Bitcoin paper

2020-02-05 09:01:57 On Jan. 28 digital money platform Uphold introduced zero-commission trading on 30 cryptocurrencies, but only on through iOS and Android mobile apps.

According to Uphold CEO J.P. Thieriot, removing fees will ensure affordable access to cryptocurrency for millions of retail investors. He told Cointelegraph:

“Cryptocurrencies were one of the more expensive asset classes for retail investors to trade, with fees north of 200 basis points on some mainstream platforms. The goal here is to create something useful for people around the world and in everyday context, while differentiating us from our competitors. Ultimately, the internet of money is likely to evolve in ways that banks haven’t been able to do a good job with.”

Bloomberg also recently reported that zero-fee trading is coming to crypto, just as it has come to traditional exchange-traded funds and to online stock transactions. Global financial technology co-head at ConsenSys Lex Sokolin told Bloomberg:

“Free trading has become a feature of all fintech direct trading offerings, from Robinhood to SoFi and even JPMorgan. So it’s not surprising that in a digital race to acquire the most users, execution prices are starting to collapse.”

Yet without exchange fees, crypto companies will likely be earning smaller amounts of revenue. Thieriot is confident this model will be beneficial overall, though, saying:

“In moving to lower fees, Uphold expects the typical tradeoff between higher volume and lower margin. The good news is that unlike incumbent banks and brokerages, our cost structure is a fraction of theirs. We are crypto-native and technology-led, which imbues important structural advantages.”

Crypto companies aim to drive user adoption, but will this help?
While high interest rates and zero-fee trading, along with other features, are aimed to drive user adoption of cryptocurrencies, skepticism remains.

According to a new report entitled “Cryptocurrencies and the Future of Money” published by IE University’s Center for the Governance of Change (CGC), existing cryptocurrencies have failed to achieve the objectives envisioned by their pioneers, and are in general not considered as money.

Research Director at the IE Center for the Governance of Change, Mike Seiferling, said:

“Although innovations are making digital currencies more realistic candidates to replace traditional money and create benefits for users across large volumes of transactions, our research suggest that cryptocurrencies still have a long way to go before they can compete, let alone or overtake, traditional forms of money backed by central and commercial banks.” Open / Comment

2020-02-05 09:01:57 Cryptocurrency exchange Deribit recently published an analysis explaining that cryptocurrency companies are racing to adopt financial services known from legacy finance.

The post points out that all crypto companies, exchanges included, will soon offer users interest accounts, cost-effective ways to perform transactions, and tax services. Throughout his post, he explains why these features, along with others, will become a standard offering for exchanges in the next 2 years.

Adoption is well underway
The crypto community is already seeing a number of companies adopt features that traditional financial institutions offer. The only difference is that many of these companies are making these features more appealing to their customers, in ways that banks cannot or will not..

The crypto lending platform Celsius, for example, recently began to offer users outside of the US and Japan up to 8.1% APR on bitcoin deposits at its highest loyalty level. While the majority of traditional banks have savings accounts and loyalty programs that allow investors to earn interest, most offer much lower rates than what Celsius will provide.

According to Celsius CEO Alex Mashinsky, it has become difficult to earn yield on crypto today due to the rise of crypto-lending platforms. As a result, he is attempting to increase investor returns with higher interest rates that are paid out in Celsius’s CEL token. Mashinsky told Cointelegraph:

“To boost the yield we wanted to do something other than paying bitcoin on bitcoin, so we’ve decided to pay in our CEL token. We also have a loyalty program with different tiers to show how much interest users will receive. Basically, we are convincing people to join Celsius by paying them more.”

And much like traditional banks, Celsius will also offer compounding interest on crypto deposits, joining the likes of Nexo and DeFiprime.

Crypto-lending startup BlockFi also recently announced that users can earn compounding interest on and trade loans backed by assets. BlockFi’s initial annual percentage yield on the assets will be 8.6% for Coinbase’s USDC stablecoin and 3.78% for litecoin.

Founder of TechCrunch and hedge fund Arrington XRP Capital, Michael Arrington, noted that higher interest rates are already driving adoption. He told Cointelegraph:

“I know of first-time crypto users who are buying stablecoins to get higher interest rates than they normally would be able to with fiat.”

Arrington sees great potential for crypto-lending companies, as the entire crypto loaning industry is estimated to be worth $4.7 billion. Arrington said:

“Keep a close eye on crypto-lending companies that are experiencing rapid growth with compelling interest earning rates and low cost loans for crypto and digital dollars, aka stablecoins. We're seeing growth trajectories in the sector that mirror some of the most successful fintech companies' like PayPal's early days.”

