General Motors patent uses blockchain to improve navigation maps, potentially for semi-autonomous driving systems.
Major car manufacturer, General Motors, or GM, has filed a patent application for a continuously updating navigation map system. The system would use blockchain to integrate data from vehicle sensors and build a reliable map for autonomous vehicles.
According to the filing, which was submitted on Oct. 1, 2018 and published on April 2, 2020, existing maps are “difficult to keep dynamic without incurring large costs.”One potential reason for this is that most maps are maintained through specialized vehicles, whose reach will necessarily be limited to just a few specific sections of the world.
General Motors’ solution is to distribute the process to many vehicles, which would collect data about their surroundings through sensors as they simply drive around.The real-time data would be compared with a discrepancy detector, which analyzes the existing maps.
Any difference is transmitted to a blockchain network that holds all the map data. The “candidate transaction” is then validated if other vehicles report a similar change. The patent suggests that the network would be maintained by vehicles and mining nodes located in data centers.
The system was likely developed for GM’s “Super Cruise” feature, which provides a semi-automated driving experience on some luxury models. Unlike competitors from Tesla, the system relies very heavily on navigation maps, which is why it can only be used on “supported” roads.
Distributing the map generation process would likely speed up the manufacturer’s efforts to cover the majority of the roads in the U.S.
The patent reveals that one of the benefits of the system is distributing the map generation process and allowing multiple vendors to contribute to a single map. This is likely the reason why it implements blockchain.
Automotive industry and blockchain
As previously reported by Cointelegraph, General Motors is one of the more prolific car manufacturers in the blockchain sector. In October 2019, it was one of the five car manufacturers testing a blockchain-based payment and identification system for vehicles.
Its finance arm invested into a blockchain startup in June, in an effort to curb auto financing fraud.
The manufacturer also patented another blockchain-based communication system in December 2018, which would help different entities communicate with autonomous cars.
There has never been a lack of effort or projects in the cryptocurrency space. According to statistics by CoinGecko, over 7,000 cryptocurrencies are in circulation today, most of which will never amount to anything.
Bitcoin remains the dominant cryptocurrency, for obvious reasons.
Too Many Cryptocurrencies Exist Today
There is ample competition, yet no other project comes even close.
As can be seen on the CoinGecko website, there are now over 7,000 cryptocurrencies, tokens, and assets.
Most of these projects will either disappear soon or see their value reduced to zero.
That is not always because of a lack of effort, however.
Trying to climb the market ranks as an altcoin has always been challenging.
As more time progresses, that battle will only intensify.
Given how there are over 7,000 competitors to Bitcoin, one has to wonder if any of them can make a lasting impact.
So far, the market cap top 30 has been dominated by mostly the same coins for years.
Trying to enter this list as a new project is virtually impossible, but that is only to be expected.
Despite the odds, developers will not stop creating currencies and assets hardly anyone will ever use.
That being said, ample innovative features and improvements made to Bitcoin in recent years were only possible thanks to altcoin projects.
The post With Over 7,000 Projects, When are There too many Cryptocurrencies? appeared first on NullTX.
The Crypto Rating Council brings more regulatory clarity to crypto by analyzing whether certain coins constitute securities.
The question of whether certain cryptocurrencies constitute securities is becoming increasingly relevant within the blockchain industry. As such, some core players in the space are upping their efforts to bring more understanding to the issue.
The Crypto Rating Council, or CRC, is a group of major United States’ crypto firms that advocates and promotes regulatory clarity in crypto. Recently, the CRC evaluated a number of new cryptocurrencies to determine whether they should show signs of being securities.
Three new tokens are analyzed
In an April 2 blog post, the CRC published an introduction to ratings for three new cryptocurrencies including Basic Attention Token (BAT), USDCoin (USDC), and Iota (IOTA). In the post, the CRC noted that it periodically reviews previously published scores based on new developments, as well as an understanding of available facts. As such, the council has also updated scores for Maker (MKR) and Polymath (POLY), the announcement reads.
As previously reported, CRC’s asset ratings tool ranks digital assets on a scale of 1 to 5, where the highest score means that a certain token is likely considered a security that cannot be issued, sold, or traded by unregulated firms. The CRC’s analysis is not endorsed by developer teams, regulators, or any other third party.
IOTA is unlikely to be considered a security
In a subsequent blog post, IOTA outlined that the rating will help the project gain more credibility in the U.S. market, stating:
“With our Crypto Ratings Council rating, we believe the US market and CRC’s partner organizations will feel more comfortable and confident engaging with the IOTA token and protocol.”
Stablecoins scored 1.00
Similarly, Basic Attention Token, an Ethereum token that powers Brave’s blockchain-based digital advertising platform, also scored a 2.00.
USDCoin, a major stablecoin project backed by major crypto companies like Coinbase and Circle, is ranked at 1.00. This indicates that the token should not be considered a security. USDC is not the only U.S. dollar-pegged stablecoin defined in the CRC’s asset ratings list. Dai (DAI), another stablecoin project, scored an identical 1.00.
Cointelegraph reached out to the firms behind the newly listed tokens for additional queries and will update if we hear back.
Crypto Rating Council is unlikely to change the opinion of regulatory groups
Established in September 2019, the CRC is a collaboration of major crypto firms including popular U.S. crypto exchange and wallet service Coinbase, Kraken, Bittrex, and others. As previously reported by Cointelegraph, some industry experts believe that the CRC’s determinations are unlikely to impact the official opinions of securities regulators.
XRP, the third biggest cryptocurrency by market cap, is facing a long-running lawsuit which claims that the coin is a security. Cointelegraph reported that XRP was considered by the CRC to likely be a security back in 2019. According to the council, the coin still maintains a 4.00 ranking as of press time.
Bitcoin has seen strong gains since the coronavirus triggered sell-off occurred in mid-March but the drop may bring unexpected changes to the mining industry.
This week the price of Bitcoin (BTC) surged more than 15%, reaching a high at $7,200 before pulling back into the $6,800 range. Despite the recovery, Bitcoin still has a way to go in order to reach the $8,000 level seen before the coronavirus-triggered selloff on March 12.
Cryptocurrency market performance. Source: Coin360
The drop had several consequences on the Bitcoin network. Having reached the $3,800 price range, the accentuated drop forced some Bitcoin miners to throw in the towel and shut down their operations due to mining becoming unprofitable.
As miners have hosting and electricity fees to keep up with, often relying on the short-term yields of their equipment, the price led to the biggest difficulty drop since 2011. However, it seems like the coronavirus and the steep drop in the value of Bitcoin may have affected some regions more than others.
Chinese miners go dark
As was recently reported by the Chinese publication Securities Daily, more than 40 established mining operations have been forced to shut down as a large number of Antminer S9s, an older generation of Bitmain’s popular Antminer products, have become unprofitable. An industry insider told the publication that “roughly 2.3 million Antminer S9s have been shut down since March 10,” according to data from F2pool.
