Posts by CryptoDude

    Overstock CEO Electrifies at Investment Bank Oppenheimer's Blockchain Event

    Patrick_Byrne_Oppenheimer_conference_3.jpg

    “Warning! This is all risky, it may all fail.”

    That was how Patrick Byrne, CEO of Overstock, concluded his keynote about investing in blockchain at a Wednesday event in New York hosted by investment bank and brokerage Oppenheimer & Co.

    Unusually formal in a suit and tie, Byrne electrified what had until that point been a fairly low-key crowd with his well-honed stump speech for blockchain’s transformative potential.

    Oppenheimer clients filled more nearly 150 seats and were enthusiastically taking pictures of Byrne’s slides illustrating his vision of the most promising applications of blockchain.

    He opened his presentation by providing a brief overview of traditional securities trading and its pitfalls – highlighting, as he has been wont to do for years, the fact that due to the arcane structure of today’s market, the ownership of stocks is indirect and somehow dubious.

    In one of many lines to draw laughs from the crowd, he said:

    “All the corporate shares in America are owned by the company called Cede & Co, and what you actually have is a contractual claim against a corporation, that has a contractual claim against another corporation, that has a contractual claim against DTCC, that has a contractual claim against Cede & Co. What can go wrong?”

    Byrne went on to proclaim that blockchain, by improving transparency and minimizing the need for trust, can bring capital markets to the state where “all kinds of systemic risks go away,” as people cannot meddle with the process or act dishonestly.

    “Imagine we have a magic ledger which is cryptographically protected, public and transparent – no way to cheat,” he mused, provoking a few more chuckles in the room.

    ‘SEC-conscious’

    Reiterating his estimation that in the course of the next decade all types of securities can be tokenized, bringing a potential value of new blockchain securities of $914.4 billion, Byrne turned to Overstock’s favorite child: the security token trading platform tZERO, which officially launched this year (though trading there so far has been slow and limited to Wall Street hours.)

    The market structure concerns mentioned are what led to the development of tZERO over the past four years, he said, noting that despite these issues, the company was still developed in accordance with U.S. regulations.

    Overstock’s team – and that of Medici Ventures, Overstock’s venture arm – has always been cautious and “SEC-conscious” developing tZERO, Byrne emphasized, and the startup even “bought a piece of Wall Street” in the form of fintech company SpeedRoute, which was acquired in 2015.

    The process has been slow, though steady.

    “In December 2015, we applied to issue a public blockchain security — it took one year and $10 million of legal wranglings [but] we issued it,” he said.

    Moreover, he wants to continue to focus on building tZERO out without violating either these regulations or otherwise harming his potential users, Byrne said, concluding:

    “We’re not going to Mt Gox things.”

    Patrick Byrne at the Oppenheimer conference, photo by Anna Baydakova for CoinDesk

    Source: https://www.coindesk.com/overs…utional-crypto-conference

    Galaxy Digital Joins $15 Million Investment Round in Crypto Security Firm CipherTrace

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    Source: https://cointelegraph.com/news…security-firm-ciphertrace

    Spain's Largest Telecom Company Seeks Entrepreneurs in Blockchain, AI

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    Source: https://cointelegraph.com/news…preneurs-in-blockchain-ai

    Crypto Markets Trade Sideways After Recent Gains, Stock Market Sees Green

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    Source: https://cointelegraph.com/news…s-stock-market-sees-green

    First Pension Funds Investing in Crypto — a Sign of Things to Come?

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    Positive moves are being made for investor sentiment in the cryptocurrency space despite a year-long bear market.

    This comes after $40 million was raised by cryptocurrency investment firm Morgan Creek Digital, which is headed up by its founder, Anthony Pompliano. The crypto-focused hedge fund is part of Morgan Creek Capital, which manages over $1 billion in assets.

    While the capital raised isn’t record-breaking, the move garnered interest because a portion of the funds come from two of three benefit plans from Fairfax County’s Retirement Systems (FCRS) in the state of Virginia. The news is being hailed as the first time a United States pension fund has directly invested into cryptocurrency assets.

    The firm had initial set its fundraising target at $25 million, but a surge in interest from investors saw the cap raised to $40 million. These funds will be used in the newly launched Morgan Creek Blockchain Opportunities Fund.

