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Lithuania Central Bank’s Policy Update Opens the Door for Crypto Payments

February 20, 2019 |

Financial Companies in Lithuania to Accept Cryptocurrencies Through Third Parties

The central bank of Lithuania has updated its position on cryptocurrencies and tokens issued through initial coin offerings. The regulator has revised the definition of these assets specifying the conditions under which financial institutions can operate with digital money and accept crypto payments.

Also read: Court Rules Brazil’s Bitcoin Max Exchange Can Keep Bank Account

The Term ‘Virtual Assets’ Replaces ‘Virtual Currency’

The governing board of Bank of Lithuania, the institution responsible for the Baltic nation’s monetary policy and financial markets, has recently released an updated version of its position pertaining to digital currencies. The regulator said it has taken into account the current market developments and evolving regulatory regimes in other jurisdictions.

In an announcement published on its website, Lietuvos Bankas reveals its intentions to provide all existing and potential financial market participants (FMPs) with a “level playing field.” This includes entities organizing initial coin offerings (ICOs) and businesses providing services to Lithuanian residents who want to invest in this type of financial products.

Responding to general questions about cryptocurrencies, the bank now says it has substituted the term “virtual currency,” used previously in regards to digital coins, with “virtual assets.” The new policy introduces strict rules for FMPs and describes under what circumstances they can work with virtual assets, including for payments.

Lithuania Central Bank’s Policy Update Opens the Door for Crypto Payments

Crypto Funds Open Only to Professional Investors

The financial institution emphasizes, however, that the underlying principles of its position have remained unchanged. Bank of Lithuania notes that companies offering financial services are required to separate their main activities from those associated with virtual assets.

Financial organizations are still not permitted to receive payments directly in cryptocurrency, give out crypto credits or use digital assets as collateral, except when the tokens are considered securities. The payments they accept in their accounts should only be in fiat currency to presumably limit risks associated with digital coins.

On the other hand, the new policy allows these companies to receive cryptocurrency payments processed by third-party platforms that convert the amounts to local fiat. When crypto-related services are provided, risk mitigating measures such as customer identification, limited movement of the virtual assets within the FMP and coverage with traditional assets should be applied.

The central bank’s updated position creates conditions for the registration of investment funds dealing with digital assets. However, these entities will be able to provide services only to professional investors. A number of such funds operate in other countries, the bank says, noting that they can do that in Lithuania too if they comply with the requirements of the country’s legislation and the bank’s guidelines.

Lithuania Central Bank’s Policy Update Opens the Door for Crypto Payments

Lithuania to Allow Equity ICOs

Lietuvos Bankas has also answered several questions regarding initial coin offerings (ICOs). The regulator stated that equity ICOs can be held via crowdfunding platforms and security tokens can be issued. Such activities are currently governed by country’s crowdfunding and securities laws.

The offering of crypto securities to the public should also comply with the respective EU directives that have been transposed into the Lithuanian legislation. One of the requirements is to indicate the other member states where the tokens will be placed so that the bank can notify local authorities.

What is your opinion about the changes in Lithuania’s regulatory policy toward cryptocurrencies? Share your thoughts in the comments section below. 


Images courtesy of Shutterstock.


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post Lithuania Central Bank’s Policy Update Opens the Door for Crypto Payments appeared first on Bitcoin News.

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Coinflex Launches Physically Delivered Cryptocurrency Futures Exchange

February 20, 2019 |

Coinflex Launches Physically Delivered Cryptocurrency Futures Exchange

Coinflex has now launched its physically delivered cryptocurrency futures exchange. The new Hong Kong-based leveraged trading platform is a spin-off from one of the United Kingdom’s oldest cryptocurrency exchanges, Coinfloor.

Also Read: In the Daily: Elon Musk Talks Bitcoin, Shanghai’s Fudan University, Xdat Exchange

Coinflex Exchange Is Now Online

Coinflex, a physically delivered cryptocurrency futures exchange with leverage of up to 20x, announced on Feb. 20 that the platform’s website is now live. Last month it was reported that the trading venue plans to offer futures contracts for bitcoin core (BTC), bitcoin cash (BCH), and ethereum (ETH), all paired against tether (USDT).

Coinflex Launches Physically Delivered Cryptocurrency Futures Exchange

Based in Hong Kong and incorporated in the Republic of Seychelles, Coinflex is owned by a consortium that includes Trading Technologies International Inc., crypto trader Mike Komaransky, and Dragonfly Capital Partners. Market markers B2C2, Global Advisors, Alameda Research, Amber AI, Grapefruit Trading, Coinfloor and its subsidiary companies also have partial ownership of Coinflex.

Cutting Out the Middle Men

The Coinflex platform is headed by chief executive officer Mark Lamb, who published a Medium post on Wednesday detailing the differences between traditional futures vs crypto futures exchanges. He explained that traditional exchanges usually have a minimum of two and often three or four layers of intermediaries between the exchange and the customer. Traditional futures brokerage firms and Futures Commission Merchants (FCMs) also usually require a customer be a high net worth individual or professional trader with experience in financial markets.

Coinflex Launches Physically Delivered Cryptocurrency Futures Exchange
Traditional futures vs crypto futures exchanges as detailed by Coinflex CEO Mark Lamb

“I fell in love with bitcoin because it’s peer-to-peer, open, and transparent,” stated Lamb. “Everyone has the chance to transact on the same network. Anyone who has the tools can run a node and I won’t reject your Proof of Work because you come from a different country, don’t speak my language, or don’t meet a government-set ‘capital requirement’. Crypto derivatives are built in the same fashion as bitcoin. Virtually anyone can sign up regardless of wealth, geographic location, or whether or not he or she has a bank account.”