This drop in the price of BTC seems to have affected Chinese miners the most due to the amount of S9s and old-generation equipment that have become unprofitable to keep using. Electricity prices for miners in China range from $0.03 to $0.05 per kilowatt-hour. Even for miners with electricity at median rates of $0.04 per kWh, miners need Bitcoin to be at $5,136 to be profitable.
Matt D’Souza, the CEO of Blockware Solutions, told Cointelegraph:
“The drop was several old generation rigs going unprofitable. If you monitor the pools. Many of the Asian pools lost hash, not the American pools. That signals it were machines in the East that shut down, not North America. It was old gen equipment out East. It was ultimately the price of Bitcoin dropping and machines becoming unprofitable and forced to shut off.”
Impact of coronavirus on China-based miners
Not only has coronavirus affected miners indirectly through its effect on the price of Bitcoin — and just about every other asset class — the pandemic has also affected the area more broadly and made machines harder to come by as supply chains have been disrupted. D’Souza explained:
“I think COVID has influenced hash rate drop because it has disrupted global supply chains. So miners are not getting rigs quick enough. The difficulty adjustment was much greater because next-gen rigs have been delayed due to COVID-19.”
The pandemic has also had a considerable effect on the secondhand market for mining equipment, which has always been a well-known subset of the mining industry. Wu Tong, the deputy director of the Blockchain Commission within China’s Ministry of Commerce, has already observed this first hand. He recently told Securities Daily:
"Under the influence of the epidemic, the difficulty of maintaining, renewing and continuing production of mining machines has further increased, and the 12.04 price plunge has put many mining machines on sale. The tide of mining machine selling has already occurred, and the average selling price of each mining machine is 30%–50% lower than before the Spring Festival."
Why miners may move away from China
China has been the market leader when it comes to mining for a long time, with studies showing it collectively controls a majority of the Bitcoin hash rate. China’s dominance is owed mainly to the country’s low electricity prices and leading manufacturers, such as Bitmain and Ebang.
These conditions not only allow more advanced Bitcoin mining operations to access new generation equipment quickly and cheaply but also for smaller operations to make use of old equipment for longer and acquire it at lower prices.
However, as Bitcoin continues to mature and gain interest among investors, other countries may have a different set of characteristics that make it more viable for mining.
Pros and cons of mining in the East
Countries like Venezuela that have even cheaper electricity and other subsidized energy sources often end up receiving old mining equipment like the aforementioned Antminer S9. But the price is not the only factor, as internet speeds also give countries like the United States an edge.
Higher purchasing power and the ability to raise capital may allow new miners in Western countries to access new-generation machines and to stay ahead of the curve. This is the case with Blockware Mining, which has kept its 180 petahash per second mining operation up and going despite higher electricity prices in the U.S.
Moreover, the Chinese government has not shied away from its dislike of cryptocurrency and Bitcoin mining. The country has a track record of cracking down extensively on exchanges and many illegal mining operations. The U.S., on the other hand, has been ahead of the curve when it comes to regulating the cryptocurrency industry, which may prove to be a decisive factor in the future.
It has certainly proven to be so for companies like Bitmain and Ebang, which have submitted listing applications to the Hong Kong Stock Exchange but have not heard back.
A pivotal moment for mining
Overall, it’s possible that we may see a shift in the mining industry, especially with moments like the halving and the ongoing pandemic.
The hypothetical decentralization of the industry would be welcome, as many have expressed concerns when it comes to the centralization of Bitcoin mining. But for now, China continues to take the lead.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Blockchain-based digital identity is becoming mainstream with banks, financial organizations rise to the adoption challenge.
Digital identity solutions are on the rise as consumers seek security and accessibility in a digitized world. A new report from 360iResearch shows that the global digital identity market is expected to have reached about $37 Million by the end of 2025. As COVID-19 continues to wreak havoc, this number could grow even larger.
Unsurprisingly, the trillion-dollar banking industry has already expressed interest in digital identity solutions. For example, Everest, a blockchain-based digital payments provider, has recently formed a partnership with BRI Remittance, a subsidiary of one of Indonesia’s largest banks. Everest has been collaborating with BRI to offer bank users a blockchain-based digital commerce platform that will allow Indonesians and Europeans to easily exchange value across international borders.
Bob Reid, the CEO and co-founder of Everest, told Cointelegraph that BRI Remittance’s digital commerce platform is already being implemented and will officially launch in the second quarter of this year. Reid noted that the goal of the project is to ensure that remittance transfers between Europe and Indonesia are settled within 24-hours — the time it usually takes for domestic wire transfers to be completed. Sending money across international borders could take up to five days in some cases. Reid added:
“The partnership is expected to drive business within the Indonesia–Europe corridor and afford Indonesians and Europeans the opportunity to seamlessly execute exchange of value across international borders.”
This is important, as Indonesia’s $11 billion global personal remittance market has more than doubled since 2005, with remittances between Indonesia and Europe representing more than $500 million. Moreover, with a population of 275 million people and a trillion-dollar economy, Indonesia arguably still lacks the digital infrastructure needed to provide value exchange between identity-verified individuals.
How can blockchain solve this problem?
Everest has integrated blockchain into BRI’s banking system to provide users with a digital identity, known as an “EverID.” According to Reid, the Everest Platform is built upon two private, permissioned Ethereum blockchain networks.
The “identity chain” allows BRI users to share certain elements of their identity, such as their name, address and income. This information is required to ensure Know Your Customer and Anti-Money Laundering verification. A user’s identity is then linked directly to a digital account, called an “EverWallet,” which contains Everest’s CRDT token. Reid explained:
“A CRDT token is a digital voucher used to capture the sender’s selected identity elements, like KYC/AML, or 5AMLD in the case of Europeans, along with foreign exchange transactions. The tokenized voucher is stable and can be conditional, programmable ‘money’ to ensure that it can only be spent on, for example, paying bills or food.”
Reid noted that once a user is on-boarded to the EverWallet in Europe, remittances can easily be sent to Indonesia. The same wallet can also be used for banking, peer-to-peer payments and cryptocurrency transactions, as everything is connected to a verified digital identity.
Moreover, since transactions take place across a blockchain network, each payment is tracked with a user’s associated identity. Smart contracts are also leveraged to ensure transactions adhere to legal requirements within the participating jurisdictions.
Why a digital commerce platform is important for Indonesia
BRI Remittance’s executive director, Gigieh Perkasa, told Cointelegraph the company was looking for a partner that could provide a combination of identity compliance, transaction tracking and use of tokenized stable vouchers. Perkasa noted that money transfers, especially those being made by migrant workers and SMEs, account for a large portion of the bank’s remittance business. According to Perkasa, BRI recorded $8.8 billion in remittance transactions in 2019.
According to the European Commission, the European Union is Indonesia’s third-largest trading partner. However, it’s been noted that remittances sent by migrant workers in Indonesia have yet to create a lasting impact on the local economy.
Silvia Mila Arini, a researcher at Singapore-based think-tank Asia Research Institute, stated in an article, “Money sent by workers is generally used to meet daily needs and to fund education and the needs of children.”