    Undaunted

    After the lofty highs of 2017, the cryptocurrency markets have endured a humbling and ongoing price correction. As a result, investors have been far more cautious about throwing capital into the space, having been burned by the current bear market.

    Considering this fact, the move by Morgan Creek Digital is a positive sign for the cryptocurrency ecosystem amid a testing 12 months.

    Cointelegraph spoke directly to Pompliano to unpack some of the details around the fund, how it managed to seal investment from pension schemes, and the challenges of managing a crypto investment firm during trying marketing conditions.

    Firstly, working to secure funding from the Fairfax County Police and Employee’s pension plans was a process that didn’t happen overnight. As Pompliano told Cointelegraph, a lot of work had to be done to ensure the fund managers that the investment was the right move:

    “Institutional investors are still getting comfortable with digital assets in general. It took a lot of education and time to ensure these investment professionals understood what the pros and cons were. Additionally, the CIOs [chief investment officers] are intelligent people who have the courage to be first.”

    This seems to be the greatest hurdle for cryptocurrency investment, given the bad run in the markets and the association of volatility within the space. Patience, Pompliano suggests, is a key factor for the future of the markets:

    “More investors will gain familiarity with digital assets over time, which ultimately leads to comfort. As investors get comfortable, they’ll begin investing more capital in the space.”

    Perhaps the biggest victory is the fact that the digital asset fund secured investment from pension funds, which are by nature conservative, in order to ensure the provision of income for beneficiaries at retirement.

    Contrary to the perception that Bitcoin is a highly volatile asset, Pompliano insists that the cryptocurrency meets the criteria of an asymmetric return profile — meaning the potential upside of the investment outweighs the potential downside risk:

    “Bitcoin is a non-correlated asset with an asymmetric return profile. This is the holy grail for an institutional investor.”

    When asked if the prospect of investing money into a crypto-focused fund was a daunting task, Pompliano said that the firm was well aware of the risks associated and took on a manageable amount of capital:

    “We set out to raise a $25M fund and oversubscribed it to $40M. We only took the money that we felt we could deploy in an intelligent, risk-mitigated way.”

    Fairfax reassure pension beneficiaries

    Following headlines drumming up the investment move last week, the Fairfax County Retirement Systems sent out an official statement to allay concerns of some investors on Feb. 14.

    Naturally, some people were disconcerted by the move, given the length of the bear market and perceived volatility of cryptocurrency markets over the past 12 months.

    According to Jeff Weiler, executive director of FCRS, the Employees’ Retirement System contributed $10 million to the fund, which amounts to just 0.3 percent of the system’s total assets.

    The Police Officers Retirement System invested $11 million into the fund, which equates to 0.8 percent of that department’s total assets.

    Furthermore, Weiler made it clear that the investments were not singularly focused on Bitcoin:

    “At least 85% of the Morgan Creek Blockchain Opportunities Fund will be invested in blockchain technology firms. As such, this is very similar to other private equity investments made by Fairfax’s three retirement systems. No more than 15% of the funds will be invested in actual cryptocurrencies and, to-date, the Fund has no exposure to any cryptocurrencies.”

    Weiler also assured beneficiaries that significant research went into the move, involving staff, board members and Morgan Creek. County attorneys and outside parties were also consulted in the drawing up of investment contracts.

    However, the parting shot of the release reminds people of the inherent risk of investments and the reality of the space. As Weiler explains, risk was mitigated by the actual amount of money that was invested into the fund:

    “All investments involve risk and this investment is no different. However, as they would do with any investment, Fairfax’s investment team determined that the expected returns from this investment were in line with the level of risk incurred. This also played a big part in how much was invested.”

    Cointelegraph reached out to Weiler for further comment, who noted that some beneficiaries of the fund had raised concerns about the move, which led to the full statement released last week.

    When asked if he expected other governmental pension funds to look to invest in the space, Weiler replied that ‘he had no idea’.

    Interestingly, the executive director also said that the Fairfax County in-house investment team was responsible for finding the investment opportunity, as opposed to Morgan Creek approaching the department for funding.

    Setting a new precedent?

    As reported by Cointelegraph last week, the Global Blockchain Business Council (GBBC) released results of an ongoing survey that suggests that 41 percent of participating institutional investors would look to put funds into digital assets in the next five years.

    This survey was carried between December 2018 and January 2019, and 71 global institutional investors took part, which included private equity, hedge funds and pension funds.