What do you think about Coinflex launching physically delivered crypto futures trading? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.

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Meet Memopay, the Bitcoin Cash Advertising Model That ‘Pays for Attention’

February 20, 2019 |

Meet Memopay the Bitcoin Cash Advertising Model That 'Pays for Attention'

There’s a different kind of advertising taking place on the Bitcoin Cash (BCH) network, using an application called Memopay. The ad campaign platform employs a novel approach to advertise someone’s website, product or service by sending a small fraction of BCH to thousands of public addresses with an encoded OP_return message.

Also read: BCH Devs Lock in Code for the Chain’s Next Upgrade: Schnorr and Segwit Recovery

Memopay: Onchain Advertising

The internet has completely transformed the advertising business into a whole new medium and programmable money is also going to create some new methods of sharing promotional content. For instance, an application called Memopay plans to do just that with its service that offers promoted onchain advertising using the BCH network. Memopay’s website explains that advertisers can reach out to bitcoiners by introducing products and services through onchain messages. The platform uses an OP_return transaction which gives an individual or organization the ability to tether a small message to the transaction and certain block explorers can read the messages.

“Memopay delivers your ad message directly to the wallets of thousands of active Bitcoin Cash users,” explains the service.

Meet Memopay, the Bitcoin Cash Advertising Model That 'Pays for Attention'
Memopay reaches out to bitcoin cash holders by sending small fractions of dust to an active address with a message tied to the funds.

Basically, Memopay sends thousands of transactions by sending a small fraction of BCH dust to active BCH wallets. The service believes each ad message delivered along with a small amount of bitcoin cash “pays for attention.” So far the business has run about six onchain ad campaigns that have added up to a total of 88,063 ad messages delivered. A typical transaction could be like 0.00001111 BCH (1111 satoshis) and Memopay says there have been 95,623,876 satoshis distributed.

For instance, the company Cyberian Mine ran a campaign with Memopay because they wanted to drive awareness to potential crypto-focused clients. According to statistics recorded by a Bitdb query in real-time, 10,000 ad messages were delivered and Memopay claims the company saw a 110 percent spike in organic traffic to their website. “You only pay when they click to visit your website,” the website details.

In another instance, Memopay tied an editorial that was shared online and delivered the link to 1,000 BCH holders. The company reports that the campaign saw a 2.5 percent click-through-rate (CTR) already after 24 hours. Memopay is also integrated with three of the major BCH block explorers developed by Bitcoin.com, Btc.com and Blockchair.

Meet Memopay, the Bitcoin Cash Advertising Model That 'Pays for Attention'
An example of Cyberian Mine’s CPS ad campaign using Memopay.

The New Advertising Target: 16 Million Public Bitcoin Cash Addresses

The process to run a campaign is fairly intuitive as the user simply chooses an ad mode to drive traffic to a website or pay for clicks only or CPS to drive awareness by paying for each delivered message. Then they have to fill out the request form and create a custom advertising message that will attract consumers. After that, the user funds the provided address with BCH to start the ad campaign. Memopay users then receive a link to the ad campaign’s dashboard to see the real-time progress of the promotional content.

Meet Memopay, the Bitcoin Cash Advertising Model That 'Pays for Attention'
The campaign dashboard.

Memopay says there are many benefits to using the service and the top attribute is a direct connection to a cryptocurrency audience. There are 16,984,512 BCH addresses and each and every one of them is open to the public’s view. This gives the project transparency says Memopay as “each contact with Bitcoiners is recorded on the Blockchain and can be easily checked.”

“[Memopay] is keyword agnostic and customers pay the same price for any keyword used,” the startup notes on the website’s benefits description. “In both Cost-per-click and Cost-per-send campaigns you’ll know exactly what the price is — Ad messages with an active link will be stored on the Blockchain forever.”

Meet Memopay, the Bitcoin Cash Advertising Model That 'Pays for Attention'
Paying for attention by using OP_return transactions that will be seen on a blockchain explorer is not new and has been done for years. TD Ameritrade created this picture last year and embedded it into the BTC chain. 

Paying for people’s attention in the advertising business is basically the name of the game but using blockchain technology adds a different flavor. Advertising using OP_return transactions has been done many times in the past in various ways. For example, back in April of 2018 the online broker for online stock trading and financial management service TD Ameritrade used BTC OP_return transactions to advertise the company. Its logo surrounded by a digital flag is forever etched into the BTC chain as the firm used 68 transactions to create the message.

“The blockchain is an amazing piece of technology — And we’re proud to be part of it — Forever,” the banking institution stated at the time.

What do you think about the Memopay advertising service? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Memopay, and TD Ameritrade. 


Have you seen our widget service? It allows anyone to embed informative Bitcoin.com widgets on their website. They’re pretty cool, and you can customize by size and color. The widgets include price-only, price and graph, price and news, and forum threads. There’s also a widget dedicated to our mining pool, displaying our hash power.

The post Meet Memopay, the Bitcoin Cash Advertising Model That ‘Pays for Attention’ appeared first on Bitcoin News.

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Judge Appoints 2 Law Firms to Represent Quadrigacx Clients

February 20, 2019 |

Judge Appoints 2 Law Firms to Represent Quadrigacx Clients

Two law firms have been appointed to represent the clients of insolvent Canadian crypto exchange Quadrigacx in court. The number of affected users has been estimated at approximately 115,000 and lawyers will have to contact as many as they can. The digital asset trading platform owes them approximately $ 190 million.

