Google Chrome Leads the Pack, but Privacy-Oriented Browsers Gain Traction

Privacy-oriented web browsers are making a serious dent in the user base of various mainstream surfing platforms like Chrome, Safar and others.

In recent months, big-name players like Google and Apple have been going the extra mile to showcase their privacy features to the world. However, as most people are now aware, these multinational companies have business models that are centered around collecting and aggregating the data of their customers. 

In this regard, growing interest in privacy-first browsers like Brave clearly suggests a collective increase in internet users’ concern over how their personal information is being accumulated, stored and utilized on a day-to-day basis.

Individuals all over the globe have become so accustomed to using free search, chat, video and other web services that they rarely understand the repercussions, especially in terms of how they are sacrificing their privacy. The Facebook–Cambridge Analytica scandal, along with other data hacks, has shed light on the potential nefarious uses of data collection. 

Expounding his views on the matter, John Jefferies, the chief financial analyst at the crypto and blockchain forensics firm CipherTrace, told Cointelegraph that privacy concerns make users shift to decentralized platforms and privacy-oriented browsers, adding:

“The topic of online privacy is even more relevant now that millions more people are working remotely due to work-from-home orders in the midst of the coronavirus pandemic. It is incumbent upon virtual video and web communications platforms to convey data collection, privacy practices, and security options so that remote workers understand the implications of relying on these tools for virtual meetings in which sensitive information is discussed and frequently recorded.”

The top web browsers in the market today

Chrome

Despite the criticism Google has faced in recent years for indulging in various user data distribution malpractices, the company’s Chrome web browser is still by far one of the most used internet surfing platforms in the world today. However, despite all of this negative backlash, Jun Hao Tan — the senior vice president and co-founder of the Zilliqa blockchain platform — believes that it would be misguided to disregard the efforts that big-name companies are implementing in relation to their browsers. 

Tan opined that one can actually argue that many of today’s mainstream browsers have started employing even more stringent privacy-preserving enhancements in the face of data privacy regulations. For example, Google Chrome recently announced that it would be phasing out third-party cookies by 2022 and has proposed a “Privacy Sandbox” with more privacy-oriented application programming interfaces for advertisers to consider for the future. Tan further added:

“When it comes to decentralization and embracing open-source software, Chrome or to be more specific, Chromium — Google’s open-source browser software project — ranks highly. In fact, Chromium has since then been adopted by many other browsers such as privacy-oriented blockchain-based browser Brave and a newer version of Microsoft Edge. However, as Chrome is led by a commercial company there may be conflicts of interest.”

Firefox

Similarly, other mainstream players like Safari and Firefox have also been making notable advancements when it comes to blocking third-party cookies by default, as well as preventing websites and advertisers from engaging in cross-site tracking of their users’ web movements.

According to W3Schools’s browser use statistics, Mozilla Firefox is one of the most loved web browsers in the world today. In fact, many consider Mozilla's introduction of Firefox as a key driver for why open-source browsers have increased in popularity over the years. 

Talking about the utility of this platform, Anna Tutova, the CEO of the crypto consulting agency Coinstelegram, told Cointelegraph that she personally is a big fan of Firefox because it offers a high level of security while also providing its users with a host of advanced features, such as pop-up blocking, a private browsing mode, as well as protection against fingerprinting, tracking, and malware and phishing attempts.

A somewhat similar outlook is shared by Caleb Chen, an author for Private Internet Access’s Privacy News Online blog. He told Cointelegraph that many of the extensions and add-ons that are freely available with Firefox have made it quite easy for users to access parts of the decentralized internet. Even when it comes to crypto integration, he pointed out that Firefox presents its users with a whole host of cryptocurrency wallets that can be installed with a few clicks, either as extensions or add-ons.

Opera

Opera is a highly popular web browser that has been able to amass a truly global following in recent years. Additionally, on March 30, Opera became the first major surfing platform to grant users access to decentralized web pages through its partnership with Unstoppable Domains.

Among traditional browsers, it is by far one of the most advanced in terms of crypto integration, since the company recently launched a blockchain browser called Opera Touch that comes with its very own built-in crypto wallet. 

Providing his insights regarding the privacy and security potential of Opera, Ankit Bhatia, the CEO of Sapien Network — a democratized social platform built for user privacy and customizability — told Cointelegraph that Opera’s recent integration of the InterPlanetary File System protocol has been a big step forward when it comes to maximizing individual privacy. Technically speaking, IPFS is a protocol and peer-to-peer network for storing and sharing data through the use of a distributed file system.

Charles Hamel, the head of crypto at Opera, told Cointelegraph that Opera’s vision from the very beginning has been to take care of its users’ data privacy and security. On the subject, he added: “For this reason, even if you aren’t accessing the decentralized web, you can use our built-in VPN or tracker blocker to protect yourself.” Similarly, commenting on the steps the company has been taking in regard to crypto-enabled technologies, Hamel pointed out:

“The first challenge to the mainstream adoption of blockchain technologies we saw and fixed was: a lack of user-friendly wallet solutions or browsers which would provide native blockchain support. We have solved this problem with our native Crypto Wallet, built into the browser (mobile and desktop). The second one was the difficulty of obtaining crypto. We have also fixed that by providing seamless crypto wallet top ups in our browser.”

With that being said, some critics have pointed out that since Opera is a Chinese-based company, there may be certain privacy-related issues that spring up in the future, especially with the Asian powerhouse’s pro-censorship stance.

Brave

Just a few years ago, the name Brave would not have elicited any response from internet users. However, according to recent data, the privacy-oriented web browser has now surpassed the 10 million monthly active users mark. In fact, according to a tweet published on April 1 by the company’s head of marketing, Des Martin, the browser’s user tally increased by more than a million people in March alone. Not only that, the platform has also been able to consolidate a creator pool of about 340,000 individuals, thereby leading many experts to believe that Brave has now entered the mainstream.

When it comes to an internet-surfing platform that provides users with a healthy mix of privacy and decentralization, many experts believe that Brave is a highly palatable option. As an open-source browser, Brave not only blocks malicious advertisements and trackers but also rewards publishers through its native Ethereum-based Basic Attention Token (BAT) that powers its blockchain-based digital advertising ecosystem. In addition to all this, the browser also comes with a crypto wallet that accommodates a whole host of popular digital assets, such as Ether (ETH), Bitcoin (BTC) and Litecoin (LTC).

In regard to why the market has responded so positively toward Brave, CEO and co-founder Brendan Eich told Cointelegraph that over the past couple of years, he has seen a privacy wave that has fueled the growth of various privacy-oriented apps. He noted: “More and more users are becoming aware that once their data is harvested by the cloud, they lose ownership and control.” However, he did concede that despite onboarding new users, retention is a key challenge, adding:

“So we keep innovating and improving on Chrome compatibility with much greater than Chrome performance due to Brave’s shields. This translates into larger circles of adoption, and also into more partnerships and ecosystem growth. As more and more decentralized apps grow and collaborate, a new landscape will represent a viable alternative to the current broken model.”

Related: Brave New World: Browser Challenging Google for the Future of Privacy

Commenting on the browser’s growing popularity, Tan pointed out that one of the key reasons why Brave has been able to capture the attention of the masses is because it recently joined the AdLedger consortium, which has many leading advertising and media giants as members, including Publicis, GroupM and IBM. Not only that, HTC also recently selected Brave as the default browser for its blockchain smartphone, Exodus. Tan further added:

“Brave is also lauded for its emphasis on speed, largely enabled by its ‘ad-stripping’ strategy which means it downloads comparatively less content from websites than any other mainstream browser on the market today.”

On the subject, Billy Rennekamp, the grants manager for the Interchain Foundation — an organization that seeks to advance the use of open, decentralized network technologies — told Cointelegraph that the team behind Brave has done a great job maximizing its browser’s ability to block ads and web trackers, as well as in offering its users access to the Tor network.

Safari

At one point in time, Apple’s Safari was one of the world’s most widely used internet browsers. However, the platform has in recent years lost a lot of its users to other more efficient options, such as Firefix, Chrome, Brave and others. In fact, Safari was initially known for its ability to block third-party cookies by default, thus preventing websites and advertisers from engaging in cross-site tracking of user behaviors online.

That being said, Safari is a close-source project — only the WebKit portion of the platform is open-source based — and thus its overall capacity to provide users with certain decentralization and privacy-related features is quite constrained.

Tor

Over the last decade or so, Tor’s global popularity seems to have increased dramatically. For starters, it is one of the most privacy-oriented browsers that one can make use of today. It not only prevents third-party trackers from keeping tabs on an individual’s surfing habits, but it also automatically clears one’s cookies and data history. 

Furthermore, from a technical standpoint, Tor encrypts an individual’s traffic three times using three different nodes, all of which are decentralized and operated by volunteers. Each node peels away only one layer of encryption, so the full message cannot be accessed by an individual operator. All of this, however, results in slower surfing speeds.

Unfortunately, the Tor network has some dark associations with it as well, especially since the browser has been used by miscreants to access a whole host of darknet marketplaces where it is possible to acquire and trade illegal items, such as drugs, firearms, etc. 

Status

An up-and-coming name in the world of decentralized web browsing, Status has been gaining widespread traction among users looking to secure their digital data in the easiest manner possible. Status offers users a three-in-one platform that includes a messenger, crypto wallet and Web 3.0 browser. Speaking on the technological capabilities of this software, Rennekamp stated:

“I think Status has made privacy and decentralization core to their offering as a crypto product and it shows. Mostly through their work on Vac, the open protocol for decentralized and encrypted chat, but also through their support of the Ethereum Name Service.”

He further pointed out that the team behind Status recently launched its first public release, Whisper, which is an open protocol for decentralized and encrypted chat that was developed by blockchain auditor and Solidity developer Dean Eigenmann.

MetaMask extension

While not a pure browsing application in and of itself, MetaMask is a browser extension that is fully compatible with Chrome, Firefox, Brave and Opera. Additionally, the add-on also comes with a native crypto wallet that is extremely popular among digital currency owners worldwide. 

Simply put, MetaMask provides users with one of the simplest and most secure ways to connect with various blockchain-based applications.

Will the future of internet browsing be privacy-oriented?

Despite big-name companies like Google continually pushing the narrative that they are looking to maximize the privacy of their users, the situation appears to be the exact opposite, especially since smaller players like Brave have been able to amass a large following in recent years.

In this regard, it seems as though there is a shift in market perception taking place when it comes to individual privacy and security, such that more and more people are beginning to move from centralized web browsing services like Microsoft Edge to more decentralized and transparent ones. On the issue, Bhatia said that he does not believe Google when it talks about prioritizing privacy, adding:

“I hope Brave and Opera make enough noise about their privacy features. There’s a strong potential to change perceptions about privacy and how users view their web browsers. Brave’s growth trajectory means there’s room for a major private browser in the market.”

And while Rennekamp believes that Google will most likely maintain a lead within the market segment, players like Brave and Opera have the potential to push the conversation in a more privacy-oriented direction. Similarly, Chen also believes that as time goes on and people become more tech savvy, their preference for transparent, auditable and incorruptible (decentralized and distributed) internet tools will slowly but surely grow.

Global Crypto Community Comes Out in Full Force Against Coronavirus

In the wake of the coronavirus pandemic, a number of blockchain firms have stepped up their global relief efforts.

With cases of the deadly coronavirus still popping up at an unprecedented rate around the world, many prominent members of the blockchain and crypto industries have heeded the global cry for help and have swiftly engaged in meaningful action — be it in terms of direct research-related participation, or through the donation of funds or resource materials, such as masks, sanitization equipment, etc. 

For example, as early as January, premier cryptocurrency exchange Binance had already donated $1.4 million worth of medical supplies to Chinese authorities in a massive effort to combat the devastating effects of the coronavirus. Dubbed as the “Binance for Wuhan” project, the effort has seen the crypto trading platform donate a total of 366,000 pairs of gloves, 56,800 masks, 9 sterilizers, 5,280 bottles of hand sanitizer, 20,000 testing kits, 7,850 protective suits, 20,000 pairs of goggles, 388 oxygen concentrators, 1,000 germicidal lamps and roughly five tons of disinfectant. 

According to Jarred Winn, senior vice president of Binance Charity — the exchange’s social outreach wing — seven batches of medical supplies have reached 124 hospitals, medical teams and command wings. The germicidal lamps were sent to Wuhan University People’s Hospital and then distributed to 74 medical teams and health centers, as well as the hotels that accommodated the medical teams. 

Winn further told Cointelegraph that the germicidal lamps have the ability to produce ultraviolet light that can result in the deactivation of bacteria, viruses and protozoa, providing a clean living and working environment for the medical teams.

Additionally, Binance Charity has also embarked on a new initiative wherein the company is looking to raise a total of $5 million in cryptocurrencies to acquire essential medical items for all of the countries that have been affected the most by the COVID-19 crisis. In this regard, a bulk of the funds will be used to quickly disseminate key medical equipment and supplies across countries like Italy, Germany, Spain, South Korea, Iran, Turkey, the United States and the United Kingdom. 

Commenting on the developing coronavirus situation, Changpeng Zhao, the founder and CEO of Binance, was quoted as saying: “We encourage the community to take part in this initiative as we unite against COVID-19, and together, we’ll drive impact.”

On the role that blockchain technology has been playing in helping Binance with its aforementioned efforts, Winn told Cointelegraph that a long-lasting dilemma related to charity has been the question of “Where did my money go?” In regard to this point, he added:

“With blockchain technology, transparency and immutability allow any user to see that funds have been transferred to an individual with 100% certainty, and subsequently, in this case, there are no secrets in giving.”

Some notable efforts

The Giving Block

Recently, non-profit fundraising platform The Giving Block launched a crypto donation drive to combat the ongoing COVID-19 pandemic. According to The Giving Block Co-Founder Alex Wilson, the #cryptoCOVID19 alliance is being facilitated in partnership with Gitcoin — an open-source bounties platform on the Ethereum blockchain. In this regard, Wilson told Cointelegraph that Gitcoin and Vitalik Buterin will be matching donations up to $100,000 made in Ether (ETH), Dai (DAI) and ERC-20s. He further commented:

“In total, there are over 20 industry partners helping support our efforts, each contributing in a unique way. For example, another one of our partners, Brave, is providing free ad inventory as part of their ad grants program to help drive traffic and awareness to the #cryptoCOVID19 campaign page.”

Wilson also pointed out that donations made through The Giving Block’s official widget will go directly to the aforementioned nonprofits — with each of these entities having its very own institutional Gemini account on the backend so that incoming funds are directly passed to the beneficiaries. Lastly, while donations are possible via a host of digital assets, Wilson told Cointelegraph that a vast majority of the funds that have been received up until now have come in the form of Bitcoin (BTC), ETH, DAI and Zcash (ZEC). 

COVIDathon

The Decentralized AI Alliance, or DAIA, recently launched #COVIDathon, the world’s first decentralized artificial intelligence hackathon that has been designed to help assist the global medical industry in creating solutions to combat COVID-19. 

The alliance currently has more than 50 members from the blockchain space, including SingularityNET, Ocean Protocol, Aragon, Shivom, NEM, InboundJunction, as well as communities of health care professionals, biotechnologists and geneticists.

Cointelegraph spoke to Ben Goertzel, chairman of DAIA and the CEO and founder of SingularityNET. In his view, the current global pandemic is confronting the masses at large with a lot of ‘unknown unknowns,’ and thus in the face of such radical uncertainty, Goertzel believes that the crypto community as a whole must launch into action immediately. Talking about COVIDathon in more detail, he added: 

“The COVIDathon AI/blockchain hackathon is pulling together a diverse global group of AI and blockchain developers, medical and policy researchers, forming a community capable of creating and deploying new tools with the responsiveness and creativity demanded by a situation that is constantly changing.”

Goertzel hopes that the community will come up with innovations, such as new apps for monitoring the health of individuals and communities, discovering new approaches for simulating the spread of COVID-19, in addition to developing new machine learning tools to help biomedical and epidemiological analysis, and many others. 

Additionally, Bruce Pon, one of COVIDathon’s key participants and co-founder of Ocean Protocol, told Cointelegraph that even though a whole lot of people are currently willing to compromise their privacy to ensure the safety of the masses, such a mindset should not become the new norm. In Pon’s view, COVIDathon will showcase useful, real-world applications that will look to give individuals more control when governments ask to surveil and track people to defeat the coronavirus.

Ripple Labs

On March 25, Ripple Labs issued a tweet stating that the organization has donated a total of $200,000 to two separate non-profit organizations — namely, the Tipping Point Community and the Silicon Valley Community Foundation. The money is primarily aimed at containing the spread of COVID-19 throughout the United States since a host of new data has shown that the total number of confirmed cases in the country is now higher than the number of reported cases in China.

San Francisco-based Tipping Point Community is a non-profit organization that recently launched its Emergency Response Fund, through which it seeks to raise a total of $1 million for the COVID-19 response initiative. Similarly, the Silicon Valley Community Foundation’s COVID Regional Response Fund will focus more on the containment of COVID-19 within the Silicon Valley region.

UAE’s MOCD

According to a recent report, a number of international blockchain firms have come together to help minimize the spread of the virus, as well as prevent future outbreaks across the United Arab Emirates — mainly through the use of distributed database-related solutions. 

In this regard, the UAE’s Ministry of Community Development has already initiated the use of various digital platforms to streamline its government’s services. For example, a blockchain system that is reportedly capable of processing 2,919 types of documents is currently live — thus allowing citizens to authenticate their official certificates and other paperwork online without having to step out of their homes.

Speaking on her country’s latest lockdown measures, Hessa Essa Buhumaid, UAE’s minister of community development, was quoted as saying that the “step confirms the ministry’s commitment to ensure the continuity and flexibility of all government services in light of the directives of the smart government to reduce the spread of COVID-19.”

Napoli Blockchain Association

The Napoli Blockchain Association recently launched a crypto fundraiser to help combat the coronavirus by purchasing a host of electromedical equipment to strengthen Italy’s health care sector — specifically within the nation’s Campania region. 

Italy has been one of the worst-hit countries of the COVID-19 pandemic, along with Iran, the U.S., Spain and China. What is most striking is that the recent virus outbreak is putting an exceptionally heavy load on the Italian health care system — a country that was touted to have one of the best medical infrastructures in the world. 

Providing his thoughts on the matter, Napoli Blockchain Association President Celestino Santagata said that he and his team will use the raised funds to acquire specific equipment, such as ventilators and vital medicines to help those in need.

Mateon

Blockchain driven immuno-oncology company Mateon released a report on March 25 claiming to have successfully completed positive testing for multiple COVID-19 drug candidates. Per the release, one of the company’s formulations — the OT-101, a TGF-Beta antisense drug — seems to have displayed significant effect against COVID-19. 

From a technical standpoint, it appears as though the drug works by inhibiting the virus from binding to its target, thus preventing the virus from replicating and infecting its host with pneumonia-related symptoms. In the wake of these promising developments, Vuong Trieu, president and CEO of Mateon, was quoted:

“We are excited about our platform for rapid response against viral epidemics and look forward to working with GMP to further expand on that platform in the U.S. and China.” 

Folding Home (F@H)

Folding@Home is a digital platform that has been designed to help provide medical researchers with adequate computational power to help them with their investigative efforts. The project has gained a lot of mainstream traction over the past month or so, with Greg Bowman, director of F@H, revealing that the project now has over 400,000 computers actively contributing their processing capacity to help with the aforementioned research efforts. 

Additionally, Folding@Home has also been able to garner the support of various big-name players, such as Tezos, a multipurpose blockchain platform, and CoreWeave, a company offering affordable and scalable machine learning on NVIDIA GPUs.

In unity, there is strength

Despite the mass destruction — both economic and social — that has occurred due to the COVID-19 pandemic, there have been many silver linings that have come through in this time of need. For example, a number of prominent individuals operating within the private sector, entertainment and sports industry have come forth and made huge contributions to aid research, as well as provide essential supplies to those currently affected by the coronavirus.

Even though the virus sadly continues to spread and with the efforts taken by a number of governments across the globe, it seems as though there might be some respite waiting right around the corner for everyone.

Bitcoin Fares Well Against Fiat Currencies, but It’s in a Class of Its Own

Much like Bitcoin, most fiat currencies experience periods of economic stagnation and immense decline when looked at from a broader perspective.

Gone are the days of dusty ledgers and checkbooks. Over the last decade or so, the word “money” has taken on a completely new meaning for a lot of people all over the world. This is partly due to the masses being utterly frustrated with the way many big banks handle their business transactions.

In fact, with the use of physical money on the decline, the market for digital payments has started to replace a whole host of traditionally popular banking avenues. To put things into perspective, in Asia alone, more than 1.4 billion individuals make use of China’s two biggest payment platforms to facilitate their daily transactions.

Not only that, but with the rise of crypto, an increasing number of consumers all over the world have been afforded the opportunity to make their payments at thousands of retail outlets via the use of their digital holdings. However, with that out there, it is worth asking oneself the question, How do traditional currencies correlate with cryptocurrencies, and if they do, what are the key indicators that clearly point to these associations?

Bitcoin as a currency

To get a better understanding of the matter, Cointelegraph reached out to Gregory Klumov, the CEO of euro-backed stablecoin issuer Stasis. In his view, over the last 10 years of Bitcoin’s (BTC) lifecycle, the flagship crypto asset has exhibited short periods of correlation with risk assets such as equities and emerging-market currencies. He went on to add:

“In the long run, I could not find any meaningful (>0.5) r-squared value comparing it to other assets. I believe that BTC will further continue to gain traction as a non-correlated asset, and become a genuine member of the liquid alternatives asset class.”

Even though Bitcoin has been the best-performing asset of the last decade, questions regarding its volatility have often been raised. To this point, Will Reeves, the CEO of Fold — a privacy-focused platform for crypto payments — told Cointelegraph that even though Bitcoin is perceived as being more volatile than most fiat currencies, the crypto asset is not subject to the same inevitability of inflation as the United States dollar, Russian ruble or the euro. Speaking on what truly sets Bitcoin apart from state-backed currencies, Reeves opined:

“Governments are constantly printing more money, but bitcoin has a fixed supply (no more than 21 million bitcoins will ever exist). Scarcity creates demand, ensuring that bitcoin will tend to gain value over time, unlike fiat currencies whose long-term value tractories are more unpredictable.”

A closer look at Bitcoin’s relationship with premier fiat currencies

Upon examination, it becomes clear that when Bitcoin is pitted against major players like the U.S. dollar, euro, British pound, Russian ruble, etc., the premier crypto coin’s meteoric rise shines forth quite clearly, as all the aforementioned currencies have faced repeated periods of long-term stagnation and economic collapse. In this regard, Bitcoin stands alone in its ability to recover beyond its past highs within short time windows, as has been exhibited time and again by the flagship asset.

On the subject, Sky Guo, the CEO of Cypherium — an enterprise-focused blockchain platform — told Cointelegraph that he believes Bitcoin’s amazing comeback power lies solely with the fact that it makes use of a deflationary design model. Not only that, Guo also pointed out that Bitcoin stands alone in another, more abstract metric: its overall purchasing power. He explained:

“Some experts misguidedly confuse price with purchasing power, i.e., they believe that a currency’s purchasing power is directly expressed by its USD value. In fact, Bitcoin’s purchasing power has risen as steadily as the dollars’ has fallen. Since the start of the 20th century, a single dollar’s impact on the material flow of goods and services in the world has steadily declined. Bitcoin’s impact on wealth and the flow of capital is becoming more powerful every day, as the engineers and entrepreneurs in our space continue to build out its spending infrastructure.”

Providing his detailed insights on the matter, Gauthier Bros, the CEO of Atayen — a company providing web solutions across the fields of blockchain, big data and cloud computing — told Cointelegraph that while the purchasing power of most established fiat currencies may not appear to fluctuate wildly when looked at within a monthly time frame, on the scale of years and decades, individuals who invest heavily in fiat inevitably end up losing value in unprecedented proportions. He explained:

“Everyone knows well that the value of $1 or €1 was worth much more in the 1990s than it is today. BTC is only a decade old, if on May 21, 2011, one could buy a pizza for 5000 BTC, today those same 5000 BTC are worth $30,000,000. Many savers who have bet on FIAT currencies would be very happy to have been able to take advantage of such an appreciation of their savings.”

Finally, Eric Benz, CEO of the Changelly crypto-trading platform, told Cointelegraph that when he started deeply exploring the crypto domain at the turn of the last decade, Bitcoin was trading at around $1 per coin. However, between 2011 and 2018, the digital currency went on to showcase its true monetary worth, regardless of any comparisons to traditional assets. Benz further added:

“I don’t really agree when Bitcoin is compared against fiat currencies. Bitcoin might act like money but it is far bigger than this, hence its value and volatility. Money is merely the first ‘app’ for Bitcoin and we have yet to witness how revolutionary this technology will be in changing many different industries. Fiat currencies all have to be more or less strong but as we have seen over the past decades, government-backed money is becoming more and more suspect and as a result, people have begun to really lose trust in it.”

He then stated that in many of the world’s more volatile regions, local currencies are slowly losing significance as more people become increasingly dependent on the U.S. dollar. Benz also pointed out that due to Bitcoin’s scarcity — in that only a total 21 million coins will ever exist — the currency will become more valuable as time passes.

Bitcoin’s volatility compared with traditional fiat assets

Even though there is a perception that traditional fiat assets like the dollar or the euro are not as volatile as crypto, it is worth remembering that volatility can only be truly measured when one is allowed to work with a minimum of two distinct assessment parameters, like the dollar being stacked up against Bitcoin.

To better illustrate this point, Sidharth Sogani of Crebaco, a blockchain/crypto research and intelligence company, told Cointelegraph that the price of Bitcoin is conventionally considered to be volatile when talking in terms of the dollar alone. However, he proceeded to add:

“One Bitcoin always remains one Bitcoin. Same thing is with other fiat currencies. But the problem is we don’t get to see the other parameter to measure the value of USD (as in we don’t know what is it backed by) since governments don’t disclose the other side. Hence we think one dollar is still one dollar in terms of its face value, not the actual value. The actual value is badly manipulated. Recently, trillions of dollars were pumped in due to the crash, where do you think they are getting all those dollars from?”

On a somewhat related note, Nokenchain CEO Guillaume Thuillet told Cointelegraph that while fiat currencies tend to display low short-term volatility, this is simply due to the fact that if the money currently being circulated globally were to drop by 10% in value overnight, the results experienced worldwide would be catastrophic. Therefore, in essence, governments have to keep printing money and pumping it into their local economies to maintain a status quo for markets all over the world to remain relatively stable.

Finally, Jasper Tay, the chief operating officer at Plutus — a crypto debit card provider — commented on the volatility aspect of Bitcoin. He told Cointelegraph that people shouldn’t be looking for correlations between Bitcoin and other fiat currencies, but should rather compare the crypto asset with stock market indices. “The market needs to realize there is an opportunity to trade into a decentralized asset when we are on the cusp of another credit crisis and depression,” he said.

Tay also opined that while Bitcoin is widely recognized as a volatile asset, investors need to bear in mind that this market still has a relatively low number of participants when compared to most fiat-driven sectors, which results in less liquidity and faster price jumps.

Why do people still trust the traditional banking sector?

For more than a century, people all over the world have been taught in their schools and universities that a slight degree of inflation is always necessary for economic growth. However, this very inflation results in what could be referred to as a recession every decade or so.

Even though the global value of different economies across the planet might have increased a hundredfold over the past century alone, what this basically points toward is that a bigger financial bubble is being created behind the scenes. Elaborating his thoughts on this matter, Sogani added:

“These bubbles have now caught the attention and people are more aware of how manipulation is being done by central banks. Bitcoin is deflationary or a stagnant system. as there is no new printing of BTC. The Alfred Marshall (father of economics) is yet to be born for the decentralized world. Very soon this economic aspect of the Bitcoin-led economy will be recognized.”