    Furthermore, digital asset management fund Grayscale Investments released their latest quarterly results, which suggests that the amount of funds coming from institutional investors into the crypto markets is on the rise.

    Their data shows that institutional investors accounted for 66 percent of funds raised in the last quarter of 2018, while the effect of the bear market has investors looking at making moves in the long term.

    Investor Profile by Type

    In October 2018, financial services giant Morgan Stanley went as far as releasing a report that labelled cryptocurrencies as a new institutional investment class.

    Retail Investors Stay Put as Institutional Investors Get Involved

    As Pompliano suggested in his response to Cointelegraph, time will be the ultimate test for institutional investors becoming more willing to invest in the crypto space.

    These first few steps are perhaps the most important then, as a select few institutions blaze the trail and invest a small, but important amount of capital in a sector that has the potential to grow exponentially.

    Source: https://cointelegraph.com/news…-a-sign-of-things-to-come

    Stablecoins to Play Key Role in Crypto Adoption, Says New Report

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    Source: https://cointelegraph.com/news…-adoption-says-new-report

    Coinbase Adds Bitcoin Cash Support to Wallet App

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    <\>","active":1,"created_at":"2015-01-22 09:14:30","updated_at":"2018-11-02 15:30:19","deleted_at":null,"default_language_id":1,"timezone":"Europe\/London","robots":"User-Agent: *\r\nDisallow: \/embed\/post-sidebar\/ \r\nDisallow: \/embed\/post-recomend\/\r\nDisallow: \/adbutler\r\nDisallow: \/marketcap\r\nDisallow: \/search?query=*\r\nSitemap: https:\/\/cointelegraph.com\/sitemap.xml ","in_menu":null,"domain_url":"cointelegraph.com","game":0,"default_language":{"id":1,"title":"English","short":"en","name":"English","code":"en","date_format":"%b %d, %Y","locale":"","flag":"\/assets\/img\/flags\/languages\/16\/English.png"},"region_contacts":[{"id":1,"operator_id":14763,"email_main":null,"facebook_url":"https:\/\/www.facebook.com\/cointelegraph","twitter_url":"https:\/\/twitter.com\/cointelegraph","google_plus_url":"","linkedin_url":"","vk_url":"","active":1,"region_id":1,"language_id":1,"created_at":"2015-03-20 09:21:29","updated_at":"2018-11-21 11:51:45","deleted_at":null,"youtube_url":"https:\/\/www.youtube.com\/channel\/UCRqBu-grVX1p97WaX4d-OuQ","tumblr_url":"","soundcloud_url":"","telegram_url":"https:\/\/telegram.me\/cointelegraph","subscribe_facebook_url":"https:\/\/www.facebook.com\/cointelegraph","subscribe_twitter_url":"https:\/\/twitter.com\/cointelegraph","subscribe_google_plus_url":null,"subscribe_linkedin_url":null,"subscribe_vk_url":null,"subscribe_youtube_url":"https:\/\/www.youtube.com\/channel\/UCRqBu-grVX1p97WaX4d-OuQ","subscribe_tumblr_url":null,"subscribe_soundcloud_url":null,"subscribe_telegram_url":"https:\/\/telegram.me\/cointelegraph","subscribe_rss_url":null,"baidu_url":null,"weibo_url":null,"wechat_url":null,"qq_url":null,"line_url":null,"subscribe_baidu_url":null,"subscribe_weibo_url":null,"subscribe_wechat_url":null,"subscribe_qq_url":null,"subscribe_line_url":null,"count":4,"socials":{"subscribe_facebook_url":{"icon":"ct-icon ct-icon_social-facebook-f","title":"Region facebook url","gtm-class":"gtm-icon-fb-news","gtm_class":"gtm-icon-fb-news","url":"https:\/\/www.facebook.com\/cointelegraph"},"subscribe_twitter_url":{"icon":"ct-icon ct-icon_social-twitter","title":"Region twitter url","gtm-class":"gtm-icon-tw-news","gtm_class":"gtm-icon-tw-news","url":"https:\/\/twitter.com\/cointelegraph"},"subscribe_youtube_url":{"icon":"ct-icon ct-icon_social-youtube","title":"Region youtube url","gtm-class":"gtm-icon-yt-news","gtm_class":"gtm-icon-yt-news","url":"https:\/\/www.youtube.com\/channel\/UCRqBu-grVX1p97WaX4d-OuQ"},"subscribe_telegram_url":{"icon":"ct-icon ct-icon_social-telegram-plane","title":"Region telegram url","gtm-class":"gtm-icon-tg-news","gtm_class":"gtm-icon-tg-news","url":"https:\/\/telegram.me\/cointelegraph"}}},{"id":2,"operator_id":2,"email_main":null,"facebook_url":"https:\/\/www.facebook.com\/cointelegraph","twitter_url":"https:\/\/twitter.com\/cointelegraph","google_plus_url":"","linkedin_url":"","vk_url":"vk.com\/cointelegraph","active":1,"region_id":1,"language_id":3,"created_at":"2015-03-20 09:25:58","updated_at":"2015-03-20 09:25:58","deleted_at":null,"youtube_url":null,"tumblr_url":"","soundcloud_url":"","telegram_url":"","subscribe_facebook_url":null,"subscribe_twitter_url":null,"subscribe_google_plus_url":null,"subscribe_linkedin_url":null,"subscribe_vk_url":null,"subscribe_youtube_url":null,"subscribe_tumblr_url":null,"subscribe_soundcloud_url":null,"subscribe_telegram_url":null,"subscribe_rss_url":null,"baidu_url":null,"weibo_url":null,"wechat_url":null,"qq_url":null,"line_url":null,"subscribe_baidu_url":null,"subscribe_weibo_url":null,"subscribe_wechat_url":null,"subscribe_qq_url":null,"subscribe_line_url":null}]}>\>