Also read: Hacked NZ Exchange Cryptopia Allowed to Reopen

Miller Thomson, Cox & Palmer to Reach Affected Users

Nova Scotia Supreme Court Justice Michael Wood issued a decision on Tuesday, Feb. 19, announcing the appointment of Toronto-based Miller Thomson and Cox & Palmer from Halifax as representatives of Quadrigacx’s clients. Both firms have extensive experience with insolvency cases, Wood said, quoted by the Canadian Press. He added that Miller Thomson has cryptocurrency-related expertise as well.

Judge Appoints 2 Law Firms to Represent Quadrigacx Clients

It was announced that the law firms have agreed to cap their fees at this stage of the court proceedings. However, the exact fees are not mentioned in Michael Wood’s decision. The judge also approved their communication strategy. The legal teams of the two companies plan to use social media channels and online discussion groups to reach as many affected users as possible.

The appointment of Miller Thomson and Cox & Palmer comes after the court accepted applications from four law firms, each representing the interests of more than 100 clients, CBC reported. The competing motions have been received since the initial creditor protection hearing on Feb. 5. The plaintiffs are owed approximately 250 million Canadian dollars (around $ 190 million).

Varied Interests of Creditors Deemed a Challenge

Quadrigacx, which is operated by the Vancouver-based company Quadriga Fintech Solutions Corp., was shut down at the end of January. Court documents suggest the platform lost access to as much as $ 190 million of cryptocurrency after the death of its CEO, 30-year-old Gerald Cotten.

The founder of the exchange died on Dec. 9, 2018 in India due to complications from Crohn’s disease. It’s been established so far that the digital money is held in offline cold wallets and Cotten is believed to be the only person who had access to the coins.

Judge Appoints 2 Law Firms to Represent Quadrigacx Clients

After Quadriga filed for creditor protection, the court appointed a monitor – Ernst & Young Inc. In a report to the court, the company revealed that just after its appointment the exchange team “inadvertently transferred” an additional 103 BTC to cold wallets which Quadrigacx is unable to access.

Affected parties can now seek to have a committee of creditors and legal counsel to represent them. According to Judge Michael Wood, the varied interests of the different creditors are a major challenge in the court case. “The business is currently suspended and may never resume, although that remains to be determined,” he wrote in his decision.

What are your expectations on future developments in the Quadrigacx case? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock.


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post Judge Appoints 2 Law Firms to Represent Quadrigacx Clients appeared first on Bitcoin News.

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Bitgo Obtains $100M Insurance Policy to Cover Crypto Assets

February 20, 2019 |

Cryptocurrency wallet service provider Bitgo has secured a $ 100 million policy through Lloyd’s insurance to cover crypto assets that are completely under the company’s control, such as those held in its business wallet and custody offerings. The policy covers issues like insider theft by employees, loss or damage of private keys and hacks.

Also read: Survey Ranks South Africa Top for Cryptocurrency Ownership

 Insurance to Cover Hacks, Theft and Loss of Keys

According to a statement released on Feb. 19, Bitgo, which provides custodial services for more than $ 2 billion in digital assets, said its business wallet customers will now be able to buy theft insurance and a key recovery service called Lost Key Cover. This will be done through Digital Asset Services, an insurance provider overseen by the Financial Conduct Authority, the U.K. financial services regulator. The key recovery service will be available for purchase either as an annual subscription or when needed, the company said.

Bitgo Obtains $  100M Insurance Policy to Cover Crypto Assets

Custodial assets held completely by either Bitgo, Inc. or Bitgo Trust Company are insured for up to $ 100 million through insurance group Lloyd’s. The assets will be covered for third-party hacks, physical loss or damage of private keys, insider theft by employees and other hazards. At the end of 2017, Lloyd’s had about $ 44 billion in gross written premiums. The insurer has a presence in nearly 200 countries and is one of the world’s largest insurance and reinsurance marketplaces.

Mike Belshe, chief executive officer of Bitgo, claimed the cover to be the “most complete insurance offering in the industry,” adding:

It is not always easy for some clients to understand under what circumstances their investments are insured and to what extent their loss would be covered. We are changing that by being more transparent than any other company about the terms of our coverage. Transparency and accuracy is essential for building trust in the market.

Lessons for Quadrigacx

Whereas traditional bank deposits are insured up to a certain threshold, cryptocurrency deposits generally are not, or only to a limited extent, such as exchanges insuring funds kept on their hot wallets, but not in offline cold storage. The Quadrigacx saga, in which the crypto exchange’s founder died with keys to $ 145 million worth of cryptocurrency, underscores the need for insurance protection. When CEO Gerald Cotten suddenly died in India in December, he apparently took with him the passwords to a multi-million-dollar fortune belonging to investors, which neither his work colleagues, court nor his wife can locate.

Commenting on the Bitgo deal, Nicholas Edwards, an official with Lloyd’s said: “We have been working hard to tailor a bespoke insurance product for Bitgo in this new, rapidly developing and complex sector. Following a thorough review of Bitgo’s security and controls we are delighted to have delivered an innovative solution that enables our client to develop and grow its business with confidence and security.”

San Francisco-based Bitgo claims to process 15 percent of all onchain global bitcoin transactions and $ 15 billion per month across all cryptocurrencies. The company is backed by the likes of Craft Ventures, Galaxy Digital Ventures, Goldman Sachs, Redpoint Ventures, and Valor Equity Partners.