Although these rates are much higher than what traditional banks offer, crypto-lending platforms typically only offer collateral backed loans. According to Credit Karma, collateral backed loans in general are risky due to shorter repayment periods and the possibility of losing the collateral if the loan is not paid back as agreed.

Arrington explained that the sector is growing rapidly nevertheless, saying:

“Leveraging blockchain payment rails instead of the traditional banking system creates an opportunity for firms to distribute a banking app at the same speed and scale as Uber. Traditionally this wasn't possible because local partnerships were needed for every market that financial companies operated in - crypto fundamentally changes the game.”

Crypto companies are getting rid of fees
Another major innovation being made by crypto companies is the removal of exchange fees, which have been roundly criticized as too high. Traditional banks are also famous for hitting users with costly fees. According to a recent MyBankTracker study, the average checking account fee per month at leading US banks is $9.60. Open / Comment

2020-02-04 13:27:47 “We collaborated on a project with Bitmain a few years ago, but there is no relationship with the company today. We would like to have them sell their miners through us, though.”

Is BitPay gearing up to become PayPal 2.0?
Support for more cryptocurrencies and a possible integration with the Lightning Network may have some thinking that BitPay is positioning itself to become the next PayPal for cryptocurrencies.

While this may be, the company has — like PayPal — been criticized for restricting payments in a few instances. A $100,000 donation to an Amazon rainforest charity was reportedly blocked by BitPay last August. The reason being was that charity organization, known as Amazon Watch, failed to meet BitPay’s internal standards.

Last September, the Hong Kong Free Press also complained that BitPay was holding donor funds for weeks.

Pair explained that the Hong Kong Free Press didn’t have their bank account set up correctly and that there were additional steps needed to be taken before transactions could be made. He said:

“We have a tiered system at BitPay that starts with minimal documentation and then more documentation along the way. Often times things like this happen because companies haven't gone through verifications or gotten approved for higher tiers.”

Pair also mentioned that BitPay takes regulations very seriously and that the company is fully compliant with U.S. regulations.

According to Pair, being compliant in the U.S. is a main reason merchants choose to use BitPay over other service providers. “Some competitors haven’t thought through the full payment experience from a merchants perspective,” he said. Pair also attributes good customer support and e-commerce tool integrations as reasons for BitPay’s success.

Although BitPay may have all the elements required to become the next PayPal, increased user adoption of cryptocurrencies is the next step. In the meantime, Pair noted that BitPay’s goal is to reach the point where people naturally expect to have the option to pay with cryptocurrencies wherever they go. He said:

“Once you achieve that level of ambiguity, you will be able to spend cryptocurrency easily. The missing link now is embedding it, which is not something that will happen overnight. Rather, this will happen like the evolution of the internet — I think we’ll see a similar story around blockchain payments.” Open / Comment

2020-02-04 13:27:47 BitPay CEO: Platform Will Support More Cryptocurrencies and Possibly Lightning Network

During an exclusive interview with Cointelegraph, BitPay CEO Stephen Pair said that the platform would soon add support for more cryptocurrencies, along with a possible Lighting Network integration.

While Pair was unable to disclose which cryptos would be added to the platform next, he mentioned there’s focus on the top performing blockchains with the highest market capitalization. He said:

“I’m not going to specifically name which ones we will add, but you can look at CoinMarketCap to see all the top blockchains and come up with good guesses in what we are interested in. We are looking at cryptocurrencies that have adoption, and work well for payments. We also might add some smaller ones that aren't as adopted, but are doing something innovative around payments.”

BitPay, which has been operating since 2011, has become a leading Bitcoin payment service provider. According to Pair, the company conducts over a billion dollars a year in payment volume and has about 30 thousand active merchant accounts. Major enterprises like AT&T and Microsoft also use BitPay to allow customers to make transactions using cryptocurrency.

While BitPay is well-known for accepting Bitcoin (BTC), Bitcoin Cash (BCH) and Ether (ETH) for online and in-store payments, Pair has noticed that customers are requesting different cryptocurrencies to be used for transactions, noting:

“We constantly get asked about XRP and a number of stablecoins. Our customers would prefer that we support all cryptocurrencies, but we have to make choices.”

BitPay recently added support for XRP, the cryptocurrency used by Ripple’s payment network. BitPay’s CMO, Bill Zielke, said that BitPay merchants everywhere are now able to accept XRP without any additional integrations required.