    Source: https://cointelegraph.com/news…ash-support-to-wallet-app

    Ongoing Economic Crises in Venezuela and Beyond Show That the Idea of Bitcoin as a Store of Value Is Increasingly Catching On

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    Just when it seemed like the economic and political situation in Venezuela couldn't get much worse, it has. Back in December, the Venezuelan bolívar witnessed its peak annual inflation rate for 2018, with this rate coming in at a dizzying 80,000 percent, according to the calculations of Steve Hanke of John Hopkins University. However, with the United States' imposition of sanctions against Venezuela's state-owned oil company on Jan. 28, and with Juan Guaido self-declaration as interim president of the South American nation on Jan. 23, this already dire situation has only deteriorated further. Yearly inflation has now reached around 139,000 percent, and Venezuelans have found it even more difficult to buy basic necessities.

    Cointelegraph has already shown in a 2018 article how Venezuela's recent plight resulted in a surge in popularity of Bitcoin and other cryptocurrencies, while data from Coin Dance reveal that over 35,000 Bitcoin (worth around $127 million at today's prices) was traded for bolívar on the LocalBitcoins crypto exchange over the entire course of last year. However, even if it’s only two months into 2019, the new year has brought new peaks of trading activity for Bitcoin and the Venezuelan bolívar, with the weekly LocalBitcoins totals for the first two weeks of February — 2,004 and 2,454 — exceeding anything seen in any month of 2018.

    Weekly LocalBitcoins Volume

    Source: Coin.dance

    Venezuela's increasingly fragile circumstances have therefore provided further confirmation of the strong link between imperilled economies and crypto adoption, yet this link also finds confirmation from other nations facing similar, if not quite as acute problems. Turkey, Iran, Nigeria and India have all faced economic or inflationary pressures over the past year, and a growing number of their citizens have adapted to such pressures by turning to crypto. And while their use of cryptocurrencies isn't on the level of Venezuela's, there has been a noticeable growth in recent months, indicating that the idea of using Bitcoin and other coins as alternative stores of value is gradually taking root in their societies.

    Venezuela

    Venezuela

    In the first month of 2018, some 807 Bitcoin was traded for bolívar on the LocalBitcoins exchange. In the first month of 2019, this number hit 6,347, rising to 10,805 if you happen to add the first two weeks of February (according to the most current Coin Dance data).

    Given that the total for all of 2018 was 35,000, it's clear that Venezuela is on its way to hitting a new national record for Bitcoin trading, especially in light of how the U.S. has stepped up its economic war against the socialist government of Nicolas Maduro. The United States’ most recent sanctions prevent the state-owned oil company — Petroleos de Venezuela, S.A. (PDVSA) — from accessing $7 billion in assets it holds in America, while also stopping all sales of oil to the U.S., a market worth around $11 billion a year to PDVSA.