What do you think about insurance cover in cryptocurrency? Let us know in the comments section below.


Images courtesy of Shutterstock.


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The post Bitgo Obtains $ 100M Insurance Policy to Cover Crypto Assets appeared first on Bitcoin News.

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Survey: Nearly Half of Millennial Traders Have More Faith in Crypto Than Stock Market

February 20, 2019 |

Survey: Nearly Half of Millennial Traders Have More Faith in Crypto Than Stock Market due to 'Generational Shift'

Nearly half of millennial traders have more faith in cryptocurrency exchanges than they do in traditional ones. They are also enthusiastic about the prospect of traditional financial institutions offering crypto assets. That’s according to a new survey which shows a “generational shift” where millennials “place their faith in the power of technology and open networks.” 

Also read: Drug Dealer Fights to Prevent Canadian Police From Forfeiting his BTC

The Beginning of a Generational Shift

The survey by U.S.-based investment platform Etoro interviewed 1,000 online traders. It found that 43 percent of millennial online traders trust crypto exchanges more than they do U.S. stock exchanges. 93 percent of millennials surveyed also said that they would invest more money in crypto if it were offered by traditional financial institutions such as TD Ameritrade, Fidelity, or Charles Schwab. Even among millennials who don’t trade crypto, one third said they would trust crypto over the stock market. Guy Hirsch, Managing Director of Etoro U.S. said:

We’re seeing the beginning of a generational shift in trust from traditional stock exchanges to crypto exchanges. At the heart of this change are the asset classes themselves. Younger investors’ experience with the stock market has seen a great deal of loss of trust, with the fall of Lehman Brothers because of irresponsible practices followed by the worst recession since the Great Depression.

He added: “Trust further eroded when Americans saw how hundreds of billions of dollars of taxpayers’ money are funneled to the largest financial institutions while their savings evaporated and how banks get free money through quantitative easing while their cost of living continued to rise.”

The survey also showed that two thirds of millennial crypto traders say they have more faith in crypto as a whole than the stock market. Of millennials who don’t trade crypto, one third said they would trust crypto over the stock market. In contrast, 77 percent of generation X respondents revealed they trust stock exchanges more.

The Perfect Asset Class

Etoro’s survey also showed that among investors across all age groups that don’t trade crypto, 59 percent would invest more money in crypto if it were offered by a traditional financial institution. Current crypto traders would be more at ease investing in the asset class if it were offered by a traditional financial institution, with 92 percent admitting they would invest more money if a conventional financial institution provided this investing option. This shows that despite crypto enthusiasts and millennials distrusting traditional institutions, established companies with a global reputation could draw in younger investors were they to offer crypto assets.

Survey: Nearly Half of Millennial Traders Have More Faith in Crypto Than Stock Market

The survey looked at savings plans too. Half of online investors surveyed expressed interest in a crypto allocation in their 401k plans. Of those that don’t trade crypto, 45 percent expressed interest in having some of their 401k allocated to crypto assets, while 74 percent of crypto traders are interested in seeing the option from their 401k provider. Hirsch added: “While there is clearly a demand for crypto assets in 401k portfolios, there are a number of regulatory and market changes that need to occur before it becomes a mainstream offering.”

Mati Greenspan, a senior market analyst at Etoro, told news.Bitcoin.com: “Millennials tend to place their faith in the power of technology and more specifically the power of open networks. This is why crypto is the perfect asset class for our generation.”

What do you think about the results of the survey? Do you trust crypto exchanges over traditional ones? Let us know in the comments section below.


Images courtesy of Shutterstock and Etoro. 


Express yourself freely at Bitcoin.com’s user forums. We don’t censor on political grounds. Check forum.Bitcoin.com

The post Survey: Nearly Half of Millennial Traders Have More Faith in Crypto Than Stock Market appeared first on Bitcoin News.

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Coinbase Wallet App Adds Bitcoin Cash Support

February 20, 2019 |

Coinbase Wallet App Adds Bitcoin Cash Support

Coinbase announced on Tuesday that users of its wallet app can now directly store their bitcoin cash. The app update will be rolled out to all iOS and Android users in the next few weeks. Both Cashaddr and legacy address formats are supported alongside Bitcoin Cash Testnet for developers.

Also read: SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

Adding BCH Support

San Francisco-based digital currency platform Coinbase announced on Tuesday that its noncustodial wallet app now supports bitcoin cash. Siddharth Coelho-Prabhu, Product Lead at Coinbase, wrote that “Starting today, you can now store your bitcoin cash (BCH) directly in the Coinbase Wallet app.” However, he elaborated:

The new wallet update with bitcoin cash support will roll out to all users on iOS and Android over the next few weeks. BCH support is activated by default — all you need to do is tap ‘Receive’ on the main wallet tab and select bitcoin cash to send BCH to your Coinbase Wallet.

Coelho-Prabhu emphasized that the wallet “supports both newer Cashaddr address formats, as well as legacy addresses for backwards compatibility in all applications.” It also supports “Bitcoin Cash Testnet to aid developers and power users,” he detailed, adding that his team also plans “to add support for the JSON Payment Protocol in the future.”

Coinbase Wallet App Adds Bitcoin Cash Support

The security of the Coinbase Wallet app is more advanced than its custodial web wallet counterpart. According to the announcement, users’ private keys are encrypted and stored on their mobile devices using a Trusted Execution Environment (TEE), or Secure Enclave technology. “This specialized hardware is considered the most secure way to safeguard private data on mobile devices,” Coelho-Prabhu claims.

