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Cryptocurrencies

After being spooked by the massive digital tokens crackdown, cryptocurrencies got another pushback by the feds recently. The Securities and Exchange Commission in the U.S has decided to gun down all the cryptocurrencies, especially Ethereum under regulatory scrutiny to whether consider it as security or commodity. After a remarked high range in digital currency world, this bull to bearish reversal is the result of investor anxiety gushes over the squabble between Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC).

ethereum icos

The second most popular digital currency after Bitcoin in the charts, Ethereum is considered under the category of security will have hard consequences. Not only for Ethereum cryptocurrency, but all digital currencies crowdfunded through ICOs, that is Initial Coin Offerings.

Coming under increased regulatory scrutiny by the U.S government, all these cryptocurrencies are viewed as securities due to their speculative nature all around. Regulators have already declared bitcoin as security. But undermining the liquidity of this second popular cryptocurrency can prove out to be disastrous for it and also the cryptocurrency economy. Though the basic mechanism working behind these two digital currencies is not merely same, but they contribute majorly to the cryptocurrency world.

Initial coin offering

Until the mid-2017, selling transaction of these tokens was not much of an exhausting task. A team would emerge through these blockchains and present their purpose of tokens in a ‘white paper’. They would then arrange an Initial Coin Offering Service, ICOs where they would offer coins to nearly anyone who would exchange them for cash or Bitcoins.

The main idea or theory behind this ICO was to fund and support the construction of that newly emerging online service. But later in a few cases, these ICOs were proved to be scams. Absconding of these organizers created an upthrust, where SEC fired a warning claiming that tokens sold in ICO may be considered as securities and their declaration will be mandatory. SEC values Ethereum similar to any public Company who strives every act to value their stock.

Now the developers are concerned that due to the fact that Ethereum ICOs investors bought the tokens in hope that their value will increase in the near future, it could be classed as security. But the plethora of issues is not that straight and easy here.

Ethereum co-founder denies

The whole dilemma was observed and addressed by the co-founder of Ethereum, Joseph Lubin in a conference. He says that the scrutiny doesn’t upset him. According to him and the developers, this does not meet the requirements of security and doesn’t have to be regulated, therefore. There were no concerns about the potential issues about the cryptocurrency. he further said, he never considered and identified the system as security ever.

The Howey Test

A case resided between the SEC and WJ Howey Co in 1946. In this case, the foundation to determine the event to be a commodity or a security was set. It is now known as the Howey Test.

In simpler terms, Howey Co. sold a part of their citrus farm to some investors. Their idea behind it was to gain profits from the operations performed on the farm. It was considered as a securities contract by the judge explaining that the scheme focuses on the idea to obtain profits from the efforts and labor of others.

Basically, in simpler terms, this test helps to determine if a transaction or profit is obtained solely by the hard work and labor of one party and not by the other party, combined in an agreement. This Howey Test has been greatly talked and argued about in the regard of these cryptocurrencies and ICO. As the basic phenomena in Ethereum ICOs reside the same. The investor expects profits primarily from others hard work and efforts.

Securities classification arguments

According to wall street journals, the future of the cryptocurrencies is under debate, whether it would be identified as security or not. Commodities and securities under which the legislation falls are regulated by different authority bodies. They are regulated and operated in different markets and agencies. These differences will greatly affect the investors, sellers, and buyers in the cryptocurrency market.

Despite all the fuss and controversy about the issue, a lot of experts are very positive and hopeful about the future and growth of Ethereum cryptocurrencies. Many have come up suggesting that Ethereum and such cryptocurrencies may be considered as unregistered securities after a continues refusal by the founders of them being never entertained as security. The growing market capitalization of Ethereum cryptocurrency has shown that this is not going anywhere this soon!

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How One Simple Trick By Ripple Almost Dislodged Bitcoin

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In 2017, the cryptocurrency conjecture went mainstream. By going mainstream, it means that the market isn’t dominated by cryptocurrency enthusiasts anymore. We’ll have to accept that the mainstream investors with even a little bit of knowledge of cryptocurrencies are in charge of the market.

A Wall Between Investor And Stupid:

The unit price of a coin is a pointless basis for making investment choices. Even a bitcoin could’ve been a sub-cent item if Satoshi had chosen the final cap to be 21 quadrillions instead of 21 million and the unit price of a bitcoin would’ve been $0.00001697 right now instead of $16,790. But the total market cap still would be $284 billion. Nothing would change except that everyone would have million times more bitcoin and the unit price would be also quite cheaper.