On the same subject, Benz explained that people still trust the system in place because it is all they have ever known. In addition to this, he pointed out that there is a clear lack of educated individuals who are aware of the differences between government-backed fiat currencies and crypto.

Paolo Ardonio, the chief technology officer of Bitfinex and Tether, also commented on this topic, telling Cointelegraph that the situation the world is currently facing has validated what the crypto industry has been building to over the past 10 years. He added that the global economy needs transparency and blockchain now more than ever: “You can’t keep printing money out of thin air leaving our children to pick up the debt. Bitcoin is the answer.”

Lastly, Bros added lightheartedly that whether it’s the U.S. Federal Reserve or the European Central Bank, most centralized financial entities don’t seem to find obstacles to their favorite pastime: printing more money. He also added that this very act of creating more cash out of thin air is the basis of all financial bubbles and continues to give a lot of people the confidence they currently have in their existing monetary systems. He pointed out:

“Thanks to their dollars, people can fill up their shopping trolleys, the petrol tank of their car. They cannot do this directly with Bitcoin, it is this capacity of FIAT that gives them their confidence. If tomorrow, and this will be the case, the masses find themselves extorting from their savings ([i.e.,] war effort against coronavirus), that their money no longer allows them to consume as before, they will turn to a system that does not allow this kind of excess, BTC will then make sense.”

Looking ahead

From a historical standpoint, a vast majority of traditional fiat assets have enjoyed extended durations of capital deployment from established institutions that provide their value with a stable anchor. However, the problem here is that institutional capital tends to reduce the volatility of an asset by running arbitrage and derivatives strategies.

Being a very young asset, Bitcoin still lacks the same volume of institutional capital participation, which is why it still fluctuates quite wildly. However, with the masses now slowly beginning to realize the limitations of the legacy financial system, it would not be surprising to see the aforementioned scenario change in the coming few years.

Brave New World: Browser Challenging Google for the Future of Privacy

Brave’s use of various novel privacy and security features has helped the browser’s reputation grow quite substantially over the past couple of years.

On March 16, Brave, a privacy-oriented web browser, filed a formal complaint against Google with the Irish General Data Protection Regulation enforcer — since the multinational tech conglomerate’s European headquarters are located in Dublin. 

According to Brave, Google has been quite irresponsible with how it has been collecting and sharing the personal data of its users. Brave’s chief policy and industry relations officer Johnny Ryan went as far as saying that owing to Google’s dubious operational policies, the multimedia giant has created a “free for all” data warehouse that is not only being abused quite blatantly but is also in clear violation of the GDPR rulebook. 

From a technical standpoint, Google is being accused of violating Article 5(1)b of the GDPR, which states that digital data being collected by a company should be done purely for reasons that are “specified, explicit and legitimate” in nature. The article states that the acquired data should not be in any way processed in a manner that is incompatible with the aforementioned purposes. Ryan contends that by filing a “purpose limitation” complaint with the GDPR, Brave will help give individuals the power to decide which of Google’s services they choose to share their data with.

Brave points the finger

In a recent conversation with Cointelegraph, Ryan stated that even though some of Google’s individual products (such as the Search function, for example) may be using customer data appropriately, the company takes personal information collected through all of its various offerings and combines it for various ill-defined purposes:

“This infringes the GDPR’s ‘purpose limitation principle.’ Brave’s evidence illustrates that there is a data free-for-all inside Google. One can never know what Google does with one’s data. If such a vast company as Google were to be permitted to operate a data free-for-all, then the GDPR would be an illusory fantasy.”

Furthermore, according to a study released by Brave that takes a detailed look at a number of documents written for Google’s business clients, technology partners, developers, lawmakers and users, the company claims that the multimedia giant routinely acquires a wide array of sensitive data from its customers — via the use of different websites, apps and operating systems — and uses it for “hundreds of ill-defined processing purposes.”

Providing his insights on the matter, Jesse Crouch, owner of Never Astray — a privacy-oriented firm that provides clients with detailed, 3D topographical maps — told Cointelegraph that Google obtains data from its users any way it can, calling this mode of operation the company’s “bread and butter.” On the subject, he added:

“Google created its analytics product so that it has as much data as possible about the web as a whole, including the traffic to websites that don’t come from its search engine. Google Maps isn’t some super expensive philanthropic effort to give the gift of navigation to the world — it was designed to give Google as much data about locations of places and users as possible.”

Cointelegraph received a similar view from Norbert Goffa, executive manager of ILCoin — a blockchain-based storage system solution — who pointed out Google’s various cases that have resulted in lawsuits worth more than $200 million. One of the most prominent ones dates back to 2010, wherein Google had made use of specially equipped cars and trucks to collect emails, passwords and other personal information which was then transmitted over unsecured Wi-Fi networks owned by tens of millions of people around the world. Goffa went on to add:

“Another lawsuit against the corporation was related to inadequate protection by Google of the information of YouTube users under 13. The company’s actions violated the Children’s Online Privacy Protection Act, which prohibits the collection of information and the publication of data belonging to users under 13 years old without the consent of their parents.”

A Brave way out?

From a fresh install, Brave looks like a browser that maximizes individual privacy and security, since ads and trackers are blocked automatically. This basically means that companies like Google and Facebook no longer have the ability to monitor the real-time activity of their users.

It should also be highlighted that people who make use of ad blockers and/or anti-tracking tools on Google’s native browsing service — Chrome — are often unaware that the browser automatically signs users into their personal accounts, thereby negating the overall effectiveness of most anti-tracking tools. 

Enumerating the various points that make Brave stand out from the rest of the fray, Catherine Corre, head of communications for Brave, told Cointelegraph that unlike other browsers, Brave makes use of a privacy-by-default foundation; the browser blocks or neutralizes tracking scripts, third-party cookies, fingerprinting methods, crypto-mining scripts and other privacy threats:

“Google Chrome, in contrast, has surveillance built in: if a user logs into any Google service by a Gmail address or similar account key, by default Chrome tracks the user’s navigation for ad targeting.”

On the issue, Crouch further pointed out that other browsers are now slowly beginning to catch on to the privacy standards. In this regard, Brendan Eich — the co-founder of Mozilla and creator of JavaScript — began the Brave project separately from Mozilla to get a fresh start and pursue a new business model.

On a somewhat similar note, Chris Hauk, privacy advocate for Pixel Privacy, a platform that seeks to help users maximize their digital security and safety, told Cointelegraph that Brave browser’s use of specialized privacy protocols allows to load the web content faster which in turn results in a smoother browsing experience.

He also pointed out that the desktop version of the browser comes equipped with the ability to deploy the Tor network to route any connection through multiple relays before reaching the desired destination. Since these connections are also encrypted, users can experience increased anonymity — all without having to load the Tor browser separately. 

Brave wants to up the game?

Recently, the core developer team behind Brave browser announced that they are working on deploying an all-new feature called the “random browser fingerprint generator,” which will allow users to greatly enhance their individual privacy and digital security. Elaborating on the overall efficacy/utility of this feature in a bit more detail, Hauk told Cointelegraph:

“Brave’s random browser fingerprint generator will make every browser session look unique, as the user moves between websites and between browsing sessions, this will make a user’s browser appear completely unique when browsing, making it difficult, if not impossible to track a user.”

Browser fingerprints can be thought of as digital markers that a number of firms use to track the movements of many casual browsers in an easy, hassle-free manner. For example, something as simple as keeping one’s browser window maximized all the time can allow one’s identity to be exposed to a number of miscreants. 

In this regard, Brave’s latest effort to randomize its user’s digital fingerprints is being seen as a potential game changer by security experts. This, according to Crouch, is one of the many reasons Edward Snowden recommends the Linux distributions of Tails, a security-focused, Debian-based OS that, by default, randomly resizes itself to ensure that users have a minimal digital fingerprint.

Elaborating on the various technical aspects of Brave’s fingerprint randomization approach, Peter Snyder, senior privacy researcher at Brave, pointed out that the technology has been designed to protect users against web-scale fingerprinting attacks:

“Brave’s fingerprint randomization techniques prevent users from being uniquely fingerprinted when sites use broad, untargeted fingerprinting tools advertisers and trackers use (e.g., common open-source tools like fingerprint2.js); Brave’s fingerprinting is not likely to be robust against highly targeted identification efforts, such as those used by state actors or law enforcement.”

When asked about why other companies such as Google and Microsoft don’t make use of such forward-looking technology to secure the information of their users, Snyder gave a twofold answer. Firstly, he explained that the randomization technique in question is novel and previously only existed (for the most part) in academic research. Secondly, he stated that there is a collective action problem in web privacy, where browser vendors are nervous about deploying new protection protocols out of the fear that their new schemes might break some websites — which are in fact major donors within this field of research. 

Privacy-oriented browsers are gaining more traction

Recently, it came to light that the number of individuals making daily use of Brave’s blockchain browser had surged past the four-million mark. Not only that, earlier this month, Brendan Eich tweeted that Brave’s standard web browser also has a total of 12.2 million monthly users. 

This meteoric rise can be attributed to Brave’s privacy-forward stance as well as it’s compatibility with a number of mainstream applications — like Google Chrome or Microsoft Edge. Additionally, Brave runs on mobile devices as well as on desktop computers and claims to be faster by default than any other browser because of its ability to reduce the load on one’s machine.

On the subject of Tor browser versus Brave, and how the two fare against each other in terms of their overall privacy and security related benefits. John Jefferies, Chief Financial Analyst at CipherTrace, crypto forensics firm, told Cointelegraph that upon doing a quick test comparing the tracking potential of the two, he found that while Tor offers more anonymity, Brave provides users with a high level of privacy. Expounding his views on the matter further, Jefferies pointed out:

“The difference is important, but essentially Tor doesn’t hide user activity but obscures user details by giving a false location. Brave protects privacy by concealing all information about user activity unless the user explicitly enables cross-site trackers. As the Pew Research Center revealed in its privacy report, more people than ever are concerned about online data privacy. Increasing apprehension about the way personal data is being used may explain Brave’s extraordinary growth.”

Individual privacy is the future

As users continue to discover ways in which their browser data — as well as other personal info — is being shared among companies, more people will likely become increasingly concerned with their online privacy and anonymity. As a result, many believe that consumer interest in online security platforms such as the Brave browser, as well as other anonymity tools like VPNs, will increase quite significantly in the years to come.

Additionally, Brave’s increasing popularity can be attributed to its goal of giving back to its users by way of a native cryptocurrency, Basic Attention Token (BAT). This is what sets Brave apart from mainstream web platforms like Chrome, Safari and Edge, which are not only prone to various third party intrusions (trackers, malware,etc) but also don’t offer much in monetary value to their users.

The masses at large seem to have reacted very positively towards Brave. Corre highlighted that the platform has witnessed a lot of growth on the creator side of things, with the browser now boasting of more than 500,000 verified publishers, concluding:

“The entire ecosystem is hungry for an alternative to the current broken ad tech ecosystem. The privacy tide is continuing to rise.”

BitMEX Takes a Hit — Community Cries ‘Foul Play’ Following Market Crash

Experts believe that BitMEX’s lack of transparency during the recent outage caused investors to lose some confidence in the exchange.

On March 13, trading giant BitMEX was thrust into the middle of a controversy that saw the premier exchange face an operational outage that lasted for about 25 minutes. During the downtime, rumors spread throughout the cryptoverse that some foul play had been going on behind the scenes, especially since Bitcoin’s (BTC) price fell to around the $3,700 mark.

Related: Crypto Traders Explain What Caused the Bitcoin Price Plunge to $3,000s

To help allay some of the suspicions that arose due to the aforementioned outage, BitMEX’s PR team issued a tweet that read that the company “became aware of a hardware issue with our cloud service provider causing BitMEX requests to be delayed.”

While the given explanation seems quite legitimate, it is worth highlighting that on the day, BitMEX saw more liquidations than during any other 24-hour period over the course of the past year. Additionally, following the event, the trading platform’s BTC futures transaction volumes were surpassed by those of OKEx’s — a niche that has long been seen as BitMEX’s core area of dominance.

Against a backdrop of heavy losses, BitMEX has faced a barrage of criticism, with people like Sam Bankman-Fried, CEO of research outfit Alameda, posting a series of tweets claiming that it was BitMEX’s unwillingness to address market conditions that caused Bitcoin’s value to plummet so rapidly. Moreover, when the platform went offline, the value of the top cryptocurrency started to rise once again, thereby prompting Bankman-Fried to post the following message online:

“BTC rallied without the gigantic sell wall of the BitMEX liq. And even more than that — BTC rallied, so fewer people *had* to be liquidated... Creating a self-fulfilling prophecy. If we could will BTC up above $5K, maybe then it would no longer *need* to go down.”

BitMEX responds

To get a more detailed understanding of the matter, Cointelegraph reached out to BitMEX. A spokesperson for BitMEX, reiterated some of the facts that had previously been highlighted by the exchange via Twitter and stated that at 12:56 p.m. UTC on March 13, 2020, BitMEX came under an aggressive DDoS attack, which delayed and prevented requests coming into the platform, adding:

“Our security team regained control to prevent further delays and resumed full service within 25 minutes. We have confirmed that the issue earlier in the day on 3/13 was caused by the same attack. We fixed the underlying issue and we will be issuing a post mortem in due course. Our engineers are working around the clock to monitor and mitigate any further issues.”

When asked about some of the theories that allude to a possibility of BitMEX having pulled the plug on its trading services out of fear that its liquidation engine could collapse the XBTUSD order book all the way down to zero, the spokesperson stated:

“That is absolutely not true. We have, and will always, operate a fair and efficient platform. BitMEX is fully prepared for such liquidation events through our insurance fund, which is the largest in the industry by an order of magnitude and remains healthy.”

Lastly, earlier on Mar. 16, Arthur Hayes, CEO of BitMEX, took to Twitter to assure the exchnage’s clients that he and the team will shortly be fielding a number of queries that users seem to have in regard to the recent outage. In his statement, Hayes said:

“We have been listening, and my team has been gathering the facts. We will be addressing these questions and concerns transparently and comprehensively over the coming days.”

Some in the crypto community are still not convinced

While BitMEX has remained true to its version of the story, Alireza Beikverdi, CEO and founder of bitHolla blockchain platform, told Cointelegraph that the events of March 13 saw a major liquidation cascade take place on XBTM20 — an XBTUSD futures contract on the BXBT30M Index. In this regard, XBTM20 went way below its present prices by approximately 15%, and for some time, it appeared as though the drop was not going to stop. Beikverdi added:

“You can chalk this up to way too many overextended longs trying to predict the Bitcoin halving and couple that with the coronavirus panic and you got one gigantic trap. The timing was rather spot on when the market was panicking. Prices recovered soon after BitMEX shutdown. I don't think the XBTUSD perpetual swap would have gone to zero but watching XBTM20 market that really did look like it would never stop tanking.”

Offering his views on the matter, Jeffery Liu Xun, CEO of XanPool, a peer-to-peer fiat gateway, told Cointelegraph that the liquidations that took place on BitMEX created an increasing spread between the prices being offered by the platform and the spot prices at the time. In his view, people wanted to make use of this arbitrage opportunity, but as the spread kept increasing due to automatic liquidations, people got scared of BitMEX’s potential liquidity problems. Xun then went on to add:

“I guess BitMEX had to shut their circuit breakers because otherwise, the short whales could have pushed the price to zero through BitMEX’s automatic liquidation system. I think they shut it down too late because they probably had already lost a lot of credibility by then.”

Additionally, Xun also believes that if BitMEX hadn't shut down its systems, prices may have swooped down to zero, and they would have lost most of their customers. 

BitMEX was not the only exchange to go down last week

While allegations of foul play by BitMEX are still being given some amount of credence by experts, Inal Kardanov, developer advocate for the Waves Platform, an open-source blockchain platform, told Cointelegraph that BitMEX was not the only big-name cryptocurrency exchange that has experienced such an outage during the crazy week. In fact, other platforms like Gemini, Huobi, Deribit and Bithumb also experienced similar issues:

“Stock exchanges suspend trading during massive drops, and it looks like we saw the same for BitMEX as well. Why should we expect different approaches from CENTRALIZED crypto exchanges?”

Kardanov also pointed out that BitMEX did not have any real reason to stop its liquidation engine if the firm thought that the market could collapse the XBTUSD order book. In this regard, he pointed to the performance of BitMEX's insurance fund that lost 1,627 BTC — which is only 4.6% of its total value — amid the intense sell-off that happened on March 13.

A somewhat similar opinion was also shared by Jeroen Van Lange, host of the Youtube channel “The Blockchain Today.” As he told Cointelegraph, such outages happen quite often, especially since certain exchanges can’t handle a lot of the activity that takes place during a huge crash or a pump. In his view, even premier trading platforms can process only a certain amount of trades per second, and if there is a lot of real-time activity combined with conditional orders, there will always be the possibility of a lapse occurring.

Van Lange also pointed out that BitMEX is well known for its “order submission errors,” which in layman’s terms means that the exchange is routinely faced with data overloads that cause its system to fail and thus don’t execute client orders. He believes that the platform is making use of depreciated technology and is thus unable to function properly under certain circumstances. 

Additionally, while he does not believe that the exchange might have indulged in any sort of foul play, Van Lange added that there was an incentive available for the firm in regard to this entire scenario — since individual client sell-offs are executed through a market order and therefore, BitMEX stands to earn more fees from them.

Lastly, Beikverdi, too, is convinced that it's highly unlikely that BitMEX did anything malicious during the price crash. However, he pointed out that a poor explanation and transparency are not something that one would come to expect from a trading giant such as BitMEX — especially since a lot of people in the global crypto community rely heavily on the platform for price discovery. Beikverdi added:

“We have seen excuses like DDoS attacks used many times in the past by other tech companies to dodge questions. It's fair to expect a detailed official explanation from BitMEX on this matter.”

Traders have to be careful when dealing with certain exchanges

It is interesting to note that during the market turmoil that occurred between March 11–13, it was mostly centralized exchanges that experienced the most downtime. For example, trading platforms like Uniswap did not experience any outages, however, its Ether (ETH) gas prices skyrocketed around that period. 

Also, even though traders on centralized exchanges, such as BitMEX, are required to understand the risks associated with using such systems, the amount of transparency and trust most crypto enthusiasts are looking for these days can ideally only be provided by decentralized platforms. In this regard, Kardanov told Cointelegraph:

“If traders expect transparency and want to trade without trust, they have to use decentralized exchanges. BitMEX uses other spot exchanges for its mark (index) price which is used for triggering liquidations. This is only the case for its perpetual markets like XBTUSD. Quarterly future markets like XBTH20 follow different rules, so messing up on calculations due to such an incident is possible.”

Van Lange, too, agrees with such an assessment and believes that people have to be extra careful with leverage trading when dealing with certain exchanges. He said that if an exchange has been embroiled in murky situations in the past, it would be best to stay away from it.

Bitcoin Price Correlates With Traditional Assets, but Not Entirely

As Bitcoin plunges close to its lowest levels since 2018, many are convinced that BTC is heavily interlinked with traditional markets.

Since coming to power back in 2016, President Trump seemed to have reinvigorated the United States stock market after it showed signs of slowing down throughout the first half of the previous decade. Just three weeks ago, the American market witnessed a combined gain of 58% compared with the last three or so years. However, following the World Health Organization’s recent declaration of the novel coronavirus pandemic on March 11 — with the independent research body citing 118,000 cases and more than 4,000 deaths globally — this rosy picture seems to have reversed almost overnight.

Additionally, ever since news of the medical emergency went live, markets all over the world began to crash at an unprecedented rate, with powerhouse economies such as Australia and India already gearing up for a period of heavy recession.

Not only that, regular office work all over the world has also been disrupted quite heavily — with many companies choosing to adopt work-from-home policies, seriously affecting global supply chains and causing many high-profile public events and major conferences to be cancelled.

The virus effect

In the midst of all this, Bitcoin (BTC) has been on the receiving end of a lot of bearish pressure, with the premier crypto asset falling from $10,000 on Feb. 24, down to $4,800 by March 12. More specifically, Bitcoin’s value slid by more than $3,000 after New York State Governor Andrew Cuomo released a public statement issuing a medical emergency, thus sealing off a one-mile containment area around the NYC suburb of New Rochelle.

Despite the apparent link between BTC’s price drop and the ongoing market slump, some experts believe that the flagship cryptocurrency’s slide has more to do with the recent PlusToken dump and other internal factors rather than the prevailing coronavirus-induced market scare.

Regarding the matter, Bill Herrmann, CEO of alternative investment banking firm Wilshire Phoenix, is of the opinion that Bitcoin’s current negative movement can largely be attributed to the instability of the traditional market. On the subject, he opined: “In times of extreme volatility, which is often followed by panic — most retail investors, whether it’s Bitcoin or in equities, sell first and ask questions later.”

A similar opinion is also shared by Mati Greenspan, founder of Quantum Economics, who told Cointelegraph that it is quite extraordinary that during this period of extreme volatility, “Bitcoin seems to be mirroring stock indices quite concisely.”

However, David Waslen, CEO of HedgeTrade — a blockchain-powered financial trading application — told Cointelegraph that while there is definitely a correlation between Bitcoin’s performance and the traditional market at large, the comparisons are quite limited in nature since a number of niche variables make BTC totally different. Waslen added:

“Bitcoin’s price did react correspondingly to the stock market plunge recently, and continues to correlate to world news announcements. But it also does its own thing, for instance pumping on March 6th while stocks were in a tailspin. It’s also affected by things that have absolutely nothing to do with traditional markets, such as mining, whales, and exchange hacks.”

Is Bitcoin truly an independent store of value?

With Bitcoin seemingly reacting quite strongly to the price corrections being witnessed in stocks, crude, and other commodities, it is worth exploring an answer to the question, “Is BTC really an uncorrelated asset class?”

Greenspan believes the events that are currently unfolding have served a devastating blow to a number of theories that many pro-crypto users gravitate toward whenever the price of BTC rises or falls independently of the traditional stock market:

“This price action is seemingly a damaging blow to two narratives that Bitcoin proponents tend to gravitate to. First, it is an uncorrelated asset class. And second, Bitcoin acting like the stocks during uncertain times means that it is now positioned as a risk asset rather than a safe haven.”

Similarly, Simon Peters, analyst for trading and multi-asset brokerage company eToro, believes that the aforementioned correlation is primarily being witnessed due to the ongoing pandemic underlying the traditional and crypto markets. On the subject, he told Cointelegraph during the London Blockchain Week:

“With coronavirus, it’s not a geopolitical issue as such. It’s a global pandemic. That’s where I think the argument for crypto is, in that area where we see a change in the monetary policy of central banks or an increase in liquidity in the markets.”

Lastly, Brian Hankey, co-founder of Cache, a provider of gold-backed tokens, told Cointelegraph that while gold and silver may be looking at short-term losses, in the medium-to-long term, they will continue to be looked at as good investment avenues. Additionally, he further pointed out that owing to the various industrial use cases associated with silver, the precious metal has a lot of potential upside.

Covid-19 has heavily skewed market indicators

Despite Bitcoin showcasing a mild tendency to start tracking traditional markets from time to time — if not testing some sort of relative correlational patterns — cryptocurrencies are still widely perceived to be a unique kind of uncorrelated, asymmetrical asset class.

However, since a flow of value to crypto has to occur from traditional markets, there is quite obviously a link there. On the subject, Glenn Benavides, co-founder of the Global Crypto Alliance — an organization comprising of experienced professionals with expertise in business development and blockchain ecosystems — told Cointelegraph:

“We saw Bitcoin move positively together with Gold and the S&P500 in the previous months. Now we see Crypto crashing as the rest of the world crashes during the COVID-19 panic. This does not mean Crypto will start behaving as a totally correlated asset from this moment. But, we can expect some more correlation from now on, in my opinion, as Crypto is plugged into traditional markets in order to fuel them.”

Speaking on Bitcoin’s role as a store of value that could rival conventional safe havens such as gold and silver, Jaian Cuttari, CEO at financial services ecosystem BDAM Foundation, told Cointelegraph that Bitcoin has failed to live up to its expectations, since many from within the crypto community believed that while markets all over the world were sliding, the premier digital currency would be able to weather the storm and thus serve as the perfect long-term investment vehicle for many, adding:

“It simply is not a viable investment as many had believed. Bitcoin is very controlled by a few groups of large holders. This puts Bitcoin at greater risk of rapid value loss. This can be seen by the $30 billion dollar wipe out on btc market cap in 3 days. This is not normal and shows sophisticated sell offs from high volume holders are bringing btc to historic lows once again.”

Lastly, it bears mentioning that up until March 8, Bitcoin had managed to hold onto most of its value amid the sharp sell-off in equities, oil and most other markets. The only other commodity that proved to be more resilient was gold, with the precious metal trading near its seven-year high levels recently.

The broader cryptocurrency market finally saw a steep liquidation on Thursday and Friday when most digital currencies saw a downward correction of 20% to 40%. Ultimately, Bitcoin has followed the rest of the financial markets lower in response to the coronavirus crisis, albeit with a lag time of about two weeks.

Is a global recession right around the corner or are we in the midst of one?

Even before the threat of Covid-19 started to disrupt supply chains all over the world, there was a looming fear that the global financial system was on the verge of a full-blown recession. Now that the coronavirus has forced a number of markets to slow down considerably, a whole host of experts believe that the effects of a global economic slowdown are starting to show.

Expounding his views on the matter, Hankey is of the opinion that there is a strong possibility that a recession-type scenario could be real as “It’s clear that the global financial system is extremely overburdened by debt,” due to the fact that years of low-interest rates have fuelled clearly reckless malinvestment, adding:

“Many stocks have obscenely high P/E ratios (if they have any earnings at all). It’s unclear what the catalyst will be or if it has occured yet. It may or may not be the Coronavirus. In any case, I think it’s hardly controversial to say that we’re long overdue for a major recession.”

It is also important to point out that the Federal Reserve’s recent $1.5 trillion liquidity injection into the market — after Wall Street circuit breakers went off twice this week — seems to be a clear signal that the coronavirus panic is being taken seriously and a global recession might be around the corner.

However, not everybody seems to agree with the hypothesis that a bear market is here to stay. In this regard, Cuttari believes that as things stand, it is the virus scare rather than a market recession that is causing all of the ongoing economic chaos. Similarly, Benavides also is of the opinion that a relative crisis that is affecting some networks of institutions and traditional organizations, but not a global recession per se:

“I don’t see a real recession, but many new powerful groups replacing the old ones, as new forms of value take the place of the traditional ones. In my opinion, Bitcoin and crypto will fuel a big portion of this revolution.”

What does the future hold for the crypto market?

With central banks all over the world lowering benchmark rates en masse and steering toward negative interest rates, it may be hard to think positively about the world economy at the moment.

However, unlike other times in the past when the only way out for the masses was to depend on traditional monetary systems, this time around there is an option to turn to the crypto market. The crypto ecosystem serves a global audience and has provided the masses with peer-to-peer trading capabilities. This makes it one of a kind, especially at a time when the global economy is being faced with a potential catastrophe.

On the issue, Waslen is of the opinion that in the short-to-medium term, global markets will most likely be defined by cash infusions to industries that are currently under siege. He also believes that with precious metals continuing to showcase steady growth as stocks fall, Bitcoin too will rise and fall with the same macro events affecting traditional markets along with other factors like the upcoming halving.

Greenspan, on the other hand, told Cointelegraph that the events that are currently unfolding are showing the global crypto community at large that Bitcoin was never designed to be a solution for an economic decline and thus its future in relation to this ongoing crisis is still not fully clear:

“Bitcoin was invented as an alternative to fiat money, which is controlled by governments and banks. So, unless the value of fiat money comes into question, I don't see bitcoin playing any significant role.”