Douglas Borthwick, the chief marketing officer of INX, a crypto exchange, told Cointelegraph that identity management is key to all banking activities and that a digital solution could provide a number of benefits both for users and financial markets:
“Legacy banking systems have trouble following basic identification information, such as the identification of final beneficiaries for securities and cap-table ownership of companies. Blockchain is the perfect technology for both private and institutional investment banking, and it has the promise of changing the identity management dogma with real-time ownership transfer settlements and other important identification management related ‘relics.’”
Borthwick further noted that while INX plans to enable regulated trading of cryptocurrencies, such as Bitcoin (BTC), Ether (ETH) and Ripple (XRP), the exchange has been working with several major banks to provide solutions for investment banking with advanced digital identification management features. He said: “This is still in its early days, but we see this as one of the key factors to the success of the rise in digital assets in the financial markets.”
Digital identity for banking is beneficial
Digital identity solutions will not only disrupt the remittance market in countries like Indonesia but will also create benefits globally, especially as the coronavirus pandemic continues. Julie Esser, the senior vice president of communications of CULedger, a credit union service organization, told Cointelegraph that digital identity for the banking industry is more important than ever before. She said:
“As concerns over the coronavirus pandemic began to spread, credit unions started closing their lobbies, urging members to use alternative ways to access their accounts — becoming a digital credit union overnight. The volumes in these ‘open’ channels have skyrocketed.”
CULedger currently provides 11 United States-based credit unions with a digital identity solution called MemberPass, powered by the Sovrin Network’s blockchain platform. Borthwick also commented that the coronavirus crisis is likely to cause a global movement toward digital money and assets, adding:
“Identity management will become central for authorizing transactions and keeping procedures and records in order. Nothing that swipes or is separate from a ‘collective’ hive brain will be sufficient to support the wide range of identity profiles all of us will need to live in the digital age of online commerce, banking, information gathering, personalization, communities and more.”
Binance, the world’s largest crypto exchange, has announced 100 new hires despite the ongoing economic downturn.
While global unemployment continues hitting new highs amid the coronavirus pandemic, the cryptocurrency industry is stepping in to shelter job losses, with some of the biggest companies in the space announcing their intention to hire new employees.
Binance, the world’s largest cryptocurrency exchange, has just announced that it is seeking to hire more than 100 new employees, despite the ongoing economic downturn.
In an April 3 tweet, Binance invited people around the world to build a career in the Blockchain space, offering a crucial opportunity to “work from home” as global jurisdictions continue strengthening quarantine measures.
Binance CEO and founder, Changpeng Zhao, subsequently brought further attention to Binance’s hiring spree by tweeting:
“Getting used to work from home, but hate your job? Good at what you do and passionate about crypto? You know what to do.”
Binance to increase its staff by at least 10%
While the official announcement says that Binance is willing to employ at least 100 people, the job listing page accounts for nearly 180 open positions, including potential hires. As reported by Cointelegraph, Binance has at least 800 employees on its team to date. The company’s open job listings cover diverse areas like business development, marketing, communications, customer service, finance, analytics, and frontend.
As a global crypto company, Binance is hiring talent all over the world. The listings include a wide number of locations in Europe, Asia, and Latin America. Cointelegraph reached out to Binance to find out more information about the announcement, but did not receive an immediate response. This story will be updated should they respond.
Crypto industry is apparently surging amid global economic uncertainty
Binance’s job postings are crucial amid as unemployment numbers continue to skyrocket globally. As reported by Cointelegraph, 6.6 million people in the U.S. filed for unemployment last week; a number which is more than double official estimates.
Binance is not the only company that is apparently expanding its staff during this difficult social climate. In late March, major United States-based cryptocurrency exchange, Kraken, reportedly announced it was expanding its team of 800 with an additional 67 hires.
The news comes amid the general uptick on crypto markets, with Bitcoin (BTC) steadily recovering over the past two weeks following a plunge below $4,000 in mid-March. On March 16, Catherine Coley, the CEO of Binance US, revealed that the coronavirus quarantine in Asia drove a significant surge in trade volume.
Yesterday, Binance officially announced its historic acquisition of major crypto data website, CoinMarketCap, or CMC. While both Binance and CMC ensured that the website will continue to operate independently, CMC’s interim CEO said that the company doesn’t expect any changes to the team in the near future.
The cryptocurrency market has gone through a bullish impulse that saw many cryptos rise substantially, including Ethereum. Now, on-chain metrics reveal that Ether could face significant resistance ahead.
Volatility is back and Ethereum benefits from it
Ethereum started off Q2 on the right foot. The smart contracts giant jumped over 13 percent from a monthly open of $132.6 to recently reaching a high of $150. In the last few hours, ETH retraced 5 percent, which is a clear sign that realized volatility is back to its “pre-Black Thursday” level, according to Skew.
The crypto derivatives insights provider maintains that from a short-term perspective, the degree of variability in the returns of Ether went back to the levels seen before the March 12 crash. However, implied volatility, which represents the market’s view of the probability of changes in a given asset’s price, remains higher. This could indicate that market participants are still “wary of possible tremors.”
Indeed, the Crypto Fear & Greed Index (CFGI) continues sensing extreme levels of fear among market participants. This fundamental indicator evaluates the emotions and sentiments from different sources, such as volatility, market momentum, social media and other datasets, and crunch them into one simple number.
Since the beginning of March, the CFGI has been hovering below a value of 17 indicating that “extreme fear” reigns the cryptocurrency market.
Although sizable opportunities are usually presented in times of uncertainty, IntoTheBlock’s “Global In/Out of the Money” reveals that almost 80 percent of all the addresses holding ETH are losing money. Meanwhile, only 10.5 percent of addresses are “in the money.” This could be the main reason why there is growing concerns over a further downturn.
Nonetheless, the In/Out of the Money Around Current Price (IOMACP) indicator suggests that there is significant support ahead. The machine learning and statistical modeling firm reveals that over 2 million addresses bought more than 9 million ETH at an average price of $130. This important demand barrier could prevent Ethereum from a steeper decline.
If the bulls manage to take back control of Ether’s price action, they would have to be able to break the strong resistance around $153. The IOMACP indicates that approximately 400,000 addresses bought nearly 3.2 million ETH around this price level. Moving above this supply wall would likely allow this cryptocurrency to surge towards $180 since there is not any major resistance in-between.
Time will tell whether Ethereum will thrive during the ongoing global pandemic. The fact that the buying power behind it is at all-time highs due to investors flying to stablecoins adds credence to the bullish outlookt, affirmed Glassnode.
The post Volatility strikes back, but on-chain metrics reveal strong resistance ahead of Ethereum appeared first on CryptoSlate.
One thing has become fairly evident: governments are trying to track the coronavirus outbreak with interesting technologies. Honduras, while also pursuing a similar goal, wants to do so while keeping privacy in mind.
Emergency measures regarding the coronavirus have gone into effect all over the world.