 

Since many cryptocurrencies, as well as bitcoin, are divisible down to Satoshis (10^8), no matter what the supply is, as long as the currency has enough particles to go around for the economic use cases imagined so it could function properly. The number isn’t much important itself, although it doesn’t affect the unit prices, which automatically means that it has a massive impact on the investment choices of mainstream investors.

 

You must’ve been wondering the reason why we look for the market caps when we compare coins. Well, this is because it is how we compare cryptocurrency’s values as a whole, instead of just looking at the unit prices. To envisage this in a fine way, we can normalize the supply for various altcoins to see what the prices would be if they all had the same supply.

 

Zcash is the best example to explain what this actually means. Zcash supply when all the coins are mined the same as bitcoin (21 million), but right now, there are only 31 million mined ones. Also, when you’re looking at sites like Coinmarketcap, it’ll tell you that Zcash has a market cap of just $2.1 billion. It places Zcash far down on the list because it has just 0.6% of bitcoin’s market cap.

 

The price of Zcash is $727 which is almost 3.2% of bitcoin’s $16,098. You’ll have to pay 0.035 bitcoin to buy Zcash if you’re buying with a bitcoin. Zcash must accumulate a market cap of $12bn, to climb to the 12th spot on Coinmarketcap. The reason why the site is listing the coins the way they are is that it tells us what the implied valuation is for coins when they’re bought at current prices.

 

You can get far in your determinations to become a more informed trader than most of the people in the market by just using your common sense and a calculator. Being able of properly comparing the coin valuation doesn’t matter if no one else is doing it.

 

It’ll take a lot of time for the markets to eventually force these prices to sort out themselves. Until they do it, it’s your diligence to ensure that you’re on the right side of that alteration.

 

Story credits: news.bitcoin.com

Image: Google images

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China Becomes the Country with Most Filed Blockchain Patents In 2017

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According to a Financial Times report, China became the country with the most patent filings for Blockchain technology to the WIPO (World Intellectual Property Organization) in 2017. Thomson Reuters collected data from the international patent organization which shows that in 2017, overall 406 patents were filled, from which more than 225 were from China.

At this time, Tech companies from all around the world are rushing to patent their innovative systems developed by using blockchain tech, which is just like a game changer supply chain management.

blockchain patent

Last year, patent applications for Blockchain technology got tripled. An editor at Thomson Reuters’ Practical Law, Alex Batteson said:

“Companies are moving fast in order to protect their ideas in new areas of technological development — long before the technology actually goes to market.”

From 2012 to 2017, Chinese companies held the sixth spot out of the top nine filers for Blockchain patents. Even though all patents didn’t lead to feasible products, but the data remained substantial in that as it shows activity in a particular area of industry and could produce blocks to the entry.

Filed Patents from 2016-2017

China filed 225 patents in 2017 and 59 patents in 2016, while the US filed 91 patents in 2017 and 21 in 2016. Australia in on the third number with 19 and 13 blockchain-related patents in 2016 and 2017, individually.

A patent is an essential tool for any company in order to attract investment. If we talk about the US, then MasterCard, which is a payment processing giant had filed 25 patents for blockchain at the same time. Also, Lichtenstein’s nChain Holdings, which is considered as the worldwide leader in development and research of blockchain technologies by itself has filed 18 applications.

But one thing, that should always be remembered is that not all companies patent their innovations. Also, all patents don’t result in the formation of a workable product/use case. However, according to Thomson Reuters, the patent information imitates activity in a certain sphere and produce entry barriers.

Is Chinese government taking interest in the Blockchain Technology?

The Chinese government is officially taking an interest in the development of Blockchain technology in the country. As there’ve been many reports, the Investment Association of China has approved the development of a Blockchain Development Center.

As well as,  list of objectives was published by the Chinese Ministry of Industry and Information Technology on 23rd March, to boost the development and regularization of Blockchain technology.

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Buy Bitcoin Anonymously – A Beginner’s Guide To Making Anonymous Transactions

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When making an online transaction, several people like to stay anonymous for various reasons. And to achieve anonymity, they tend to use Bitcoin – a peer to peer, decentralized, digital currency.

It is often said about Bitcoin that it provides complete anonymity – which is not true. The Bitcoin transactions are not completely anonymous. They are made through Bitcoin exchanges. And the exchanges involved in a transaction may request you to provide your personal information, such as email address, a photo of yours, government ID, etc. and by using this information, they can trace and keep track of all your Bitcoin transactions.