Lastly, Hankey is cautiously optimistic that Bitcoin has the potential to weather the storm it is currently being faced with. He believes that if Bitcoin does survive a major global recession, chances are high that its perception and overall market reputation as a legitimate financial instrument will increase even more.

Simon Peters interview was conducted by Joseph Birch during the London Blockchain Week.

Blockchain R&D Funding Is Vital, but It Mostly Comes From One Source

Most research grants for crypto firms are coming from independent companies and organizations with massive financial backings.

On March 4, Twitter topman Jack Dorsey’s digital-assets payment company Square Crypto released a statement showcasing its support for Bitcoin (BTC) development with the creation of a grant program that aims to contribute toward the enhancement of the premier cryptocurrency’s native ecosystem.

More specifically, the company revealed that its grant program is open to developers interested in pursuing this field of work. Two developers have already received monetary support from the company: BTCPay Server received $100,000 to continue its work relating to Square’s open-source payment processor, and a pseudonymous developer received an undisclosed sum for working on the Lightning Network.

The folks over at Square also mentioned that they are currently funding research that is being driven by Jon Atack and Tankred Hase, two BTC developers who have been active in the space for quite some time.

Nothing new here

This is hardly the first time a mainstream organization has entered the burgeoning domain of crypto research. Earlier this year, IOHK gave out $500,000 worth of Cardano’s Ada (ADA) currency to the University of Wyoming’s blockchain lab. According to a representative of the firm, the Ada tokens will not just fund research into real-world uses of blockchain technology but will also foster Wyoming as a talent hub for software engineering and for the advancement of novel software development methods related to advanced technologies like blockchain, the Internet of Things, etc.

Ankit Bhatia, the co-founder and CEO of Sapien, an Ethereum-based social network, spoke to Cointelegraph on the issue of big-name financial entities driving traditional crypto research and the implications such moves may have on the ecosystem at large. He said that more often than not, the best crypto developers work independently or in small teams. Established companies are thus usually forced to issue favorably conditioned grants to tap into the space’s innovation and thereby “leech off the credibility” of the leaders operating within this domain:

“While these companies often provide genuine support to these devs, with cash and other resources, players like Square Crypto need more legitimacy to crack open the crypto community and find monetization.”

Other established organizations such as Chaincode Labs, Xapo, Blockstream, BitMEX and OKCoin have also served as patrons for many developers who have been working to make the crypto ecosystem more future ready and secure.

The shortage of research funding is quite glaring

As things stand, Bitcoin is widely considered to be one of the most critical codebases in the world. While the currency itself has attracted a lot of attention in recent years, a deep review of its code is still severely lacking. Deep reviews are essentially thorough, routine inspections that are carried out within a project’s codebase to weed out any frailties or exploits that may be present in its fundamental design.

In fact, quality code reviewers are so scarce these days that the domain itself has turned into a microeconomy of sorts. To put things into perspective, the Bitcoin Core project alone is currently faced with an ever-deepening pool of over 750 open issues and more than 350 pull requests that need reviewing.

These deep reviews are quite complex in nature, and even highly-skilled developers can sometimes take weeks or even months to resolve them. One of the most striking cases in which this lack of review became apparent was in September 2018, when an inflation bug was detected within Bitcoin’s code. The bug provided troublemakers with an open-ended route to create Bitcoin out of thin air; however, the issue was quickly resolved once the gravity of the situation was established.

But that does not mean that such exploits will never reappear in the future. The world seems to be transitioning into an era of decentralization, and sovereign nations may look to compromise digital currencies because they hold the potential to challenge the supremacy of state-issued fiat assets.

Joe Vezzani, the CEO and founder of the crypto-insights platform LunarCRUSH, told Cointelegraph that grants usually come with certain conditions, especially in cases pertaining to early stage technologies:

“Most grants are not large enough in size and while they are immensely beneficial for early-stage companies, unless the amount is extremely huge, outside financing is still needed for success.”

Grants from companies like Square are good for the crypto ecosystem

Some members of the global Bitcoin community have raised questions regarding Square’s decision to start doling out Bitcoin-specific grants, as they could adversely influence the platform’s future development efforts. When large, nonnative companies dive into spaces like this, they’re typically met with wariness and skepticism from all ends. This is mostly because they did not invest any capital or put in any effort into bringing blockchain and decentralization into the mainstream when the sector was still in its infancy.

However, such an outlook is not shared by every expert within the community. Adrian Pollard, the co-founder and chief product officer bitHolla — a platform that sets up crypto exchanges — told Cointelegraph that Square’s decision to start giving out grants to “worthy” developers is mutually beneficial for all parties involved, citing the company’s 50% increase in profits from offering Bitcoin via its native smartphone app:

“As far as I know, Square’s grant is the most generous and productive because its purpose is solely to enhance the Bitcoin protocol. I believe it has the greatest chance of affecting positive change.”

When asked about some of the dubious eligibility conditions outlined by Square for its grants — such as developers having to be “in good standing” with the global Bitcoin community — Pollard added that these stipulations are only in place because the approval of multiple parties, such as other developers, crypto exchanges, users and miners, is required for any meaningful change to take place in Bitcoin’s core protocol. He added that anyone not in touch with the community has “very little chance of affecting change and Square understands this.”

Bhatia shared a similar sentiment, alluding to Square’s increasing reliance on Bitcoin to rake in its profits. He believes other companies that are operating within this nascent space will also try to cash in on this opportunity and dish out sizable monetary grants.

What are some of the strings that come attached to research grants?

Even though developers are sometimes required to meet certain milestones in order to receive the next round of funds to continue with their development efforts, Vezzani believes that there are usually no legal strings attached to early stage small grants. In his view, if a developer has been awarded a grant, they probably have a good relationship with the giving party to begin with.

That being said, there are some niche caveats in most agreements that are usually not disclosed. For example, donors often demand a free and perpetual license for the projects they are funding while still enabling creators to conduct their business in a manner they see fit. Similarly, developers often give investors access to their research knowledge repositories, as it could give them a head start in understanding the direction in which the sector may be heading.

Speaking on the subject, Adel de Meyer, the CEO of the fully private blockchain Daps Coin, told Cointelegraph that contractual agreements between top companies and developers are usually never made public, so it is hard to establish if there are any strings attached to the deals:

“I don’t believe top-notch developers on Bitcoin would agree to give their research over to a private company as their IP to hold onto. I believe that most grants being issued by mainstream players require that the project has to be open-source, meaning that the success of the innovation is shared with the whole to tap into, for free. This leads to crypto tech being able to blossom as it doesn’t narrow or limit further innovation.”

Where do most grants come from?

As things stand, it seems as though it is mostly independent companies and organizations that are financing crypto research, as only they have the monetary capacity. While the popular belief is that universities are funding most of the blockchain and crypto research taking place today, it actually appears as though their budgets are becoming increasingly limited.

Similarly, governments don't seem to be interested in supporting research related to decentralized technologies, as they have the potential to threaten their position of power and control. Bhatia opined that money-making is what drives independent companies to issue grants:

“They see their need to achieve a certain vision or goal and may lack the expertise themselves. Issuing grants or bounties outsources the project management and recruitment costs and hopefully sparks innovation when presented with several ideas. Grants programs are also very useful for ensuring that firms build products that serve their target communities since most applicants are very likely drawn from that same talent pool.”

Vezzani is of the belief that most grants these days come from large nonprofit organizations that are mostly funded by private donors in fields that traditionally have longer monetization life cycles.

Pollard told Cointelegraph that while there are occasional grants coming in from universities, they are futile 99.9% of the time, since most researchers operating out of these institutions are rarely in touch with members of the global Bitcoin community.

India Back in the Race: Landmark Judgment to Fuel Crypto Adoption

With the Indian apex court repealing the RBI’s crypto ban, experts now believe that the S.E Asian country’s economy is set to surge.

In what is widely being considered a historic day for the crypto industry as a whole, the Supreme Court of India has passed a judgment nullifying the controversial banking ban imposed by the Reserve Bank of India on the country’s local digital currency market. 

The three-judge bench presiding over the matter — justices Rohinton Nariman, S. Ravindra Bhat and V. Ramasubramanian — stated in their joint verdict that the ban, which was issued as a precautionary measure by the RBI in order to “protect” the nation’s economy, had not been substantiated by any hard facts.

It is worth recalling that back in April 2018, the RBI — India’s central banking authority — had issued a circular asking the nation’s various banks and other financial intermediaries to stop their monetary dealings with any crypto-related businesses. This imposition was regarded by many experts as unconstitutional but also beyond the general purview of the RBI. As a result, a number of prominent members from India’s crypto ecosystem came together to stand up against the unjust ban.

A case was brought forth before the supreme court by both the Internet and Mobile Association of India — a nonprofit organization seeking to expand and enhance India’s online and mobile value-added services sectors — and Ashim Sood, chief counsel for the association, who served as the Indian crypto community’s legal representative. 

Sood is being widely praised for his efforts, especially for putting forth many pro-crypto arguments in front of the judge’s panel — a task that many experts believe could have only been carried out meticulously, since the information on digital assets is quite skewed among the Indian masses.

In an exclusive conversation with Cointelegraph, Sood stated that the recent judgment is not only fair and just but will most likely serve as the core basis for many future decisions regarding this emerging tech space, adding:

“The Supreme Court’s verdict is a call for responsible and balanced regulation — it encourages a fact-based empirical approach to cryptocurrency regulation. In the coming years, this judgment could serve as a beacon for decisions concerning emerging technologies and their effects.”

Loretta Joseph, a government affairs consultant at Medici Ventures, told Cointegraph on the sidelines of the London Blockchain Week that she welcomes the move to lift the ban, as it will help to establish a better regulatory environment:

“I think this opens up blockchain innovation. Entrepreneurship gives India the best opportunity now, because I think when you ban things, it's not good, as regulation is very important. We need regulation and this industry needs regulation. But banning, it doesn't help innovation and entrepreneurs start to do things that they can do without any recourse of the law.”

Lastly, just a day after the supreme court passed its judgement, Unocoin — one of India’s leading cryptocurrency exchange platforms — announced via Twitter that it had enabled bank account deposits and withdrawals in Indian rupees, thereby making crypto purchases available. It is expected that more exchanges will soon follow suit. 

What impact will this latest verdict have?

Following the reversal of the ban, many had expected the price of Bitcoin and other premier digital currencies to surge. However, no significant market shift has been observed as of yet. Providing his insights on the matter, Sumit Gupta, CEO of cryptocurrency exchange CoinDCX, told Cointelegraph that India’s crypto environment is set to undergo a massive transformation, since the nation’s existing peer-to-peer exchanges will now have the option of teaming up with legitimate banking partners, adding:

“We expect trading volumes to surge because, from our side, we are going to do our best to remove any doubts that people may have regarding cryptos. Also, global exchanges have been seeing huge potential in India over the past year or so. That is why they partnered with us even when the ban was in place.”

This sentiment was strongly echoed by Sidharth Sogani, CEO of Crebaco, an India-based analytics firm, who told Cointelegraph that owing to the simple fact that more than 50% of India’s current population is under the age of 35, it would not be surprising to see the adoption of crypto-enabled technologies increase dramatically in the coming few weeks. 

India’s economy all set to blossom?

Prior to the Reserve Bank of India’s nationwide banking ban, the country’s crypto economy was worth a whopping $12.9 billion. However, with the industry at large having grown leaps and bounds over the past couple of years, Gupta believes that this figure has most likely increased quite substantially. On the subject, he added:

“I think the Supreme Court has opened a much larger space for us which is only going to prosper from this point. We have always seen cryptos and crypto-based products as fuel to India’s current economic growth. You will see an ecosystem developing in this country that is going to flourish from all ends.”

It is also worth noting that the Indian Supreme Court is currently hearing another case that will most likely decide the nature of the regulations to surround the country’s digital currency market. In this regard, the judgment on reversing the RBI’s crypto trading ban weakens the case for stricter norms and so, it would not be surprising to see significant growth in Indian investor activity across the sector.

Expounding his views on the matter, Jamal Hassim, the founder and CEO of the BOLT.Global blockchain platform, told Cointelegraph that the crypto ban effectively stifled all innovation in the Indian crypto industry:

“A lot of start-up companies working in the space had ceased operations as did trading portals. More than the loss in trading, India lost the opportunity for critical innovation in the space, which is the key driver for utility, adoption and effective prices. We can expect an influx in both local and international companies trying to capitalise the new market. I wouldn’t be surprised if Facebook’s Libra project tries to re-start from India, considering the current opposition within the U.S.”

Lastly, Hassim believes that the re-entry of Indian traders will most likely bring in more volume as well as an increase in the market cap of premier crypto assets like Bitcoin or Ethereum. Furthermore, Binance CEO and Founder Changpeng Zhao told Cointelegraph that the local community will now likely see a greater exposure to crypto:

“This has been a landmark judgement giving the people of India a chance to realize their crypto dreams. [...] Binance has already shown its commitment to the Indian people via WazirX, and we are looking to increase our exposure in the Indian cryptocurrency and blockchain scene to grow it even further.” 

India’s finance ecosystem is primed for advancing crypto innovation and adoption

Prior to the blanket ban, India was seen as one of the largest crypto markets in the world — with exchanges like BitBNS and WazirX driving massive daily trade volumes. Now, with the passing of the supreme court’s latest judgment, a number of investors who had been seeking alternative avenues to traditional stocks and bond options will have the ability to add crypto assets to their portfolios. 

Speaking on the monetary potential that the Indian crypto ecosystem currently possesses, Gaurav Dahake, CEO of the BitBNS crypto trading platform, told Cointelegraph:

“India is the hub for blockchain innovation and has the 2nd highest number of blockchain developers in the world. This judgment has opened up the market tremendously. There are investors that have already pinged us who would want to invest.”

Additionally, some in India previously thought that when the banking ban was imposed by the RBI, buying and selling of cryptocurrencies had become illegal. However, the central bank’s circular had only instructed banking institutions to refrain from facilitating any deals involving digital currencies. 

Now, with the supreme court siding with the Indian crypto community, a lot of potential investors will be given the opportunity to buy crypto using traditional banking avenues — thereby providing the local industry with a new air of legitimacy. 

Providing his views on the subject, Jagdish Pandya, chairman of BlockOn, a blockchain venture builder and venture capital firm, told Cointelegraph that in the coming few months, the Indian market will witness more and more people making use of crypto to encash, exchange and redeem their digital holdings:

“I foresee big product adoption and multi-channel integration via wallets like Paytm, Rapidz as well as many loyalty programs. Prices will grow upon adoption in Q3 and Q4.”

What lies ahead?

With the supreme court providing a lot of clarity in regards to the financial status of crypto within India, it is now quite clear that the banking ban was a bad decision on the RBI’s behalf, especially because a number of crypto and blockchain startups were forced to migrate to countries like Singapore, Thailand, and Malaysia following the ban — thereby adversely affecting the nation’s economy. WazirX CEO and Founder Nischal Shetty told Cointelegraph:

“This positive judgement will open doors to massive crypto adoption in India. It proves that we can now innovate, and the entire country can participate in the blockchain revolution.”

Also, the Indian government has taken a little more than two years to lift a ban that was widely perceived to be unconstitutional to begin with. Thus, it will be interesting to see how much time it now takes to create a regulatory framework to govern the local crypto market. 

Last but not least, the supreme court’s verdict may see a number of scammers and miscreants make their way into the Indian crypto sector in order to take advantage of unsuspecting investors. As a result, a whole host of crypto pundits are eagerly waiting for regulations to be established, otherwise, if people lose their funds to scammy initial coin offerings, fingers will once again be pointed at Bitcoin (BTC).

The interview with Loretta Joseph was conducted by Joseph Birch.

Iota Lays Out Plan to Re-Enable Network After 20 Days Offline

With Iota’s “coordinator” node still on hold since the breach came to light, experts are still unclear on the extent of the hack.

For over two weeks now, the Iota network has been down, with MIOTA token-holders being unable to facilitate any transactions since Feb. 12. This is because a hacker was able to make off with over $2 million from Iota’s native Trinity wallet, causing the project to lose around 40% of its value — which has been touted to be worth almost $400 million — since the network was turned off.

The Iota Foundation has downplayed the severity of the hack, but a number of indicators suggest far more wallets might have been compromised than the Iota Foundation has so far announced. And while funds may have only been stolen from a limited number of wallets, the vulnerability in question has likely existed for an extended period of time. It is also quite possible that the hacker was able to obtain the wallet seeds from everyone who used the Trinity desktop wallet while the vulnerability was active.

In response, Cara Harbor, director of communications for the Iota Foundation told Cointelegraph that the firm is taking this incident very seriously and that a dedicated team is working around the clock to identify the issue and to find a solution as soon as possible. She added:

“The vulnerability at hand was only within the Trinity Desktop wallet and was indeed caused by the Moonpay integration. There is no vulnerability in IOTA itself or the protocol. While it is an unfortunate event, the actions of the Iota Foundation show that we are serious about the project and its users.”

How did it go down?

To gain a better understanding of the situation, Cointelegraph spoke with Casper Niebe, a developer at Obyte, a directed acyclic graph platform, who believes that the timeline for the hack most likely looked like this:

First, when the MoonPay plugin was first included within the beta version of Trinity, no foul play was detected. The plugin was then included in the non-beta version, allowing the hacker to start collecting seed words from those using the compromised wallet.

Then, people at MoonPay notice something was wrong and turned off their API key, but they failed to notify the Iota Foundation. At this point, the hacker began emptying wallets with large balances by using the wallet seeds collected while the wallets were exposed. Iota noticed and shut down the coordinator, which prevented any further transactions from being confirmed.

According to Niebe, the attacker was able to inject his own code into the MoonPay plugin. The malicious code likely grabbed wallet seeds from the platform and sent them to the attacker.

Additionally, the MoonPay plugin included a library from a third-party operator — and instead of waiting for a version that would have allowed the developers of the Trinity wallet to know exactly what they were working with, the integration/release of the plugin was rushed. Thus, because the exploit was likely active for an extended period of time, the attacker was able to obtain far more wallet seeds than those used to actually steal tokens.

Expressing her thoughts on the subject, Harbor stated that the aforementioned event has shown the Iota team that they need to take their security — especially in regards to third-party providers — extremely seriously. She further opined:

“We take this attack incident very seriously and have not minimized the effect it has had on our community in any way. The actions and transparency that was taken by the Iota Foundation is a testament to that.”

The theft seems to have been quite sophisticated in design

It is believed that the aforementioned breach required the miscreant to possess a certain amount of technical prowess in writing code, as the attack was not trivial in nature. In this regard, the Iota Foundation detected several iterations of the injected code during its investigation, which basically suggested that the hacker employed a “trial-and-error” mode of operation.

From a more technical standpoint, the evidence seems to suggest that the hacker started to manually steal tokens from the compromised wallets after the vulnerability was patched by MoonPay. The attacker moved funds from a very limited number of wallets through several other wallets. 

Every time the stolen amount passed through a wallet, 28 GigaIOTA (i.e., 28,000 MIOTA tokens) — worth roughly $9,000 at the time — was left behind in each wallet. This amount was likely chosen because it was small enough to escape the automatic security measures of exchanges. But the speed at which funds were transferred from one wallet to the next ranged between 10 and 20 minutes. Had the transactions been made by an automated script written by the attacker, the entire process could have been completed much faster and definitely with fewer varying intervals between transfers. Niebe pointed out:

“A major indication of the stolen funds having been manually moved is the amount of 28 GigaIOTA being left in each wallet it passed through. Two of the transactions in the ‘chain’ of transactions that spread the stolen funds in several wallets stand out. One is of 2.8 GigaIOTA, which indicates that the amount was entered with a missing '0' digit. Another transaction was of only 2 GigaIOTA, indicating they missed the '8' digit when entering the amount. Those mistakes would not have occurred if transfers were done using a script.”

While these technicalities are only indicators, they seem to point to a scenario where the actual vulnerability was discovered and exploited by an attacker, who then sold the seeds of wallets holding the largest number of tokens to someone far less technically knowledgeable. 

The two abnormal transactions — of 2.8 GigaIOTA and 2 GigaIOTA — can be seen on the network explorer.

Tangle’s “coordinator” node is still on hold following the breach

Iota currently runs on its own dedicated network, Tangle. However, its “coordinator” node — which is designed to prevent attacks — is currently on hold following the recent breach. The coordinator can also be thought of like a huge, centralized on/off switch, which was turned off to save the network from additional damage. It is now confirmed that the node will be reactivated on March 10, after MIOTA holders take the necessary steps to protect their wallets by installing the firm’s latest seed migration tool.

While the Iota Foundation has been bashed online for turning off the entire network, the fact that $2 million worth of tokens had already been stolen means that such a step was arguably necessary. Providing his insights on the matter, Daniel Hernandez Rodriguez, co-founder and CEO of HASHWallet, told Cointelegraph that the issue at hand is not wholly related to the Iota wallets in question but is also related with the online generators associated with them, adding:

“Every software system that generates seeds can be cracked. The seeds must be generated and stored in an isolated system so nobody has access to them nor to the generation system if not a TRNG (True Random Number Generation) system.”

In regards to the attack and the extent of the damage done, Harbor stated that because the Iota team was unsure of the severity of the attack — i.e., how many seeds were stolen from Trinity wallets through the vulnerability — the firm made the difficult decision to halt the coordinator to prevent the attacker from extracting more tokens. Harbor then went on to add:

“People less familiar with Iota have misinterpreted the fact that Iota currently has the coordinator, as an indication that the network is not decentralized. Currently, the Iota network is decentralized with several hundred nodes issuing and validating transactions. The confirmation process relies on milestones that are issued by the coordinator and validated by the entire network; in other words, the transactions' finality, indeed, depends on this centralized component. However, all nodes verify all transactions and would not accept any ‘wrongdoing’ (like approving invalid transactions, double spends, etc.) from the coordinator.”

Lastly, Harbor also pointed out that some have failed to understand that Distributed Ledger Technology is still fairly new, and as with any such offering, it takes some time for it to reach full maturity.

Many important details are still questionable

Even though there are clear indicators that suggest a great number of wallet seeds were stolen when the MoonPay exploit was active, there is no way to ascertain which seeds were stolen and which ones weren’t.

The only certain thing at this moment is that users who used the desktop version of the Trinity wallet were at risk of having their wallet seeds stolen. This is the reason why the Iota Foundation has asked its customers to promptly make use of the firm’s latest migration tool.

Also, this is not the first time the Iota ecosystem has been on the receiving end of such a security breach. A few years ago, the platform faced another serious vulnerability related to its native cryptographic protocols. In a conversation with Cointelegraph, Inal Kardanov — a developer advocate for Waves Platform, an open-source blockchain ecosystem — pointed out the following:

“A second serious vulnerability in three years looks very dangerous for holders and especially developers. So, I personally expect that many developers will avoid building products on Iota in the future despite all efforts from the Iota team to mitigate the problem.”

Does the future look bleak for Iota?

As mentioned earlier, since this latest security lapse came to light, Iota has lost a little over 40% of its value, and it remains unclear what will happen to the token’s price once the network reactivates on March 10.

MIOTA/USD price chart since Feb. 11. Source: Coin360.com

MIOTA/USD price chart since Feb. 11. Source: Coin360.com

Additionally, the Iota Foundation claims that its Tangle protocol is still in its beta-testing phase. However, this begs the question: If it is a beta network, will its tokens be considered beta tokens, and will they just be traded on beta exchanges by investors using beta money? And if the project is in beta, then why rush to introduce the MoonPay plugin without sufficient control over whether it would load the code from an external source?

Lastly, a whole host of experts have argued that if the Iota ecosystem had been decentralized — even in the event of the platform losing $2 million as a result of the hack — the network could have stayed switched on, and the Trinity wallet issue could have probably been fixed quite quickly.

So, one point of view is that with a decentralized structure, the Iota Foundation might have prevented the deep market crash it is facing right now — which could take an even bigger hit if token holders choose to sell off their MIOTA tokens once the network comes back online.

Finding a safe way

Upon its inception, the Iota project started off with the promise of using ternary logic (instead of binary) to make its ecosystem completely secure and resistant to attacks from quantum computers. However, after years of no tangible progress being made in that direction, the concept now seems to have been scrapped — thus leading many to believe that the platform is still vulnerable to various external threats. Niebe shared his thoughts on the matter:

“They have focused on finding a way to safely turn off the coordinator for almost three years, initially claiming that it only had to run until a large enough number of transactions would pass through the Tangle. That has also turned out not to be true. So, as some users have jokingly said: ‘Iota has effectively become the most expensive centralized spreadsheet in existence.’”

In regard to the matter, Harbor told Cointelegraph that progressive decentralization as the network grows and strengthens is pretty commonplace — pointing to Bitcoin (BTC) as an example of the same, adding:

“With the removal of the Coordinator, Iota will fulfill its promise as the very first feeless, decentralized and scalable distributed ledger technology available. The feeless nature of Iota is important to the future of IoT.”

CBDC Push Takes Ukraine Closer to Crypto Adoption

With the e-hryvnia pilot testing successfully over, the Ukrainian government is making a concerted effort to engage in the crypto-adoption race.

At a press conference held on Feb. 21, a representative for the National Bank of Ukraine released the results of its much-hyped central bank digital currency project called the e-hryvnia. However, the banking institution is still not certain of the impact this financial offering will have on the country’s overall financial stability as well as on its local banking market.

An official statement released by the NBU clearly states that if a massive chunk of the Ukranian population were to switch to this ambitious digital currency, the nation’s banking ecosystem “may cease to be a major financial intermediary.”

Furthermore, to allay concerns of the Ukrainian hryvnia being severely affected by the release of the CBDC, the NBU has mentioned in its statement that the country’s native inflation levels will not be significantly affected by the release of the digital currency, since the asset itself will be issued by the country’s central banking authority. 

Not only that, the NBU also believes that the release of such an offering will potentially strengthen the confidence of the masses toward Ukraine’s traditional finance ecosystem as well as its various monetary offerings. The statement further reads:

“In addition, the digital currency can help reduce the amount of paper money in circulation. For many countries, this is an urgent task, since the shadow economy is often ‘fed’ with paper money.”

So, it does appear as though the e-hryvnia project is not a top priority for the NBU right now, since the bank’s governor Jacob Smol recently tweeted that even though the CBDC’s pilot project has been executed successfully, the matter will only be looked into again when the technological feasibility of the project can be fully verified.

With that out there, it seems as though Ukraine’s crypto ecosystem is still going through a period of metamorphosis, especially since the government seems to be in favor of using various novel decentralized technologies. Therefore, to gain a better understanding of how popular digital currencies actually are in the region, Cointelegraph reached out to Evgen Verzun, a Ukrainian crypto expert who is also the founder of Hypersphere AI — a decentralized cyber-secure network and computation platform. Verzun pointed out:

“Cryptocurrency use is extremely widespread in Ukraine and the current government understands that this growing industry can jump-start the economy as successfully as it did with the IT sector. Even the president of Ukraine participated in a round table with crypto-leaders recently, deciding on how to develop the crypto space and protect the rights of market players.”

Hryvnia-backed stablecoin sees the light of day

With Ukraine seemingly pushing for more crypto innovation across its finance sector, it bears mentioning that on Feb. 20, local cryptocurrency exchange Kuna released a stablecoin called UAX. This new asset has been built atop the Ethereum network and will have its value pegged to the hryvnia on a 1:1 ratio. As things stand, UAX is currently in its beta testing phase and will be under trial until March 20, 2020. 

