Crypto Guides, Knowledge & Insights

Bitcoin and Litecoin Move Closer to Their Privacy Improvements

The Speedy Trial (ST) proposal for Taproot, a protocol upgrade that should improve Bitcoins privacy and flexibility, has received a lot of ACKs over the past eleven days, signaling the communitys support for it and the upgrade activation.　　The vast majority of the participants voiced their acknowledgment (ACK), while some had additional opinions or reservations, such as longer deadlines, a concern that a failed speedy trial will become “a major driver in favor of LOT=true,” as well as other more technical opinions, including those on timeline, start time, stop time, and earliest active time.　　“If it avoids contention and deadlock and nothing else is on the docket, it is worth a try,” christianriley said.　　But there were some NACKs too. Free software programmer and developer working on Bitcoin Lightning Rusty Russell argued that “Taproot could be activated by a blind monkey, but that doesnt mean we should do it that way.” According to him, given that it will “almost certainly” pass, ST “avoids the hard questions. [...] Weve made it as easy as possible for miners to say ”yes“. They dont have to upgrade, just flip a bit and promise to do so later,” and added,　　“Nobody has to answer the hard questions on

2021-03-18Deep Dive

'Deflationary' Eth2 could flip Bitcoin: Messari analyst

Ryan Watkins, a senior research analyst at crypto analysis firm Messari, has speculated that Ethereum could overtake Bitcoin as the largest crypto asset once its Eth2 and Proof-of-Stake overhaul is complete.　　Appearing on Youtube show FinTech Today on March 18, Watkins noted that while he does not know “if or when” Ethereum will flip Bitcoin, he does believe Ether could emerge as the leading crypto asset in the future, due to Eth2, stating:　　“The selling point of Bitcoin over Ethereum as a store of value asset boils down its monetary policy being very predictable and the Bitcoin blockchain being very secure. I think that with the shift to Eth2 and to Proof-of-Stake, [...] Ethereum may actually potentially be more secure than Bitcoin.”　　Watkins also emphasized Ether‘s changing underlying economics amid the Eth2 transition, highlighting expectations that Ethereum’s forthcoming burn mechanism will result in Ether being destroyed at a rate exceeding the creation of new supply.　　“Ethereum‘s monetary policy will actually change in Eth2 so that it actually won’t just be just be less inflationary than Bitcoin, it would actually be deflationary. So then, every year, there is actually less and less Ether in existence because its being burnt.”　　He posted the question: If Ethereum is

2021-03-18Deep Dive

Thailand’s central bank warns against ‘illegal’ THT stablecoin

The Bank of Thailand has issued a stern warning against a privately issued stablecoin pegged to the national currency, the Thai Baht.　　According to a Bangkok Post report on March 18, the central bank has told citizens that Thai Baht Digital (THT) has no legal assurances or protection and that users could be at risk of cyber theft or money laundering　　Citing a sixty-year-old law, the central banks assistant governor of the legal group, Pruettipong Srimachand, stated that any activities involving the stablecoin are considered illegal:　　“The creation, issuance, usage or circulation of any material or token for money is a violation of Section 9 of the Currency Act 1958.”　　The stablecoin is issued on the Terra platform which has produced various other stablecoins including the TerraUSD, first issued in September 2020, and TerraKRW. It is also behind the Chai payments app, an e-commerce wallet powered by stablecoins that is widely used across Asia.　　The THT is pegged to the Thai Baht raising fears it could cause fragmentation of the Thai currency system should it attempt to compete with the central bank issued currency. Mr Pruettipong added:　　“Such usage would ultimately affect the general publics confidence in the stability of the national currency system, which is