A Blockchain app for Coronavirus Cases in Honduras
The next order of business is digitizing medical records and civilians’ locations.
While that approach needs to be applauded, it also raises ample privacy concerns.
One entrepreneur in Honduras is turning to blockchain technology, but with a strong focus on privacy.
Emerge is working with several partners to launch a new app in Honduras called Civitas.
It is capable of linking a government ID number with unique blockchain records.
This data can then be used for permits, medical purposes, and so forth.
With over 3 million people under lockdown in Honduras, a new solution such as Civitas is no unnecessary luxury.
During the initial phase, the app will have a limited rollout.
At first, 25,000 citizens will be able to sign up for this service.
Later on, it will become accessible across 18 regions in the country with confirmed coronavirus cases.
This particular approach may set a precedent for the rest of the world.
Similar initiatives might show up in other countries if the situation doesn’t improve in the near future.
The post Honduras Prepares to Experiment With a Blockchain app for Coronavirus Cases appeared first on NullTX.
Bitcoin price could see a rally to $8,000 following the breakout to $7,000, but a potential selloff in stocks could put BTC at risk of revisiting new lows.
The Bitcoin price (BTC) rallied to around $7,300 on April 3, and BTC is still holding onto the $6,700 support level, meaning the price could push the dominant cryptocurrency to the $8,000 area. But, a highly accurate hedge fund manager’s stock market warning could rattle the cryptocurrency market in the short-term.
Dan Niles, the founding partner of Alpha One Capital Partners, said in a note to clients that the dire economic consequence of the coronavirus pandemic could lead to a steeper correction in the U.S. stock market.
With Q2 earnings set to be released in the coming weeks, jobless claims exceeding 10 million, and major European economics in free fall, the appetite for high-risk assets that include single stocks and crypto assets could fade once again.
Fakeout rallies have occurred frequently in 2020
As Cointelegraph previously reported, prominent trader PentarhUdi predicted the Bitcoin price to recover from $5,200 to the 200-week simple moving average (SMA) at $8,500 before it eventually grinds back down to the $3,000 region.
The pattern of a strong rally leading straight to an intense selloff has already been seen multiple times in the past 12 months. This is the result of Bitcoin’s price abruptly surging in a short period of time and shaking out late shorters in the market. This gives whales time to adjust their positions, often leading to a severe correction afterward.
Since late March, the Bitcoin price has broken out of its correlation with the U.S. stock market. Previously, BTC closely followed the movement in the U.S. stock market, going as far as reacting to pre-market trading of the Dow Jones Industrial Average.
As such, even if the price of Bitcoin sees a large upside movement to the $7,700 to $8,500 range in the short term, the price remains vulnerable to a pullback to the $3,000 to $5,000 area.
BTC USDT daily chart. Source: TradingView
Bitcoin’s V-shape recovery makes it vulnerable
The March 12 drop to $3,750 could have technically caused the Bitcoin price to flash crash to zero as discussed by a few industry executives. Fortunately for investors, the price impressively rebounded from $3,600 to $6,700 with barely any pullback apart from a brief wick down to $4,400.
The stock market also demonstrated a similar V-shape recovery as Bitcoin, prompting renowned strategists to predict a deeper correction in the upcoming weeks.
Niles said about the stock market:
“I sort of laugh when I hear people talking about a V-shaped recovery because we are going to have at least 10% unemployment, my guess is closer to 20% before all of this is said and done.”
Liquidated longs remain a threat
The same argument for the lack of strength of a V-shaped recovery in the equities market can be applied with Bitcoin. Given that the cryptocurrency has not established strong support levels during its recovery to the $6,700 to $7,300 range, it faces a risk of a March 12-esque fall where a significant amount of long contracts are liquidated in a short period of time.
A long accumulation phase, in contrast to a V-shape recovery, allows spot volume to grow and actual retail investors to buy into the market, rather than highly-leveraged futures orders affecting the short-term price trend of BTC.
AAX exchange CEO Thor Chan thinks crypto markets will do well, despite recent and current uncertainty.
As the world sits in flux between coronavirus and financial market concerns, AAX crypto exchange CEO, Thor Chan, thinks cryptocurrencies will ultimately make out ok.
“During a period of intense panic, many investors fled the markets in search of cash, or to defend their positions elsewhere,” Chan told The Merkle in a March 30 interview, referencing recent plunging crypto and mainstream markets. “Cryptocurrency markets suffered together with all other markets,” he continued, adding:
“But over the coming weeks and months, as governments cut interest rates, I think we will see the crypto markets surging.”
All markets have fallen during the coronavirus pandemic
Over the past month or so, in the face of the coronavirus pandemic, mainstream markets suffered carnage comparable to the market crash of 1987, as well as the 2008 recession.
Initially, crypto assets fell alongside traditional markets, with Bitcoin reaching its most recent pinnacle of pain between March 12 and 13, dropping more than 50%. Since then, however, the asset has shown price action relatively unattached to traditional markets.
Current circumstances may force mass reevaluation
Global coronavirus conditions have spurred drastic measures, leaving many folks quarantined and changing daily life dramatically for people around the world.
“If anything, this is a time during which a lot of people may want to reflect on how we’ve organized our society,” Chan said. “Such thinking can be around social issues, environmental issues, but also around finance and economics.”
The CEO noted investigation into blockchain and crypto use cases as a useful endeavor during these times.
“I think the value of crypto will become more apparent to the mainstream, including institutional investors, and this will bring more capital into the market,” Chan said.
Present quarantine measures have caused many companies to put more thought into the digital realm, leading some to further investigate remote work methods. As the crypto industry is largely digital, such conditions could logically steer more of the public toward blockchain and crypto solutions.
Cointelegraph reached out to AAX for additional details, but received no response as of press time. This article will be updated accordingly should a response come in.
Despite what gold bug Peter Schiff says, economists are uncertain that gold will shine during the current coronavirus crisis. While gold and other precious metals have seen decent gains in the last few weeks, a few investors are terrified that central banks will use their flight-to-safety assets in order to save their economies. Data shows that the U.S. owns the biggest stockpile of gold reserves and the Federal Reserve could very well unload the bullion in times of extreme financial stress.
Central Banks Might Need to Sell Gold, Which Could Crush the Price Long-Term
Just like digital assets like bitcoin, investors are curious about gold and whether or not the metal will rise much higher during the financial meltdown. For over a millennia, gold has been considered a safe-haven asset and the yellow metal is far more scarce than the unlimited fiat central banks create regularly. Despite the scarcity, economists understand that central banks are the largest holders of gold and there’s a great possibility they could dump on the market at any time. In 2019, central banks worldwide purchased the most tonnage of gold in more than 50 years.
Interestingly, in the midst of the coronavirus outbreak, Russia’s central bank surprisingly stopped buying gold and gave no official reason. Russia was not the only country to curb gold purchasing as Kazakhstan, and Uzbekistan brought gold purchases to a grinding halt. Speculators assume central banks are simply using gold for its flight-to-safety purpose and they will have to sell the bullion when economies get crushed.