Ukraine’s economy has been on the receiving end of heavy financial turmoil over the past decade or so. This is in part due to Russia’s alleged aggression against the Eastern-European powerhouse that started back in 2014. Elaborating on the country’s dwindling economic condition, IMF representative Gosta Ljungman pointed out that Ukraine is one of just 18 nations to have witnessed a reduction in its economic growth between 1990 and 2017 — showcasing an annual GDP depreciation of -0.2%.

With that being said, the aim of UAX will primarily be to help stabilize the market as well as introduce the masses to decentralized finance options that are not only easy to use but also auditable in nature. 

It is expected that UAX will be released to the public by Michael Chobanian — the founder and CEO of Kuna — at BlockchainUa 2020 during the last week of March. Lastly, the stablecoin will be fully compatible with major Ethereum token standards such as ERC-20/ERC-865 and will be auditable using a method known as proof-of-reserve — a protocol that helps facilitate independent, cryptographically-verified audits. 

At the moment, the proof-of-reserve scheme is being employed by a number of popular crypto exchanges such as United States-based Kraken to ensure that its customer funds are backed by verifiable reserves.

Regulatory uncertainty still plagues the Ukrainian crypto market 

As things stand, Ukraine does not have a solid regulatory framework for governing the digital assets held by its citizens. Therefore, to govern a stablecoin such as UAX, Kuna will be making use of its very own governance infrastructure until a legal process is established that can help clarify the government’s position in regards to stablecoins (and other such offerings).

Additionally, the Ukrainian government passed the final draft of its money laundering law some time back — based on the guidelines put forth by the FATF — designed to address a host of pressing economic matters, including how virtual assets and digital currency operators should be regulated. In this regard, Konstantin Yarmolenko, the head of Blockchain4Ukraine — an organization seeking to streamline local government and business processes through the use of blockchain — was quoted as saying that Ukraine’s virtual asset-related law number 2179 will most likely be enforced by April 28, 2020.

The new law includes a number of guidelines regarding how the government will monitor and regulate the trading of cryptocurrencies. For example, one of the guidelines says that the government will only collect a limited amount of information (such as the sender’s public key) for transactions worth less than 30,000 hryvnias ($1,300). 

On the subject of Ukraine trying to gain an edge within the global crypto arena, Igor Pertsiya, advisor to Ukraine’s Ministry of Digital Transformation and partner at tech startup investment firm TAVentures, told Cointelegraph that like any progressive government, Ukraine is also trying to lead innovation when it comes to blockchain and crypto:

“I see many startups in Ukraine that are developing and growing within the global crypto sphere. It is no coincidence that there are a huge number of technical institutes in Ukraine — 23,000 students of technical specialties graduate each year, thus helping in the influx of new talent into this space. Take Bitfury, CEX.io, GHASH.io for example, all of these projects have Ukrainian DNA associated with them.”

Lastly, over the course of the past few months, Ukraine seems to be actively exploring the digital currency and blockchain space. For example, the Finance Minister of Ukraine stated a few months back that the State Financial Monitoring Service of Ukraine will soon be tracking the movement of its citizens’ crypto holdings — that is, the origin of the funds as well as their final destination.

Crypto mining in Ukraine all set to boom

Earlier in February, Ukraine’s Ministry of Digital Transformation released a manifesto on digital assets clearly mentioning that the country’s mining sector does not fall under the administrative purview of any government body or regulatory agency. Instead, all mining-related activities can be regulated by members of the network as well as the protocol itself.

A spokesperson for the ministry also stated in the manifesto that it will help foster the development and implementation of decentralized technologies as well as establish sandboxes designed to evaluate their market potential and utility. If that wasn’t enough, the agency also promised to help bridge the gap between Ukraine’s traditional financial market and the digital currency sector by establishing healthy practices on crypto taxation.

Providing his insights on the matter, Verzun told Cointelegraph that owing to the unstable nature of Ukraine’s national currency, mining crypto for monetary gains has become an extremely popular economic avenue for the country’s youth:

“The younger generation of Ukrainians are pretty positive about cryptocurrencies as alternative money to traditional finance. But there is no doubt that the older generation (people above 50) and people in villages have absolutely no idea about cryptocurrencies and what to do with them.”

The future looks good for crypto

The way things are, it seems as though a number of governments are waiting for China to release its much-hyped central bank digital currency — so as to analyze the pros and cons of such an offering as well as adapt the technology to the specific realities of their local landscapes. Thus, it is quite commendable that the Ukrainian e-hryvnia is already being tested with different DeFi solutions and will most likely be launched for mainstream use by the end of March.

If successful, the project could definitely simplify a host of operations related to the Ukrainian crypto and traditional finance sectors. And while platforms like Kuna may not become extremely popular due to established exchanges already staking their market share, the spread of UAX to other platforms may be a game-changer for the local digital currency market.

Speaking on how the future of crypto looks like in Ukraine, Veroslava Novosilnaya, CEO of SLOVA Tech PR — one of the largest tech-oriented PR firms in Ukraine — told Cointelegraph that, having been involved with the crypto market since 2015, he has witnessed a vast increase in the number of projects related to this space over the past few years:

“Before when I came to any crypto-startup office, I saw 10 people at max but now this number is in the hundreds. The level of industry has grown and in Ukraine specifically, it is also due to the fact that the government is not enforcing tight regulations but rather trying to negotiate with major players to give them an opportunity to develop and grow.”

CFTC Joins the Telegram Vs. SEC Case, Shedding Light on Likely Verdict

With the final verdict on TON expected before April 30, most crypto analysts believe that the court’s decision will favor the U.S. SEC.

The United States Commodity Futures Trading Commission has recently weighed in on the Security and Exchange Commission’s ongoing legal battle with Telegram by filing a letter that contained its views on the case. According to the submitted document, the CFTC’s Office of General Counsel believes that all digital currencies are commodities, thus implying that Telegram’s Gram token is not a security and therefore not subject to registration under the Securities Act of 1933. 

With that being said, the CFTC did concede that the Commodity Exchange Act does afford certain securities with the status of being commodities — to which security laws also apply. Regarding the Telegram case, the regulatory body refrained from passing any specific comments or judgments, stating that it had no particular views on the matter. 

However, it is interesting to note that the CFTC’s comments came just hours before an important hearing on the case was scheduled to take place, leading many crypto enthusiasts to believe that the U.S. government is trying its best to curb the growth of the country’s crypto market. 

On Feb. 18, court documents revealed that an anonymous venture capital firm — known simply as Investor F in the documents — requested authorities to redact a few pieces of evidence that had been submitted as part of the first court hearing between the SEC and Telegram. To be a bit more specific, Investor F claimed that some of the emails requested by the SEC contained a host of confidential data detailing the firm’s strategic plans regarding certain prospective cryptocurrency investments and custody solutions. 

The SEC might be trying to make an example out of Telegram

Following the CFTC’s recent involvement in the SEC vs. Telegram case, a number of people are beginning to wonder if regulatory authorities in the United States are making a concerted effort to slow down the progress of digital currencies in America. 

To discuss this notion further, Cointelegraph reached out to Jefferey Liu Xun, the CEO of XanPool — a fiat-gateway software solution for exchanges, wallets and other cryptocurrency businesses. As he sees it, regulators tend to set the letter of the law in a manner that is not only ambiguous but also very overreaching, thereby making it possible for prosecutors to interpret the law in a number of ways that might be most suitable for them. Xun further added:

“I believe this is a case of the CFTC trying to make an example out of GRAM, because if they successfully persecute Telegram, then that would set an incredibly powerful precedent to persecute other smaller projects as well since GRAM certainly has raised a lot of money compared to most other projects.”

He further opined that the SEC and CFTC, more often than not, work in tandem so as to increase their personal power and overall responsibilities — all while claiming to be working in the best interest of the American consumer market. 

Furthermore, Sidharth Sogani, founder and CEO of research and intelligence company Crebaco Global, told Cointelegraph that the SEC and CFTC are concerned about the case because of the size of the Gram token’s initial coin offering and the number of users Telegram has. He added:

“According to Telegram, the firm’s number of monthly active users will cross 1 billion by 2022. The SEC and CFTC don’t want 2.9 Billion Gram tokens flooding the markets, because as of today they are locked, but once released they could go beyond their control.”

A closer look at the SEC’s definition of a commodity and security

The SEC defines a security as being any “transferable instrument representing an ownership interest in a corporation (equity security or stock) or the debt of a corporation, municipality, or sovereign.”

Therefore, other forms of debt, such as mortgages and certain derivatives, can also be considered securities. Also, from a traditional perspective, a security can be equated to the shares of a firm that gives an investor ownership rights of the company. However, as things stand, the same principle cannot be applied to utility tokens.

Now, in regards to Telegram’s groundbreaking ICO that took place a couple of years back, it is now public knowledge that TON, or Telegram Open Network, was able to raise a whopping sum of $1.7 billion by selling around 2.9 billion Gram tokens — which the company claims are utility tokens. Also, even though Telegram had set up base in the British Virgin Islands for its ICO, the SEC was able to intervene in the matter because the firm raised money from American citizens. 

On the subject of whether Gram tokens constitute an investment product or not, Sogani believes that owing to some of the loopholes that currently exist in the SEC’s formulation of laws on digital assets, the matter remains quite ambiguous. For example, as per the websites of the SEC and CFTC, ICOs can be classified as security token offerings under certain conditions. However, these conditions have not been clarified in detail, and thus Telegram does have a case on its side. Sogani further pointed out: 

“Telegram’s token is not a security ideally, because it’s not like a share which gives ownership to the shareholder. It is a utility token which can be redeemed against the services of Telegram or its blockchain Telegram Open Network. The SEC is claiming that because it raised from American investors, it shall be under the regulations which are for STOs. Even if we consider Gram to be a digital token/currency it will still fall under CFT’s guidelines.”

Lastly, he believes that the regulatory stance of the United States government on digital currencies is still not clear, as the nation’s financial regulators are still unable to understand several core aspects of the crypto industry. In Sogani’s view, many of the SEC’s regulations currently have loopholes that are being leveraged by various legitimate as well as scammy projects, adding: “It is time that the SEC re-drafts its regulations related to crowdfunding and raising money through virtual tokens.”

What could the verdict potentially look like?

With the outcome of the Telegram–SEC case set to be decided by April 30, a number of crypto pundits are quite eager to see how this entire scenario plays out. Gregory Klumov, the CEO of Stasis — the company behind the EURS stablecoin — told Cointelegraph that the U.S. government is quite clearly against the creation of any decentralized entity that has the power to provide settlement in a currency other than the U.S. dollar. He elaborated, “Such projects are the top targets for the SEC and other regulators, and they will do everything to ensure that the launch of such platforms never happens.”

In Xun’s opinion, the trial can play out in one of two different ways: Either Gram and its creators will be prosecuted — which essentially means that the U.S. legal system will set a precedent for prosecutors to have complete reign over all matters related to the country’s crypto sector — or Telegram will have to settle for a fine, probably a small portion of total raised funds, similar to how Block.One did with its EOS ICO. He further added:

“Regardless of what happens, more projects will position themselves outside of the USA, as the US market would be reserved for those with the money to either comply with its draconian laws or pay off the prosecutors.”

A similar view is shared by Sogani, who is also of the opinion that the case most likely favors the regulators. He believes that Telegram will either be required to pay a certain fine or initiate a refund to its American customers. Whatever may be the case, Sogani is doubtful that Telegram will get an honest chance in the matter.

Crypto Accused of Facilitating Illegal Gambling — What Are the Odds?

Despite receiving a lot of flak from regulators, use of crypto is still limited when compared to fiat within the illegal gambling sector.

Last week, a report claimed that cryptocurrency-based illegal gambling has surged in many parts of Asia owing to the rise of this novel asset class in recent years. In this regard, the article further added that over the course of the last five years or so, betting amounts have become substantially larger, partly because of traditional payment methods being replaced by cryptocurrencies. 

From a more technical standpoint, a research study released by Transparency International, a nongovernment organization based in Berlin, Asia’s illicit gambling market was found to be worth a staggering $400 billion in 2018. This is in part because gambling is an extremely popular recreational activity across a number of countries in the region such as China, India, Indonesia, Pakistan and Bangladesh.

Additionally, cryptocurrencies are becoming a preferred source of betting for online gaming operators around the world because the payment medium works without the need for an intermediary. Additionally, it alleviates the risk of customers initiating fraudulent credit card chargebacks, which take place after a scammer has topped up their betting account but then request their credit card operator to process a refund by citing illegal activity.

Crypto use in gambling is still limited

Even though online gambling has grown considerably across Asia as well as many other parts of the world recently, the use of cryptocurrency within this domain is still largely contained to some comparatively small, little-used gambling decentralized apps

Licensed operators only take bets in countries where online gambling is legal. So, it is entirely possible that players using cryptocurrency to engage in illegal gambling only represent a tiny fraction of the market. 

Sulim Malook, founder of Crypto Millions Lotto, a licensed Bitcoin (BTC) lotto, told Cointelegraph that a vast majority of Asia’s gambling activities are regulated and not related to its local sporting market. Instead, people prefer to bet on a number of western sporting domains, such as the English Premier League or the Spanish La Liga. He further highlighted:

“You can get an idea of how big this is just by looking at the number of sponsorships clubs have with sports betting partners. Players from countries like China, India, Indonesia, Pakistan and Bangladesh can open up betting accounts legally at many online bookmakers, including the world’s largest, www.bet365.com. They don’t need cryptocurrency to do this. In fact, Bet365 doesn’t even offer cryptocurrency as a direct means to deposit.”

When asked about why so much of the blame was being placed on crypto even though fiat-based illegal gambling is still thriving, Malook stated that a large portion of the bad publicity is happening because it is easy for government officials and regulators to point fingers at this industry, especially since it is still in its infancy.

He further pointed out that even though Bitcoin is well known for its censorship-resistant nature, most people — especially those living in developing nations — like to view the digital asset as a global currency that can allow them to take advantage of services that people in most western nations take for granted. Mulook then added:

“Card issuers have made it so difficult for people to gamble (deposit and withdraw) even when the transactions are legal. As such, it is not surprising that people are looking for alternative currencies and payment methods. Cryptocurrency is an excellent facilitator for online gambling, which is a huge industry even without it.”

Fiat still accounts for a majority of global illegal gambling activities

To gain a better understanding of how fiat compares to crypto in relation to illegal gambling, Cointelegraph spoke with John Caldwell, co-founder of ASG Blockchain and director of advocacy of CasinoCoin Foundation. CasinoCoin is a digital currency designed specifically for the regulated online gaming industry. 

In his view, an overwhelming majority of funds being passed back and forth across a host of illicit gambling markets is still fiat-based money. However, he did concede that with the introduction of crypto into the fray, the existing problem might be exacerbated, albeit quite marginally. 

On the issue of whether the increasing use of crypto — for online gambling purposes — gives governments all over the world a good enough reason to ban this unique asset class, Caldwell pointed out:

“Methods to support illicit gambling via fiat have been tried and true for decades now, and the tools that blockchain and crypto provide to battle this should be the focus. Will politicos/governments figure this out? I am hopeful, but we shall see. Given the direction of governments toward national digital currencies, one would hope a government would see that using a digital currency and its supporting tools to shed more light on all transactions is the answer.”

Lastly, the privacy benefits related to most crypto assets are quite limited unless people are looking to get their hands on privacy-oriented digital currencies — most of whom are anyway very difficult to use due to various regulatory problems. In regards to the subject, Malook pointed out that every licensed exchange that is currently offering its customers seamless fiat-to-crypto conversions is making use of rigorous Know Your Customer checks. For those who want to bypass such KYC requirements, the cost is having to pay very high fees and currency conversion spreads that seriously impact a gambler’s overall market edge. 

The key to crypto gambling is to bring more clarity to the entire process

Despite the anti-crypto gang reiterating the mantra that “crypto is untraceable,” the fact of the matter remains that most cryptocurrencies are actually more traceable than cash. And while the growth of the illegal gambling market should be a reason for concern to regulatory bodies across the globe, putting the blame largely on crypto does not help solve anything.

Commenting on the issue, Brandon Morey, CEO of We Accept Cryptocurrency, an online resource of merchants, told Cointelegraph:

“I don't believe illegal gambling will ever be curbed or contained since a whole lot of people like betting on sports. In fact, illegal gambling markets will only grow due to technological advances.”

On a somewhat similar note, Caldwell pointed out that the key to unifying the crypto and gambling world is by bringing more clarity to the entire betting process. In his view, hiding or trying to obfuscate any part of this process will only draw in negative attention toward all of the involved parties. Caldwell further opined:

“Crypto and blockchain should facilitate that process and make players, operators, regulators and governments all more comfortable — not less. The key is educating polls, regulators and operators on how blockchain and crypto can be used to make their lives easier — not more difficult. The blockchain should be seen as a tool — not a threat.”

All in all

As things stand, cash and credit cards are still by far the preferred mode of payment for most gambling enthusiasts across the globe. This is because, despite crypto eliminating the need for any gateways and intermediaries, digital currencies are still hard to use for a whole host of day-to-day buy/sell activities. 

Add to this the fact that most traditional credit card operators provide their users with financial guarantees that crypto just cannot provide at the moment. As a result, the overall incentive for people to use crypto for legal or illegal gambling-related activities is quite limited.

Coming to a ConsenSys: JP Morgan Acquisition Paves JPM Coin Growth

Pundits believe that a merger between JP Morgan and ConsenSys is a step in the right direction for both companies and the crypto industry.

According to an all-new report released earlier this week, banking giant JP Morgan is currently in the process of facilitating a merger of its in-house blockchain unit called Quorum with Ethereum-based software developer ConsenSys. The deal is currently under negotiation and is likely to be finalized by the end of Q3 2020.

Quorum is a blockchain-based network that has been built atop the Ethereum ecosystem. It currently serves as the foundation for JP Morgan’s Interbank Information Network, a decentralized network that connects more than 300 banks and financial institutions, allowing them to exchange a host of information related to payments. The project currently counts 25 employees.

Additionally, JPM Coin — a digital asset created by JP Morgan to facilitate its native monetary transactions — has been built on Quorum’s digital infrastructure. In this regard, a recently published Reuters article claims that by merging with ConsenSys, JP Morgan is not only looking to tackle a host of real-world financial issues but also to expand the reach of its Quorum platform.

Providing his thoughts on the alleged merger, Gregory Klumov, CEO of Stasis — a euro-backed stablecoin issuer — told Cointelegraph that such news should not come as a shock to anyone, since deals of this magnitude routinely take place when a bear market is coming to a close:

“At the end of a bear cycle, consolidation is usually the most organic way out for a lot of businesses. This is an overdue indicator for the start of a new market cycle.”

The merger is a smart move on JP Morgan’s part

To better understand the implications put forth by this latest deal, Cointelegraph reached out to Michael Poutre, CEO of Terraform Capital LLC. In his view, the move to acquire Consensys shows that JP Morgan is trying to buy a credible brain trust headed by Ethereum co-founder Joseph Lubin, which has so far been hard for big banks and governments to come by.

He further added that taking up to six months to close the deal is a smart move on JP Morgan’s part, since it allows the banking giant to “try the milk for free before buying the cow.” He further pointed out:

“I suspect that JPM’s internal effort, Quorum, wasn’t living up to the expectations laid out at inception. For what is tantamount to a rounding error for JPM, they are getting top-tier industry veterans that will afford them the opportunity to develop and launch a successful token. Consensys had cashflow problems, which JPM can solve immediately; in turn, JPM gets the world-class team that they sorely needed.”

Additionally, Poutre told Cointelegraph that he has worked under Jamie Dimon, the CEO of JP Morgan Chase, in the past. He is certain that the decision to go through with this deal would have only been made after a lot of careful deliberation and meticulous planning. He also added that, “If Quorum wasn’t producing what he wanted, Dimon does not need to wait, hope, and pray that his team gets it right — he saw an opportunity to fix an issue, and he seized it.”

A similar outlook is shared by Anti Danilevski, CEO and founder of Kick Ecosystem and KickEX exchange, who also believes that the deal works in the best interest of both companies. In his opinion, even though Ethereum’s underlying technology has become fairly outdated now — referring to the platform’s various scalability issues — it is still one of the world’s most popular development systems for decentralized applications, or DApps.

With Quorum already utilizing the Ethereum network, JP Morgan will most likely push many of its existing clients to start making use of its blockchain system once the deal is finalized — something that Danilevski believes prompted Joseph Lubin to push for this deal in the first place. He further added that, “This deal could also potentially bring more validity to the JPM Coin and increase the overall use of bank-backed stablecoins.”

Consensys’ recent layoffs may have had nothing to do with the potential merger

According to a couple of reports released last week, it has come to light that Consensys was moving to cut its employee base down by roughly 14% as part of a restructuring plan. This new development drew the attention of a number of media houses, prompting them to believe that something larger may be going on behind the scenes.

In this regard, Alex Axelrod, the CEO and founder of Aximetria, a crypto-centric mobile finance app, told Cointelegraph that he believes news of the recent downsizing should not be associated with the alleged merger. In his view, both companies already enjoy a significant market following and would not be forced into a deal because of financial reasons.

A similar point of view is also shared by Danilevski, who pointed out that the recent layoffs aren’t a first for ConsenSys, and thus they are unlikely to be related to a potential partnership at hand. He added:

“Cryptocurrency and blockchain-related companies, such as Bitmain, are constantly letting staff go based on how the market is doing. While we’re in a bullish market as of now, it’s worth noting that the recent layoffs were in the HR, finance, and marketing departments, while the development team was unaffected.”

However, Herbrecht believes that the layoffs could have been done because of JP Morgan wanting to integrate its Quorum team with Consensys’ core developer staff — so as to make its internal work-related operations more streamlined. He also believes that if JPM Coin is built as envisioned, the banking consortium that JP Morgan is looking to establish with its Interbank Information Network could very well be the most serious attempt to bridge the gap that currently exists between the traditional financial system and the crypto industry. Herbrecht added:

“With this possible partnership, we can imagine all kinds of possible scenarios, with one such being the introduction of crypto technology to a whole new audience.”

Impact on the market and sector?

Even though the price of Ether seems to be on the rise following this latest development, it is quite difficult to predict how this deal will affect the market at large. For example, Klumov is of the opinion that a partnership between a leading financial institution such as JP Morgan and one of the world’s most recognized and reputable blockchain service providers is bound to help the industry in one way or the other.

As far as historical precedents go, very few projects have had a major monetary impact on the industry as a whole. Even this latest partnership seems to be focused more on enhancing JPMorgan’s personal blockchain adoption efforts rather than improving the state of the Ethereum project as a whole.

Lastly, over the course of the past few years, more and more banks have entered the crypto market with varying degrees of success. For example, firms like Ripple have been able to rope in a number of traditional finance players to use its native technological offerings such as xRapid and xCurrent.

Through the sector’s regulation, an increasing number of opportunities for banks to utilize crypto and blockchain have opened up, thereby allowing for mergers of crypto service providers to take place and thus create greater value for the market at large.

Since the details surrounding this alleged partnership are still quite limited at this point, it is hard to assess the overall impact it may have. In Danilevski’s opinion, this merger will most likely have no major financial implication on this burgeoning sector — especially since JP Morgan’s JPM coin has not received the kind of attention that the company initially expected. He further added:

“Considering Ethereum is the most popular blockchain for decentralized finance applications, ConsenSys is probably the best company JP Morgan could merge with to further pursue its goals. It’s just hard to see anything major happening in the market in the short term.”

Lastly, Herbrecht pointed out that global interest in decentralized finance, or DeFi, applications has been on the rise in recent months, with Ethereum being increasingly used by developers for the creation of novel DeFi-related DApps as a result. Thus, it seems to be a good idea for JPMorgan to get closer to Ethereum’s core development team and promote the use of the platform on a global scale.

Botched Iowa Caucuses Won’t Cast Shadow Over Blockchain Voting

With the U.S. voter turnout declining, experts believe that blockchain-based mobile voting platforms can restore trust.

According to a report released on Feb. 5, a mobile software application that was devised to help calculate the total number of votes in the Iowa Democratic caucus reportedly malfunctioned, resulting in the Democratic Party having to delay its public reporting of last Monday’s results. It was also revealed that a coding issue with the software resulted in the app relaying results that were either partially incorrect or unreliable. 

The application under scrutiny was designed by a relatively unknown firm called Shadow Inc. The startup was founded by Gerard Niemira and Krista Davis, who played a major role in promoting Hillary Clinton’s 2016 presidential campaign. In January 2019, the company was bought out by Acronym, a pro-Democrat nonprofit founded in 2017. 

It is worth mentioning that the CEO of Acronym is Tara McGowan, a former journalist and digital producer who was closely tied with former President Barack Obama during his 2012 re-election campaign. Additionally, a number of other high-profile Democrats also seem to be closely linked with the app, including David Plouffe, one of Obama’s close aides who worked with him during his second tenure. 

Lastly, McGowan is married to Michael Halle, an official senior strategist working for Pete Buttigieg’s presidential campaign, who incidentally went on to declare himself victorious after the Iowa caucuses even before the final results were released — thus prompting conspiracy theories of foul play.

Following the incident, a spokesperson for Voatz, one of the world’s leading blockchain voting firms, took to the internet to release a blog claiming that the app used in the Iowa Democratic caucuses did not make use of mobile voting technology. An excerpt of the statement reads:

“We’ve never previously heard of the technology nor the company behind it. [...] Using an app to tabulate in-person caucus votes is not mobile voting.”

Mobile voting platforms distance themselves from the Iowa debacle

To gain a better understanding of this entire issue, Cointelegraph reached out to Pete Martin, the CEO of Votem Corp., a mobile voting system designed to securely cast votes in elections across the globe. In his view, the Iowa debacle wasn’t really linked with mobile voting, since it was largely a private affair — a sentiment that is also shared by another voting solution provider, Voatz. 

Related: Blockchain Voting Systems — Can Democracy Rely on Them?

Martin then alluded to the various paper-based, in-person polling scandals that quite conveniently were seemingly ignored by a lot of political experts — referring in particular to the election scandals that took place in Florida back in 2000 and then again in 2018. On the subject, Martin added:

“We believe that mobile voting enhances the voting experience, makes it more accessible at potentially less cost to taxpayers so that voters can vote more often on more issues and more conveniently. Young people (under 30) will make up the majority of the electorate in the U.S. in a few years and this is how they want to vote; not in person, and not through the mail.”

In Martin’s opinion, the biggest challenge with blockchain and mobile voting systems is the fear of change, entrenched interests of various big-name players in maintaining the current status quo, and the very real threat of hacking and interference. However, he believes that mobile technology has proven to positively affect virtually every other industry giving greater access, convenience and lower costs to people all over the globe.

Lastly, regarding blockchain’s overall utility, especially in relation to large-scale voting purposes, people need to understand that the technology is still just a decade old and that it will take some time for startups to demonstrate blockchain’s ability to make elections more convenient, secure and verifiable. 

Blockchain voting is here to stay

Recently, many political commentators and media analysts have been speaking out against mobile- and blockchain-based voting technology. However, Rachel Livingston of Tusk Philanthropies — an organization working to advance the use of advanced mobile voting technologies — told Cointelegraph that these novel ballot systems are here to stay, especially since they are already being used by a number of states across the United States. On the subject, she pointed out:

“I don’t think it’s too early to judge the overall utility of mobile voting as we have now used Voatz in West Virginia, Denver, UT County, Umatilla & Jackson County, Oregon and Pierce County, WA. All these elections have completed and through audits (some are still in process) the tabulation of the results came back 100% accurate.”

Livingston also provided Cointelegraph with some data on the matter:

  • The technology used to facilitate the proceedings in Iowa was brand new, untested and created in secrecy.

