Crypto Guides, Knowledge & Insights

Russian Finance Ministry, Central Bank at Loggerheads over Crypto Tax

The Russian Ministry of Finance and the nations Central Bank are still at odds over crypto tax laws, per a local media report.　　According to Interfax, an anonymous “source familiar with the talks” between the two parties, who must forge the nations crypto policy, “cannot agree” on a number of key points.　　Chief among these is the role of tax officials, which the ministry wants to be allowed unfettered access to citizens bank account data in a quest to find and punish citizens who fail to declare their crypto earnings on tax declarations.　　But the source reportedly said that the Central Bank, which remains deeply skeptical about all crypto-related matters, has emerged as an unlikely champion for crypto traders in this instance. The source claimed that the Central Bank opposes giving tax authorities the right to freely request information from commercial banks about transactions conducted using cryptoassets.　　The move would be “outside the framework of existing tax audits,” the bank reportedly said.　　The news agency claimed it had seen a document with responses from both the ministry and the bank, confirming their stances.　　The Ministry of Finance, though, calls the measures part of a “risk-based approach,” that will help avoid crypto-powered “tax evasion” – and said

2021-04-16Deep Dive

Billionaire Mike Novogratz says cryptocurrencies face a 'washout' after the Coinbase listing frenzy

The cryptocurrency market is probably in store for a “washout,” billionaire investor Mike Novogratz has said, after the Coinbase listing created a frenzy that drove up bitcoin and the likes of Dogecoin and XRP.　　Novogratz, the founder and chief executive of crypto-focused investment company Galaxy Digital, told MarketWatch in a virtual event: “Ive seen a lot of weird coins like dogecoin and even XRP have huge retail spikes, which means theres a lot of frenzy right now.”　　He added: “That never ends well, and so well probably have a washout at one point.”　　Novogratz also said: “In the next week, certainly we could have some volatility because of the excitement around Coinbase.”　　Cryptocurrency exchange Coinbase went public on Wednesday, closing with a valuation of $65.4 billion, in what analysts have heralded as a coming-of-age moment for the crypto word.　　Coinbases direct listing to the Nasdaq generated a lot of excitement around cryptocurrencies. It sent bitcoin soaring to an all-time high close to $65,000 and also pushed the ether, XRP and Dogecoin cryptocurrencies to records.　　But bitcoin (BTC) has fallen quite sharply since Coinbases debut to below $62,959 on Thursday.　　Despite his words of warning about the short-term outlook, Novogratz remains highly bullish on bitcoin, saying Coinbases IPO

2021-04-16Deep Dive

Cryptocurrency as a Settlement means is limited, says BOK Governor

Lee Ju-yeol, the Bank of Korea Governor, stated that cryptocurrency carries forth several limitations as a means of payment. The BOK head aired his views in a recently televised policy committee meeting. According to the Governor, cryptocurrency assets do not harbor any intrinsic value. Mr. Ju-yeol acknowledged that the U.S Federal Reserve chair Jerome Powell also supports his statement on cryptos shortcomings as a settlement means.　　Additionally, the Governor attributed his reason to the price volatility characteristic that cryptocurrencies hold. He said,　　“It is very difficult to predict the price, but its price will be extremely volatile.”　　The Weight of Adoption　　South Korean financial regulators had previously announced that they would impose a 20% tax on crypto earnings exceeding $2.5M from the financial year 2023. The country is one of the few regions where there has been a red-hot crypto-asset movement. Back in 2018, crypto analysts claimed that the regions cryptocurrency activity had made the country able to affect the market price of BTC.　　According to a Korean business blog, residents as old as 40 to 50 years old make cryptocurrency purchases. The blog also noted that older people were more successful in the virtual currency business than the ‘20s to 30’s age group. One