Statistics show that the U.S. is the largest holder of gold reserves with 8,965 tons to-date. This is followed by Germany (3,709t), the International Monetary Fund (3,101t), Italy (2,702t), France (2,684t), Russia (2,504t), China (2,159t), Switzerland (1,146t), Japan (842t), India (686t), Netherlands (674t), and the European Union (556t).
Financial columnist David Fickling explains in a recent editorial that investors should not “expect a crisis to be good for gold.” “It might be argued that the current crisis is precisely the sort of emergency that proves the enduring value of gold for a central bank, as an asset with no counterparty risk that can be sold in an exchange for any currency if things get tight,” Fickling wrote on April 1. Fickling continued:
It’s worth reflecting that the surging price of gold is increasing the share of bullion in most central banks’ reserves right now, in some cases to the point where they need to think about selling.
Retail Investors Forced to Pay Higher Premiums for Small Bars and Coins
Further, even though investors might want to get some gold to hold onto as a safe haven asset, financial news outlets are reporting on gold dealers explaining there are “big shortages of small bars and coins.” Small bars and coins are popular among retail consumers and people looking to grab some are paying “well above the per-ounce prices being quoted on financial markets.”
“People want to buy, not to sell gold,” detailed Mark O’Byrne, the founder of the firm Goldcore. “We have a buyers’ waiting list and we emailed our clients seeing who wished to sell their gold. At this time there are roughly only one or two sellers for every 99 buyers,” O’Byrne added.
In fact, retail premiums for gold “have exploded,” remarked Markus Krall, CEO of Degussa, a German-based precious metals dealer for retail investors. Krall said that the price of bullion at certain shops can be 10-15% above spot prices. Furthermore, Ronan Manly, an analyst at Singapore dealer Bullionstar told the press that Kilobars distributed by Argor-Heraeus SA are selling for 6% above spot. Even though there’s a shortage of small bars and coins, gold bugs like Peter Schiff still think that the yellow metal will surely skyrocket in the near future. Thanks to the stimulus plans across the world, gold proponents have always said that gold will be the best store of value. Many other gold proponents agree with Schiff and Bob Haberkorn, senior commodities broker with RJO Futures feels the same way.
“With all of the stimulus money, interest rates at zero, loss of jobs and multiple battles on the economic front, I can’t see how gold is not higher next week,” Haberkorn told Kitco on Thursday.
The Benefits of Bitcoin: Portable, Harder to Confiscate, and a Superior Rate of Issuance
While analysts and wealth managers ponder if gold will be a safe haven asset during the current crisis many believe digital assets like bitcoin will be king. There are various reasons why bitcoiners think crypto is better than gold and one of the biggest is the fact that bitcoin is much harder to confiscate. Gold investors are often reminded of when the U.S. stole everyone’s gold in the 1930s, back when President Franklin D. Roosevelt (FDR) outlawed the yellow metal. Bitcoin is far more portable than gold, as traveling with the metal could weigh hundreds of pounds, which often leads to storing it with a third party.
Additionally, bitcoiners are more confident in the BTC supply and there’s no central banks to dump on the market. Moreover, BTC’s rate of issuance continues to outshine gold as 3,300 tons of new gold or $200 billion is mined every year. There’s a myriad of reasons why bitcoin and cryptocurrency assets are built for economic calamities such as the one we are experiencing today. If you are interested in learning more about bitcoin then check out our guides and educational resources today.
What do you think about gold during the economic crisis? Let us know in the comments below.
The post Gold Investors Are Terrified Central Banks Might Dump Bullion During the Economic Crisis appeared first on Bitcoin News.
Malaysia-based cryptocurrency trading firm Tokenize Malaysia has received full approval from local securities watchdog.
Following a nine-month-long probationary period, Malaysia-based cryptocurrency trading firm, Tokenize Malaysia, has received full approval from local securities watchdog.
With the approval to operate a Digital Assets Exchange, the company’s cryptocurrency trading platform, Tokenize Xchange, became legally approved and regulated by the Securities Commission (SC) of Malaysia, local news outlet, SoyaCincau, reported on April 3. The exchange offers fiat-to-digital asset pairings.
Malaysian laws require that local cryptocurrency exchanges register with the SC, after which they have up to nine month to achieve compliance with the SC’s regulation standards.
Commenting on the development, Hong Qi Yu, CEO and CTO at Tokenize Malaysia, said:
“We are now able to go ‘live’ in Malaysia and it is perfect timing –- as we have received many interested enquiries from individuals aged 24 to 50 years old who are keen to invest in digital assets.”
The SC registered the firm — along with Luno Malaysia and Sinegy Technologies — last June. At the time, Luno stated that the aforementioned three exchanges were the only registered digital asset exchanges to operate in Malaysia.
The SC introduced the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 on January 15, 2019. The regulation classifies digital currencies, tokens, and crypto-assets as securities, placing them under the Securities Commission’s authority.
Crypto regulations in other countries
While some countries undertake efforts to develop adequate cryptocurrency-related regulations, others are in no hurry to give digital assets the green light. Thus, after facing multiple delays, the adoption of Russia’s major cryptocurrency law will be postponed again, this time due to the coronavirus.
A pending bill may still inhibit cryptocurrencies from flourishing in India, with India’s parliament yet to rule on the "Banning of Cryptocurrency and Regulation of Official Digital Currency Bill" from 2019. If passed, the bill will introduce unique regulatory frameworks for virtual currencies, utility tokens, and commodity-backed tokens.
Bitcoin showed a tight correlation with the U.S. stock market for about two weeks from March 12, raising concerns among investors that cryptocurrencies are just as vulnerable to a financial crisis as stocks and other high-risk assets.
A study from Seba, a Swiss banking startup that raised $103 million in 2018, showed that gold performed similarly to Bitcoin in previous crises. Over time, however, gold broke out from its correlation with the stock market, and Bitcoin could do the same.
Still a chance for Bitcoin to work as a safe haven asset
During the Dot-com bubble in 2000, for example, the price of gold moved in tandem with the stock market for about three months before the correlation broke down.
After the initial panic period where the overwhelming majority of investors and institutions frantically sold off assets, markets stabilized and gold began to see an upward trend.
Seba’s research read:
“Gold performed differently in the three crises. Gold’s correlation with S&P saw sharp spikes during crisis periods, however, over the longer term, there are no doubts regarding gold’s position as a diversifier. Over the past 30 years, the correlation between gold and S&P500 averages -0.05.”
Gold behaved similarly to how the Bitcoin price moved as the U.S. stock market crashed following an abrupt spike in the number of coronavirus cases in the U.S.
Bitcoin fell when the Dow Jones slipped, even during pre-market trading, and it recovered as the Dow Jones rebounded. But, eventually, within less than two weeks, the correlation has worn off and the Bitcoin price started to rally despite the downtrend in the equities market.