The BCH support follows the BTC support announced on Feb. 5. Coinbase Wallet previously supported only “ethereum, ethereum classic, and over 100,000 different ERC20 tokens and ERC721 collectibles built on Ethereum,” the product lead noted.

Other Developments

A week before BCH support was added, Coinbase announced that users “can now backup an encrypted version of your Coinbase Wallet’s private keys to your personal cloud storage accounts, using either Google Drive or iCloud.” Coelho-Prabhu described, “This new feature provides a safeguard for users, helping them avoid losing their funds if they lose their device or misplace their private keys.”

However, the optional feature was met with a large amount of negative feedback on social media. Tallycoin developer DJ Booth tweeted, “This is a terrible idea and encrypting with a user-chosen password is even worse. Most people cannot choose/remember strong passwords and generally reuse passwords.” After hundreds of tweets disapproving of the new feature, the company responded: “If you feel uncomfortable storing an encrypted backup in your cloud account, you can keep a copy of the recovery phrase (mnemonic seed) by yourself.”

Coinbase Wallet App Adds Bitcoin Cash Support

Then, on Tuesday, Coinbase announced that it has acquired Neutrino, which describes itself as a blockchain data intelligence platform. “By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors,” explained Varun Srinivasan, Coinbase’s director of engineering. “It will also help us bring more cryptocurrencies and features to more people while helping ensure compliance with local laws and regulations.”

What do you think of the Coinbase Wallet app? Will you use it? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Market Cap: A Flawed Ranking System for Valuing Crypto

February 20, 2019 |

Market Cap: A Flawed Ranking System for the Valuation of Crypto

Market cap is often used as a metric of importance in the crypto industry. Communities will react jubilantly as their preferred coin moves up the rankings. People will often invest in the top X coins based solely on their market cap as they think it is representative of a diversified portfolio. However, is market cap the right metric to focus on?

Also read: Coinbase Acquires Cryptocurrency Surveillance Company Neutrino

In this post I will explore the fallacy of market capitalization. I will look at the methods with which market cap is often determined and why it could be considered flawed for a number of reasons. I will also touch on other potential metrics which could be more representative of “value.”

But first, let’s start with some basics…

Recap on Market Cap

Market capitalization is a concept that has been borrowed from the traditional equity markets. In the context of a publicly traded company, it is supposed to give a measure of how much the outstanding free float of shares are worth on the market. It is merely calculated by taking the price of the shares and multiplying it by the outstanding free float of shares.

Capitalization is often used as a metric of size, value and importance in the equity markets because all the shareholder information can be publicly verified and the shares are often traded on one exchange.

There is no disagreement as to the market cap of Coca Cola because analysts can easily replicate it themselves. They can pull the shareholder records from their databases and grab the latest price from the NYSE ticker information. However, the same cannot really be said for the cryptocurrency markets.

Market Cap in Crypto

When cryptocurrencies first started gaining the public’s attention a few years ago, numerous websites wanted to find a quick and easy way to compare all of the different coins on the market. They needed a simple ranking number that people could use as a rough benchmark.

Market cap was one of the most applicable metrics that they could use. It was also relatively easy to understand for those who were new to the cryptocurrency markets. It was understood to imply the total value of all coins in circulation.

A problem that is unique to cryptocurrencies though is the fact that this “circulating supply” is often defined subjectively by the coin ranking websites. For example, if we were to take a look at the definition of “circulating supply” on Coinmarketcap (CMC) it states the following.

Market Cap: A Flawed Ranking System for Valuing Crypto
How circulating supply is calculated on CMC. Image via Coinmarketcap.

While this seems like a pretty thorough examination of the circulating supply of a project, a great deal of it will come down to the judgement of the folks at CMC. You will have to trust their assessment of what is freely circulating based on information that is provided to them by project teams.

As many Bitcoin proponents know, “Don’t trust, verify.”

Potential Manipulation of Numbers

Something specific that CMC does is exclude the pre-mined coins from the circulating supply of a particular project. While the intentions behind this may be right, there are some negative externalities that come with this.

For example, when a project has pre-mined a large proportion of their coins, every time they release these funds, their circulating supply will go up. If these coins are not sold immediately (which impacts price) then the market cap of the coins is also likely to increase.

There have been many projects that have been accused of this tactic. While some of them may not have been intentionally seeking to impact price, it is disconcerting that such an important metric can move at the whim of the developers.

This is of course only the circulating supply number that we are talking about. We are well aware of how crypto whales are able to impact price in relatively illiquid markets. Through wash trading and limited external demand, nefarious actors can pump the price and hence impact market cap.

What Can Be Done?

In a sense, the coin ranking websites are in a bind when it comes to market capitalization. They are using it precisely because it is well known, easy to understand, comparable and seemingly applicable. They are trying to provide an objective view of the coin’s total value and the more they try to tweak the formula, the more they can be accused of being subjective.

Another coin ranking site, Coingecko, has taken a slightly more transparent and innovative approach to their rankings. For example, when it comes to listing their circulating supply they do not exclude pre-mined coins. They do this more for consistency because technically tokens issued on smart contract platforms are all pre-mined. Similarly, pre-mined coins could potentially already be traded on exchanges because they are not locked.

They also give the user more information on how circulated supply is calculated for each coin that they have listed. For example, in the below image you can see the supply numbers for the 0x (ZRX) project.

Market Cap: A Flawed Ranking System for Valuing Crypto
Circulating supply breakdown for ZRX. Image via Coingecko.