    As a result, the Venezuelan bolívar is likely to lose even more of its dwindling value, given that the government will have to finance more of its growing debts by printing larger quantities of the national currency. And as happened in 2018, the deepening of this crisis is on course to strengthen the reliance of Venezuelans on Bitcoin and other cryptocurrencies. In fact, as the above figures for the LocalBitcoins exchange indicate, this effect already began taking shape in January, which saw more trading activity than any other month in Venezuelan history. Yet, the effect of Venezuelan strife on cryptocurrency isn't restricted only to Bitcoin, since other coins are witnessing comparable — if not quite as pronounced — spikes in use.

    Chief amongst these is Dash, which near the end of December celebrated the 2,500th merchant in Venezuela to accept it. Back in August, it could boast of only 1,000 merchants, indicating the impressive emergence it has witnessed since then. And seeing as how the count of the merchants listed on its DiscoverDash portal reveals that the current figure is 2,605, it's apparent that it is still rising and likely to continue rising for the foreseeable future.

    This expansion is the product of Venezuela's unresolved economic and financial issues. However, in contrast to the possible perception that the country is ruled by a prohibitive, iron-fisted government, it would seem that the Maduro administration -- in its desperation -- is tentatively taking steps to facilitate and profit from the rising prominence of cryptocurrencies like Dash and Bitcoin. This has become all the more likely in light of how American sanctions are, according to certain analysts, killing off the petro, which was launched in early 2018 but which quickly suffered from a U.S. ban.

    For example, on Feb. 9, the National Superintendency of Crypto Assets and Related Activities (SUNACRIP) published new regulations, which introduce commissions and monthly limits on remittances sent in crypto to Venezuelan residents. This commission (payable to SUNACRIP) would be a minimum of 0.25 euro ($0.28) and a maximum of 15 percent of the value of the remittance, while the monthly limit would be set at $600.

    This move by SUNACRIP follows in the wake of the government's recent crypto bill, which came into force on Jan. 31 and which forces all crypto exchanges and miners to apply for licenses. As with the introduction on Jan. 9 of a law that requires people and firms operating in crypto to pay their taxes in crypto, there's no denying that it indicates a move on the government's part to harness cryptocurrencies for its own increasingly endangered ends. Nonetheless, it also serves as a message to the Venezuelan population that the government is effectively embracing its move to Bitcoin and other coins, despite the fact that the Maduro administration had cracked down on Bitcoin mining in the past, for example.

    While commissions on crypto remittances might potentially have a depressive effect on the thriving Bitcoin and Dash markets in Venezuela, there are signs that Venezuelans will become increasingly able to source their own crypto without needing someone to send it to them from abroad. Toward the end of January, Venezuela’s first ever crypto ATM opened in Caracas, supporting withdrawals in Bitcoin, Dash and Litecoin. This may be the only such ATM in Venezuela at the moment, but its installation shows that, despite already enjoying impressive growth in 2018, cryptocurrency is likely to enjoy further expansion in the Bolivarian Republic in 2019.

    Turkey

    Turkey

    Venezuela may be the starkest example of how financial crises can encourage cryptocurrency adoption, but it isn't the only one. One of the biggest economies to suffer an inflationary crisis in late 2018 was Turkey, where the Turkish lira hit a record low of 7.24 against the U.S. dollar on Aug. 13, soon after the Trump administration introduced higher tariffs against Turkish steel and aluminium. And even though the government of Recep Tayyip Erdogan took the remedial step of hiking interest rates to 24 percent on Sept. 13, the lira's inflation rate actually increased after August, when it was 17.9 percent. It rose to 24.5 percent in September, to 25.2 percent in October, and has since “settled” to just over 20 percent.

    In response to the devaluation of the lira, the Turkish people have shown an increased willingness to trade Bitcoin, as indicated by data from LocalBitcoins and other exchanges serving the Eurasian country. For example, statistics provided by CryptoCompare show that the trading of Bitcoin saw a steady and overall increase in the second half of 2018, a period that also witnessed a number of noticeable spikes (particularly during the economically turbulent months of August, September and October). On May 17, daily Bitcoin volume was only 60, yet by August, this had mounted to a daily average (for that month) of approximately 255.5, with the peak for the month being 830.

