether the application of NFTs ever expands beyond art and collectibles in a big way remains an open question, yet industry insiders generally agree that the non-fungible token is here to stay.　　The NFT: more than a fad？　　Critics would probably classify the NFT as another (crypto-related) fad, used to generate extra publicity and cash (which they did) for the crypto industry and a tiny minority of elites (e.g. Kings of Leon and Grimes), but with little real use for the vast majority of individuals and businesses.　　However, not everyone shares such a view. For Messari research analyst Mason Nystrom, non-fungible tokens are a legitimately useful technical standard with a wide range of potential applications.　　“There are various

2021-04-19Deep Dive

Peak fear? Bitcoin funding rates crash to lowest levels in 7 months

The funding rate of Bitcoin (BTC) has dropped to levels not seen since September 2020 as the price of Bitcoin plummeted below $52,000 on April 18. Quant trader and analyst Lex Moskovski says it shows fear has returned to the market.　　According to the data from Glassnode, the average Bitcoin futures funding rate across all exchange dropped to as low as around -0.03% on Sunday.　　What is funding rate and why does it dropping matter？　　Bitcoin futures exchanges use a mechanism called “funding” to achieve balance in the market.　　The way the mechanism works is simple: if there are more longs or buyers in the market, the funding rate rises, and vice versa.　　As such, when the funding rate turns negative, it means the majority of the market is short-selling Bitcoin, indicating fear in the market.　　Moskovski said:　　“Wow, its been a long time since weve seen funding this negative. Fear.”　　Bitcoin futures perpetual funding rate. Source: Glassnode　　Earlier this week, Bitcoin was hovering at around $64,000 in anticipation of the Coinbase public listing. At the lowest point of the day on April 18, BTC dropped to as low as $50,000.　　From the days highest to lowest point, the price of Bitcoin dropped by almost 15% against the U.S. dollar.　　The

2021-04-19Deep Dive

Stablecoins are in the limelight, but this Yale Economist remains skeptical about their stability

Stablecoins are taking the center stage in crypto-related discussion especially as adoption increases meteorically. Sean Stein, a professor, and entrepreneur recently noted in a Forbes article, that “more (allegedly) mundane versions of cryptocurrency – stablecoins – look increasingly like the method by which crypto will achieve mainstream adoption and utilization.” But this viewpoint has done little to sway critics. As it turns out, not everyone isnt a fan of stablecoins.　　Economist says Stablecoins like Tether are sketchy　　Gary Gorton, an economist at the Yale School of Management has long been in the business of dissecting the defects in the financial ecosystem, with a particular interest in the factors that played a role in the financial crisis that took place between 2008 and 2009. Stablecoins happen to fall into the list of questionable assets that Gorton has been poking at for a long time.　　As Bloomberg reports, Gorton doesn‘t believe in the Blockchain’s ability to assure that stablecoins have any reliable pillars backing them. Stablecoins are usually paired to fiat, exchange-traded commodities, or other cryptocurrencies.　　They are designed with the aim of bringing market volatility to the barest minimum but Gorton questions their stability. He refers to the part of Tethers website homepage that adds

2021-04-19Deep Dive

A Trio of Ethereum ETFs Set to Launch in North America

It took years for regulated cryptocurrency investment products to hit the mainstream. But in Canada, things are heating up fast. Fresh off the launch of three Bitcoin exchange-traded funds (ETFs) earlier this year, Canada has now approved three more funds: this time, Ethereum ETFs.　　The ETFs, which will be available on Torontos stock exchange (TSX), will give investors exposure to the second biggest cryptocurrency by market cap, Ethereum—or Ether.　　The companies behind the three separate ETFs are Evolve ETFs, Purpose Investments, and CI Global Asset Management (which is working with Galaxy Digital on its product.) Purpose and Evolve already have Bitcoin ETFs trading on the TSX.　　All three Ethereum ETFs will be available next Tuesday.　　ETFs are products that allow investors to buy shares that represent a certain asset—in this case, Ethereum. Investors can trade them continually throughout the day but dont have to worry about the tricky stuff that comes with holding crypto, like storage.　　A Bitcoin ETF in the US is long-awaited. There is currently a long-list of high-profile companies applying to the Securities and Exchange Commission for Bitcoin ETF approval; eight firms—including Galaxy Digital—are awaiting approval.　　But the SEC has repeatedly rejected applications from companies that want to set one up. The SEC

2021-04-17Deep Dive

Dogecoin Flips XRP, Ethereum, and Bitcoin (On Google)

The worlds most famous meme coin, dogecoin (DOGE), moved pass the biggest coins in the world on Google Trends, and flipped two major altcoins to move deeper into the top 10 list.　　The search interest in doge has flipped that of four biggest coins in the world by market capitalization: bitcoin (BTC), ethereum (ETH), binance coin (BNB), and XRP.　　But another flippening happened as well. DOGEs market capitalization surpassed litecoin (LTC)s and uniswap (UNI)s, pushing the two into the 9th and 10th spots, respectively - and taking the 8th for itself. Its market capitalization is now USD 32.7bn (08:57 UTC), compared with LTCs and UNIs USD 19bn. Polkadot (DOT) is on the 7th place with USD 42bn.　　DOGEs price rallied recently, going up 97% in a day and 318% in a single week, hitting its all-time high of USD 0.285 today. Overall, its up 13,163% in a year, now trading at almost USD 0.26.　　Its not really clear what pushed the coin up. As for the recent news surrounding it, American brand of snack Slim Jim announced Doge Week, posting numerous DOGE-related tweets in the past days, boosting their engagement.　　Furthermore, luxury nightclub E11even Miami announced that it would start accepting DOGE, and Dallas Mavericks

2021-04-16Deep Dive

Turkey to ban cryptocurrency payments

A new ban in Turkey will prohibit crypto holders from using their digital assets for payments, in addition to preventing payment providers from adding funds to their digital wallets at crypto exchanges.　　According to a Friday announcement by the Central Bank of the Republic of Turkey, the ban will come into effect on April 30, rendering any crypto payments solutions and partnerships illegal.　　The bank stated, “any direct or indirect usage of crypto assets in payment services and electronic money issuance” will be forbidden.　　While banks are excluded from the regulation, which means users can still deposit Turkish lira on crypto exchanges using wire transfers from their bank accounts, payment providers will be unable to provide deposit or withdrawal services for crypto exchanges.　　Payment providers and digital wallets are widely used in Turkey to transfer fiat funds to crypto exchanges and vice versa. Major global exchange Binance partnered with local payment provider Papara when they first entered the Turkish market to provide a lira onramp for several different cryptocurrencies.　　This new regulation means that users have two weeks to clear their balances if they exclusively use payment providers as fiat-to-crypto gateways.　　Historically, the Turkish government has always had a tight grip on the payment ecosystem. In

2021-04-16Deep Dive

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