(Learn about what are the top Bitcoin exchanges to trade coins)

To sort this out, we are going to discuss here some simple methods that will help you make anonymous transactions. Read carefully.

Stay Anonymous – Buy Bitcoin with Cash:

Wondering how to buy Bitcoin anonymously? Use cash! Yes, this is one of the simplest methods to buy Bitcoin anonymously. However, cash is not the only option – there are some other methods too, and we are going to discuss three of the most common ones here.

Buy Bitcoin Through ATM:

The ATMs give you complete anonymity to buy Bitcoin through cash. The machines don’t require any personal information or something else that a third party can trace. All you have to do is to go to your nearest ATM and make the transaction.

To buy the coins, all you have to do is enter your Bitcoin address and the number of coins you wish to buy. If you don’t have an address, just specify that you don’t have one and the machine will automatically generate a paper address for you.

Later on, using that address, you can import the private key and transfer your bitcoins to PayPal, or wherever you like.

Buy Through Local Bitcoin:

Another way to buy Bitcoin anonymously is Local Bitcoins. It’s a way of buying cryptocurrency through cash and in person. Through Local Bitcoins, you can find someone who is willing to sell bitcoins in exchange for cash in or near your area.

In order to use the service, you will need to sign up to their website. There is no documentation involved, so the process is completely untraceable.

Use Your Prepaid Card to Buy Bitcoin:

Prepaid credit card is another option to stay anonymous. The card is easily available at any supermarket or a convince store. Once you have the card, you can use it to buy the cryptocurrency without having to provide any personal information.

Some Methods That Are Just Partially Anonymous:

If you don’t have access to the above-mentioned methods, you can use the ones that are partially anonymous. These methods don’t require you to provide any ID. However, a phone number is still needed to enjoy the service.

Let’s take a look at some of them down below:

Wall of Coins:

A peer to peer Bitcoin exchange which only requires your phone number to use the service. Wall of coins currently operates only in Latvia, US, Argentina, Canada, Poland, Philippines, and Germany.

BitQuick:

Acts like an escrow between a buyer and a seller.  BitQuick takes the cryptocurrency from a seller and instructs the buyer to deposit cash into the seller’s account. Once the cash is deposited, the coins are released.

BitQuick also requires your phone number for its services.

Conclusion:

These are some ways to trade Bitcoin with complete/partial anonymity. If you are looking to buy coins without being traced, it will solve most of your problems.

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ICO Promotion by John McAfee – How much will it cost?

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Do you know how much it cost to get a crypto influencer for your ICO promotion on social media platforms? Here’s the surprising answer!

ICO (Initial Coin Offering) operators don’t really like to disclose the amount they are spending on marketing, although promoters usually prefer to delay discussions related to prices ’til after they’ve had the chance to make a sales pitch as précised figures are hardly discussed in public. However, John McAfee (cybersecurity pioneer) has spent all his life resisting convention, and now he is operating an ICO marketing service, McAfee Crypto Team.

ico marketing service

Company’s Official Statement

According to the official site of the company, McAfee Crypto team is a full-service ICO promoter as it offers:

  • Whitepaper support
  • Web optimization
  • Marketing
  • Strategic advice

The cost for many of the services is not listed; however, clients will have to pay $105,000 to get McAfee tweet about their ICO, which will be sent to its 811,000 followers, at least few of them will be probably bots.

According to the website:

“John McAfee’s tweets are by far the most influential in the field of cryptocurrency. Few leaders in the Crypto community can come close to Mr McAfee’s reach into the heart of the cryptocurrency investor community.”

Dubious Claims by McAfee Crypto Team

Furthermore, the website makes suspicious claim that this is one of the most inexpensive ways of marketing a cryptocurrency project. The site also claims:

“Given Mr McAfee’s price of $105,000 per tweet, the cost per investor reached is the least costly of any marketing avenue in the Crypto world. Considering only his own followers, the cost per investor reached is $0.13. Considering his reach beyond his own followers, the cost per investor reached is frequently less than a penny. This is orders of magnitude less than any other approach.”

Even with the heavy price tag, the company still claims that so many projects are showing their interest that now the company has to establish a $750 registration fee to stop staff from being dazed with applications. While responding to opponents, McAfee refused to accept that he has sold out and stated:

“They say I sold out ’cause I use my tweets to promote, but the last 200 ICOs that lined up, we rejected 195 and chose 5.”

He added, he promotes only those projects that he believes in as he tweeted:

“I only promote what I believe.”

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