Observing the low level of correlation between Bitcoin and the stock market as of late, researchers at Seba said:
“After the recent sell-off, the correlation has shrunk. This behaviour is similar to what we have observed with gold and S&P 500 during the dot-com bubble burst. Therefore, dismissing that bitcoin offers diversification based on short bursts of high correlation is not a good strategy in our view.”
Currently, the market cap of Bitcoin is hovering at around $125 billion. That is a market cap lower than most major corporations in the U.S.
As the market cap of Bitcoin grows with stronger infrastructure and a larger base of investors, it is likely to see lower volatility and correlation with the broader financial market.
Long-term future of BTC still bright
Seba’s paper emphasized that the correlation between Bitcoin and the stock market in the latter half of March does not indicate a gloomy long-term outlook for BTC.
The paper further read:
“The outside money characteristics of bitcoin coupled with bitcoin’s ability to continue to operate in phases where the price remains low, and unaffected demand for stablecoins even after the recent crash suggest that the long-term future of the field is intact.”
Following the crash of Bitcoin to $3,600, many investors moved their funds to stablecoins rather than moving their capital out of exchanges completely to fiat, which indicates that investors are readying to enter the market in the near-term.
The post Like gold with previous crises, Bitcoin will thrive after coronavirus, research shows appeared first on CryptoSlate.
Sea-bound computer programmer John McAfee offers $500 in DAI for best original post-quarantine photograph.
Famed altcoin advocate, John McAfee, has put up a $500 reward in the Ethereum based stablecoin, DAI, for the best original photo taken in the midst of the coronavirus lockdown.
The sea-bound computer programmer asked for pictures of vacant highways and cities from people who are still able to leave their homes for essential supplies and activities. McAfee tweeted:
“Those able to leave your homes during quarantine ... (to buy food or get medical care, etc.) ... Take photos of interesting aspects of your vacant cities, highways, etc. $500 in DAI crypto paid for the best photo (Chosen by @theemrsmcafee next week) Just drop photos here:)”
Submissions began to flood McAfee’s feed within minutes of the tweet. One Twitter user posted this pic of a herd of goats prowling around a quiet neighbourhood:
(Source: Twitter, @freethemkitties)
Another user exemplified the extent of the coronavirus lockdown with this picture of a vacant Grand Central Station in New York during rush hour.
Bitcoin price continues to push higher but major cryptocurrencies should sustain above their 20-day EMA to confirm that the downtrend might be over.
On April 2 the U.S. Labor Department reported that the U.S. weekly jobless claims skyrocketed to 6.6 million. In the previous week, the claims stood at 3.3 million, meaning over the past two weeks the number of laid off American workers seeking unemployment benefits has reached 10 million. If the numbers continue to grow, the government and Federal Reserve is likely to announce another round of stimulus measures.
All the money printing is likely to erode the value of the US dollar. In such a case, the investors will search for assets that can protect their buying power and add value to their portfolio. Author of ‘Rich Dad, Poor Dad’ Robert Kiyosaki said that people should “save gold — god’s money or Bitcoin — people’s money.”
Daily cryptocurrency market performance. Source: Coin360
Similarly, Max Keiser recently predicted that the current coronavirus pandemic will initially drive people into gold. However, later, as gold faces supply issues due to mass purchases, people “will start flocking en masse into Bitcoin.”
Bitcoin bull Mike Novogratz has reiterated his bullish stance on Bitcoin, projecting a retest of the all-time highs by the end of this year. In a recent interview, he said: “This is the year of Bitcoin and if it doesn’t go up now by the end of the year, I might just hang my spurs.”
With Bitcoin having made a bullish move in the past two days, can it extend its rally and pull other cryptocurrencies along with it? Let’s analyze the charts.
The bulls bought the dip on April 1 and that helped Bitcoin (BTC) scale the 20-day exponential moving average (EMA) at $6,526. That was followed by another rally on the next day that carried the price above the horizontal resistance at $7,000.
Although the bulls failed to sustain the price above $7,000, the positive thing is that they did not allow the price to dip below the 20-day EMA. This shows that the bulls are buying the dips.
BTC–USD daily chart. Source: Tradingview
The 20-day EMA has flattened out and the relative strength index (RSI) is close to the midpoint, which suggests a balance between buyers and sellers.
If the bears sink the BTC/USD pair below the 20-day EMA, a drop to $5,660.47 is possible. A break below this level will be a huge negative and can result in a drop to the support line of the symmetrical triangle. We give this a low probability of occurring.
Conversely, if the bulls can propel the price above $7,000, it will signal strength. Though the 50-day simple moving average (SMA) at $7,704 is likely to act as a resistance, we expect it to be crossed.
After crossing this level, a rally to $9,000 is likely. For now, the traders can retain the stop loss on the long positions at $5,600.
Ether (ETH) broke above the 20-day EMA on April 2 but failed to climb above the horizontal resistance at $155.612. Nonetheless, if the price sustains above the 20-day EMA, we anticipate another attempt by the bulls to scale above $155.612.
ETH–USD daily chart. Source: Tradingview
If successful, a new uptrend is likely. The 50-day SMA at $189 might offer resistance but we expect it to be crossed. The target objective is a move to $250. Hence, we have retained the buy suggested in an earlier analysis.
Contrary to our assumption, if the ETH/USD pair turns down from $155.612, a few more days of range-bound action is likely. The pair will turn negative on a break below the support at $117.09.
XRP sustained above the overhead resistance at $0.17468 on April 1 but the bulls could not drive the price above $0.18867. This shows that the bears are unlikely to give up without a fight.
XRP–USD daily chart. Source: Tradingview
The 20-day EMA has flattened out and the RSI is close to the center, which suggests that the sellers are losing their grip.
Above $0.18867, the XRP/USD pair can move up to the 50-day SMA at $0.21, which might offer resistance. After this level is crossed, the next move can be to $0.25.
Our bullish view will be invalidated if the price turns down from the current levels and plummets below $0.16190. For now, the bulls can keep the stop loss on the long positions at $0.143. The stops can be trailed higher to $0.16 after the pair sustains above $0.19 for four hours.
Bitcoin Cash (BCH) broke above the 20-day EMA on April 2, which is a positive sign. This signals that demand is picking up. If the bulls can push the price above $250, we expect a move to $350.
The 20-day EMA has flattened out and the RSI is at the midpoint, which suggests that the selling pressure has reduced.
BCH–USD daily chart. Source: Tradingview
Though the 50-day SMA might offer resistance, it is likely to be crossed. Therefore, we retain the buy suggested in an earlier analysis.
However, if the BCH/USD pair turns down from the current levels or the 50-day SMA and plummets below $197.43, a drop to $166 is possible.
Bitcoin SV (BSV) has broken above the 20-day EMA but the bulls are facing resistance at $185.87. If this level is scaled, the next resistance is likely to be the 50-day SMA at $208 but we expect the level to be crossed.
BSV–USD daily chart. Source: Tradingview
Above this level, the BSV/USD pair is likely to pick up momentum and the up move can extend to $260.