BitPay also supports 3 stablecoins pegged to the U.S. dollar – USD Coin (USDC), Gemini Dollar (GUSD) and Paxos Standard Token (PAX). The platform, however, has been criticized for not supporting Tether (USDT), which is the stablecoin with the biggest trading volumes.

Pair explained that BitPay hasn’t seen strong demand for Tether. Moreover, he noted that the current speculation around Tether has left the company hesitant to add it.

BitPay considers adding support for the Lightning Network
Pair also mentioned that the Lighting Network is “high on our list for what we are considering adding to the platform.”

The Lightning Network adds an additional layer to Bitcoin’s blockchain, enabling users to create payment channels between any two parties on that extra layer. This ensures almost instant transactions, with extremely low or even non-existent fees. Pair explained:

“The whole idea of the Lightning Network is to allow payments to happen off the blockchain so they don't take up space and storage, letting them achieve higher scalability.”

About a year ago, a conversation regarding if and when BitPay would add support for the Lighting Network took place on Reddit. And although it would appear that some users are anxious for the integration, there is still debate that onchain Bitcoin transactions are better than lightning transactions.

Pair, however, told Cointelegraph that the most important aspect for BitPay is listening to customer feedback. He said:

“If our customers are asking for lightning payments, or Bitcoin cash payments, or XRP, then that's what matters to us. It’s perfectly reasonable for someone to perform lightning transactions on top of Bitcoin Cash or other Bitcoin-like blockchains.”

Bits of BitPay and Bitmain?
It’s also noteworthy to mention that BitPay had plans to form a partnership with Bitcoin mining company, Bitmain, in 2017. The agreement would have allowed BitPay to help Bitmain develop open source blockchain security software.

While a partnership between BitPay and Bitmain was established, Pair mentioned that there is no current relationship between the two companies. He said: Open / Comment

2019-10-31 17:04:51 Last week, Bitcoin (BTC) suddenly shot higher, surging from $7,300 to $10,500 in under 24 hours’ time in a monumental move. One minute, the cryptocurrency was down in the doldrums; the next, it was trading sky-high in a move that the optimists said would lead to a rally to $20,000 and beyond.

Despite the lofty sentiment, Bitcoin has cooled since then. As of the time of writing this article, the cryptocurrency is trading at $9,000 — some 15% lower than the recent high — and seems poised to break down further over the next couple of days.

One analyst has gone as far as to say that unless BTC clears the $10,300 region, which is an important historical level, there is no need to get too excited. In fact, he went as far as to say that the recent move is “just a bearish retest,” and that “new local lows” are still on the table.

But a key technical pattern that may indicate that the long-term Bitcoin bull case is back on is poised to form in the coming weeks, something that may fuel investors leaning long on digital assets.

Impending Bitcoin Signal Implies Long-Term Uptrend Forming
Trader and CoinTelegraph contributor FilbFilb recently noted that while analysts are making much ado about a death cross, investors should not be worried about Bitcoin’s prospects.

He argued in a recent Twitter thread that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses. As Filb’s chart below depicts, the last time the 50-week crossed above the 100-week, Bitcoin rallied for months straight, surging to fresh highs month in, month out. Historical precedence would suggest the same is about to happen… again. Open / Comment

2019-10-25 20:58:38 Bitcoin Transferred a Giant $11 Trillion Since 2009, New Data Reveals

Bitcoin (BTC) has transferred $11 trillion in wealth since its blockchain first went live in 2009, according to the fresh calculations.

Bitcoin “going strong” at $9.6 billion per day
Uploaded to social media by analyst PlanB on Oct. 24, the latest buoyant statistics for Bitcoin show the largest cryptocurrency is still beating out fiat competitors.

At present, the network is processing around $9.6 billion every day. At that rate, Bitcoin passes PayPal’s annual transaction volume — $578 billion for 2018 — in just two months.

PlanB used his Bitcoin full node to verify the transaction data. The numbers underscore the continued interest in Bitcoin, coming despite the bearish price action in the second half of 2019.

Can BTC overtake Visa and Mastercard in ten years?
Its ability to beat out major fiat alternatives including Visa and Mastercard is meanwhile nothing new. As Cointelegraph reported, in April, new research even suggested that Bitcoin could overtake the fiat payment heavyweights by 2029.

“In just 10 years, Bitcoin has managed to compete with the leaders of the payment system industry. Bitcoin’s development is occurring exponentially,” analysis firm DataLight concluded at the time.

In the future, as the development of off-chain scaling solutions such as the Lightning Network brings new advances, less and less activity in Bitcoin will occur on the blockchain. This, commentators note, should ensure current block sizes cope with demand.