    The peak was reached on Aug. 10, just a day after Erdogan's ill-fated “buy the Turkish lira” speech, which precipitated another cliff-edge drop for the struggling currency. It was almost as though the Turkish populace (correctly) perceived the president's urges as a tacit admission that the lira was in serious trouble, so many of them went out a did something commendably rational: They dropped the lira and started buying Bitcoin (among other stores of value).

    However, as was noted in last year's article on currency crises, one of the biggest distinctions between Turkey and Venezuela is that the Turkish population has access to foreign currencies. As such, there was a pronounced jump in U.S. dollar prices at the height of the Turkish lira crisis, as Turkish traders and laypeople turned more to the world's reserve currency as a store of value than to alternative stores, such as Bitcoin. This is why the recent increases in Bitcoin trading against the Turkish lira haven't been on the scale of trading against the Venezuelan bolívar.

    Nonetheless, compared to nations with comparable gross domestic product (GDP) levels, Turkey has witnessed above-average trading. Sweden, Switzerland and Mexico are 22nd, 20th and 15th for nominal GDP, according to the International Monetary Fund (IMF), yet their daily trading peaks for 2019 were 32, 45 and 636, respectively. By contrast, Turkey — which the IMF pegs as the 19th-biggest economy in the world — saw a 2018 peak of 877 (on Nov. 20), underlining the extent to which an unstable national currency can drive people toward crypto.

    India

    1C1oiPZ74s_7xlWgr3ldQE0ZhvBQkddhVIwF2_UoP5RbYT_u5Uw6Mbm0xHtGCeXSiJSF0p__muuEdCWV2NBeNb9YncfT1FhkGcQ1H1uCmd4BKt7J_Uq6mXPY2QGJ8xaXksgw0Dez

    While Turkey was "one of the biggest economies to suffer an inflationary crisis in late 2018," it was not, in fact, the biggest. This accolade belongs to India, which — much like Turkey — was adversely affected by American protectionism (although it also had its own sources of difficulty, such as inflation). By September, its currency, the rupee, had become the worst-performing in Asia, losing 12 percent of its value against the U.S. dollar since the start of the year, while it continued to see pointed falls as late as December.

    And as one might expect, such declines were complemented by upticks in Bitcoin trading. In the second quarter of 2018 (after the end-of-2017 bull run had calmed down), the figures show a daily average of 18.4 BTC. By contrast, the third and fourth quarters — when the rupee crisis began setting in — saw daily averages of 28.5 and and 30.6 BTC (and data is missing for the last two weeks of December). Compared to Q2 2018, these two figures represent increases of 54.9 percent and 66.3 percent, while data for comparably sized economies show smaller increases across these two periods.

    For instance, CryptoCompare data for the British pound shows a decrease of 14.9 percent between Q2 and Q3 2018, and an increase of only 15.2 percent between Q2 and Q4. In other words, while there was a general, worldwide increase in the volume of Bitcoin trades over Q3 and Q4, it was more tangible in some nations than others. And for the most part, the nations where it was more tangible were those that were experiencing periods of financial turbulence and uncertainty, like India, Turkey and (especially) Venezuela.

    Iran

    2QnqLBwqug_TF8oQdercW_KDRG3S0Z0WGNTnoCb22ujbSH-oSOhxehF0-iRB1cF36l5ickbUgljSY3a7mW8dgLsoV8zsOWf5V1UwMHlLF0L9ED5dn1anTfacpg8pkvcA982Ld4GQ

    This is also apparent in Iran's case, even if the effect is much subtler. On Nov. 4, the U.S. introduced sanctions against Iranian shipping, banking and oil. Or rather, it reintroduced sanctions that had been removed in 2015 by the Obama administration as part of a conciliatory deal on Iran's nuclear program. These sanctions had in fact hit the Iranian economy and the Iranian rial as early as June, when the Trump administration announced that it was withdrawing the U.S. from the aforementioned deal, and that the sanctions would kick in again after a “wind-down” period.

    By September, this announcement was the biggest factor behind the rial having lost around 70 percent of its value since May, with one U.S. dollar worth approximately 150,000 rials on the black market in September. In the midst of this collapse, there has been a noticeable increase in trading volumes for the BTC/rial pair, although once again the increases aren't anywhere near the level witnessed in Venezuela, largely because the rial's inflation rate sat at around 203 percent at the apex of the crisis (compared to over 112,000 percent for Venezuela), and because Iranians had access to dollars and other stores of value (e.g., gold).