Contrary to our assumption, if the price turns down from the current levels or the 50-day SMA and plummets below $146.96, a drop to $120 is possible. For now, the stops on the long positions can be retained at $146.
Litecoin (LTC) broke above the 20-day EMA at $40.69 on April 2 but the bulls could not scale the price above the horizontal resistance at $43.67. However, if the price sustains above the 20-day EMA, we anticipate the bulls to make another attempt to push the price above $43.67.
LTC–USD daily chart. Source: Tradingview
If successful, we anticipate the start of a new uptrend. The first target to watch on the upside is $52.55 and if that is crossed, a move to $63.8769 is likely. Therefore, we retain the buy recommendation given in the previous analysis.
Our bullish view will be invalidated if the LTC/USD pair fails to break above $43.67. In such a case, it might extend its stay inside the $35.8582-$43.67 range. The pair will turn negative on a break below $35.8582.
EOS broke above the overhead resistance at $2.4001 on April 2 but the bulls could not sustain the breakout. The price dipped back below the breakout level. Currently, the bulls are making another attempt to push the price above $2.4001.
EOS–USD daily chart. Source: Tradingview
If successful, the EOS/USD pair is likely to pick up momentum and move up to the 50-day SMA at $3.08 and above it to $3.86. Therefore, the traders can buy as suggested by us in an earlier analysis.
Conversely, if the pair turns down from $2.4001, it is likely to extend its stay inside the range. The pair will turn negative on a break below $2.0632.
Binance Coin (BNB) has reached the critical overhead resistance at $13.65. Above this level, the bears are likely to defend the downtrend line aggressively. If the price turns down from the downtrend line and re-enters the $10.8427-$13.65 range, it will be a huge negative.
BNB–USD daily chart. Source: Tradingview
The 20-day EMA is flat and the RSI is close to the midpoint. This also suggests that the selling pressure has reduced.
A trend change will be signaled if the bulls can propel the BNB/USD pair above the downtrend line. Above the line, a move to $21.80 is possible. Therefore, we suggest a long position on a close (UTC time) above the downtrend line with a stop loss at $10.
Tezos (XTZ) is attempting to rise above the 20-day EMA at $1.74. If successful, a move to $1.955 is possible. We anticipate the bears to defend the zone between $1.955 and the downtrend line aggressively.
XTZ–USD daily chart. Source: Tradingview
If the XTZ/USD pair turns down from $1.955, it is likely to extend its stay inside the $1.4453-$1.955 range for a few more days.
Conversely, if the bulls can push the price above the overhead resistance at $1.955 and the downtrend line, a new uptrend is likely. Though the 50-day SMA might offer some resistance, we expect it to be crossed.
The target objective to watch out on the upside is $2.75 and above it $3.20. Therefore, we have retained the buy recommendation given in the previous analysis.
The bulls have not been able to start a new up move following the breakout above $1.04. This shows a lack of buyers at higher levels. On April 2, Unus Sed Leo (LEO) dipped back below $1.04 but found support at the 20-day EMA at $1.019. This is a minor positive as it shows buying at lower levels.
LEO–USD daily chart. Source: Tradingview
Currently, the bulls are attempting to maintain the LEO/USD pair above $1.04. If successful, we anticipate the pair to pick up momentum on a break above $1.06.
Our bullish view will be invalidated if the price again drops below $1.04 and slides below the 20-day EMA at $1.021. Therefore, we suggest traders retain the stop loss on their long positions at $0.097.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
The case for an immediate Bitcoin price spike after the halving in May is flawed, past data shows.
The block reward halving of Bitcoin (BTC) has long been touted as an optimistic factor to drive the short-term price trend of BTC in the first half of 2020. Historical data, however, shows that the halving does not necessarily coincide with an immediate upsurge in the price of Bitcoin.
On the Bitcoin network, miners create blocks that record Bitcoin transactions to essentially verify and confirm payment data using computing power. Through large-scale mining centers filled with ASIC mining chips and sophisticated equipment, miners use a large amount of electricity and have high maintenance costs in order to mine BTC. Individual or small producers can mine BTC through pools — i.e., a group of miners that work together by contributing their computing power to mine Bitcoin blocks.
Every four years, the reward of mining Bitcoin halves, dropping the revenues of miners by 50%. Often, miners prepare for halvings by saving six to 12 months of cash as a buffer to ensure that even if Bitcoin’s price drops after the halving, their businesses can be sustained.
What does the historical data say?
The first halving of the Bitcoin network occurred on Nov. 28, 2012. At the time, there were only a handful of major cryptocurrency exchanges that facilitated Bitcoin trading, and it was still relatively difficult to purchase Bitcoin. For that reason, many analysts made the argument that market data prior to 2016 — when there were a limited number of exchanges — may not be reliable.
BTC USDT 1-month chart. Source: TradingView
After the first halving in 2012, the price of Bitcoin took about 11 months to enter a parabolic rally, securing extended upward momentum. In November 2012, the price was hovering at around $12 on Bitstamp. In November 2013, Bitcoin had climbed to as high as $1,100, recording a 7,562% increase in price.
The second halving of the Bitcoin network occurred in July 2016. Coming off of a sharp price decline from $1,100, the price of BTC stabilized at around $600. The price then started to see a strong rally in May 2017, exactly 11 months after the halving occurred — just like in 2012. So, the past two halvings show that Bitcoin’s price tends to see a vertical rally 10 to 11 months after the halvings took place, but not immediately after.
Why does the Bitcoin price rally many months after halvings?
Large miners tend to save a cash-buffer for up to 12 months prior to a block reward halving, as the risk of the BTC price going down subsequent to a mining revenue cut is always present. But, small miners do not have the financial means or resources to prepare for the halving in advance.
Various data points, including Digital Assets Data’s 21-Day Miner's Rolling Inventory, show that miners have been selling more BTC than they mine in recent weeks. As hinted by major investors such as Joe007, arguably the biggest whale on Bitfinex, the potential sell-off of BTC by miners has not been priced into the market.
When small miners continue to sell their Bitcoin, it applies increasing selling pressure on the cryptocurrency exchange market. Some miners tend to sell crypto assets through the over-the-counter market; over time, however, OTC data also gets reflected by the cryptocurrency exchange market.
In mid-March, Joe007 warned that “overleveraged miners” will be unbelievably hurt by the time the halving comes, which could translate to the capitulation of some miners and, ultimately, the sell-off of Bitcoin through both exchanges and OTC platforms.
Why do investors expect the Bitcoin price to increase after the halving?
The main reason behind the widespread expectation of a short-term increase in the price of Bitcoin following the block reward halving in May is that the breakeven price of Bitcoin mining increases to anywhere between $12,000 to $15,000, as TradeBlock’s head of research, John Todaro, stated earlier in 2020. Many investors theorized that since it costs $12,000 to mine Bitcoin, it would be logical to have the BTC price above $12,000 after the halving.
While BTC could eventually enter the $12,000 to $15,000 range in the future, major miners prepare large cash-buffers precisely as a countermeasure against a possible dip in the price of Bitcoin subsequent to the halving.