  • The technology was rolled out by the state party with zero opportunities for input from stakeholders prior to the election.

  • There was no backup plan in place in case the app malfunctioned — which, incidentally, it did.

Traditional voting methods are outdated and lack transparency

As mentioned earlier, ballot voting has been at the center of a number of prominent election scandals in the past. For example, during the 2004 U.S. general election, a number of concerns were raised regarding the voting processes used to determine the winner, resulting in several experts believing that the final vote tally in itself was incorrect.

Blockchain and mobile voting systems attempt to serve the diverse needs of constituents by providing them with accessible and convenient ways to vote irrespective of where they may be during the time of election. Moreover, they allow users to check and see if their vote was counted without them having to compromise on their privacy. For example, most voting platforms provide their users with a high degree of verifiability as well as the option to independently confirm the vote of each participant in real time.

When asked about the similarities shared between the Shadow Inc. app and other popular voting platforms such as Votem, SecureVote, Scytl and Voatz, Martin stated, “We don’t know very much about the Shadow app other than what we have read, but our understanding is that it wasn’t truly mobile, nor is it blockchain-based.”

The masses want an alternative 

A quick look at the U.S. voter turnout in recent years shows us that fewer people are participating in the country’s electoral process with each successive cycle. For example, the total turnout in the 2016 presidential race dipped to 55% of voting-age citizens — one of the lowest tallies since the 1996 elections, when only 53.5% showed up. 

Although there could be many factors to explain this decline, it seems as though many blockchain platforms are ready to tackle the issues surrounding trust, verifiability and security that exist in relation to the various democratic processes that seem to be in place today all over the world. For example, Voatz claims to be working in conjunction with the Department of Homeland Security as well as the Cybersecurity and Infrastructure Security Agency to test the efficacy of its security infrastructure on a routine basis.

Related: Electronic Voting With Blockchain: An Experience From Naples, Italy

Also, it appears as though the blockchain voting industry has been gaining a lot of prominence over the last couple of years, with a number of politicians conceding that the technology does indeed have the potential to increase the transparency aspect of any election process, as it helps establish a record base that is immutable in nature. 

For example, back in August 2019, Andrew Yang — a pro-crypto presidential hopeful from the Democratic Party — stated in an interview that if he were to come into power in 2020, he would implement blockchain-based mobile voting protocols to help increase voter turnout as well as to restore the public’s trust in America’s electoral process. It has also been reported that the state of Virginia is currently considering making use of this technology to streamline its elections.

Last but not least, while most mobile voting systems prefer to make use of blockchain technology, there are platforms like Democracy Live’s OmniBallot that employ Amazon Web Services’ Object Lock to facilitate its native ballot collection operations. To be a bit more specific, AWS is NIST-compliant and has even been certified by FedRamp, a government program that provides a standardized approach to security assessment, authorization and continuous monitoring for cloud services.

Verdict in India Imminent, RBI Cites Warren Buffet Skepticism as Reason to Ban Crypto

RBI’s legal counsel claims crypto can adversely affect India’s financial stability.

Back in April 2018, the Reserve Bank of India decided to go ahead and issue a notice prohibiting all of India’s banking and financial institutions from offering their services to crypto exchanges, companies operating within the space, and individuals seeking to explore the nascent asset class. 

Following the ban, India’s crypto ecosystem was brought to its knees, with a majority of operational exchanges either folding up completely or relocating to other nations with more hospitable regulations. Additionally, the notice resulted in digital currencies being maligned across India’s investment landscape, with many casual enthusiasts starting to view the overall sector with an air of suspicion.

This seemingly unjust decision was taken up in court by the Internet and Mobile Association of India, or IAMAI, a nonprofit organization that seeks to expand and enhance India’s online and mobile value-added services sectors. It is composed of a number of individuals currently operating within the Indian digital currency market, including executives affiliated with different crypto exchanges. The IAMAI’s contention is that the reserve bank’s ban not only falls outside its legal purview, but is also totally unconstitutional. 

As part of last week’s court proceedings, Ashim Sood, counsel for the IAMAI, started off by reviewing the fundamental precepts underpinning cryptocurrency and blockchain technology, as well as reading out the guidelines issued by the Financial Action Task Force in relation to digital currencies last year.

Sood also explained to the judges the way in which many countries like Australia, Malta and Japan have been able to regulate their local crypto industries in a largely successful manner. In this regard, Sood laid out many of the stringent Know Your Customer practices being employed by various Indian exchanges, stating that the industry, by and large, had followed strict self-regulatory measures, but there was still a clear need for positive regulation to curb some of the issues plaguing the ever-evolving sector. 

Latest developments

On Jan. 28, the legal counsel for the Reserve Bank of India put forth its key arguments defending its move to ban cryptocurrencies from the Indian economic landscape. As part of the proceedings, the RBI accepted the fact that it never implemented a ban on Bitcoin but rather “instructed” banks to simply refrain from dealing with cryptocurrency exchanges.

Cointelegraph reached out to Nischal Shetty, the CEO of WazirX, one of India’s largest cryptocurrency trading platforms and a recent acquisition of Binance — a move that showcases the crypto giant’s faith in the overall potential of the Indian crypto market. Shetty pointed out:

“Throughout the hearings, we’ve seen evidence of how the RBI hadn’t done any due diligence before releasing its circular banning crypto. Their move was arbitrary and led businesses to shut down or move outside of India. I’m optimistic that the Supreme Court will see the problems with RBI’s move and give a judgment in our favor. Huge props to our lawyer, Ashim Sood, for presenting solid arguments.”

The RBI’s core defense included arguments claiming that cryptocurrencies pose a huge threat to the nation’s monetary system and overall stability. Additionally, the RBI also stated that digital currencies were being used mainly by bad actors for money laundering, tax evasion, financing of terrorism-related activities, and so on. Lastly, the RBI’s legal counsel argued that crypto should be banned simply because a number of high-profile finance experts and economists such as Warren Buffet are against it.

To discuss this point further, Cointelegraph spoke with Sidharth Sogani, the CEO of Crebaco Global Inc., an India-based analytics firm focused on crypto and blockchain. In his view, there has been no research to date showing that crypto poses a threat to the Indian economy:

“The crypto economy is less than $250 billion to date, if we assume that all the Bitcoin on this planet is used for terrorism and money laundering, still it will be smaller than the money laundering, terrorist funding, and other illicit activities funded by fiat money.”

On the subject of Bitcoin’s untraceable nature and the claim that many people make use of venture capital funds to evade taxes, Sogani stated that the RBI was simply making assumptions. He asserted that BTC is, in fact, traceable given that the right regulatory infrastructure is in place. In his view, if regulated entities like banks start accepting Bitcoin, the government, as well as regulators like the RBI, would be better positioned to track its movements:

“Tax evasion is an allegation since they are assuming that all the transactions in India are taxed properly. 30% of all cash transactions in the country are not monitored by tax authorities, whereas local crypto exchanges are following all of the necessary compliances and are even filing their Goods and Services Tax! Thus, such comments are baseless.”

The RBI’s decision to ban crypto was about stopping illegal activities

Since the start of this legal battle, the RBI has reiterated that its ban was about protecting India’s investor community, as well as to push back against any illegal crypto-related activities. But per the legal rights afforded by the constitution of India to its citizens, neither the government nor any regulatory entity like RBI has the power to enforce such a ban. On the subject, Shetty added:

“As our counsel pointed out in court, according to the RBI’s annual report available on record, there is negligible risk from crypto in terms of its effect on the country’s economy.”

Sogani echoed a similar sentiment, stating that the RBI should first and foremost try to curb the illicit laundering of millions of rupees that routinely takes place both locally and across international borders. 

For example, he pointed to the 2018 Punjab National Bank fraud wherein jeweler Nirav Modi was able to scam the bank to the tune of $1.4 billion. Sogani then alluded to the Indian bank scam that saw hackers make their way out with $1.77 billion.

He also pointed out that back in 2018, when Indian Prime Minister Narendra Modi implemented a nationwide ban on certain currency notes, the RBI issued a statement criticizing the move, which in hindsight, seems extremely hypocritical of the independent finance body. Sogani further told Cointelegraph:

“The RBI is not allowed to take decisions or ban any economic activity which affects an entire industry. This is above their power, legal jurisdiction since the Indian constitution allows every citizen to run a legal business.”

A crypto ban could adversely affect India’s economy and job market

As the global crypto community awaits the Indian Supreme Court’s decision, a study released by Crebaco Global Inc. claims that if the existing blanket ban is upheld by the court, India’s economy could end up losing $12.9 billion. 

The data states that Indian crypto exchanges such as ZebPay, UNocoin and others recorded a total trading volume of around 40,000 crore rupees ($5.6 billion) last year. Additionally, trade-related activities from Indian IPs on Binance between January 2018 and December 2018 was at 7.9% — a number that clearly shows the booming interest among Indian people when it comes to cryptocurrencies.

The study then proceeds to highlight the number of jobs that have been created thanks to crypto and blockchain technology. For example, Crebaco’s data suggests that in 2019, a total of 6,150 individuals were employed as blockchain coders and content writers within India’s local fintech market.

Furthermore, a new research article recently released by the firm suggests that if the Indian crypto market were regulated, it could help provide employment opportunities to an additional 25,000–30,000 people within a short period of time.

Losing control

With all of the arguments now presented to the Supreme Court, it is quite evident that the Reserve Bank of India’s core issue with crypto is that people will start to make use of currencies like Bitcoin, Bitcoin Cash and Ether exclusively for payment purposes, shifting the balance of monetary power within India. 

However, it seems the RBI has so far failed to understand that payment isn’t the only use case for crypto and that the asset class is viewed by a whole host of Indians as being an alternative investment avenue to regular stocks and bond options. On the subject, Shetty opined:

“We should not pit Bitcoin against fiat because they both have different properties. One is deflationary, while the latter is inflationary. BTC has characteristics of property as well as of utility, currency, etc.”

According to a poll conducted by Crypto Kanoon — an Indian crypto news platform that has been covering the aforementioned proceedings in real-time since they began — it seems as though more than 68% of Indians believe that the judgement will come out in favor of the digital asset industry.

All in all, India’s relationship with crypto has been quite negative over the last couple of years. However, if healthy regulations within the subcontinent are established, they can help set a precedent for the rest of the world to follow. 

As things stand, the judge’s panel presiding over the case seems to have understood the potential that crypto and blockchain possess and how these technologies can transform the digital and economic landscape of the nation in the coming few years. The final verdict is expected to be released sometime within the next few days.

Davos 2020: Awaited Regulations, Unexpected Enthusiasm, New Challenges

The World Economic Forum 2020 tackled many of the regulatory issues currently plaguing the global crypto sector.

Last week saw a whole host of world leaders — including United States President Donald Trump and Prince Charles of Wales, along with a number of other prominent dignitaries — come together to attend the 2020 iteration of the World Economic Forum that was held in Davos, Switzerland Jan. 20–24. As part of the five-day event, the WEF announced its decision to establish a global consortium for governing digital currencies — including stablecoins. Following the news, the price of Bitcoin proceeded to swiftly rise from around the $8,200 mark to $8,455 within an hour’s time.

The consortium will consist primarily of various traditional financial institutions, global government agencies, economists, academics, as well as members of the forum’s different communities. In regard to what the consortium’s core goals are, a report released by the WEF states that in order for digital assets to become a part of the mainstream financial ecosystem, they have to be governed using an innovative regulatory structure that is transparent, inclusive and interoperable in nature. Thus, the body will seek to create such a framework as soon as possible with the help of the public and private sectors.

Lastly, in comparison to WEF 2019, where the crypto industry at large was at the receiving end of a lot of flak — with people like PayPal CEO Dan Shulman and JPMorgan Chase CEO Jamie Dimon bashing digital currencies for their perceived nonutility — this year’s event has seen a marked difference in how a number of high-profile individuals and companies have begun to view cryptocurrencies and its underlying technology — i.e., blockchain. For example, according to KPMG’s U.S. blockchain lead, Arun Ghosh, the accounting giant will be making use of blockchain (in conjunction with IoT technology) this year to help solve many climate change-related issues.

Experts remain divided on recent crypto-related developments

Even though the WEF appears to have become increasingly more inclusive in its approach toward the crypto sector on paper, a number of experts believe that despite emerging technologies such as blockchain and artificial intelligence finally getting the recognition they deserve, most of the talk surrounding crypto in Davos has been about nation-states and central banks issuing their own digital currencies — an idea that a lot of people believe is self-defeating. For example, in an exclusive interview with Cointelegraph, Riccardo Spagni, a major contributor to Monero’s core development, was quoted as saying:

“They’re talking about how it's going to be inclusionary, but at the end of the day, they still want to police it. They still want to regulate it. So, it's not really inclusionary. It's inclusionary within the same framework that they've always had. So, that's a little bit disappointing because you can sense that it's still like the same room full of old school bankers, old school regulators. They are reluctant to change.”

He further added that with the global crypto community starting to become more and more unified in its cause to help spread awareness regarding this burgeoning space, the financial elite of the world are being given a clear message that “if they don't adapt, if they don't change, they're going to end up losing.”

However, on a more optimistic yet cautious note, Mark Esposito, a professor at Harvard University and the Thunderbird School of Global Management, told Cointelegraph he is hopeful that with more and more people beginning to understand the potential of crypto tech, it seems as though the global finance industry is on the threshold of a new beginning:

“You see all these senior people that don't need to talk about crypto the way they are now. So, it looks like 2020 is going to be the tipping point of a major transformation. We are waiting for a new narrative to happen, and fintech is part of the new narrative.”

Top crypto-related news to come out of Davos last week

In addition to the forum establishing a consortium for governing digital assets, it also released a framework designed to help central banks create their very own state-backed cryptocurrencies, or CBDCs. According to an official press release, this latest “CBDC Policy-Maker Toolkit” has been devised in conjunction with a number of central banking institutions, economists and international organizations. In this regard, it bears mentioning that the Bank of Thailand and the Central Bank of Bahrain are already making use of this toolkit.

News of the aforementioned release was met with a lot of market hype, with value investor Bill Miller and Boston University professor Mark Williams stating that this announcement signifies a change in how the world’s economic elite now consider crypto and blockchain technology.

Also, as part of the Davos 2020 forum, Singapore-based crypto exchange Huobi announced the launch of its new crypto brokerage platform that is designed primarily to lure institutional investors into this ever-evolving market. What makes the platform unique is that it offers its users zero transaction fees while making use of the “Smart Order Routing” model — which basically allows investors to get the best deals on their purchases. In relation to his company’s latest move, Huobi Group’s vice president for global business, Ciara Sun, said:

“Institutional investors and HNWIs will be the major contributors of growth for the crypto economy in 2020 and beyond, but barriers like low liquidity and a lack of asset enhancement products are stalling widespread adoption.” 

Lastly, a spokesperson for Bakkt, a crypto futures trading platform run by the Intercontinental Exchange, announced the release of an all-new consumer app that is designed to support digital assets — including a wide range of cryptocurrencies. With that being said, Bakkt’s president, Adam White, did say that the app will look more like a traditional finance product rather than a crypto fintech one.

Comparing previous WEFs in regard to crypto

On the subject of how this year’s blockchain agenda in Davos compared to ones from previous years, Daniel Haudenschild, the president of the Crypto Valley Association, told Cointelegraph”

“I think the level of discussions is healthy. I think what's happened is that the content has completely changed. I think anybody still walking around talking about crypto in blockchain now have something to hold on to. There's something serious behind their intention. There's no more fluff now because we've been through the Valley of Tears and many projects are coming to fruition. It's exciting. It's much more real. It’s almost like 2017 but without the hype.”

He further added that 2020 seems primed to be the year of infrastructure development, especially because the market is seeing the entry of better players, institutional investors, and wealth and asset management companies — which is being driven primarily by negative interest rates. Haudenschild also pointed out:

“We are observing a flush of new ASIC classes, tokenized securities, tokenized commodities, digital commodities as well as a rush of people trying to get the infrastructure in place — you know, the custody solutions, the wallets in order to be able to provide those services both on the banking side, but also on the trading end.”

Also in attendance at the conference was Russian author and composer Alexander Shulgin, whose ideas regarding crypto mining have gained a lot of traction in recent years. When asked to expound on the subject, Shulgin told Cointelegraph:

“Decentralized servers in regard to mining can help usher in a bright future for IoT-based technologies, smart cities and for so-called AI because, without computer processing, you cannot do any data mining.” 

He further added that this WEF, a lot of conservative businessmen and big companies were taking the time to understand the implications of the forthcoming industry revolution and how it will make local mining easier (by reducing the overall computing requirements) for everyone interested in the business.

CV Summit, TechPark and other side-events draw massive crowds

In addition to all of the activities taking place as part of the WEF’s core agenda this past week, many other satellite events were also in full swing at the same time — with perhaps the largest of these being the Crypto Valley Week, a series of events organized by CV Labs.

CV Summit on Jan. 23 featured public addresses by a number of high-profile crypto personnel including  MakerDAO’s Rune Christensen, ex-Cambridge Analytica’s Britanny Kaiser and Cardano’s Charles Hoskinson, among others. The topics of discussion ranged from how mainstream finance players can benefit from tokenization to how different countries administer their local crypto markets and beyond.

To get a clearer picture of how much attention the crypto sector has been receiving from people all over the world this past year, Cointelegraph sat down with Cardano’s Hoskinson, who was in attendance at the CV Summit. In his view, Davos presents individuals with tremendous networking opportunities, citing his recent dinner meeting with Guns and Roses drummer Steven Adler as a perfect example of this. He then proceeded to add:

“It's no longer just a bunch of nerds sitting around talking about code. We're really talking about solving real-life problems. And generally, the problems are always the same, which is this middleman of necessity that sucks value out of commercial connections between the edges. You have the AirBnbs, the Ubers, the Googles and other platforms like Facebook, where their product is their customer. And basically, they get so powerful that they get to sculpt an entire marketplace.”

Lastly, the week also saw another important conference, TechPark, draw in many famous innovators from all over the world, who discussed artificial intelligence, education technologies, blockchain, Big Data, the Internet of Things, and virtual and augmented reality, among others. Some of the speakers at the event included Jorge Sebastiao, the chief technology officer of Huawei Technologies; Heinz Sommer, the CEO of HSO; Evan Luthra, the CEO of Startup Studio; as well as Cointelegraph’s Kristina Lucrezia Cornèr, who participated in important debates on the role of women in the construction of fintech’s future. 

Davos has set the ball rolling in the right direction

Despite the crypto-related announcements at the WEF being met with mixed emotions, a number of experts were happy with the fact that more and more world leaders are at least beginning to recognize the overall potential and utility of this novel tech space. In this regard, Francesco Pierangeli, business development and research associate at UCL Center for Blockchain Technologies, told Cointelegraph that he has witnessed a lot of positive movement taking place within the crypto and blockchain sector over the past year, especially at the WEF:

“There is a lot going on when it comes to regulations, when it comes to which forms of blockchain are going to make an impact on society. And this is really what Davos is all about — how emerging technologies can be integrated into society for good reasons. There is a lot going on. And I believe that the more we discuss these topics, the more this stuff gets on the agenda of key decision-makers of the world.”

Similarly, Jordi Puigneró, Catalonia’s minister for digital policy and public administration, spoke at Tech Dinner — an event organized by CV VC and powered by Cointelegraph. In his speech, Puigneró stated that blockchain will help usher in a new era of governance by empowering citizens and defining new models of trust, similar to how the internet completely revolutionized the way in which people connect and interact with one another. He further pointed out:

“The government of Catalonia has already approved and is deploying a blockchain strategy in which one of the first projects will be deploying a self-sovereign identity for Catalan citizens. Digital identity will be an essential framework from which can be developed many new services of the digital economy."

The interviews in Davos were conducted by Kristina Lucrezia Cornèr, Cointelegraph’s managing editor and head of features.

SEC Goes Head-to-Head With Telegram, Makes a Guinea Pig of TON

A new debate emerges over the nature of digital assets and if they should be treated separately from the circumstances of their offering and sale.

Earlier this week, the Chamber of Digital Commerce went ahead and filed an amicus brief for the ongoing court hearing taking place between Telegram — one of the world’s most widely used encrypted messenger services — and the United States Securities and Exchange Commission.

In its most basic sense, an amicus brief is a legal document that provides non-litigants with the right to submit their views and opinions in relation to an ongoing case for the court’s consideration. The brief was authored on behalf of the CDC by Lilya Tessler, a partner and the New York head of Sidley Austin LLP.

Similarly, another brief filed by the Blockchain Association on Jan. 21 appears to be in clear support of Telegram. The association’s brief explicitly opposes the SEC’s move to block Telegram from delivering its native crypto tokens, Grams, to the early investors who participated in its initial coin offering. As part of its central argument, the independent body states that the purchase agreements offered by Telegram were designed to fully comply with the SEC’s existing securities rules.

CDC argument in a nutshell

As part of its filing, the CDC put forth a number of arguments as to how the U.S. District Court for Southern New York should view digital assets. For example, it urged the judiciary to make a clear distinction between the term “digital asset” — the subject of an investment contract — and the securities transaction associated with it.

This is because, as things stand, there is no real clarity in regard to the following subjects:

  • Whether or not an investment contract is being offered in a securities transaction
  • Whether an investment contract is a commodity that can be sold in a traditional commercial transaction

Since its inception back in 2014, the Chamber for Digital Commerce — a nonprofit trade association — has been working tirelessly to promote the adoption of crypto and blockchain-based technologies all over the world.

Additionally, the principles governing the U.S.’s existing securities laws were drafted nearly a century ago, when the SEC was first established by Congress. Since then, the Securities Act of 1933 and the Securities Exchange Act of 1934 seem to have dictated much of the U.S. government’s approach to financial regulation.

Not only that, but since SEC’s inception, a number of interesting cases seeking to define the term “securities” have been tried in front of the U.S. judicial system, with the most famous example being the SEC vs. Howey Co. trial, which resulted in the creation of the Howey Test — a set of criteria that can be used to determine the purview of the SEC’s jurisdiction over securities. Gregory Klumov, founder and CEO of euro-backed stablecoin Stasis, told Cointelegraph:

“If a developer team retains certain assets and sells it to investors, it falls into the definition of security. I think that the U.S. legislation must be shaped to take into regard emerging technologies and new business models that hadn’t been present not only in the days of SEC creation but also during the judicial battles on security definitions.”

What is the CDC proposing?

Simply put, the CDC is of the opinion that digital assets should be viewed on a case-by-case basis and that newer, more recently established regulatory policies should be enacted when considering matters related to this novel asset class.

To further elaborate on the subject, Cointelegraph reached out to Anti Danilevski, CEO and founder of Kick Ecosystem. He pointed out that the CDC isn’t really pushing for a framework that would benefit them specifically, but rather for one that’s consistent among all digital assets — so as to ensure that a case like “SEC vs. Telegram” does not happen again. He further added:

“They do have suggestions as to what the SEC could do regarding the case, with the primary one being the “reasoning used by the U.S. Supreme Court in SEC v. W.J. Howey Co,” which is that an asset does not become a security “simply by virtue of being the subject of an investment contract.” Not only would this help prevent a blanket regulation over all cryptocurrencies, but it would ensure that this developing technology has the room to expand without facing regulatory pushback.”

In regard to the matter, Alexey Ermakov, the founder and CEO of crypto-centric mobile finance app Aximetria, told Cointelegraph that the Chamber of Digital Commerce’s core argument is pretty much the same as the one put forth by Telegram’s legal council.

However, it does raise questions that seem to be broader and more specific than the ones related to this case. For starters, the CDC claims that once Telegram’s native tokens (referred to as Grams) are issued, they will immediately be classified as utility tokens and thus won’t be subject to securities laws. Ermaov further added:

“The U.S. securities laws have been around for more than eight decades and they have already made the point in 2017 with the Munchee case that calling a token a ‘utility token’ does not unmake it a security.”

He then proceeded to say that the crypto market is currently undergoing a phase of evolution, which is forcing traditional crypto assets like BTC and ETH to be replaced by more modern cryptocurrencies such as Gram, Libra, Venus, etc.

“While it somehow contradicts the philosophy of blockchain and decentralization of power, for the average person it does not really matter whose currency they are using as long as they get paid. The crypto industry will continue to develop in the direction of replacing traditional financial instruments, such as loans, profitable deposits, and insurance services.”

Lastly, as part of its amicus brief, the CDC attempted to explain to the court what other regulatory agencies outside of the U.S. have done in terms of administering their local crypto markets. Most digital assets are being classified into three main categories:

  • Payment tokens: used primarily as digital mediums of exchange
  • Utility tokens: allow access or usage of a digital network or application
  • Security tokens: financial instruments, similar to traditional equities or debts

Do token sales constitute an investment contract?

One of the core issues that the CDC has sought to discuss with the U.S. judicial system is the issue of whether a token sale can be classified as an investment contract or not. To better understand the nonprofit organization’s stance on the same matter, Cointelegraph spoke with Philip Moustakis, counsel for Seward & Kissel and an advisor of companies and individuals on SEC-enforcement matters. In his personal opinion, everything depends on the facts and circumstances regarding a sale, not whether the thing being offered and sold is a digital token:

“The CDC argues, that certain activities, not the technology, should be regulated by the appropriate regulators. The SEC takes a principles-based approach to regulation and enforcement that, generally, is technology-agnostic and looks to the economic realities of a transaction. In this respect, they seem to be on the same page. The CDC is simply trying to focus the court on the fact that there are two financial instruments involved here, not one, that is, the purchase agreement and the Grams, and they must be analyzed independently of one another.”

On the subject of the CDC claiming that not all digital assets should be regulated as securities, Moustakis believes that The SEC has never branded something a digital asset just because it is blockchain-based, adding:

“In its amicus brief, the CDC expressed its concern that orders issued by the SEC in certain settlements have not, in the CDC’s view, parsed the transactions at issue carefully enough and taken an independent look at the underlying digital assets offered.”

Lastly, he expounded on the reasons why the CDC asked the court to provide digital asset investors with all of the protections that today’s existing securities laws offer. Meanwhile, Moustakis also stressed that not all digital asset-related transactions require the protection of securities laws, and thus the Chamber was basically saying that if a token involves the offering of a security it, of course, must comply with appropriate securities laws and regulations. However, the court needs to be mindful that not all token offerings are securities offerings.

It is worth highlighting that the SEC classifies nearly every cryptocurrency, aside from Bitcoin and Ethereum, as securities. This is because, aside from those two, most cryptocurrencies have been created via an ICO, whose value directly benefits the company behind their development and from the use of which, investors can make a profit.

When it comes to utility tokens, this topic is still up for debate — as is the case with XRP, since there are grounds to say that XRP is not a security, as it doesn’t necessarily represent an investment vehicle designed for profits.

Related: Telegram’s Legal Battle With the SEC Heats Up Over TON Bank Records

In regards to the Telegram vs. SEC case, the amicus brief filed by the Blockchain Association states that since the purchase agreements offered by Telegram were strictly limited to accredited investors — who were promised the tokens after the official launch of the company’s native blockchain network — the company did nothing wrong.

Conclusion

Since last year, the crypto industry has been witnessing an enormous amount of interest around stablecoins, a digital offering that presents users with all of the various advantages of cryptocurrencies while having their values pegged to a stable fiat asset such as the U.S. dollar, the euro and others.

Not only that, but many countries and mainstream multinational corporations (like JP Morgan Chase, Walmart, AirAsia, Mitsubishi Nornickel, and Tencent) are also either already using or planning to launch their very own cryptocurrencies.