Indeed, determining the “value” of a cryptocurrency project is itself such an involved discipline. If someone really wanted to analyze this then they would need to look at factors such as on-chain metrics, developer activity, community interest and so forth.

In fact, exchanges such as Binance have even started to roll out their “gold standard” metric which awards projects based on their “communication.” Although this is not an endorsement by Binance, projects that regularly communicate with their community could be a valuable metric.

Of course, one can’t really look at these other metrics in isolation and compare them to another coin. They have to be broken down and analyzed piece by piece and adjusted for particular technicalities of the coins in question.

None of these metrics can be viewed as a potential replacement for the quick-and-dirty measure that comes with a coin’s market cap. They can only be used as a complement to it by the analyst should they decide to delve deeper into the relative “value” of a project.

Don’t Get Bitconnect Rekt

Market capitalization is a useful metric. It allows us to get a rough sense of the general market value of particular coins that are on the market. However, that is where its usefulness should stop.

It should not be used as some sort of a metric of importance, value or market support for the project in question. It is a simple metric which, although useful, can and has been manipulated.

While circulating supply numbers can be tweaked to better reflect market dynamics, market cap should be a singular factor in a much more thorough due diligence process. Development, user numbers, scaling and communication should all be thrown into the “DYOR” soup.

Let us not forget that Bitconnect was at one time in the top 10 of CMC. If you had invested solely based on this fact, you would have been utterly Bitconnect rekt.

Do you think crypto market capitalization is inherently flawed? How useful is market capitalization for determining the crypto market’s total valuation?


Images courtesy of Shutterstock, Coinmarketcap, and Coingecko.


OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.


This article was written by Nic Puckrin. He is an ex Investment Banker and blockchain enthusiast. He has founded several online businesses and fell down the crypto rabbit hole in 2016. When he’s not sitting behind six screens trading Bitcoin, Nic is maintaining his numerous mining rigs.

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Bitcoin Cash Merchant Acceptance Is Thriving in These 3 Regions

February 20, 2019 |

Bitcoin Cash Merchant Acceptance Is Thriving Within These Three Regions

Bitcoin Cash supporters are all about spreading adoption, and many enthusiasts are relentlessly trying to get people to try BCH and merchants to accept the cryptocurrency for payments. Right now, there are three regions in the world with a significant number of BCH merchants: Slovenia, North Queensland, and Japan, areas which continue to add a slew of new brick n’ mortar stores every day.

Also read: Regulations Have Ruined the Physical Bitcoin Industry

Three Regions With Lots of Bitcoin Cash Accepting Merchants

Bitcoin cash merchant acceptance is growing. According to Marco Coino, there’s close to 1,000 retailers willing to accept BCH as a means of payment for goods and services. These merchants can be located all around the world and each country displays the number of retailers who accept BCH in the region. As BCH merchant adoption continues to grow, there are three specific regions in the world that have dense populations of retailers accepting the decentralized cryptocurrency.

Slovenia

At the moment, the Republic of Slovenia has the most merchants that accept bitcoin cash. According to geo-mapping application Marco Coino, the sovereign state located in southern Central Europe has 207 active BCH retailers who accept the cryptocurrency for payments. Slovenia has always been known for doing business as the country is in the middle of important European cultural and trade routes.

Bitcoin Cash Merchant Acceptance Is Thriving in These 3 Regions
Slovenia has 207 merchants according to Marco Coino.

The country has always been crypto friendly as well and most of the BCH merchants can be found in in the capital of Ljubljana, home to an area that is known as ‘Bitcoin City.’ BCH accepting merchants in Slovenia include the Asan Chill & Lounge Room, the Malibu Bar, AHZ Design, Venera Shop, the Blackout Bar, Potokar, Hot Horse, Soba’Room promenade bar, and Blockmaster.

Bitcoin Cash Merchant Acceptance Is Thriving in These 3 Regions
‘Bitcoin City’, Slovenia.

North Queensland

Many bitcoin cash fans are probably familiar with the name North Queensland because residents have posted so many many stories about the region’s BCH acceptance, it’s hard not to notice them. At the time of writing, this northern region of Australia is home to 56 BCH accepting merchants. North Queensland has a large Bitcoin Cash meetup, and the area also hosted the country’s first BCH-only automated teller machine.

Bitcoin Cash Merchant Acceptance Is Thriving in These 3 Regions
North Queensland has 56 merchants according to Marco Coino.

Right now BCH supporters can purchase meals, get their car fixed, and even get work done on their home by paying for the services in BCH. Merchants accepting BCH in the northern part of the Australian state include Bel Paese Pizzaria, Elements Studio, RJ’s Mechanical, Dawson Moving & Storage, FNQ Computers, and Toasted Bean Coffee. A denser area of North Queensland BCH-accepting retailers is located in the middle of Condon, Kelso, and the Townsville Conservation Park.

Bitcoin Cash Merchant Acceptance Is Thriving in These 3 Regions
North Queensland BCH supporters are extremely passionate about spreading bitcoin cash adoption.

Japan

Ever since Japan legalized cryptocurrency payments, the region has become a digital currency hub. Japan also has a ton of BCH merchants that accept the cryptocurrency for goods and services. According to the Marco Coino application, there are roughly 56 BCH accepting merchants in Japan.

Bitcoin Cash Merchant Acceptance Is Thriving in These 3 Regions
Japan has 56 merchants according to Marco Coino.