Earlier this month, Samson Mow, CSO of Bitcoin technology company Blockstream, suggested that there is already more than enough spare capacity in Bitcoin. Open / Comment

2019-10-24 21:23:33 ​​Bitcoin Hash Rate Record Highs Show Miners Are Long-Term Bullish

Bitcoin (BTC) continues to set new records for its network hash rate this month, a sign that miners have shaken off weak price performance.

Hash rate hits all-time highs in October
Data from monitoring resource Blockchain confirmed hash rate hit 114 quintillion hashes per second on Oct. 23.

This is the largest reading ever and echoed by others such as BitInfoCharts, which recorded an all-time high of just over 110 quintillion at the same time. Coin Dance numbers put the all-time high of 134 quintillion occurring on Oct. 10.

Due to it being impossible to measure hash rate exactly, all charts are estimates that rely on the previous period’s block times.

Hash rate refers to the overall computing power involved in validating transactions on the Bitcoin blockchain. More power suggests greater network security, as well as interest in the profitability potential of Bitcoin mining.

In other words, miners are anticipating higher Bitcoin prices in the future.

Miner profitability being tested with the latest price drop
As Cointelegraph reported, the network hash rate appeared to experience volatility last month, with Blockchain’s reading falling 40% in one day before analysts explained the statistics did not imply miners were deserting Bitcoin.

Nevertheless, the mounting hash rate in the face of a falling Bitcoin price underscores their dedication to investing in the industry — and its future profitability. Mining giant Bitmain, for example, this week launched what it calls the “world’s largest” mining farm in Rockdale, Texas.

On the other hand, the profitability metric is, in fact, approaching its lowest in 12 months, with one miner telling Cointelegraph that $6,500 is a floor price to maintain profitability for participants. Pass it, and Bitcoin then could see a reduction in hashing power, as miners may choose to turn off their rigs until difficulty adjusts and/or prices recover.

According to investor Dovey Wan, Bitmain’s Antminer S9 mining rig model — one of the most popular miners int he world — is already in the red at current prices, even before miscellaneous costs such as electricity are taken into account.

Therefore, it remains to be seen if the latest drop in Bitcoin price will have a negative impact on the hash rate.

All eyes on block reward halving
From May 2020, miners will compete for half as many new Bitcoins per new block as now — 6.25 BTC instead of 12.5 BTC.

With the equivalent of up to $63 million unavailable each week, commentators widely expect the block halving event to dramatically boost the Bitcoin price. Open / Comment

2019-10-23 20:52:27 Litecoin Foundation Pitches Opt-In MimbleWimble Via Extension Blocks

The Litecoin Foundation has published two new draft Litecoin Improvement Proposals that work toward establishing privacy features for the network.

On Oct. 22, the Foundation shared links to details of the draft proposals on GitHub: LIP-0002 EB and LIP-0003 MW.

Protecting Litecoin’s functional fungibility from government
As the Foundation outlines, both proposals are targeted at mitigating the privacy risks associated with a transparent ledger, where transaction history can be publicly traced.

The proposal’s authors — Andrew Yang, David Burkett and Charlie Lee — argue that this transparency hinders Litecoin’s “functional fungibility in a government-regulated merchant world,” observing that:

“Personal identifiable information collected from IP address, exchanges, or merchants can be leaked then tied to your addresses. Also services, such as chain analysis, provide risk-scores based on whether or not any addresses that they have blacklisted appear in its transactional history. This results in some businesses treating these coins as ‘tainted’ and then sending them back to the owner, or worse yet, shutting down their account.”

To solve this, the Foundation is working on the integration of the scalability- and privacy-focused Mimblewimble protocol — named after a fictional tongue-tying curse from the popular Harry Potter novels.

Mimblewimble is in part a variant of the cryptographic protocol known as Confidential Transactions, which allows for transactions to be obfuscated yet verifiable so as to achieve both heightened privacy and the prevention of double-spending.

Privacy-supporting protocol development
For these specific proposals, the authors envision implementing MimbleWimble as an opt-in new transaction format through “extension blocks” (EBs). These EBs run alongside main chain canonical blocks, at the same interval of 2.5 minutes on average.

The documents outline the functioning of this opt-in integration and the effects it has for transaction privacy, and exactly how the proposals tackle the interaction between coins in the EBs and the canonical blockchain.

As previously reported, the privacy-centric cryptocurrency Grin (GRIN) underwent its first network hard-fork this summer to introduce tweaks to its consensus algorithm in order to achieve greater resistance to ASIC miners.