2021-03-18Deep Dive

French retail giant will launch Tezos-based stablecoin

Groupe Casino, a 120-year-old retail company headquartered in France, will reportedly be launching a stablecoin pegged to the Euro.　　According to journalist Grégory Raymond, the French retail giant will be launching the stablecoin to use in its stores loyalty programs as well as for trading. Groupe Casino oversees more than 11,000 stores in France and Latin America.　　The coin has reportedly been developed using the Tezos protocol in partnership with crypto exchange Coinhouse, accounting firm PricewaterhouseCoopers, stablecoin infrastructure provider Sceme, research and development firm Nomadic Labs, and financial services group Societe Generale.　　Source: Grégory Raymond　　The new stablecoin, called the Lugh — named after a god in Irish mythology — will go by the ticker symbol EURL. The initial offering will reportedly include 500,000 coins available exclusively on Coinhouse for “a few months” until the test phase is complete, and then on other platforms.　　The Bank of France has been active in developing a stablecoin pegged to the euro. The country recently completed a pilot program for a digital euro issued from its central bank in December.　　As one of the Big Four accounting firms, PricewaterhouseCoopers, or PwC, has backed some projects in the crypto space related to stablecoins. Three years ago, the firm partnered with

2021-03-18Deep Dive

How Reliable Will Bitcoin Be As A Hedge Against Inflation?

Bitcoin has a limited supply of $21 million so it cant be printed to infinity like the dollar. Its price has risen dramatically over time and continues to do so. However, is it too new as an asset to be a reliable hedge against inflation？　　Gold has endured the centuries, holding its value through the most turbulent ups and downs of financial history. It is said that Bitcoin is digital gold and many investors are starting to see it as the safe haven in the digital world, just as gold is in the traditional world of finance.　　That being said, there are those that say that Bitcoin is just too young to be regarded in the same way as gold.　　In a Bloomberg article, Cam Harvey, Professor of Finance at Duke University, states that gold is also subject to short crashes. In actual fact, it has fallen 9% so far this year, and that in the face of expected rising inflation.　　However, he does add that Bitcoin appears to fluctuate wildly whether inflation is mentioned or not:　　“What‘s going to happen to Bitcoin？ It’s really unclear,” And “The price is not just driven by the money-supply rule, it‘s driven by other speculative forces. That’s

2021-03-18Deep Dive

Avant-Garde Painting to Be Sold With NFT-Backed Proof of Provenance

A 20th-century avant-garde artwork is being auctioned later this month, with the buyer to receive a certificate of authenticity in the form of a non-fungible token (NFT).　　According to a press release shared with CoinDesk on Wednesday, the auction is for a 1926 painting titled “Abstract Composition” by Ukraine-born Wladimir Baranoff-Rossine. The sale will take place on the Mark Cuban-backed NFT marketplace Mintable, which says it has been working closely with the artists family as part of a series of sales of his works.　　The artwork will be sold in its original frame, signed by the artist and with the NFT certificate that digitally verifies the artworks provenance and authenticity using blockchain technology.　　Additional sales, to be solely digital NFT representations of Baranoff-Rossines works, will be conducted via three auctions and six limited edition sales beginning March 25.　　Mintable CEO Zach Burks told CoinDesk via email the artists grandson had reached out to Mintable a few months ago seeking to use NFTs as a means to digitize the family legacy.　　Baranoff-Rossiné was a Ukrainian, Russian, and French painter, sculptor and inventor. He was part of the Cubo-Futurism movement before being swept up in Nazi persecution based on Jewish heritage which saw him transported to Auschwitz

2021-03-18Deep Dive

Why The Return Of High Inflation Can No Longer Be Excluded

The Covid-19 pandemic has caused worldwide economic devastation. In the EU and the United States, many early emergency measures sought to address the shortcomings and disorganization of health care systems. Other policy measures were textbook demand-management and liquidity-provision programs, not unlike those adopted during the 2008-2009 global financial crisis.　　While many economists called attention on the supply-side impact of a pandemic-driven economic crisis, policy measures implemented in 2020 mostly discarded this caveat. Assuming that the demand shock is much stronger than the supply shock, the fall in output could only be accompanied by stable or falling prices. This dominant mindset is summarized by economist Joseph Stiglitz, who in February 2021 referred to inflation as a “bogeyman that is more fantasy than real threat nowadays”.　　Given the current circumstances, central banks can and even should subordinate their action to whatever fiscal policy requires. And because a central bank is the lender of last resort, the government can spend what it takes to restore full employment, which is exactly what proponents of Modern Monetary Theory (MMT) assert.　　To be fair, in the last 25 years inflation has been remarkably low, not only in structurally crippled economies such as Japan, but also in dynamic economies that