Thus, in regard to how the regulatory future of the crypto market seems to be evolving, Yusaku Senga, founder of cloud computing platform Swingby Protocol, told Cointelegraph that as with many new emerging technologies, their legal foundations often tend to clash with outdated, ill-fitting legislation — thus creating gray areas in which both good and bad actors can operate:

“We should wholeheartedly embrace, and actively work on sensible legislation that helps regulate the industry and lay the groundwork for wider adoption of blockchain applications. I agree that the existing securities laws are too blunt for dealing with such a nuanced industry and we hope that these recent developments are indicative that regulators across the world are engaging with the industry in a more detailed way.”

Crypto Winter to Spring: Key Factors That Brought Bitcoin Back to Life

Let’s take a look at some of the key factors that helped spur the growth of the crypto market in 2019.

During the first couple of months of 2019, the price of Bitcoin (BTC) stayed put under the $4,000 mark, thereby solidifying fears that the market was indeed in the midst of a long crypto winter. Not only that, but all through 2018, this space witnessed the simultaneous collapse of around 2,000 cryptocurrencies — which lost around 80% of their combined market cap.

Additionally, it can be seen that over the course of 2018, the general perception of the crypto sector was greatly tarnished thanks to a number of scams and illegal actions that caused investors to lose a whole lot of money (estimated to be worth millions of dollars). As a result, high-profile personalities such as Nouriel Roubini, a Nobel Prize-winning economist, went on record to claim that BTC was the mother of all financial bubbles, thereby causing market panic to spread globally at quite a rapid pace.

Additionally, Ernst & Young also released a market study in early 2018 that showed cybercriminals were able to steal around $1.5 million per month in initial coin offering proceeds, totalling around $400 million of the funds raised.

As a result of these shady developments, a whole host of legitimate projects went underground, waiting for the unwanted noise to settle down — thus causing the crypto market to suffer a great deal. To put things into perspective, Forbes’ “Fintech 50 — 2019,” a list comprising of the world’s most promising tech companies, featured only six blockchain projects. In comparison, 11 crypto companies were included in the 2018 list.

A closer look at the matter

The bull run of 2017 really expanded the global reach of the crypto market, with many novice investors becoming aware of Bitcoin and its potential around that time. However, after the flagship crypto asset hit its all-time high value of nearly $20,000, most analysts and experts started to realize that this positive momentum could not be sustained for much longer and that the market would invariably move to a more bearish mode of operation.

Indeed, such was the case after the first few months of 2018, when BTC’s value tumbled down to $3,300. It was also around this price range that a number of experts thought Bitcoin had found its bottom. Whenever an asset finds its bottom, its overall volatility generally tends to decline. The same was observed for BTC — so much so that during the first half of January 2019, the currency’s native volatility dropped to extremely low levels.

BTC volatility chart, 2017–2020. Source: Coin360

BTC volatility chart, 2017–2020 

Source: Coin360

Another important indicator that seems to suggest that Bitcoin bottomed out between December 2018 and January 2019 is its hash ribbon quotient. In its most basic sense, a hash ribbon can be thought of as a computational tool that combines the hash rate and mining difficulty of Bitcoin in order to identify certain time periods when buying the digital currency is at its most lucrative. In this regard, when the hash ribbon marker sends out a buy signal it often indicates that a local bottom has been formed — which is exactly what happened with BTC at the start of 2019.

“The smart ones bought Bitcoin between $3K and $4K,” Jeroen Van Lange told Cointelegraph. The independent analyst believes the run from $3,000 to $13,000 had a lot to do with market psychology and in particular the fear of missing out:

“This was the ground layer for people who were already invested in 2017 but lost money in the bear market, however, they still had a big belief in Bitcoin.”

Van Lange also outlined other reasons he believes helped push the price of Bitcoin in an upward direction:

  • The currency finding support on its 200-week moving average.
  • BTC’s volatility touching extremely low levels at the start of 2019.
  • The asset dropping by almost 85% from its all-time high value.

Additionally, in relation to the matter, Craig Russo, owner of Peer, a Boston-based startup behind the popular media outlet SludgeFeed, told Cointelegraph that he believes several factors combined to fuel the rise of Bitcoin’s price during the first half of 2019, including "the supply/demand dynamics of the upcoming block reward halving and renewed belief in the inherent value of BTC as a result of major financial institutions and companies entering the space." Russo also believes that the BTC price has predictably reacted to the market situation:

“It also stands to reason that Bitcoin was recovering from significantly oversold conditions that fueled a short squeeze at a few key levels between $3K and $10K. However, after topping out at around $14K, it has become apparent that BTC is now stuck in a larger range.”

Other key factors that helped thaw the crypto winter of 2018–19

Chinese backing

On Oct. 25, 2019, when the price of BTC lay at around $7,500, Chinese President Xi Jinping announced that he will be accelerating his country’s efforts to adopt blockchain in order to promote novel technological innovation across a host of China’s local industries. This was seen as a massive endorsement for the industry as a whole because by Oct. 27, the price of a single Bitcoin surged to just under the $10,000 mark.

If that wasn’t enough, it also came to light last year that China is looking to release its very own central bank digital currency sometime during 2020. Termed the “digital yuan,” the currency will essentially serve as tokenized form of money and will be backed by China’s central banking authority — the People’s Bank of China.

Frank Fu, managing director of Fenbushi Capital, however, believes that the value of BTC has indeed increased because of the announcement, telling Cointelegraph that it was “purely due to general public‘s speculation."

Related: Chinese National Cryptocurrency Turns Out Not Being an Actual Crypto

Increased mainstream adoption

Over the last 12 months or so, a number of established financial entities, such as JPMorgan Chase and Wells Fargo, announced that they were either working to create their very own crypto tokens or making use of blockchain tech to streamline their internal work processes. These mainstream endorsements helped increase confidence among investors operating within this relatively nascent market space.

Bitcoin halving anticipation

Another reason why the market turned bullish is the possible spread of FOMO that permeated this space thanks to the Bitcoin halving event that is scheduled to take place on May 12, 2020.

Related: Bitcoin Halving, Explained

Following this latest halving event, BTC’s native block reward quotient will reduce from 12.5 to 6.25 BTC. Accordingly, this will result in the number of Bitcoin that can be sourced per block becoming more scarce.

Cyclical market movement

The digital currency market goes through periodic cycles of monetary ups and downs. For example, after surging through all of 2014, the value of Bitcoin dropped quite considerably the following year. A similar trend was observed in 2017 and 2018.

To gain a better understanding of this dynamic ebb-and-flow trend, Cointelegraph reached out to Jeffery Liu Xun, CEO of XanPool, a peer-to-peer fiat gateway that is instant and does not require customers to take any custody risks. “It was about time — Bitcoin is an asset designed to go up,” he said, going on:

“Now, as with all markets, people go through greedy phases, fearful phases, and after the greedy phase of 2017, it's only natural that Bitcoin experienced a bearish fearful phase for a duration. Mind you that Bitcoin has always reached new all-time highs if you're looking at a time frame of three years.”

Libra announcement

Earlier in 2019, Mark Zuckerberg presented to the world his vision of a mainstream cryptocurrency that would allow users of social media platform Facebook to facilitate their local/international payments with the touch of a button.

While Libra may not have been able to garner the mainstream support that Zuckerberg and his team might have initially expected, it did help legitimize and educate people about the immense potential of this novel asset class.

Launch of Bakkt

September 2019 saw the launch of Intercontinental Exchange’s long-awaited digital asset platform, Bakkt. The platform was extremely hyped before its launch because it finally gave institutional players a road to enter this burgeoning domain in the easiest, most hassle-free manner possible.

The platform’s daily Bitcoin futures volume hit its all-time high during November 2019, thereby pointing toward an increasing amount of consumer interest in this market space. At the start of 2020, FTX and CME also joined the market, which should continue to drive up demand.

The end?

While the crypto sector made a respectable recovery in 2019 — with the price of a single Bitcoin scaling up to the $13,000 mark once during June and then again in July — all through November and December, the market continued to showcase bearish signals that forced the price of the premier cryptocurrency to recede and hover around the $7,500 region.

This was possibly due to the fact that during the first half of November, the founders and creators of the PLUS token Ponzi scheme were taken into custody by Chinese law enforcement agencies for scamming investors to the tune of $3 billion worth of Bitcoin.

PLUS token was one of the largest cryptocurrency-related Ponzi schemes ever uncovered, with the project promising to provide its investors with ridiculous monthly returns ranging between 9% and 18%. It is believed that after the unearthing of this scam, a lot of investors started to cash out their holdings in order to minimize their losses (via a shot of different Chinese exchanges such as Huobi and OKEx), thereby forcing Bitcoin’s value to drop and stay put around the $7,500 price point.

With that being said, since the turn of the new year, things have looked much better for the market as a whole, with Bitcoin gradually gaining value and sitting at a respectable price point between $8,600 and $8,800 over the past few days.

Crypto Fights for Freedom in India’s Supreme Court, Critics Cite Risk

As India’s Supreme Court inches closer to giving its final verdict on RBI’s crypto ban, experts believe the judgment will favor crypto.

Following the session that took place last August, a three-judge panel from India’s Supreme Court reconvened once again this week to discuss the much-hyped Crypto v. RBI case. During the last hearing, the Supreme Court had asked the Reserve Bank of India (RBI) to clarify its position as to why exactly it enforced a nationwide banking ban on the country’s crypto market, as well as to discuss the seemingly unconstitutional nature of its aforementioned move. 

Ever since the RBI decided to go ahead and issue its controversial prohibition order, a number of public and industry-led petitions have been filed by prominent members of the Indian crypto community contending that the RBI’s decision was not only unjust but also in clear violation of the law. 

As part of its reply, the RBI’s legal counsel pointed out that the institution has complete authority to operate India’s currency and credit system and to protect the nation’s overall financial stability — if it feels the need to do so.

In this regard, the ongoing petition that is currently being heard in front of the Supreme Court has been brought forth by the Internet And Mobile Association of India (IAMAI), a not-for-profit industry body that seeks to expand and enhance India’s online and mobile value-added services sectors.

Latest developments

When the aforementioned case was reopened earlier this week, Ashim Sood, the counsel for the IAMAI, started off by reviewing the arguments that had previously been discussed in court last August. For starters, he once again explained to the judges some of the basics underlying cryptocurrency and blockchain technology and also read out the guidelines issued by the Financial Action Task Force last year. 

Additionally, after explaining how countries like Australia, Malta and Japan had been largely successful in regulating their local crypto markets, he emphasized the need for conventional banking avenues to be made available to blockchain/crypto business owners. Under such favorable regulations, investors, as well as casual altcoin enthusiasts, could gain access to digital currencies in a streamlined, transparent manner.

Cointelegraph spoke to Sumit Gupta, the CEO of DCX, an Indian cryptocurrency exchange, and he believes that Sood has proffered some good arguments on the matter of how the technology works, and how it can be used, given that the right regulation is in place:

“On the question of anonymity with virtual currencies, he explained the strong KYC process practiced by various exchanges. He argued that, although the industry follows strict self-regulation, it cannot enforce them beyond a point, and hence highlighted the importance of positive regulation. He discussed that every new technology will have a grey side, however, positive regulations that curb the negatives are the need of the hour.”

As part of its defense scheme, the RBI alluded to incidents, such as the Binance KYC breach of 2019, as being clear examples of why the crypto industry at large is still in its infancy, and thus, poses a massive cybersecurity threat to the economy of any nation where it is allowed to foster and grow. 

However, Sood told the judges that such cyber attacks were exactly the reason why positive regulatory measures were needed in India — so that the sector as a whole could be better equipped to face such challenges.

He then alluded to a couple of previous judgments passed by the Supreme Court, which clearly stated that legal activities can be only be shut down if a definitive risk has first been identified by the Indian parliament and not by an administrative body like the RBI. In regards to the matter, Gupta added:

“RBI’s arguments may sound inadequate, however, that is something for the judges to decide. Our judicial processes are strong enough and we have complete trust in them.”

Lastly, Kashif Raza, founder of Crypto Kanoon, an Indian crypto news platform that has been covering the ongoing hearing live via its Twitter channel, told Cointelegraph that the main goal of IAMAI’s legal counsel is to establish the fact that the Indian crypto community is not trying to push digital assets as being currencies but rather as alternative investment options. He further added:

“The IAMAI drew the focus of the court on the fact that nowhere in the FATF’s guidelines is it mentioned that cryptocurrencies should be banned completely. India is a member of the FATF, and most of the agency’s guidelines demand for KYC and better cooperation between members when it comes to controlling the cross border movement of crypto-assets.”

Indian Judges seem to have an open mind

Indian judges, who are currently presiding over the hearing, seem to be eager to learn about crypto-based technologies and the immense economic possibilities that they represent. For example, they have requested the legal counsel for the IAMAI to explain how cryptocurrencies were being regulated in countries like Australia, Italy, Malta and Japan, and whether or not instances of money laundering or tax evasion had increased following the implementation of these measures. 

In response, Sood proceeded to take the judges through a detailed comparative table related to different countries, their regime nature and how they were handling crypto-related matters within their respective jurisdictions. Furthermore, he also cited the example of Mt. Gox, and how its collapse led to the creation of an efficient regulatory framework by the Japanese government.

Related: India’s Income Tax Department Is Secretly Training Its Officials to Investigate Cryptocurrencies

The Judges further requested a detailed explanation regarding how current crypto-crypto and peer-to-peer exchange models work as well as how digital currency trading actually takes place. Sood, in response, explained to the panel the various laws that are currently being employed in South Africa, the United Kingdom and certain states of the United States that allow people to trade digital assets in a fully legal and taxable manner.

Lastly, the Supreme Court questioned the IAMAI about various suspicious services, like Silk Road, the dark web, Tor and onion routing, and how such avenues have been used by bad actors to abuse digital currencies in the past. However, the judges did concede that crypto, like any other technology, was not bad in itself and could be used for nefarious reasons when in the hands of the wrong people. 

To elaborate on the subject, Varun Sethi, CEO of Blockchain Lawyer, told Cointelegraph that “The RBI’s argument that crypto’s anonymous nature poses a threat to national security cannot be totally ruled out.” He added that, indeed, crypto can freely flow between international borders, while the cybersecurity risks are hard to deny. He went on to say:

“However, such arguments are similar to challenges faced by other regulators also. The court would surely take cognizance of similar facts and how it was dealt with in other countries.”

Some key concerns put forth by the Supreme Court

Even though the Supreme Court seems to be finally understanding the potential that crypto and blockchain technologies possess in regards to transforming a multitude of local industrial domains, it did express concerns regarding the use of digital assets for money laundering and tax evasion purposes. 

Digging deeper into this argument, Tabassum Naiz, founder of Bit2Buzz, an Indian crypto hub that presents users with a host of educational content, pointed out to Cointelegraph that recently, a number of established Indian financial/banking entities suffered heavy losses due to a host of different cybersecurity breaches and threats. Naiz alluded to banks like HDFC, ICICI, the State Bank of India, Axis and Punjab National Bank as having been embroiled in massive scandals related to money laundering and data breaches. 

While local cryptocurrency exchanges do make use of KYC protocols to minimize the occurrence of such issues, their measures are largely self-designed and, therefore, need to be validated by a central regulatory agency. On the issue, Sethi highlighted:

“If an exchange’s KYC processes are stringent and also validated by a government regulator, then the argument that all crypto transactions are used only for anonymous trading won't hold valid. That's where government policy is needed.”

Gupta, too, reiterated Sethi’s sentiments and claimed that self-regulation has its limits and that a government devised regulatory framework will actually strengthen the Indian crypto ecosystem — a point that has been sufficiently argued by Sood and his team this past week.

Lastly, a World Bank report regarding mining-based electricity consumption was also read in court to highlight the potential negative impact of the crypto industry on India’s power sector. However, the judges proceeded to spell out the various advantages of cryptocurrencies and how they have the potential to serve the under/unbanked, as well as fill out the many deficiencies that currently exist within the Indian payments market.

Supreme Court grills the RBI

As aforementioned, the RBI has claimed that the reason it restricted crypto activities in India was because of a lack of clear regulations, especially in regards to things like financial anonymity, money laundering, etc. However, in the opinion of the judges, it was the responsibility of the RBI — and not the local crypto exchanges — to devise a regulatory system that incorporates crypto into India’s general financial framework. Essentially, the Supreme Court labeled the RBI’s ban as being a burden-shifting ploy that was unjust.

Similarly, when the RBI stated that digital currencies were only being used by people who wanted to mask their identities, Sood told the judges that this information was factually incorrect and that many people merely viewed cryptocurrencies as being alternative investment options to conventional stocks and bonds.

What may the verdict look like?

As things stand, it might be a little early to definitively claim to which side the verdict will swing, especially since the RBI has yet to present its complete argument in front of the judiciary. However, Gupta is confident that the IAMAI’s case is strong, and that the judges will see merit in the arguments put forth by the independent agency, “We are of the firm belief that the judges will see reason in our arguments and provide a judgment, which is fair and favorable.”

It is expected that on Tuesday, Jan. 21, the RBI will submit all of its remaining statements regarding its concerns about cryptocurrencies.

Bitcoin Is Becoming More Valuable to Iranians Amid Tensions With US

As tensions between Iran and the U.S. continue to escalate, more and more Iranians seem to be turning toward crypto and BTC.

Earlier this week, the world’s flagship crypto asset saw its value surge from around the $8,000 mark to just over $8,430 within an hour’s time. This latest price action came after the Iranian government decided to launch a missile attack on an Iraqi military base housing American troops.

However, it bears mentioning that Iran’s actions were prompted by United States President Donald Trump’s decision to eliminate Iranian general Qassem Soleimani — a controversial figure in the West but loved by the masses in his home country.

The overall value of Bitcoin (BTC) is now up by around 15% this year, but since President Trump recently downplayed the situation in Iran at a White House press conference — saying that the Middle Eastern power is ready to stand down — the currency’s price slid back down to under the $8,000 mark.

With that being said, a whole host of prominent figures, including Galaxy Digital’s Mike Novogratz and Digital Asset Capital Management’s Joshua Green, seem to agree with the notion that the aforementioned rally was definitely linked with the events that recently unfolded in Iraq.

Also worth exploring is the fact that Bitcoin’s price increase has followed an increase in the value of other safe-haven assets such as gold and oil. To put things into perspective, the yellow precious metal is trading close to its highest levels since March 2013. Meanwhile, the price of Brent Crude is up by 2.5% to around $70 per barrel — which could possibly be in relation to concerns over the global oil distribution being disruption because of the U.S. and Iran’s escalating military tensions.

Providing his thoughts on the matter, Mati Greenspan, the founder of QuantumEconomics.io, was quoted as saying, "The resemblance between digital gold and the physical stuff is uncanny. They've basically been moving in a very similar pattern throughout most of last year."

Do Iranians really believe in the power of Bitcoin?

With all of the news stories recently floating on the internet that claim people in Iran are scurrying to get their hands on Bitcoin, especially in the wake of the recent geopolitical tensions that have been rising in the region, Cointelegraph reached out to Hadi Nemati, an Iranian digital currency specialist and chief operating officer of Bitfolio Capital — an open-end crypto hedge fund. He pointed out the following:

“After the summer of 2019, many Iranians came to know about Bitcoin because of all the mining news and the use of electricity associated with the same which was vastly covered by various state media outlets and newspapers. Bitcoin, on a mass scale, is being seen as a speculative alternative asset and digital money.”

When asked about which section of people among the local masses are actively making use of Bitcoin the most, Nemati pointed out that a threefold categorization can be made:

  • Miners: This, in Nemati’s opinion, is the most dominant group of the three — both on an industrial and retail scale. However, miners are forced to liquidate their BTC holdings regularly in order to meet their operational costs.
  • Investors: These individuals, as per Nemati, are mostly buying Bitcoin for long-term investment purposes and are using the asset to hedge their capital against the inflation of the Iranian rial. Additionally, in his opinion, even though Bitcoin is not as popular as many other foreign currencies or precious metals such as gold or silver, adoption has been increasing steadily in recent years.
  • Active traders: This group operates mostly in the local crypto market — at the corporate and retail levels — because, according to Nemati, Bitcoin rarely gets used for day-to-day transactions due to a lack of infrastructure. Not only that, even the Central Bank of Iran has yet to issue clear regulatory guidelines regarding the use of digital currencies.

In regard to why the popularity of BTC has surged so dramatically in Iran over the past 24 months, Cointelegraph reached out to Mahyar, a Tehran-based crypto miner and investor. He pointed out that since many Iranians do not possess international accounts, they are able to use Bitcoin as a means of receiving cross-border payments in a seamless, hassle-free manner. On the subject, Mahyar added:

“People send bits to a currency exchange and receive cash. Most bits also come from farms, and the dollar revenue is very important to people. I think big companies are doing their best to avoid taxation as well.”

Another reason he believes Bitcoin’s popularity has increased so much in recent years is because of the anonymity benefits that most cryptocurrencies bring to the table. Not only that: Owing to the fact that BTC can be used by anyone irrespective of their financial background, more and more people are willing to make use of this novel asset class.

On the subject of whether there currently exist any easy conversion avenues for people to liquidate their BTC holdings, Mahyar told Cointelegraph that there are a lot of folks who are willing to facilitate peer-to-peer exchanges because they believe BTC is destined for big things in the near future. Additionally, he also highlighted that more traditional routes, such as LocalBitcoins, are quite popular among the masses.

Iran’s relationship with crypto seems to be constantly evolving

Since being faced with severe economic sanctions by the U.S. government back in 1979, the value of the Iranian rial has been on a steady decline — with the downturn becoming especially blatant during the 2000s.

As a result of this, many Iranians have tried to look for novel ways in which to transfer their wealth to different stores of value, including other fiat currencies, precious metals, etc.

Related: Five Countries Where Crypto Regulation Changed the Most in 2019

Additionally, many wealthy Iranians have taken refuge in banks based across Dubai and other friendly Middle Eastern countries. However, with inflation constantly on the rise, the rial has been facing a lot of devaluation, especially after President Trump reinstated certain economic sanctions against the Islamic nation last year.

Iran's inflation rate over the past five years

To further elaborate on this topic, Cointelegraph spoke with Jeremy Joo, the CEO of Unicoindcx and member of the Malaysian blockchain conglomerate G1. Joo frequently deals with crypto firms and startups based in and around Iran, and in his personal view, many locals who up until now did not have the means nor the volume to move their money out of the country have started to turn toward Bitcoin at a rapid pace — especially the younger generation. He added:

“The younger population started small mining operations. Electricity costs are next to nothing in Iran and in 2017, the customs were not familiar with mining machines thus many came into the country — especially S9s and other equivalents. As of late 2018, the government is finally aware of these mining machines, which has resulted in their prices going up. However, this has not deterred the masses.”

Joo also aligned with Mahyar’s stance that a number of Iranian miners and crypto holders are currently making use of LocalBitcoins as well as a host of local over-the-counter groups — that have strong overseas connections — to facilitate their crypto transactions in an off-exchange fashion.

Joo also pointed out that while there exist small pockets of crypto traders in the country, Iranians are not known for their financial market knowledge, but rather their engineering skills — which is highlighted by the fact that most of these traders are also involved in some sort of Ether- or Bitcoin-based mining activity. Joo added:

“Iranians use crypto as a store of value — very much like in Venezuela, where their currency has been rapidly devalued. Also, no merchants accept Bitcoin openly as payments in Iran and e-wallets are nonexistent.”

Bound for cryptocurrencies

Political views aside, the sad reality of Iran is that since the revolution of 1979, the country has been faced with a myriad of economic sanctions as well as other destabilizing issues, such as constant currency devaluation and high inflation.

People living in countries like Iran, who face constant economic and social turmoil, are bound to turn toward cryptocurrencies at some point or another in order to safeguard their assets — especially since digital currencies cannot be controlled or manipulated by governments or any other centralized financial/banking institution.

In this regard, younger folks — especially those with international exposure — seem to be hopping onto the crypto bandwagon at an extremely fast rate, simply because crypto seems to be a better option when compared to the nation’s sovereign currency.

Whenever Bitcoin Prices Go Up or Down, Google Searches Soar

Data clearly suggests a link between Bitcoin’s price volatility and global Google searches for the top crypto.

Last month, the value of Bitcoin (BTC) nosedived to around the $6,500 mark after having stayed above the $8,000 threshold for a considerable period before that. This downturn showcased Bitcoin’s worst market performance over the past seven months — with the flagship crypto asset’s last stoop below the $6,500 mark occurring in May. 

However, even with this aforementioned reversal in BTC’s fortunes, data available on Google Trends suggests that global interest in the premier cryptocurrency seems to increase every time the asset witnesses sudden price movements — positive or negative. Also, it bears mentioning that last month, the term “Bitcoin” reached its highest search ranking since Oct. 26, a time when the coin was trading above the $9,200 mark. 

Lastly, another interesting point worth highlighting is that the majority of the interest being directed toward Bitcoin seems to be coming in from developing African nations such as Nigeria, South Africa and Ghana as well as smaller European countries like Austria and Switzerland. 

Correlation between BTC Google Trends data and its price

According to data available online, a vast majority of Bitcoin-related Google search interest this year has come during periods when the cryptocurrency was either surging or rapidly losing its value. 

For example, between June 19 and June 29 — a period when BTC’s price rose quite sharply from around $9,000 to just over $12,900 — global interest in the currency reached a 12-month apex. Similarly, another complementary spike was observed during the second week of May, a time when Bitcoin’s price rose from $5,500 to just over $8,000.

Interest in Bitcoin once again surged between July 14 and 20, a period during which BTC lost over 10% of its value. The exact same trend was then witnessed three times more, once during the third week of September, when the price of Bitcoin slid from just over $10,000 to around $8,000. 

The second time was between Oct. 20 and 24, a period during which BTCs value fell by 9%. The last drop was observed between Nov. 22 and 25, when BTCs price dropped by a little over $1,000 within a matter of 36 hours. 

To elaborate further on the matter, Cointelegraph reached out to Jeroen Van Lange, founder and analyst for YouTube channel The Blockchain Today. He concurred that Bitcoin’s increased volatility seems to be resulting in higher search volumes on Google. On the subject, Van Lange highlighted:

“On the 24th and 25th of September Bitcoin dipped from 10080 to 8126. On those exact dates we are seeing a spike in volume on Google trends. The same counts for 25th and 26th of October, huge volatility increases search volume.”

He then proceeded to add that Tether’s market cap can also be used as an excellent indicator as to whether any new money is entering the crypto space or not — which, as per the chart below, suggests that there hasn’t been too much new money flowing into the market over the past few months.

However, Alexey Ermakov, the CEO of Aximetria — a crypto-centric mobile banking platform — is of the opinion that conjuring up correlations between the price of BTC and its related inquiries on the internet is a futile effort.

In his view, such associations can be invented at any time by any individual or entity that wants to create a pro-Bitcoin sentiment in the market, and are basically a means of spreading misinformation on the internet. On the subject, Ermakov told Cointelegraph:

“All of this seems inappropriate. You need to look at more functional ways, like hash rate and mining. Everything else are signals that either push up or down.”

Lastly, it is projected that in the next few months, Bitcoin will continue to garner more and more mainstream traction, as the currency’s upcoming halving is set to take place sometime after the second week of May 2020. Around this time, many analysts predict that the crypto market as a whole will witness a new parabolic bullish phase.

Related: Bitcoin Halving, Explained

Developing countries are onto Bitcoin 

As mentioned previously, Google Trends data suggests that a lot of interest related to Bitcoin appears to be coming from developing nations such as Nigeria, Ghana, South Africa, Venezuela, Slovenia and Brazil. 

Not only that, it also appears as though the aforementioned countries are aggressively exploring the overall potential of distributed ledger technology, or DLT, so as to boost their economies’ growth. In this regard, Jeroen points out that what Nigeria, South Africa and Ghana all have in common is that their local currencies are declining in relation to the United States dollar. He also highlighted:

“Bitcoin has a tremendous important use case in those countries where we see the local currency failing.”