    For example, according to the  data for the BTC/rial market on LocalBitcoins, the average daily volume in Q2 2018 was a modest 3.32 BTC. In Q3 2018, this rose slightly to 3.61 BTC, while in the fourth quarter of the year — when the sanctions were activated — it rose to 4.1 BTC. Coming in respectively at 8.7 percent and 23.8 percent (compared to Q2), these are only modest rises, but they're still more than can be witnessed in other nations with comparable GDP. For instance, the IMF puts Norway at 28th for nominal GDP (and Iran at 30th), yet between Q2 and Q3 2018 trading of Norwegian krone for Bitcoin declined by 29.9 percent — while between Q2 and Q4 2018, it declined by 25.9 percent.

    Nigeria

    JKgmemImJfXV0s5sfcPJNBFY77I-6kCxk108Jds8XyjYK5SgGEvusgSmNTsci23TKgrLYH9NSyrtMsGubRIcnghwZTJWY5xoEFTe8S7_0KpDQy64XsBbKpSNwdnbkSkLbHdd0L9g

    Once again, at a time when similarly sized economies are seeing stagnation or even a downturn in their Bitcoin market, a country in financial crisis is seeing an upturn. Another country that bears witness to this effect is Nigeria, which, despite not suffering from any particularly severe crisis in 2018 (and despite not being the object of American sanctions), has still had a rough economic ride recently, having only just exited a five-year recession at the beginning of 2018. Its currency — the naira — is also expected to experience an inflation rate of 13 percent in 2019, having stood at around 11 percent at the end of last year.

    The north African nation is therefore ripe for interest in Bitcoin, something that is confirmed by the data. Between Q2 and Q3 2018, BTC/naira volumes increased by 17.7 percent, from 144.8 BTC per day to 170.4. And between, Q2 and Q4, these same volumes increased by an impressive 52 percent. This strong growth in the final quarter of the year was partly the result of the return of rising inflation, which had bottomed out at 11.14 percent in July, only to begin rising again toward the end of the year, putting a strain on the ability of Nigerians to purchase food using the naira.

    To a large extent, Nigerians have for several years now had a particular attraction toward Bitcoin, given that the oil-dependent economy has had a tough financial ride. And with the Nigeria-based FSDH Merchant Bank predicting an inflation rate of 13 percent for 2019, it's likely that this attraction will remain strong for the foreseeable future, particularly when the weakness of the naira is part of the explanation as to why more people live in extreme poverty in Nigeria than in any other country in the world.

    Conclusions

    However, while the above data all indicate that people move toward Bitcoin and other cryptocurrencies during financial crises, it's worth making a few important qualifications.

    First of all, there's little doubt there is evidence for movement, yet most of the push toward crypto is still distinctly modest, particularly when compared to the end-of-2017 bull market. For example, Turkey, Iran and India may have seen rises in BTC trading toward the end of 2018, yet these rises generally fall short of those seen at the end of the previous year. In Iran, the highest number of Bitcoin ever traded on a single day was 24, a quantity that was traded on Feb. 6, 2018. In India, Nov. 29, 2017 saw 592 BTC traded for rupees, while the biggest peak of Q4 2018 was 79 BTC (on Nov. 20). And in Turkey, Coin Dance reveals that the weekly trading average in Q4 2017 was 32 BTC, while in Q4 2018 it was 16 BTC (although CryptoCompare data show that the end-of-year peaks for 2017 and 2018 are roughly comparable).

    The only country where there is a strong exception to this rule is Venezuela, and it's here that the biggest lessons regarding crypto adoption in the face of economic crises can be learned. That is, even though “normal” high inflation can lead people toward the likes of Bitcoin, it's apparent that, in order to push people en masse toward crypto, excessive hyperinflation is required, as well as a lack of alternative reserve currencies and an economic crisis of near-catastrophic proportions.