2021-03-18Deep Dive

Bitcoin Volatility Index ‘BitVol’ Makes First Trade

A new bitcoin (BTC) “fear gauge” began trading last week. The T3i BitVol Index from T3 Index, a financial indexing firm, measures the 30-day implied volatility of bitcoin.　　The index offers cryptocurrency investors the ability to “trade volatility as a distinct asset class,” said Simon Ho, CEO of T3 Index.　　The BitVol index has settled around an annualized 100% after reaching a high near 170% on January 15, which preceded a roughly 20% price correction in bitcoin.　　Elevated volatility could be a signal of investor fear or uncertainty, while low levels of volatility signal investor complacency.　　The first options trade off the BitVol Index was initiated on March 10, consisting of a March expiry 1-by-2 call spread that was bought for zero cost, Bloomberg reported.　　The BitVol Index uses strike prices from tradable bitcoin options across various exchanges, a similar methodology applied by the Chicago Board of Trades (CBOE) VIX Index, which investors use to track volatility in the stock market.　　Other cryptocurrency volatility indices are widely tracked, such as the BitMEX Daily Historical Bitcoin Volatility Index (.BVOL24H).　　Chart shows the BitVol Index, a measure of bitcoin volatility, elevated around 100%.　　Source: T3 Index

2021-03-18Deep Dive

Putin Says Russia Must Stop Illegal Cross-Border Crypto Transfers

Russian President Vladimir Putin called for closer attention to the illicit use of digital assets during his meeting with the attorney generals office on Wednesday.　　Putin said Russia needs to “take additional measures to prevent illegal cross-border transfers of digital assets,” according to the transcript published on the presidents official website.　　“Criminal elements are using digital assets more and more often, and this what you should pay closer attention to, together with your colleagues from other law enforcement agencies, including Rosfinmonitoring,” Russias anti-money laundering agency, Putin said.　　Russias law on digital assets was signed in July and took effect in January 2021. It describes how digital tokens run by centralized entities must be issued. It also designates decentralized cryptocurrencies as property, which must be reported for tax purposes.　　Russian civil servants have been explicitly banned from owning crypto, according to the order issued by the countrys Ministry of Labour in January.　　The legal guidelines regarding crypto-related services has proven inconsistent in Russia, with the courts occasionally banning crypto-related websites, including the popular cryptocurrency exchange Binance.　　Russias central bank, in the meantime, has been actively exploring the prospect of launching a CBDC.　　Russias civil activists, including the prominent opposition leader Alexey Navalny. have been using cryptocurrencies to function

2021-03-18Deep Dive

Polkadot to Enhance Interoperability Between Networks by Releasing Decentralized Bridges

In an attempt to serve as the next generation of DLT, Polkadot has announced plans to establish decentralized and trustless bridges to enhance interoperability among various networks. Parity Technologies is developing the first generic bridge that will enable all Substrate-based chains to connect and communicate with each other.　　Polkadots Decentralized Bridges　　The blockchain project behind the sixth-largest cryptocurrency by market cap announced its latest developments in a press release shared with CryptoPotato.　　According to it, Polkadots initial design was to serve as an “underlying infrastructure to realize the kind of scalability and interoperability needed to enable the multichain future, allowing different chains to interact and communicate with each other within the ecosystem.”　　However, the statement outlined the existence of numerous networks outside the Polkadot system. Consequently, the team behind the project plans to develop cross-network bridges, which are “necessary to make Polkadot truly interoperable.”　　Such bridges typically fall under two categories – centralized and trusted or decentralized and trustless. Naturally, the centralized versions include a third party who operates the system, while in the decentralized option, there is no central authority to control it. With the latter, the interaction is “enforced by the technology (or incentive mechanism) behind the system rather than a promise or

2021-03-17Deep Dive