Additionally, it is a well-known fact that many African nations are currently struggling with inflation-related issues that have led to an increase in the use of crypto across the region. In this regard, a recent study has shown that South African internet users own the highest amount of digital assets (with a ratio of 10.7%) among all of the top crypto adopters in the world. Similarly, on Nov. 26, the governor of the Bank of Ghana announced that the West-African nation is currently in the process of developing its very own digital currency. 

In a similar vein, Gregory Klumov, CEO at euro-backed stablecoin company Stasis, told Cointelegraph that a number of African countries (particularly ex-French colonies) are currently making use of the euro as their second official currency. 

As a result of this, there is a strong euro-based crypto remittance market that is much cheaper for the average person to access — especially with the advent of many new decentralized applications that can be deployed using a smartphone.

Lastly, developing nations stand to gain a whole host of advantages by adopting cryptocurrencies as well as DLT-enabled technologies, since they help in eliminating various issues related to corruption, red-tapism and centralization by introducing an unparalleled level of transparency. 

For example, in East Africa, a number of local entrepreneurs have started to make use of novel payment platforms such as BitPesa that allow individuals to make cross-border transactions in a highly streamlined and cost-effective manner. Similarly, cryptocurrency use in countries like South Africa, Nigeria, Zimbabwe and Venezuela has increased quite significantly over the last year or so, as these assets present the masses with an opportunity to democratize the way in which their governments handle their money.

Will Bitcoin’s upcoming halving have an impact?

Historically speaking, every time a Bitcoin halving has taken place in the past, the event has been followed by the start of a parabolic growth phase for the asset. However, the mid- to long-term trend for BTC appears to be different this time around. 

This is because the crypto market has witnessed a steady growth in the adoption of Bitcoin over the last couple of years. Thus, if this trend continues as expected, then the event — which will halve the existing BTC native block reward to 6.25 — will serve as a catalyst for increased price action. 

It can be seen that during Bitcoin’s most recent halving cycle — which took place on July 9, 2016 — the currency’s value increased nearly tenfold, with the price of a single coin rising from $268 to just over the $2,500 mark over the following 12 months. After the event, Bitcoin’s native block reward quotient dropped from 25 BTC to 12.5 BTC.

Providing his insights on the matter, Ermakov believes that the halving event, combined with the 2020 U.S. presidential election, will quite likely result in the value of BTC surging in the coming future. He also sees the currency’s adoption rate continuing to increase, as Bitcoin is considered by a lot of investors as being an ideal way of escaping the incoming political uncertainty that is bound to engulf the global finance sector as the election finally draws near. Ermakov further commented:

“The ongoing trade war between China and the United States, a possible economic crisis, the launch of a Chinese stablecoin will increase the popularity of Bitcoin, and probably increase its value.”

Lastly, when looking at Bitcoin’s previous halving cycles, it becomes clear that such an event will most likely push the price of the cryptocurrency in an upward direction as well as draw more people into this burgeoning space.

Best Performing Cryptos of 2019 Not Named Bitcoin

Here’s a list of the best performing crypto assets — excluding Bitcoin — for 2019.

Since the start of 2019, the crypto market has been on the receiving end of an insane amount of financial volatility. 

For example, in January, the total market capitalization of this burgeoning sector was around $130 billion. However, by July, the market at large had witnessed an influx of bullish momentum that pushed the total capitalization value of this space to a whopping $373 billion. Following this period, the aforementioned bull run proceeded to subside quite a bit, with the market now hovering a tad under the $200 billion threshold. 

A few cryptocurrencies maintained a strong financial standing all year long and were able to stave off the various economic slumps that were observed throughout 2019. Here are the standout cryptos not named Bitcoin. 

ChainLink 

While a fair few people may be surprised to see ChainLink (LINK) in the list of the best-performing cryptocurrencies of 2019. The platform essentially seeks to bridge the gap that exists between blockchain-based smart contracts and real-world applications.

From an economic standpoint, LINK started the year relatively slow — with the price of a single token rising from $0.31 to just over $0.45 over a five-month period. However, by the first week of July, the currency reached its financial apex, with a single LINK token being traded for as high as $3.74. And while the currency has lost a bit of its insane financial momentum over the last couple of months, LINK is still trading slightly above the $1.90 mark. 

All in all, the LINK/USD trading pair has surged by over 500% since the start of the year, and the LINK/BTC pair has also gained more than 300% over the same time period — which is quite an impressive feat, to say the least. 

Binance Coin 

Released onto the market back in mid-2017, Binance Coin (BNB) is a token that can be used for trading purposes as well as for the facilitation of various fee-related payments within the Binance exchange platform. Not only that, but Binance also provides BNB holders with various incentives and discounts for making use of the digital currency for internal transactions.

In regard to BNB’s performance, the currency started the year at a price point of around $6. However, by the final week of May, the price of a single BNB token rose to $35.20 — thereby signaling a growth of more than 450%. During the third quarter of 2019, BNB’s value slid from $33.10 to $15.79, thus showcasing a drastic reversal in the currency’s fortunes. However, over the last couple of months, BNB’s value has remained relatively stable, with the asset’s average value in December currently floating just below the $14 mark.

Since the start of the year, the overall value of the BNB/USD pair has increased by over 140%.

Tezos 

Tezos (XTZ) is a decentralized computing platform that makes use of a formal verification protocol as well as a proof-of-stake consensus module for its internal governance-related matters. In regard to how the system works, XTZ holders who stake their tokens are eligible to receive additional tokens as an incentive for creating and verifying blocks.

From a financial performance standpoint, XTZ started off the year at a price point of $0.47. However, by the end of the first quarter of 2019, the value of a single token had scaled up to an impressive $1.06. XTZ’s performance continued to surge between April and June, with the currency touching its annual high of $1.88 on May 19. During this year’s third quarter, XTZ’s value continued to hover around the $1–$1.20 region. However, since the start of December, the crypto asset has once again picked up momentum, with a single token currently trading for $1.51.

Over the course of 2019, the value of the XTZ/USD trading pair has increased by over 190%.

Synthetix Network Token

The Synthetix Network Token (SNX) is an ERC-20 token that is meant to facilitate all of the native transactions associated with the Synthetix exchange. Additionally, SNX tokens are traded using a peer-to-contract model and are also used as collateral to back SNX synthetic assets, called Synths, that are employed within the Synthetix Network to track the market value of any basic asset.

Between January and April, the price of a single SNX token touched a maximum of $0.07. However, since May, the digital currency has continued to soar in value — with the only major slip coming on Nov. 26, a time when the crypto market at large experienced a major financial pullback.

Overall, since the start of 2019, SNX’s value has increased by over 200%, with the currency currently trading for $1.33.

Bitcoin Cash 

Currently one of the market’s top 10 cryptocurrencies, Bitcoin Cash (BCH) is basically a hard fork of Bitcoin.

From a financial perspective, one BCH was trading for $135 during the second week of January. However, by the beginning of April, the currency had soared to over the $300 threshold. The currency reached its annual monetary apex on June 26, when the asset was trading for $479.96. During the third quarter of 2019, BCH’s value remained relatively stable — hovering around the $300 mark — but since the start of November, the currency has been continually slipping in value, with a single coin currently trading just over $195.

All in all, over the course of the last 12 months, the value of the BCH/USD trading pair has risen by over 30%.

Cosmos 

Cosmos (ATOM) is a decentralized network comprising of various blockchains that are independent, scalable and interoperable. The platform has gained a lot of attention over the course of 2019, especially since cryptocurrency associated with the network, ATOM, surged dramatically during the month of May. To put things into perspective, it bears mentioning that on Jan. 1, ATOM was trading for a price of $0.001. 

As things stand, the currency is selling well over $4.20.

Litecoin

Litecoin (LTC) is a top 10 cryptocurrency that was created by Charlie Lee to serve as a more resource-friendly version of Bitcoin. 

LTC was trading for $32 during the first week of January. But by June 22, the altcoin had risen to an impressive price point of $141.73. Since then, LTC’s performance has continued to decline, with the currency trading for an average price of around $43 throughout December.

All in all, the value of the LTC/USD trading pair has increased by around 40% since the start of the year.

Basic Attention Token

Basic Attention Token (BAT) is a digital currency used in the Brave internet browser. Brave is a blockchain-based internet browser that incentivizes its users’ internet habits by rewarding them with BAT tokens for watching ads, spending a certain amount of time on a particular website, etc. From a technical standpoint, the browser’s native framework is quite similar to that of Chromium — a project that was created by Brendan Eich, the man behind JavaScript and the co-founder of the Mozilla project. 

BAT started off the year trading at around $0.13. However, by the second half of April, the currency had already scaled up to its annual high of $0.44. Following this period, the top 50 asset continued to slide in value until September, after which it once again began a financial ascent, reaching a relative high of $0.27 on Nov 17. Since the start of December, BAT’s value has remained relatively stable around the $1.70 region. 

Over the course of 2019, BAT’s value has increased by around 35%.

Ether

Ether (ETH) is a top 10 crypto asset that is widely recognized as being the second most popular digital asset (i.e., after Bitcoin) on the market today. Ethereum developers envisioned the platform as a “world computer” for smart contracts — a digital protocol that helps facilitate, verify and enforce a contract whose terms have been predetermined. Not only that, but the Ethereum ecosystem also allows for the issuance of ERC-20 tokens.

On Jan. 13, Ether was trading for $116. However, over the course of the following six months, the value of the second-biggest cryptocurrency continued to increase, finally scaling up to its annual high of $334.66 on June 26. Following this period of bullish momentum, Ether once again continued to slide before finally settling down around a price range of $150–$180, except for a brief period in September when the currency surged above the $210 mark. 

Since late November, Ether has been trading steadily between $130 and $150, thereby showcasing an overall value increase of around 20% since the start of the year.

EOS 

EOS is a cryptocurrency platform that can be used by developers to devise a number of novel decentralized applications. In this regard, the EOS token is used to facilitate the eponymous system’s native transactions as well as its internal processes. Additionally, the EOS blockchain has been designed to be highly scalable and leaves a lot of room for customization — which is one of the main reasons why the project is so popular in the first place.

In terms of EOS’s financial performance, the digital currency was trading for $2.23 during the second week of January. Between the months of February and May, the asset surged quite dramatically, with the value of a single token reaching a price point of $8.54 on May 31. Over roughly the next five months, the currency’s value continued to float between $3–$3.80. However, since the last week of November, EOS has remained quite stable, currently trading around the $2.55 mark. 

Presently, the EOS/USD trading pair has gained around a 10% value since the start of the year.

Deep Truths of Deepfakes — Tech That Can Fool Anyone

How exactly do deepfakes work and why are they hard to detect and prevent? Experts believe blockchain technology has a role to play.

In its most basic sense, a deepfake is a combination of face- and voice-cloning AI technologies that allow for the creation of life-like, computer-generated videos of a real person. 

In order to develop a high-quality deepfake of an individual, developers need to accumulate tens of hours of video footage associated with the person whose face/voice is to be cloned, as well as a human imitator who has learned the facial mannerisms and voice of the target.

There are two humans involved in the creation of a deepfake, such that the target face/voice is that of the famous person while the other belongs to an unknown individual who is generally closely associated with the project.

From tech to reality

From a technical standpoint, visual deepfakes are devised through the use of machine learning tools that are able to decode and strip down the images of all the facial expressions related to the two individuals into a matrix consisting of certain key attributes, such as the position of the target’s nose, eyes and mouth. Additionally, finer details, such as skin texture and facial hair, are given less importance and can be thought of as secondary. 

The deconstruction, in general, is performed in such a way that it is mostly always possible to fully recreate the original image of each face from its stripped elements. Additionally, one of the primary aspects of creating a quality deepfake is how well the final image is reconstructed — such that any movements in the face of the imitator are realized in the target’s face as well. 

To elaborate on the matter, Matthew Dixon, an assistant professor and researcher at the Illinois Institute of Technology’s Stuart School of Business, told Cointelegraph that both face and voice can be easily reconstructed through certain programs and techniques, adding that:

“Once a person has been digitally cloned it is possible to then generate fake video footage of them saying anything, including speaking words of malicious propaganda on social media. The average social-media follower would be unable to discern that the video was fake.”

Similarly, speaking on the finer aspects of deepfake technology, Vlad Miller, CEO of Ethereum Express — a cross-platform solution that is based on an innovative model with its own blockchain and uses a proof-of-authority consensus protocol — told Cointelegraph that deepfakes are simply a way of synthesizing human images by making use of a machine learning technique called GAN, an algorithm that deploys a combination of two neural networks. 

The first generates the image samples, while the second distinguishes the real samples from the fake ones. GAN’s operational utility can be compared to the work of two people, such that the first person is engaged in counterfeiting while the other tries to distinguish the copies from the originals. If the first algorithm offers an obvious fake, the second will immediately determine it, after which the first will improve its work by offering a more realistic image.

Regarding the negative social and political implications that deepfake videos can have on the masses, Steve McNew, a MIT trained blockchain/cryptocurrency expert and senior managing director at FTI Consulting, told Cointelegraph:

“Online videos are exploding as a mainstream source of information. Imagine social media and news outlets frantically and perhaps unknowingly sharing altered clips — of police bodycam video, politicians in unsavory situations or world leaders delivering inflammatory speeches — to create an alternate truth. The possibilities for deepfakes to create malicious propaganda and other forms of fraud are significant.”

Examples of deepfakes being used for nefarious purposes

Since deepfake technology is able to manipulate and imitate the facial features and personality characteristics of real-world individuals, it raises many legitimate concerns, especially in relation to its use for various shady activities. 

Additionally, for many years now, the internet has been flooded with simple tutorials that teach people how to create digitally altered audio/video data that can fool various facial recognition systems.

Not only that, but some truly disturbing instances of audio/video manipulation have recently surfaced that have called into question the utility of deepfakes. For example, a recent article claims that since 2014, deepfake technology has advanced to such levels that today, it can be used to produce videos in which the target can not only be made to express certain emotions but also bear resemblance to certain ethnic groups as well as look a certain age. On the subject, Martin Zizi, CEO of Aerendir, a physiological biometric technology provider, pointed out to Cointelegraph:

“AI does not learn from mistakes, but from plain statistics. It may seem like a small detail, but AI-based on plain statistics — even with trillion bytes of data — is just that, a statistical analysis of many dimensions. So, if you play with statistics, you can die by statistics.”

Zizi then went on to add that another key facet of facial recognition is that it is based on neural networks that are quite fragile in nature. From a structural standpoint, these networks can be thought of as cathedrals, wherein once you remove one cornerstone, the whole edifice crumbles. To further elaborate on the subject, Zizi stated:

“By removing 3 to 5 pixels from a 12 million pixels image of someone’s face brings recognition to zero!  Researchers have found that adversarial attacks on neural net attacks can find those 3 to 5 pixels that represent the ‘cornerstones’ in the image.”

One last big example of deepfake tech being misused for financial reasons was when the CEO of an unnamed United Kingdom-based energy firm was recently scammed into transferring 220,000 euros ($243,000) to an unknown bank account because he believed he was on the phone with his boss, the chief executive of the firm’s parent company. In reality, the voice belonged to a scammer who had made use of deepfake voice technology to spoof the executive.

Blockchain may help against deepfakes

As per a recent 72-page report issued by Witness Media Lab, blockchain has been cited as being a legitimate tool for countering the various digital threats put forth by deepfake technology. 

In this regard, using blockchain, people can digitally sign and confirm the authenticity of various video or audio files that are directly or indirectly related to them. Thus, the more digital signatures that are added to a particular video, the more likely it will be considered authentic. 

Related: As Deepfake Videos Spread, Blockchain Can Be Used to Stop Them

Commenting on the matter, Greg Forst, director of marketing for Factom Protocol, told Cointelegraph that when it comes to deepfakes, blockchain has the potential to offer the global tech community with a unique solution — or at least a major part of it. He pointed out:

“If video content is on the blockchain once it has been created, along with a verifying tag or graphic, it puts a roadblock in front of deepfake endeavors. However, this hinges on video content being added to the blockchain from the outset. From there, digital identities must underline the origins and creator of the content. Securing data at source and having some standardization for media will go a long way.”

McNew also believes that owing to the blockchain’s overall immutability, once a particular data block has been confirmed by the network, its contents cannot be altered. Thus, if videos (or even photos, for that matter) are made to flow immediately into a blockchain verification application before being made available for sharing, altered videos could be easily identified as fake. 

Lastly, a similar idea was shared by Miller, who is of the opinion that blockchain technology in conjunction with artificial intelligence can help solve many of the privacy and security concerns put forth by deepfakes. He added:

“AI perfectly copes with the collection, analysis, sorting and transmission of data, improving the speed and quality of execution of internal processes. The blockchain, in turn, ‘makes sure’ that no one intervenes in the work of AI — it protects data and its sequence from any encroachment.”

Blockchain technology has its own limitations

As things stand, there are a few small drawbacks that are preventing blockchain technology from being actively used to monitor deepfakes on the internet. For starters, the technology is limited in its overall scalability, as the amount of computational resources and memory required to combat digitally manipulated A/V data in real-time is quite intense.

Another potential issue that could arise as a result of blockchain being used for deepfake detection is a substantial curbing of crowdsourced video content (such as the material that is currently available on YouTube). On the issue, Dixon pointed out:

“How does someone in a poor country reach the world with their message if they have to be approved by a Silicon Valley-based company? Should we be entrusting tech companies with such power? Liberty is always at stake when trust weakens.”

A similar opinion is shared by Hibryda, creator and founder of Bitlattice, a distributed ledger system that uses a multidimensional lattice structure to address issues such as scalability, security, timing, etc. In his view:

“The biggest drawback of blockchain tech lies in its inability to determine whether the signed media is really genuine or not. But that isn't an internal issue of blockchain or related technologies — they only provide ledgers that are extremely hard to manipulate. It's external and there's no good way to solve that. While crowd-powered verification could be a partial solution, given crowds can be manipulated it's rather impossible to build a system that provides reliable and objective fact-checking.”

However, Forst told Cointelegraph that while the majority of people tend to believe that leveraging blockchain might be too expensive for deepfake detection, there are several open-source solutions that seek to do this. Forst then added that, “The biggest drawback is that blockchain doesn't solve the problem with deepfakes in its entirety, rather it can be a piece of the solution.”

Christmas Shopping: Where to Buy With Crypto This Festive Season

Here are a few websites that can help you finish your Christmas shopping using crypto.

Christmas is just around the corner, which means it’s time to get your holiday shopping out of the way for good. And while online retail giants such as Amazon and eBay have made online purchasing wonderfully simple for the average person, they do not really cater to a growing population of individuals who are looking to use their crypto for digital payment purposes.

While a number of startups have entered this space over the last three to four years due to issues relating to market volatility, certain remaining setbacks need to be tackled before the sector can really flourish.

But setting the issues aside, here is a list of online retailers that accept not just Bitcoin (BTC), but a whole host of other popular crypto assets.

Overstock.com

Overstock.com is widely considered to be one of the best shopping destinations for Bitcoin holders. For Christmas shoppers especially, this website is an absolute treasure trove, as it allows users to purchase items ranging from television sets to furniture to golfing equipment using crypto. Not only that, even the checkout process is seamless, since all one has to do is click on the “Pay with Bitcoin” button and follow the instructions.

And while Overstock does not allow BTC payments on its mobile site, it does enable customers to use their Bitcoin in conjunction with any other valid gift cards, coupons, and credit points that they may own. Additionally, in the event of a refund, Overstock issues the exact amount of crypto per its price at the time of the transaction.

Alagoria

When it comes to making purchases from retail giants like Walmart, Home Depot and Amazon, most crypto enthusiasts have to first liquidate their coins and then process their payments in fiat. However, this holiday season, Alagoria is allowing its customers to get a 10% discount on all purchases made via HomeDepot and Walmart using cryptocurrencies.

To shop on Alagoria, customers simply need to copy and paste the URL of a product they want to buy into the search bar on the platform. They can then proceed to checkout and pay for the item using the crypto of their choice — with the conversion rate set before the payment takes place.

Once this process is done, Alagoria notifies customers of their completed orders and provides a tracking number. Most items are usually delivered within a period of three to four business days.

Lastly, the company allows customers to use discounted gift cards from Walmart and Home Depot to fulfill order payments, and even have an open buy-back offer on most gift cards from the aforementioned retailers at the moment.

eGifter

People looking to present their loved ones with premium gift cards can use eGifter, a platform that enables customers to buy a wide range of gift cards from big-name brands like Amazon, Apple, Macy’s, Adidas and GameStop. Items can be purchased using digital currencies (like BTC, BCH, Dash, LTC and ETH) and can be obtained in either physical or digital form.

Also, quite like many other retail firms today, eGifter makes use of an internal point system, wherein regular customers can collect eGifter credit every time they buy a gift card. These points can then be used during future checkouts in lieu of instant discounts and other monetary benefits.

Bitcoin Superstore

Florida-based Bitcoin Superstore is the perfect shopping avenue for people looking to make purchases from Amazon.com using their crypto savings. Even though the platform has its headquarters in the United States, it extends its shipping services to more than 50 countries across the globe.

Not only that, for couples and solo travelers looking to explore the world at this time of year, the platform enables flights and hotels to be booked through mainstream platforms such as Expedia or Priceline.

Navigating and operating Bitcoin Superstore is quite simple, as customers only have to copy and paste a product URL in the provided search column and add the price so the platform can automatically calculate the applicable sales tax and present the user with the final amount to be paid.

Bitcoin Superstore currently supports a large number of cryptocurrencies, including many popular ones. Not only that, but the website also sells a wide range of gift cards and discount coupons for merchants from industries such as electronics, travel and hospitality. 

CheapAir

People looking to make a quick holiday getaway this Christmas can explore CheapAir.com, since it currently has a number of discount deals on flight tickets to destinations around the globe.

However, what makes this platform really stand out from the rest is the fact that it allows users to complete their purchases via Bitcoin. The entire process is quite straightforward and based on the digital currency’s USD value at the time of booking.

Newegg

For tech enthusiasts looking to buy the latest electronics this Christmas season, Newegg is the place to be. The website offers users with a wide range of gadgets ranging from high-end gaming laptops, desktop computers, hardware components and audio/video peripherals. Additionally, the platform also offers customers quality products from big-name brands like Microsoft, GigaByte, Corsair, AMD, Msi and Seagate amongst others.

Regarding how the payment process works, customers can proceed to initiate a BTC payment after deciding on a product by simply scanning the provided QR code and sending the amount due in crypto to the given address. After the funds have been moved, the Newegg team sends an email confirmation containing all of the purchase and delivery details.

Olodolo

Christmas shoppers looking to buy clothing, jewelry, cosmetics and fashion accessories can consider Olodolo — a platform that specializes in helping people buy items on Aliexpress using cryptocurrencies.

The checkout process is similar to that of other retailers, and delivery is available to a large number of countries worldwide. All payments are processed by a POS operator called Coinpayments, and the final price (including shipping and other associated taxes) is displayed at the end along with the three cryptocurrencies supported — Bitcoin, Litecoin and Ethereum — that a customer can choose from to complete the process with.

Forra

Forra can be thought of as the Ebay equivalent of Olodolo, as it allows customers to purchase a wide range of Ebay listings using crypto assets such as BCH, BTC, LTC and ETH. In order to ensure the security of its internal monetary transactions, Forra makes use of an escrow system and charges users a flat 3% fee on each individual purchase.

For Christmas shoppers looking to buy electronic items (computers and laptops in particular), software, books and game titles, Forra is definitely a website worth checking out.

Experts Claim Allegations on MakerDao Vulnerabilities Are Substantial

Even though Maker has refused to explicitly acknowledge the vulnerability claims put forth by Zoltu, experts see their validity.

At the start of December, the Maker Foundation hosted a number of governance polls on its website to ease rising concerns following allegations put forth by developer Micah Zoltu in regards to how hackers with enough financial resources could potentially carry out an attack on the MakerDAO network and steal close to $340 million.

As part of the initiative, the foundation’s interim risk team asked their global community of users if they should upgrade the platform’s native Governance Security Module from 0 seconds to 24 hours.

In its essence, the GSM allows MKR token holders to review any new changes that have been proposed for the MakerDAO ecosystem, thereby giving network participants a chance to act if any potential changes are deemed malicious.

The $340 million question

In regards to the matter, Zoltu published a blog on Dec. 9 claiming that any hacker with a disposable $20 million could potentially launch a full-scale attack on the MakerDAO network and pocket a cool $340 million worth of Ether (ETH). He was also quoted as saying:

“Maker DAO v2 was supposed to launch with safeguards against a hostile MKR holder stealing all collateral and potentially robbing a good chunk of Uniswap, Compound, and other systems integrated with Maker in the process. Instead, they decided not to.”

Zoltu’s primary point of contention is that MakerDAO’s operational framework is plagued by an extremely niche technical glitch — a small GSM-based time delay within the system each time it selects a new contract to execute.

While this delay allows the network time to decide whether the contract in question is malicious or not, hackers and third-party agents can potentially exploit the time lag to upvote their own contracts that have been programmed to steal all of the platform’s stored collateral.

Further elaborating on the network’s vulnerabilities, Zoltu added that hackers with 80,000 Maker (MKR) currently have the option of doing whatever they please with Maker’s native contracts. This is because the system’s current GSM delay quotient is set at 0 seconds — which leaves network defenders completely helpless against attacks initiated by wealthy, malicious agents.

Related: Could Blockchain Technology Prevent the Next Financial Crisis?

Maker Foundation denies the issue

Ever since the issue came to the attention of the global crypto community, the MakerDAO team has refused to acknowledge any of Zoltu’s claims. Instead, they have sought to amend the problem by hosting a number of community polls and publishing blog posts outlining their potential plan of action in relation to the matter.

To gain a better understanding of the situation, Cointelegrah reached out to Robert Beadles, president of the Monarch crypto wallet. On the subject, he pointed out:

“Micah brings up some real concerns that appear to hold water. One of the problems with these decentralized smart contracts is that they are only as smart as the person who wrote them.”

Beadles went on to say that very few people in the world can find such vulnerabilities and exploit them, since crypto is still a very new phenomenon, adding that:

“One of the drawbacks of having open source code is that people who do understand it and have the time can find ways to break it or exploit it. If Micah is correct — and it looks like he is — they better patch this quick.”

A similar point of view is shared by Jefferey Liu Xun, the CEO of XanPool — a P2P fiat gateway. He told Cointelegraph that from a purely technical standpoint, Zoltu’s claims seem valid. Additionally, he believes that it is the goodwill of a few that is maintaining the integrity of the system — something that holds true in the crypto world for the vast majority of projects. Xun further added:

“As much as many projects would like to think that their system’s integrity comes from their technology, they are held together socially, depending on the goodwill of major stakeholders such as whales, and developers. Often when building a complex system on Ethereum, it’s difficult to measure ALL of the possible outcomes.”

Further elaborating on his position, Xun highlighted that a vast majority of users and node runners associated with a particular project almost never verify the code that they are running themselves, which puts them at the mercy of the developers and the foundation — essentially, trusting in their reputation and self-interest.

Not only that, but he also pointed out that a vast majority of all coin-based projects (like XRP) are controlled by a few major players who ultimately have the ability to manipulate the price of the currency. Cointelegraph also reached out to Lewis Daniels, chairman of investment firm Mayfair Ventures. He pointed out the following:

“As the Dai crypto is backed by a surplus in smart contracts on the Ethereum chain, making loans unsafe that can then go on to cause various liquidation issues, it’s these that are accessible due to the loophole within the smart contract.”