    In Venezuela, with inflation currently exceeding 100,000 percent, and with millions of people struggling to feed themselves, these three conditions have certainly met. Given that foreign currency controls had been in place since 2003, and given that the Venezuelan bolívar is now all but worthless, people have had almost no choice but to turn to Bitcoin, Dash and other coins. By contrast, people in Turkey, Iran, Nigeria and even Zimbabwe (another nation that suffers from high inflation) have had access to other stores of value, while their usual currencies have still been usable as everyday currencies, despite suffering from volatility. As such, there hasn't really been a “transition” to crypto comparable to that evident today in Venezuela.

    Even so, it's interesting to note that, even without large-scale adoption, there has been more trading of Bitcoin in these countries in the past few months than in previous quarters. And while this effect isn't massively significant, it at least demonstrates that the idea of using crypto as a reserve currency and as a way of storing value is increasingly gaining, well, currency.

    Source: https://cointelegraph.com/news…-increasingly-catching-on

    Sparkpool to Freeze Mysterious 2,100 Ether Mining Payout for Now

    ether-ethereum-e1522103447270.jpg

    Cryptocurrency mining pool Sparkpool has said it is temporarily freezing a mysterious 2,100 ether payment it received Tuesday and is waiting for the sender to reach out for a solution.

    The transaction was received as an apparent reward for mining just one block on the ethereum blockchain, but the amount is roughly 600 times the network’s standard block reward.

    The company notified its collective of miners in a statement on Wednesday that it will hold the ether – currently worth around $300,000 – for now, in case the abnormally high mining fee was attached in error.

    “Sparkpool has recently mined a block with a 2100 ETH mining reward, which was an anomaly that triggered our internal emergency mechanism,” the company said in a statement. “We have temporarily frozen this fee and are now waiting for the sender to contact us for a solution. If the sender does not reach out in the next a few days, Sparkpool will then allocate the fees to miners who are entitled for the reward.”

    Xin Xu, CEO of Sparkpool, told CoinDesk via WeChat that the pool is holding the funds given the significant amount involved, and that the firm’s users and miners understand the decision.

    Xu added:

    “Unfortunately, and fortunately, blockchain is so far not completely run by machines; human are still involved. So we have an opportunity to correct the problem,” Xu added. “Integrity is our pool’s priority.”

    Sparkpool received the 2,100 ETH payout after mining block number 7,238,290 on the ethereum blockchain.

    Since then, users have suggested such activity could be a random fluke when one or perhaps several users accidentally attached abnormally high transaction fees to their payments. Others said it could also be goodwill from anonymous supporters of the ethereum mining community, or even an attempt to launder money via the world’s second largest public blockchain.

    Editor’s note: Xin Xu’s statements have been translated from Chinese.

    Ethereum token image via Shutterstock

    Source: https://www.coindesk.com/spark…her-mining-payout-for-now

    Elon Musk Calls Bitcoin 'Brilliant,' Better Than Paper Money for Value Transfer

    Musk-1-e1540284955293.jpg

    Elon Musk, founder and CEO of Tesla and SpaceX, has officially gone public with his belief cryptocurrency offers an improved alternative to conventional money.

    In a podcast interview with investment firm ARK Invest on Feb. 19, Musk talked about his views on the future of his companies and responded specifically to questions about his thoughts on cryptocurrency.

    To that end, Musk said he believes bitcoin’s structure “is quite brilliant,” adding:

    “It [crypto] bypasses currency controls. … Paper money is going away. And crypto is a far better way to transfer values than a piece of paper, that’s for sure.”

    That said, Musk also pointed out aspects of the industry that are keeping his companies from getting involved in using and applying the technology.

    Speaking to the downsides of cryptocurrency, in the case of bitcoin for instance, he said he believes its use of a large computing network to secure its ledger is “computationally energy intensive.” He added for a company that aims to boost the adoption for sustainable energy, it may not be “a good use of Tesla’s resources to get involved in crypto.”

    “It’s very energy intensive to create bitcoin at this point,” he said.

    Notably, this is not the first time that Musk had made remarks on cryptocurrency. In October last year, he made a mysterious tweet about buying bitcoin that whipped up speculation on social media.

    Musk has also been impersonated several times on Twitter by scammers who have tried to use his profile’s likeness in crypto give-away schemes, a development he noted in his remarks.

    “Bitcoin and ethereum scammers were so rampant on Twitter I decided to join in and I said at one point wanna buy some bitcoin?” he quipped.

    Listen to the full interview here.

    Elon Musk image via Shutterstock

    Source: https://www.coindesk.com/elon-…-money-for-value-transfer