Yesterday, Cointelegraph reported on comments from the CEO of crypto transaction tracking firm CipherTrace, who argued that the Financial Action Task Force’s crypto regulations will trigger a shift of criminal activity away from Bitcoin (BTC) and toward privacy coins. Open / Comment

2019-09-30 21:43:43 Binance Becomes Tron’s Top ‘Super Representative’, Adds TRX Staking Support

Major cryptocurrency exchange Binance has become the highest-ranked “Super Representative” (SR) in the Tron (TRX) ecosystem.

According to Tronscan’s data on Sept. 30, Binance acquired over 12 billion votes for the top-spot ranking. Blockchain community Sesameseed.org is now the second-largest SR, Tron-based BeatzCoin — in third place.

Binance announces TRX staking support
On Sept. 30, Binance revealed that it would add support for TRX staking starting Oct. 1, with initial estimation of rewards to be calculated through Nov. 1 and subsequently distributed before Nov. 5. The system will then continue on the same basis monthly, per Binance’s website.

The development follows the exchange’s recent launch of dedicated staking services last week, which enable Binance users to deposit their token holdings and earn staking rewards, but without having to set up their own nodes to fulfill minimum staking amounts and/or time lengths.

Binance freezes 12B TRX, taking ⅙ supply out of circulation
BeatzCoin COO Misha Lederman noted in a tweet on Sept. 29 that Binance has essentially frozen 12 billion TRX, taking 1/6 of the coin’s supply out of circulation.

The exchange’s ascendancy to top SR has sparked avid debate amid a small group of crypto Twitterers.

While Lederman appears to view Binance’s prominent position in the ecosystem and token lock-up as a potentially bullish development for TRX’s price, others have expressed some concern as to the implications of a leading industry player “buying-out” the top spot.

At press time, TRX is 14th largest cryptocurrency by market capitalization, seeing a price hike of almost 6.5% on the day, according to Coin360 data.

Earlier this month, Tron founder and CEO Justin Sun announced a new plan for TRON's proof-of-stake mechanism focused on the promotion of “a fair, decentralized distribution of staking revenues” to bolster user participation and engagement from industry players such as exchanges, wallets and partners.

The CEO has also revealed plans to imminently reschedule his highly-anticipated charity lunch with Berkshire Hathaway chairman and arch Bitcoin skeptic Warren Buffett.

Sun had won a charity auction on eBay in June to have lunch with Buffett and his own choice of guests, with a winning bid of $4,567,888 — the highest bid in the event’s 20-year history. Yet just days before the high-profile event he was forced to postpone for medical reasons. Open / Comment

2019-09-25 21:48:28 Fold App Raises $2.5M to Bring Bitcoin Lightning Payments to Starbucks

The Fold app, a mobile shopping app that supports Bitcoin’s Lightning Network enabling users to withdraw funds to an external Bitcoin (BTC) wallet, has raised $2.5 million and added a fiat currency payment option.

In a Sept. 25 blog post, Fold’s editor, Will Reeves, informed the public that the app’s users can now spend both fiat currency and Bitcoin at online and in-store retailers by synchronizing their credit card or Lightning wallet.

Fold has also enabled its users to stack sats when making purchases with fiat and Bitcoin at major retailers such as Amazon, Uber, Starbucks and Hotels.com, further rewarding users for shopping in Bitcoin.

Moreover, Fold revealed new partnerships with investors such as venture capital funds Craft Ventures, Goldcrest Capital, Slow Ventures, Fulgur Ventures and digital asset management firm Coinshares, which resulted in a $2.5 million contribution towards further development.

Other crypto rewards projects
Earlier this year, another Bitcoin rewards shopping app Lolli teamed up with major American grocery chain Safeway and pet retailer Petco to give customers 3.5% back in BTC on all their purchases. The company also added major booking service Hotels.com to its list of supported merchants.

Meanwhile, American Express is also looking to achieve with its Hyperledger-based rewards platform, which is geared toward enabling partner merchants to create customized rewards offers for the financial corporation’s clients.

Crypto payments gain traction
Cryptocurrency payments are gradually becoming mainstream when it comes to the retail sector. The Kaspersky Lab Global IT Security Risks Survey, published in February, reported that a respectable 13% of more than 12,000 consumers across 22 countries had used cryptocurrency to pay for their online purchases.

By early 2020, support for Bitcoin payments will be purportedly launched at over 25,000 sales points for 30 French retailers, including sportswear giant Decathlon and cosmetics store Sephora. Open / Comment