An easy vulnerability to rectify

While MakerDAO’s vulnerability issue may have caused quite the stir globally, the problem seems to be quite straightforward and can be corrected without any apparent difficulty.

On the issue, Pascal Thellmann, CEO of project reviews and guides platform CoinDiligent, told Cointelegraph that in his article, Zoltu has only really talked about the cost of obtaining the MKR tokens needed to perform the attack. However, he ignores the far greater costs associated with the potential legal consequences, the cost to launder and cash out the funds, and the risk of miner coordination to reverse the attack. Thellman then proceeded to add:

“The attack Zoltu outlines is not economically attractive for a regular individual. The only malicious actor that could execute this attack is a rogue nation-state, like North Korea, since they would not have to worry about potential legal consequences and are able to give use to the funds, regardless of them being tainted.”

Xun also believes that the problem is relatively easy to fix, noting that that Zoltu himself raised the problem before it was deprioritized by the Maker Foundation.

Denied to comment

While the vulnerabilities put forth by Zoltu may not be as serious as previously imagined, the fact that MakerDAO’s PR team have refused to fully acknowledge his assertions appears strange to both experts and the community.

Cointelegraph reached out to Maker with hopes of getting a clearer view on the situation, but a spokesperson for the organization refused to comment on the questionnaire submitted — instead citing a blog post issued by the company on Dec. 9.

Soccer Teams Like Juventus Look to Score With Blockchain Push

Sports teams like Juventus are now using the power of the blockchain technology to connect with fans.

On Dec. 2, Italian soccer giant Juventus revealed that the long wait for its much-hyped fan token had finally come to an end. In regard to the matter, news of the deal first came to light back in 2018, when it was revealed that the token would allow holders to take part in a host of voting and polling-related decisions.

It has been reported that the $JUV coin took nearly a year and a half of full-time development and was created by the club in conjunction with Socios, a tokenized fan-voting platform for sports.

Fans who possess the token will have the ability to vote on a wide range of club-related decisions. For example, they can vote on which song should be played anytime the club scores a goal.

The token has been released to interested investors at a base price of 2 euros ($2.22). Additionally, there are a limited amount of free $JUV coins that will be made available through the Socios app, which has augmented reality features, called "Token Hunt."

As per a number of reports, Juventus was initially planning to release its blockchain token during the first few months of the year. However, due to certain unforeseen circumstances, the release date was pushed back to the fourth quarter of 2019.

Also, Juventus’s blockchain initiative follows in the footsteps of the partnership between Paris Saint-Germain, or PSG, and Socios, which is also meant to enable fans to vote on a number of club-related matters as well as confer VIP status to token holders.

Soccer clubs see a lot of potential in blockchain

To get a clearer picture of why so many soccer clubs are gravitating toward the use of blockchain technology, Cointelegraph reached out to Alexandre Dreyfus, the CEO of Socios. He pointed out that over the last couple of years, Socios has been able to rope in a number of established soccer clubs from all over the world.

Soccer teams collaborating with Socios

When asked about what makes his company’s blockchain offerings unique, Dreyfus told Cointelegraph that Socios is able to offer sports teams the opportunity “to create Fan Tokens that give a voice/influencer to their fans globally.”

On the subject of how Juventus stands to benefit from this latest partnership, Cointelegraph reached out to Arjun Pradeep, a self-professed “Juventino,” a sports commentator and a contributor to the publication Soccer Laduma.

In his opinion, Juventus's collaboration with Socios should be viewed as a symbiotic relationship that will most likely benefit both parties. Pradeep added:

“Certainly the popularity of Juventus as a gigantic club with superstars like Cristiano Ronaldo who have a big fan following increases the visibility of blockchain technology in the footballing world.”

He further added that the soccer club most likely believes in the future of the technology and its ability to attract new followers of the club:

“At the moment, I am not sure if crypto technology is something that excites South American Juventini or even Italian Juventini. However, I am inclined to believe that Juve's fan following in East Asia and USA/Canada, are well educated about crypto technology.”

Over the past few years, Juventus has been making a concerted effort to increase its online visibility across a host of social media platforms, as soccer’s popularity over the past decade has skyrocketed dramatically thanks to the power of satellite television and the internet.

To put things into perspective, Dreyfus pointed out that Juventus currently has more fans in Asia than in Italy — thus, Socios seeks to help international fans get closer to their clubs by offering them an enhanced experience that they can participate in. He further added:

"The purpose of this launch is to get clubs close to their fans globally. 99.9% of Juventus fans are NOT in Turin, but everywhere in Italy and in the world.”

Fan tokens to connect with their teams

According to Pradeep, Juventus’s recent move to adopt blockchain tokens is a step in the right direction. He believes that because of the club’s conscious decision to stay abreast with all of the latest technological advancements taking place around the world, the soccer giant has been able to increase its overall social media presence exponentially. He further added that distributing VIP tickets and free merchandise helps the club achieve its goal of connecting with fans:

“As time passes by, there's a sense of feeling in the football community, in general, that the clubs are operating as businesses now and there's a lack of feeling that once existed between fans and their clubs. They feel like customers, not fans. I think crypto tokens can diminish this feeling and help in restoring the rapport between fans and their clubs by involving them in many decisions.”

Related: Tokenizing Sports — How the Industry Is Incorporating Crypto

On the subject of whether soccer fans are really educated about blockchain and its immense potential, Dreyfus told Cointelegraph that an average fan may not be well informed about the economic and social potential of this technology. However, he believes that the point of such an exercise is primarily to offer a set of novel utilities as well as build a bridge between clubs and their fans. In Dreyfus’s own words:

“Blockchain is just the medium of the utility and not the service itself.”

When asked about the core differences between Socios’s token offerings and other blockchain projects, such as those initiated by Germany’s Bayern Munich and the NBA’s Sacramento Kings, Dreyfus highlighted that:

“Bayern Munich is launching collectibles (like Panini stickers) and there is NOTHING related to native tokens to vote or connect their fans with. It is completely different. Same with Kings, it is a token for a betting game.”

To further his point, Dreyfus revealed that Socios has already sold more than $150,000 worth of $JUV tokens — the details of which can be checked online.

Is this a trend that will carry forward into the future?

A number of sports analysts are of the opinion that by adopting decentralized technologies such as blockchain, sporting organizations are paving the way for increased fan participation all over the world — which, in the long run, will translate into increased financial revenue for all the parties involved.

For example, by allowing their fans to buy crypto collectibles that are backed by nonfungible tokens or enabling fan participation in various club-related decisions, forward-thinking teams like Juventus and PSG are laying a foundation for something that will possibly help their fan bases grow exponentially. On the subject, Dreyfus opined:

“Blockchain can be used for influencing and giving fans a real opportunity to become 'super-fans' instead of being 'just a fan.’”

Grin’s Mimblewimble Privacy Model Under Threat After Alleged Break-In

Grin’s reputation seemingly taking beating in light of the recent allegations put forth by crypto researcher over Mimblewimble protocol.

On Nov. 18, crypto researcher Ivan Bogatyy published an article on Medium claiming that he had found an extremely easy way of bypassing Grin’s Mimblewimble privacy protocol. As part of his efforts, Bogatyy stated that he was able to trace over 96% of all Grin-related transactions in real time, including the addresses of the senders as well as recipients associated with these sets of transactions.

What’s more striking is the fact that Bogatyy claims he was able to achieve all this by spending just $60 a week on Amazon Web Services computational power, which helped connect him to Grin’s native blockchain nodes. 

Not only that, but the Google AI research alum also claims that he could have quite easily exposed the addresses of “almost all” Grin users if he had decided to connect to all 3,000 of the system’s nodes. In this regard, Bogatyy wrote the following:

“Grin still affords a stronger privacy model than Bitcoin or other non-privacy coins, since amounts are safely encrypted. But Mimblewimble provides a strictly weaker privacy model than Zcash or Monero. This makes it insufficient for many real-world privacy use cases.”

As expected, as soon as these developments came to light, the future of Mimblewimble was immediately called into question by people around the globe, who began saying that the privacy protocol could no longer be trusted, since it was clearly not secure enough. 

However, a few days after the initial report, Daniel Lehnberg, a member of Grin’s core developers team, published a blog arguing that the “alleged” break-in was confined largely to the protocol’s already-acknowledged privacy limitations. He also added that the attack was facilitated through the use of a passive vector that did not have the capacity to acquire any actionable data.

Lastly, Grin makes use of a technology called “Patient Dandelion,” which is basically a modified version of Bitcoin’s Dandelion++ proposal that was outlined in BIP0156. The protocol is commonly used to mask the IP addresses linked with any given transaction because it adds additional stem hops as well as other delays at each node junction. However, since Grin’s latest privacy scandal came to light, many experts are now calling into question the overall operational efficacy of Dandelion as well.

A closer look at Grin and its privacy framework

In its most basic sense, Grin can be thought of as an implementation of the Mimblewimble, or MW, protocol, whose privacy is derived from two key aspects:

  • The protocol employs confidential transactions to obfuscate transaction amounts.
  • The protocol makes use of aggregated transactions to prevent the linking of native transaction inputs and outputs.

Additionally, the MW transaction format is substantially different from Bitcoin-like cryptocurrencies, as it allows multiple transactions to be aggregated into a single larger transaction. 

This aggregation process is “lossy,” which essentially means that the protocol hides the size of asset transfers taking place between the involved parties, thus improving the overall scalability of the network. The process of mining blocks with Mimblewimble aggregates all of the associated transactions into a single block, thereby making it difficult for bad actors or any third-party entities to link inputs and outputs when viewing the chain on a historical basis.

Are Bogatyy’s assertions valid?

With so many conflicting details currently floating around on the internet regarding the recent Mimblewimble security lapse, Cointelegraph reached out to Jake Yocom-Piatt, co-founder and project lead for Decred, a community-driven digital currency that uses a hybrid proof-of-work and proof-of-stake consensus model. When asked to comment on Bogatyy’s claims and whether he was right or not with his assertions, Yocom-Piatt pointed out:

“Despite an aggressive response from Daniel Lehnberg from Grin, I am of the opinion that Ivan’s attack is valid. The attack links inputs and outputs to most MW transactions, and it achieves this by monitoring the Grin network, where it can log transactions prior to their being aggregated either over Dandelion or in a block.”

He then added that a few months back, he had published an article in which he too had highlighted the exact same weakness that Bogatyy was able to exploit — that is, once Grin’s native blocks have been mined, participating miners and affiliated nodes have the ability to monitor individual transactions that have been published before they are aggregated. 

This basically allows a third-party entity (who may be closely monitoring the transactions being published on the network) to potentially make use of the data in order to link transactions that would otherwise not be possible by looking at the information related to other mined blocks. Yocom-Piatt then added:

“Ivan executes exactly the attack I described. While Daniel takes exception to Ivan’s post for various technical reasons related to terminology, the linking of inputs and outputs is hard to argue against.”

Is Lehnberg’s recent blog post just damage control?

Many crypto enthusiasts firmly believe that Lehnberg’s recent post is a defense tactic. With enough technical know-how, hackers or other third-party entities could easily retrieve a huge volume of the input/output data about the majority of the involved entities, as long as MW-based native transactions can be reliably surveyed before they are aggregated.

With that being said, Ethan Fast — a co-founder of security-oriented crypto exchange Nash — is of the opinion that Bogatyy’s findings are incorrect because of his flawed understanding of how the Mimblewimble protocol works. On the subject, Fast told Cointelegraph:

“He [Bogatyy] is able to demonstrate that an adversary can construct a transaction graph on the network, in the sense that input A became output B. But because of how the protocol works, this is not like identifying an output address on Bitcoin. Just knowing A=>B does not imply you know who received the funds in any useful sense. So my interpretation is that what Ivan found was already publicly known and he mischaracterized its implications in the article he published.”

Fast then pointed out that a big part of the misunderstanding seems to have stemmed from the confusion surrounding what an “address” within the Grin ecosystem actually represents. To further solidify his stance, Fast highlighted to Cointelegraph a number of other instances where similar issues over Grin’s native operational framework came to light. He further added:

“Grin does not have anything like Bitcoin addresses. In fact, every time you want to send someone an asset, you need to interact with them in a live computation, working together to create a transaction. Given this fact, my understanding is that being able to construct a transaction graph on Grin is not a major security issue, as transactions don’t have anything like public addresses that tie them together.” 

The conversation continues

Despite Grin’s reputation being called into question after the allegations put forth by Bogatyy started to gain widespread attention on the internet over the last week, the platform’s core backers (as well as community members) have continued to claim that the assertions put forth by Bogatyy are inherently wrong and that there are many factual inaccuracies — six, to be exact — in his findings. 

Also, it is quite obvious that due to this entire episode, Grin’s financial value has taken quite a beating. The currency has dropped from $1.52 to just under $1 over the space of the past seven days.

Zero-Knowledge Proofs, Explained

Let’s take a closer look at the core concepts underlying zero-knowledge proofs.

Notable use cases

Over the last two to three years, a number of platforms have adopted zero-knowledge proofs in order to bolster their native security/privacy capabilities.

ZoKrates is a digital toolbox that can be used by skilled developers to devise and verify zero-knowledge proofs using Solidity — an object-oriented programming language used for creating Ethereum-based smart contracts.

Similarly, a couple of years ago, JP Morgan Chase adopted Zcash’s zk-SNARKs-based proof of concept to bolster the privacy of its native blockchain ecosystem called Quorum. Simply put, Quorum is a fork of the Ethereum blockchain that makes use of its very own smart contract language called Constellation.

What advantages do zero-knowledge proofs offer?

ZKPs completely eliminate the need for passwords as well as the use of any other sensitive data when facilitating a transaction.

Zero-knowledge proofs allow for a transfer of information to take place between two parties without the originator having to use a password or reveal any data related to him/her. This helps weed out many of the potential risks that are involved with the use of password-only authentication protocols. Additionally, ZKPs also help in bolstering the security of a person’s online payments/transactions and public cloud accounts.

The only potential downside to using zero-knowledge proofs is that in case the originator of a transaction forgets his/her source passcode, all of the data associated with the transfer will be lost forever.

Can ZKPs be integrated into blockchain platforms?

Zero-knowledge proofs offer a lot of benefits to blockchain systems that make use of the technology. For example, they help in making crypto transaction’s extremely secure thanks to their high-level of encryption.

Yes, a zero-knowledge proof can be very easily be used within the context of a blockchain ecosystem, especially in regard to validating cryptocurrency transactions without disclosing any data related to it — such as where the transactions originated from, where it went or how much money was transferred. 

A real-world use case of this technology is Zcash, a crypto platform that employs a special iteration of zero-knowledge proofs (called zk-SNARKs) that allow native transactions to remain fully encrypted while still being verified under the network's consensus rules.

With that said, even though zero-knowledge proofs possess a lot of potential to alter the way in which today’s data systems verify information, the technology is still considered to be in its nascent stages — mainly because researchers are trying to figure out how to best use this concept as well as determining any potential flaws.

Where are ZKPs actually employed?

Zero-knowledge proofs are used by government agencies to determine the origin of certain data without them having to prove how or where they got the information from. 

Since their inception, zero-knowledge proofs have been used across a wide array of digital domains. For example, researchers have used this technology for creating novel digital identification mechanisms that do not require users to reveal any sensitive information related to them. 

In this regard, several examples exist of self-sovereign identity platforms that allow third-party personnel such as law enforcement agencies to determine whether an individual has a valid driver's license without the person having to hand over anything other than their ID number.

Similarly, governments can also use ZKPs to determine the nuclear capabilities of various militaries without having to spy on or inspect their inventories. On the subject, it can be seen that in July of this year, the Defense Advanced Research Projects Agency, or DARPA, released a statement in which it claimed that it was working on a new project called SIEVE — i.e., Securing Information for Encrypted Verification and Evaluation — that makes use of ZKPs to determine the origin of highly secure data without the U.S. government having to reveal the way in which it was acquired.

What is a zero-knowledge proof?

A zero-knowledge proof is a digital protocol that allows for data to be shared between two parties without the use of a password or any other information associated with the transaction.

In its most basic sense, a zero-knowledge proof (also commonly referred to as ZKP) can be thought of as a protocol through which a digital authentication process can be facilitated without the use of any passwords or other sensitive data. As a result of this, no information, either from the sender’s or receiver’s end, can be compromised in any way. 

This is quite useful, especially since such a level of safety provides tech enthusiasts with an avenue to communicate with one another without having to reveal the content of their interactions with any third party. 

The idea underlying zero-knowledge proofs first came to the fore back in 1985, when developers Shafi Goldwasser, Charles Rackoff and Silvio Micali presented to the world the notion of “knowledge complexity” — a concept that served as a precursor to ZKPs. 

As the name suggests, knowledge complexity acts as a metric standard to determine the amount of knowledge required for any transaction (between a prover and verifier) to be considered valid.

China Walks Back Hardline Media Rhetoric Toward Crypto and Blockchain

With Chinese President Xi Jinping recently showcasing support for blockchain, local media is seemingly changing its sentiment toward crypto.

Earlier this week, a story published by Chinese state-run media outlet Xinhua featured some pro-Bitcoin comments that referred to the flagship digital currency as being the world’s “first successful application of blockchain technology.”

This latest endorsement comes against the backdrop of China’s stringent anti-crypto stance, wherein the country’s lawmakers implemented a blanket ban on its local cryptocurrency exchanges as well as initial coin offerings back in 2017.

The aforementioned Xinhua article takes a balanced approach toward crypto tech, outlining the history of Bitcoin’s development and its overall evolution. It starts off by asking readers the question “Does BTC present the global finance industry with an inevitable trend as far as future currency development goes or is the digital asset just another ‘tulip’ hype?” 

The piece then proceeds to describe the core tenets of blockchain and how such a decentralized, immutable and trustless technology can be used to facilitate value transfers in a completely peer-to-peer manner. Additionally, it also covers other relevant aspects related to crypto such as mining, digital scarcity and pseudonymity.

However, similar to most Western media coverage of cryptocurrencies, the piece then starts to devolve into a sweeping tirade of how Bitcoin is mostly being used by criminals and other nefarious individuals to facilitate black market and darknet transactions — a notion that has been debunked several times over in the past. Not only that, but Xinhua’s writing staff also goes on to highlight the volatility of Bitcoin, citing its lack of central backing as being one of its core weaknesses.

The global crypto community weighs in

To better assess the implications of China’s apparent change of heart toward blockchain tech and Bitcoin, Cointelegraph reached out to Matvey Voytov, the chief marketing officer of Waves, a private blockchain solution designed to compete with existing DLT platforms. He believes that China is likely to become the most active blockchain market in the world, as it looks to spend $2 billion on projects by 2023. Voytov further added:

“You can’t ignore Bitcoin as being the most successful case of a value transfer system built on blockchain as well as the fact that Chinese investors control a significant part of today’s global bitcoin operations. Still, it doesn’t mean that in the near future China will change its stance on the trading of cryptocurrencies that are not under their control.”

Similarly, Peter Somerville, head of node and developer relations for blockchain platform Elixxir, told Cointelegraph that he too is quite optimistic about the future of crypto and blockchain in China. He pointed out that owing to the country’s massive 1.4 billion strong population, there will always be a huge appetite for real-world crypto and blockchain use cases in the region. 

Additionally, he believes that since the Chinese tech community has played a meaningful role in the development of the industry from its very inception, the local market will soon change its mode of operation from a phase of hype and speculation to laying greater emphasis on projects that seek to innovate and build platforms in order to promote general adoption of these technologies.

Lastly, Andre Szykier, the chief technology officer Bitcoin ATM operator Blockchain BTM, told Cointelegraph that with China is seemingly committed to creating a gold-backed security token offering with a stated reserve of 13,000 tons — similar to what Russia has proposed for the ruble. 

On the topic of Chinese-owned media outlets appearing to tone down their erstwhile stringent opposition to things like Bitcoin mining and speculative cryptocurrency trading, Szykier made an observation that gambling is a fundamental characteristic of social behavior in China, adding that, “Since the government has gone forward in creating a ‘social score’ to reward or punish behavior in the country, cryptocurrency speculation falls into this area.” Szykier concluded:

“By controlling the buy/sell activity they can identify and control participants. How this affects the top tier individuals with very large wealth is TBD. The future of retail commerce in China is heavily mobile with ease of interchange between various payment systems highly advanced. By making paper/coin payments a smaller part of retailing, the government can monitor their citizens more closely and perhaps impact their social score.”

Has local sentiment toward crypto changed in China?

In order to gauge whether local sentiment toward crypto and blockchain technology in China has actually changed since the 2017 blanket ban came into effect, Cointelegraph reached out to Alex Lam, CEO and co-founder of digital asset services platform RockX. 

In his view, the Chinese government’s ban — which, at the time, was in response to an increasing amount of unregulated crypto market activity taking place within the country — ended up bringing digital currencies such as Bitcoin and Ethereum to the attention of many who had not heard of them before:

“In my opinion, the 2017 ban led to no big change in people’s perception of cryptocurrency technologies.”

It is no surprise that China, as well as a host of smaller countries, were initially fearful of BTC and blockchain technology for their disruptive potential. However, since China was recently threatened with sanctions and tariffs, the local regime moved to realize that the U.S. dollar and the SWIFT monetary system were being used against it as weapons of war and attrition. 

Where is China heading in terms of adoption?

The crypto-friendly media reports are now showing that China is truly working toward its goal of widespread blockchain adoption at a rapid pace, and that the country is gearing up for some big changes in the coming few years following President Xi Jinping’s call for adoption. 

To gain further insights on the matter, Cointelegraph asked Max Pertsovskiy, head of growth at Waves, to comment on whether or not he believes blockchain adoption will continue to increase throughout China in the coming few years. 

On the subject, he noted that China’s plans have instigated a fire under all potential stakeholders around the globe, as the race for blockchain supremacy is now on:

“I believe that over the next decade, nothing will shape the texture of the global economy as the jostling for leverage between China and the United States will. While there are many benefits to central bank digital currencies, the obvious impetus for CBDC was the Libra. China wants to both increase the international reach of the RMB and prevent the spread of the Libra.”

Similarly, Ben Golub, CEO of cloud storage platform Storj Labs, is also of the belief that China’s apparent change of heart toward crypto-related technologies could be a sign for bigger things to come for the industry as a whole. Golub told Cointelegraph that China is likely to broaden the lead in blockchain relative to the U.S.:

“Until the SEC rolls out more clear guidelines related to cryptocurrencies and blockchain, the US market will continue to stagnate."

Scale of OneCoin Scam Unravels Amid Ongoing Court Hearings

A U.S.-based lawyer linked with the OneCoin scam allegedly helped Ruja Ignatova, the principal accused in the OneCoin scam, launder over $400 million.

With each passing day, the financial nitty-gritty associated with the cryptocurrency-related OneCoin Ponzi scheme continues to become of increasing interest to members of the global crypto community. 

The U.S. government’s previous estimate of the scam that raked in a total of $4 billion seems to be well off the mark, as the figure could be more than three to four times the official estimate — this is according to Jamie Bartlett, the person responsible for the BBC's podcast series The Missing Cryptoqueen

As part of the show, Bartlett and his team followed a trail of clues to track down Ruja Ignatova, who is widely credited as being the mastermind behind the entire OneCoin scam. Bartlett also uncovered a host of shocking documents during his research that revealed that OneCoin may have gathered more than $4 billion from just a single continent alone.

To put things into context, it appears as though over the course of the fourth quarter of 2014 and the third quarter of 2016, OneCoin was able to generate a total of 3.4 billion euros (approximately $3.8 billion). However, since the coins had no intrinsic value attached to them, they could not be used to facilitate any real-world deals or purchases. 

What are the figures?

Instead, the scheme relied solely on heavy marketing tactics and other nefarious ploys — such as Ignatov claiming that OneCoin Ltd. had successfully attracted more than three million members across the globe. However, at its core, the project was no different from any other multilevel marketing scheme, simply because, much like other MLM schemes, OneCoin too doled out handsome commissions to its members for on-boarding new recruits. 

Fast forward to 2019 and the aforementioned scam is currently being tried in front of a court of law. The prosecutors allege that Mark Scott, a U.S.-based attorney who had previously worked for reputed law firm Locke Lord LLP, helped Ignatov launder the bulk of the proceeds acquired through the OneCoin scam. 

Scott, who has pleaded not guilty, is being accused of employing a wide network of fake companies, offshore bank accounts and fraudulent investment schemes to siphon off more than $400 million in illegal proceeds. As compensation for his shady activities, prosecutor Julieta Lozano pointed out that Scott was paid handsomely in the form of a 57-foot yacht, three multimillion-dollar homes in Cape Cod, Massachusetts and luxury cars, including three Porsches and a Ferrari. 

What is happening in court?

To better understand the ongoing situation and how its potential outcome will pan out, Cointelegraph reached out to Matthew Russell Lee, founder of Inner City Press, which is known for its investigative journalism related to the global finance industry. Lee has been following the situation closely and has attended all of the recent hearings concerning OneCoin and the U.S. vs. Scott trial. 

When asked about Scott and his claim that he duly informed the FBI about his efforts to determine whether OneCoin might be a pyramid scheme before he got involved with the project, Lee replied:

“Mark Scott's defense is that he didn't know that OneCoin, for example, had no blockchain. But his claims of not knowing that something was wrong are undercut by evidence he would only speak with Ruja Ignatova on a ‘crypto-phone’ and in some cases, only in person. Scott traveled to Sophia and, according to cooperating witness Konstantin Ignatov (Ruja's brother and, until her abrupt disappearance, personal assistant), met with Ruja with nearly all other OneCoin staff told to go home for the day not witness or overhead anything.”

On the subject of Ruja Ignatov’s current whereabouts and how she has been able to evade various law enforcement agencies for so long, Lee told Cointelegraph an intriguing detail: Konstantin Ignatov testified on Nov. 6 that after his sister fled, security personnel who accompanied her told him that she had met with people who spoke Russian. Konstantin Ignatov also added that his sister informed him that she had the support and protection of a "rich and powerful" Russian individual.

Despite all this information now being out in the public domain, the OneCoin project continues to remain fully operational. Even the project’s parent company, OneLife, continues to reiterate the mantra that "OneCoin verifiably fulfills all criteria of the definition of a crypto-currency." 

To make sense of this, Cointelegraph reached out to a Singapore-based crypto executive who claims to have inside knowledge on the matter but wishes to remain anonymous due to privacy concerns. According to the executive:

“OneCoin has at various times, attempted to involve legitimate community players in creating a functioning blockchain for optics.”

The executive also claimed that a lot of the market hype that OneCoin generated upon its release had crossed over to the Singapore scene and that Marcelo Carsil of Macenas, as well as an early Bitcoin developer, had been hired to work for OneCoin at one point.

Lastly, Lee believes that the company’s ongoing operations are just a smokescreen to make it seem as though the project is still going ahead, as laid out in the original roadmap. He further highlighted that the mother of Ruja and Konstantin Ignatov still works at the OneCoin office in Sophia, Bulgaria. However, Lee expressed his doubts about OneCoin, saying, “I cannot imagine, given the evidence, how much longer this can continue.”

What happens next?

Even though Scott is currently being tried in court in relation to a sizeable sum of $400 million, the larger question still remains: What happened to the rest of the money? It seems as though there has been little to no accountability as far as the entire score goes, but Lee believes that Ruja Ignatov — and perhaps her sponsors — took a lot of it. 

Additionally, he pointed out that as per a recent testimony, a man in the United Arab Emirates named Amer Abdulaziz, who is still free and makes routine public appearances, took around $100 million from the total stash. Lee concluded by saying:

“I am particularly interested in the alleged money launderer(s) who were named in testimony on November 6, and other professional enablers some of whom have gone on to work on other crypto-currency projects.”