2021-04-16Deep Dive

How Chainlink 2.0 Will Expand The Reach for DeFi and Smart Contracts

Chainlink the Whitepaper for its second iteration. Chainlink 2.0 has been created to allegedly take the “next steps in the evolution of decentralized oracle networks”.　　With one of the most used applications in DeFi, these protocols need oracles to feed them with off-chain information. In the new iteration, Chainlink could go beyond, as the document claims:　　We foresee an increasingly expansive role for oracle networks, one in which they complement and enhance existing and new blockchains by providing fast, reliable, and confidentiality-preserving universal connectivity and off-chain computation for smart contracts.　　Chainlink 2.0 will be based on a concept called Decentralized Oracle Networks (DON). Maintained by “a committee of Chainlink nodes”, the platform will be able to support an “unlimited” number of functions.　　What are Chainlinks hybrid smart contracts？　　The DON will be a layer to deploy smart contract interfaces with the capacity to support off-chain computing resources without the intervention of a third party. The Whitepaper says:　　Decentralized Oracle Networks can go on to create a decentralized metalayer that enhance smart contracts with highly scalable, confidential, and secure forms of off-chain computation, in addition to the external data that Chainlink already provides today.　　With the above capacities, Chainlinks team of developers will focus on 7 core areas,

2021-04-16Deep Dive

What Are the Legal Challenges That Crypto Faces and the Way Out?

The popularity of the cryptocurrency space has catapulted to new levels in recent times. Apart from retail investors, institutional interest in the crypto space has grown massively. The next logical step for the progress of the crypto industry is some sort of government validation while remaining totally decentralized. While this seems too good to be true, this has to be the next step in the evolution of blockchain.　　For that to happen, the crypto industry must take care of the stigmas revolving around it that make it seem too risky, complex, and unapproachable.　　What are the factors that are defaming the cryptocurrency？　　Are you piqued with the legal challenges disarming you from making the best out of the cryptocurrency market？ According to an excerpt from Chainalysis 2021 report, in 2019, criminal/illegal activity represented 2.1% of all cryptocurrency transaction volume (roughly $21.4 billion worth of transfers).　　Lets look at the two main challenges that cryptocurrency faces at the moment as far as legality is concerned.　　（1）Use of Illegal Assets　　One of the factors contributing to this stigma is the use of illicit assets for investment. Not that Fiat has never been used for illegality, yet cryptos being relatively new and fresh, it does arouse doubts. The use

2021-04-16Deep Dive

World’s Third Richest Insurer AXA Now Accepts Bitcoin Payments in Switzerland

AXA, a multinational insurance firm is all set to offer a Bitcoin payment option for its customers in Switzerland, making them the first all-line insurer to do so. The new payment option is available for all the customers in Switzerland since the start of April and would allow them to pay premiums for all non-life products of AXA Insurance Ltd. The firm would soon send out bills with Bitcoin Payment QR code along with it to make the transaction seamless.　　Source: AXA　　Claudia Bienentreu, Head of Open Innovation at AXA Switzerland said,　　“This is AXAs response to growing demand from its customers for alternative payment solutions, with new technologies playing an ever-greater role,”　　The insurance firm is also the third richest in the world, and their offering of Bitcoin as a payment option is another leap forward for Bitcoin adoption. The insurance firm in its official release noted that Bitcoin and cryptocurrencies have been a part of their discussion since 2019.　　The firm had conducted research back in 2019 asking their customers for their thoughts on cryptocurrencies and nearly one-third of the respondents either already owned cryptocurrencies or were willing to invest in them.　　More Crypto Payments to be Added in Future　　AXA in its official release

2021-04-16Deep Dive

Environmentalists say Bitcoin must do what Ethereum is doing to fix climate impact

The New York Times published an article featuring calls from experts saying Bitcoin will eventually need to follow what Ethereum is doing and change to a Proof-of-Stake (PoS) consensus mechanism.　　Bitcoin‘s ravenous demand for electricity is an undisputed fact. But things get muddled when it comes to where that energy comes from, i.e., fossil fuels vs. renewable sources. As much as switching to a PoS mechanism would bypass both issues, that isn’t something that will happen soon, if at all.　　Bitcoins environmental impact　　Data from Cambridge University estimates Bitcoin‘s annualized electricity consumption is 138.6 TWh. That’s more than Sweden, which consumes 131.8 TWh of electricity a year.　　Bitcoin relies on the Proof-of-Work (PoW) consensus mechanism. This process enables miners to add new blocks based on whoever comes up with the winning PoW.　　Finding the winning PoW is matching a “guess” of random letters and numbers to the target. The more guesses get churned out, the more likely to match the target and earn the block.　　Millions of calculations a second are made in what is a highly competitive endeavor. All of which places a huge demand on electricity supply.　　The founder of Blockchain for Climate, Joseph Pallant, spoke about Ethereums switch from PoW to PoS, saying Bitcoin