Retailers accepting the cryptocurrency here include the Village Hostel Namba, Hikari Clinic, Ruins Minakami, Good Heavens, Rakan, Yakitori Wine Bar, Ginza Secret, Organic Hair Salon, So Law Office, Cafe de Perle, Soul Food House and Two Dogs Taproom. The Tokyo BCH meetup is extremely large as well, as the group currently has 1,253 members. One member of the Japanese BCH community is Akane Yokoo, a passionate supporter who is responsible for spreading a lot of merchant adoption throughout Tokyo.

Bitcoin Cash Merchant Acceptance Is Thriving in These 3 Regions
Akane Yokoo is responsible for kickstarting a lot of merchant adoption throughout Tokyo

Spend & Replace: Kickstarting the Peer-to-Peer Electronic Cash Evolution

Other global runners up that are densely populated with BCH-accepting retailers include the U.S., Colombia, Barcelona, Belarus, and London. Bitcoin cash merchant adoption continues to thrive and the many retailers listed on Marco Coino does not include the vast array of merchants using Bitpay and Coinbase merchant services. Many BCH supporters believe in the idea of “spend and replace” when it comes to using the decentralized cryptocurrencies. Supporters believe a deflationary currency can still be spent and replaced over time in order to kickstart its evolution as a solid means of exchange. At the moment Slovenia, Japan and North Queensland BCH supporters are taking the lead by continuously spreading more adoption and merchant acceptance.

What do you think about Slovenia, North Queensland, and Japan having the most BCH merchants today? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Marco Coino, Twitter, and r/btc.


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No Internet, No Problem: How to Send Bitcoin by Amateur Radio

February 20, 2019 |

No Internet, No Problem: How to Send Bitcoin by Amateur Radio

In an age where governments are trigger happy at censoring or shutting down networks, it is reassuring to know that Bitcoin can operate sans internet. Network censorship, after all, is not some dystopian storyline but a power exercised by many democratic governments across the world. Thankfully, there are solutions that enable people to send and receive bitcoin even in a worst case scenario. For an advanced technology, it turns out that cryptocurrency can get surprisingly low-tech.

Also read: Bitcoin and Weak Frequency Signals: Bypassing Network Censorship With Radio

Send Bitcoin by Radio and Circumvent Network Censorship

Imagine waking up one morning to find that the internet is down. Not because the wifi’s been disconnected: instead, your government has pulled the plug . You’ve no idea when it’ll be back online, and in the meantime, you’re cut off from life as you know it, ranging from contact with loved ones abroad to paying for anything by card. Since society isn’t big on keeping cash these days, and ATMs stock up on only so much paper money at a time, chances are you’ll have to sidestep – or engage in – a few fistfights if you’re to put a meal on the table.

Since bitcoin is, itself, a form of digital currency, it takes a good amount of preplanning to set up a transaction, but in theory, it could still operate even when conventional options are forcefully removed from the equation.

While most of us will hopefully never experience a dystopian world of intermittent internet, the productivity sages remind us that a failure to plan is planning to fail. Knowing how to transact with cryptocurrency in a chaotic world is the sort of knowledge that might just come in handy one day, and in the meantime will make you the most interesting guest at the dinner party.

Depending on the political stability of your geographic location, learning how to send bitcoin without internet could be nothing more than a fun Saturday afternoon science project. Then again, it could provide the way out of a tight spot one day, whether it’s transferring funds to a buddy stuck in the middle of the ocean or bribing a zombie to feast on the coins stored in your brain wallet instead of devouring your brain.

Bitcoin Over Airwaves

2014 saw the earliest mentions of bitcoin being sent via the airwaves. Hamradiocoin was one of the early vanity altcoins, geared at the ham radio industry. While it wasn’t entirely clear why said niche industry needed a dedicated currency, its current $ 794 market cap – unchanged since May 2017 – adds to crypto’s rich historical arsenal of questionable coins.

But the idea of marrying Marconi and Satoshi was bound to lead to more useful experiments. A step in the right direction saw Finnish company Vertaisvaluutta.fi propose the creation of a P2P half-duplex CB/HAM radio cryptocurrency. Also in Finland, Kryptoradio partnered with a national broadcaster to pilot a cryptocurrency data transmission system that broadcasts bitcoin transactions, blocks, and currency exchange data via national DVB-T television networks in real time. The project failed to launch its commercial phase, with founder Joel Lehtonen explaining:

The project raised huge audience and there has been some serious commercial interest but nothing I am really interested in because they would destroy the original idea of Kryptoradio – distributing the Bitcoin ledger autonomously without internet connectivity.

Come 2018, there was a new experiment in town. Ingredients: Brooklyn-based gotenna, a mobile, long-range, off-grid consumer mesh network, and bitcoin privacy wallet Samourai Wallet. A New Zealand developer transported crypto from a distance of 12.6km away, entirely offline, using only a network-disconnected Android phone and four portable antennas. Though as his Twitter recount acknowledges, it took one heck of a prep, including setting up relay stations.

Fast forward to this year, and in perhaps the most simplistic effort yet, Coinkite founder Rodolfo Novak managed to move BTC some 600km away from Toronto, Canada to Openbazaar co-founder Sam Patterson in Michigan, USA. And in that moment, Bitcoin-by-sky went international.

Advocates for Bitcoin by Air

In 2017, computer scientist Nick Szabo and PhD researcher Elaine Ou delved into the topic at Stanford’s Scaling Bitcoin conference, introducing a research project that proposed tethering bitcoin to radio broadcast to secure consensus proofs using weak signal radio propagation. (View their talk, a copy of the presentation, and our coverage of the event for further information.)

With Novak and Patterson’s latest feat, crypto Twitter went wild. Szabo, showing that he’s still a firm proponent of taking bitcoin skyward, chimed in to congratulate the duo for a successful sendoff that not even a snowstorm could stop.

How to Send Bitcoin by Radio

As Novak and Patterson have illustrated, you don’t need to overload on gear or make space for satellite storage in your backyard to send bitcoin by air. Accompanying an SDR ham on this quest was nothing more than a 40m 7Mhz antenna and the JS8call application.

While the setup seems simple enough (Google “ham radio for beginners” for a primer), in practice this is probably not something you’ll dive into unless you’re just messing around or, in real life, shit gets real.

No Internet, No Problem: How to Send Bitcoin by Amateur Radio
Gearing up is as easy as H-A-M

In truth, there are restrictions aplenty when it comes to sending bitcoin by radio.

First off, legalities. To stay on the right side of the law, some countries require you to be a licensed ham operator, and even then you’re unable to send any encrypted messages or use the airwaves for commercial purposes unless so licensed. At this point, it’s not yet clear which governmental task force will join the SEC and co in clamping down on illegal apocalyptic bitcoin-via-radio transactions.

Since legal restriction is the mother of all invention, Novak and Patterson circumvented this by broadcasting their experimental, non-commercial wallet encryption sendoff via public cypher.

Then there’s prepping it all. For this to be a viable – albeit last resort – solution in an actual nail-bite situation, sender and receiver would have to set it all up in advance. Novak and Patterson were able to execute their experiment by communicating and collaborating in lieu of the transfer, using a brain wallet. (The brainwallet, which is simply storing your mnemonic recovery phrase in your brain, is not to be confused with the recent more nefarious version – the deathwallet popularized by CEO Gerald Cotten who took the keys to Quadriga’s crypto kingdom to his grave.)

Thus, if you’re going to use this as a backup plan for when stuff hits the fan, you’d better secure a right-hand wo/man and a fool-proof project management blueprint while things are still web-friendly. If this process seems as though it walked off the pages of a James Bond novel, yes. It’s decidedly more involved than a mere intra-wallet send-off.

However, if you’re gung-ho on testing out alternative bitcoin transports, don’t let the naysayers stop you. Yours might well be the next proof of concept the interweb is waiting for. The blog Better Off Bitcoin, for one, offers a run-through protocol tutorial.

Scalability Is a Big Bottleneck

Clearly, scaling is a non-issue here. For the foreseeable future, sending bitcoin by radio isn’t happening unless it absolutely has to.

According to Australian crypto trader Boss Cole, “As Bitcoin and other cryptocurrencies are moving into the future, it is an interesting concept to think about what would happen if we instead went into the past. It is possible and easy to transfer Bitcoin without an internet connection, but it is not convenient. There are a number of projects working on this with satellites or their own infrastructure, however at the time of this writing they are not “popular” simply because there is no real demand.” He continues:

In the case of government censorship, the infrastructure would change rapidly. If we were dealing with serious problems, the infrastructure would follow. Because it is possible. If we went into the dark ages, the main way to transfer Bitcoin would be transferring private keys between individuals. This would be simple, but not convenient.

No Internet, No Problem: How to Send Bitcoin by Amateur Radio
Not even extreme weather conditions can deter the determined from sending bitcoin via radio waves

So while it’s theoretically possible to take to the skies and send crypto wallets around the world and all the way into space, DIY bitcoin ionosphere amateurs won’t be sending satoshis to the dark side of the moon any time soon.

Why Radio Wave Transmission Might Be Necessary

We tend to associate worst-case scenarios in which the main character has nothing but a walkie talkie and an old ham lying around with Hollywood’s portrayal of doomsday.

Yet for unstable regimes like Zimbabwe and Venezuela, internet blackouts were how 2019 got its start. In reality, network censorship is an all-too-common control tool for many governments around the world.

India leads the pack with 288 shutdowns between 2012 and 2019, with 134 instances in 2018 alone. The Middle East and Africa aren’t strangers to forcing citizens into offline mode, either.

Under the Communications Act 2003 and the Civil Contingencies Act 2004, the U.K. has an internet kill switch, which could be enforced in light of a serious threat such as a significant cyber attack. The U.S. has had, for the past 85 years, the power to kill electronic communications under the Communications Act of 1934. And with talks of Russia considering a test run to decouple from the global internet, we risk taking a rude awakening if we assume the world’s 72,558 Google searches every second to be an unquestionable given.

Bitcoin for Every Situation

It might have taken a mini-library worth of code to get NASA astronauts to the moon, but sending bitcoin there won’t be nearly as hard. All you need is a radio. Okay, that and a moon rocket. But the point is, this new technology can be just as comfortable – or accessible – even when when the tech you’re using is decidely old school.

Bitcoin might have been invented on the internet for the internet, but it can straddle both the digital and analog worlds. Cryptocurrencies like bitcoin walk the line between money under the mattress and cash in the bank. As these trailblazers show, bitcoin can straddle those worlds not only functionally, but also technically. Thanks to the efforts of the pioneers profiled here, crypto has shown it can survive in even the most challenging environments.

Sending bitcoin by radio isn’t quite carrier pigeon, but in tech terms it might as well be. Which, says crypto developer John Villar, is “probably the most low end you can get before smoke-signaling a brain wallet.”

Can you envision a situation in which you might have to send bitcoin by ham radio? What other ways could you picture cryptocurrency being transferred without the internet? Let us know in the comments below.


Images courtesy of Shutterstock.


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