2021-04-16Deep Dive

Coinbase CEO Says Listing Is a ‘Shift in Legitimacy’ for Crypto

The direct listing of Coinbase Global Inc. on Nasdaq is a turning point for the whole cryptocurrency sector, according to the firms Chief Executive Officer Brian Armstrong.　　Banks used to hang up on Coinbase‘s calls and many people thought the digital-currency platform was a bad idea, Armstrong said during a discussion on the Clubhouse app after the stock’s debut. Now top executives from the banks that helped Coinbase go public are calling to ask how they can get more into crypto themselves, he said.　　“It feels like a shift in legitimacy not just for Coinbase but the whole industry,” Armstrong said. “Crypto has a shot at being a major force in the financial world.”　　Coinbase, which fell 14% on its debut Wednesday to close at $328.28, now has a valuation of about $86 billion on a fully diluted basis. That compares with a 2018 funding round that valued it at around $8 billion. The listing was widely anticipated by the wider crypto community, with many coin prices and crypto-affiliated company shares rising in advance of it, before falling back once the trading started.　　The company‘s growth hasn’t been without controversies, such as restrictions Armstrong placed on employee discussions of politics last year, or frequent

2021-04-15Deep Dive

Tezos (XTZ) is testing a new consensus algorithm called ‘Tenderbake’

Smart contract platform Tezos has confirmed that it is trialing a new form of consensus algorithm called ‘Tenderbake,’ it said in a release shared with CryptoSlate.　　First touted as “a blockchain synchronizer and single-shot consensus algorithm” in a blog post published last January, Tenderbake is being utilized in the latest Tezos testnet, with team members seeking to identify potential implementation errors and optimize performance.　　The introduction of Tenderbake follows a hectic period for Tezos, which has seen approximately one upgrade implemented every quarter. The latest single-shot consensus algorithm was developed by Tezos engineers and academic researchers over the course of the last year, including those from the Baking Bad cooperative.　　Demystifying Tenderbake　　Distinct from Tezos existing Emmy+ algorithm, Tenderbake was inspired by Tendermint, the first adaptation of classical BFT-style consensus algorithms. In a recent Medium post,　　Tezos revealed that Tenderbake was capable of shorter block times and near-instant finality, with block times of 1 second or less. This would make it a market improvement on Emmy+, and bring Tezos in line with Visa levels of transactions per second (TPS) – without sacrificing decentralization.　　Because Tenderbake is capable of handling a large number of validators, the latest upgrade is seen as a major milestone for the network,

2021-04-15Deep Dive

WisdomTree Lists Bitcoin ETP on Deutsche Boerse as ETF Application Awaits SEC Review

Asset manager WisdomTree Investments announced Wednesday it has listed its bitcoin exchange-traded product (ETP) on Deutsche Boerses Xetra market, based in Frankfurt.　　The firm said the WisdomTree Bitcoin ETP tracks the spot price of bitcoin has a total expense ratio of 0.95%, and is trading under the ticker “WBIT.”　　WisdomTree said the product will give investors access to bitcoin without having to hold the crypto directly, store private access keys or interact with the digital currency infrastructure in any way. In March, WisdomTree said it had taken on Coinbase as its second custodian for the WisdomTree Bitcoin ETP.　　“The Xetra listing, along with the recent appointment of Coinbase Custody as our second custodian, will appeal to a wide range of professional investors and really demonstrates our commitment to delivering a superior investment experience to those allocating to our Bitcoin ETP,” said Jason Guthrie, WisdomTree European head of capital markets and digital assets.　　The listing comes against the backdrop of a looming decision by the Securities and Exchange Commission (SEC) over whether to approve the first bitcoin exchange-traded fund (ETF) for U.S. investors.　　On April 9, the SEC officially started its review of WisdomTrees bitcoin ETF application.　　So far, the SEC has blocked all attempts at launching

2021-04-15Deep Dive

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