Todaro’s research also found that newer mining equipment is consistently being developed by major companies like Bitmain and Canaan, which also makes it a variable in calculating the breakeven price of mining. Efficient mining equipment, together with cheaper electricity and resources, can substantially decrease the breakeven price of mining, even after a halving occurs, according to research by TradeBlock.
For large miners that have the cash-buffer and resources to speedily obtain new mining equipment, the eventual drop in mining difficulty through automatic adjustments make it possible to sustain their businesses through the early months following a halving.
What’s next for BTC?
If the Bitcoin price trend follows historical performance, as seen in 2012 and 2016, then Bitcoin should increase significantly in mid-2021, 10 to 11 months out from the halving scheduled to be activated in May. As such, there is a strong possibility that price will remain well below the breakeven price of mining over the next few months.
However, the popular theory that the hash rate of the Bitcoin network could reflect the decline in mining revenues — and thus lead to a “death spiral” to severely downgrade the Bitcoin network security — has not been proven to be accurate, based on historical data and on-chain research.
Despite the halving being one month out, the hash rate of the Bitcoin network has dropped only to December 2019 levels. Because the network’s hash rate has consistently achieved new record highs throughout the past two years, there is a low probability that the halving would have a noticeably large negative impact on the hash rate.
A study by BitMEX found a variety of scenarios that could play out, such as: “The halvening has a much larger impact on the network hashrate, causing a 47% decline” or one in which “the halvening only caused a 12% drop in the network hashrate.”
That means that even if Bitcoin’s price remains below the cost to mine BTC and stays that way for the next three to four months, and given that large miners tend to prepare in advance and that hash rate rarely drops by a large margin, the hash rate of the Bitcoin network is likely to remain stable until the BTC price begins to reflect the cost of mining.
The halving may shake out overleveraged and small miners in the near-term, the same way a drop in the price of Bitcoin can shake out overleveraged traders, as it is not likely to trigger an immediate price spike of BTC. But over the medium to long term, the fundamentals of the Bitcoin network and mining ecosystem are expected to remain strong.
Both minor and major acquisitions in the mining sector are ongoing despite the market dip and the stagnation in the cryptocurrency market, as seen in a $2.8 million acquisition of a Bitcoin mining center in Quebec, Canada on March 30, 2020. This suggests that miners expect a short-term drop-off in the global cryptocurrency mining sector, but a recovery over the long run.
A 150-year-old Chinese utility provider will ramp up blockchain adoption in partnership with VeChain and ENN Energy Holdings.
Chinese energy company, Shanghai Gas, announced an expansion of its blockchain efforts following a successful trial partnership with supply chain management blockchain firm, VeChain (VET), on March 31.
Shanghai Gas, founded in 1865, is owned by utility services company, Shenergy Group — which claims to occupy more than 90% of Shanghai’s gas market. The firm has an annual supply of over 8 billion cubic meters.
Shanghai Gas expands blockchain adoption
Shanghai Gas’ trial used distributed ledger technology, or DLT, provided by VeChain to comprehensively monitor its supply chain and identify opportunities for efficiency savings and reduced operational costs.
The expanded partnership will see Shanghai Gas build “a trust-free ‘Energy-as-a-Service’ ecosystem” in partnership with VeChain and electricity provider ENN Energy Holdings.
ENN generates electricity for 17 provinces, more than 16 million residential dwellings, and nearly 100,000 industrial customers. The firm has a market cap of $85 billion.
Pilot concludes after 16 months
The three companies have participated in the Blockchain-Enabled LNG (Liquified Natural Gas) Solution pilot together since November 2018.
The pilot was found to have “significantly eliminate[d] information barriers in the supply chain, contribute[d] to a transparent product process, and provide[d] a reliable database for LNG risk management.”
Blockchain in energy to see $35B in investment by 2025
DLT is increasingly seeing adoption from the energy industry, with a recent report estimating that applications for blockchain technology within the energy sector will drive year-over-year investment growth at a rate of 82%.
If the forecast is accurate, blockchain would represent nearly 2% of the entire $1.85 trillion industry by 2025.
The South African National Blockchain Alliance has been launched to drive technology development by bringing public and private enterprises together.
The South African National Blockchain Alliance carried out an online livestream launch while the country is in the midst of a 21-day lockdown to curb the spread of the coronavirus pandemic. The organization was due to be launched at the beginning of April in Johannesburg but had to be taken online as South Africa and the world tackles a global health crisis.
The launch happened during a livestream on YouTube on April 3, which included a panel of speakers elaborating on how SANBA will help nurture blockchain-focused startups and companies that are developing capabilities using the technology.
Bringing parties together
SANBA has been set up by the Council for Scientific and Industrial Research and its subsidiary, the Office for Digital Advantage. These bodies fall under the jurisdiction of the Department of Science and Innovation.
Akhona Damane heads up the project and said that SANBA intends to be the central cog in a network of partnerships between South Africa’s government, industry-leading companies, startups and civil society. An important consideration for SANBA is the development of blockchain-based systems and solutions coming from inside South Africa, as Damane told Cointelegraph:
“There is a lot of venture capital out there, we need to provide support to startups in the country. There are new job opportunities and a chance for new economic participation. Satoshi’s paper was looking at democratizing economies. In South Africa, that has worked, there are even people in deep rural areas that buy and trade cryptocurrency using smartphones.”
Another major focus will be driving the development of skills needed to explore and create blockchain solutions. An integral part of this will be educating civil society on the various use cases and further potential of the technology to improve a wide variety of industries.
The importance of supporting academia
Education and developing skills will form a major part of SANBA’s focus over the next few years. The launch event highlighted the work being done by the University of Cape Town to help incubate talent in the space. Co-Pierre Georg, an associate professor at UCT’s School of Economics, said that the university is the first in Africa to offer a master’s degree program in fintech, which has been modeled on the programs of universities in the United States, such as the Massachusetts Institute of Technology and the University of California, Berkley.
Georg said that a major hurdle in South Africa is having the capacity to develop talent in the space. The professor also said there had been 400 applicants for the 15 spots available for the program:
“We need to create people who can code. Quite simply, they need to know some finance and organizational skills, but the core skill lacking is coding ability. There is not a deep enough skill set in the country.”
Another problem is the allure of opportunities offshore, as Georg noted that as soon as the program educates students with those highly sought-after skill sets, they begin to receive offers from companies, and the university cannot entice them to stay for a Ph.D.:
“The second step is creating a pipeline that develops skills, which in turn leads to those people creating companies. We need to build companies that can scale globally but are based in South Africa.”
Tertiary education institutions will also be receiving support from SANBA. Damane told Cointelegraph that the Department of Science and Innovation is exploring an exchange program for students taking blockchain-focused courses:
“At the academic front, SANBA is committed to developing a blockchain curriculum which encourages the uptake of courses at undergraduate level. We also envision the facilitation of funding of a few postgraduate research students in collaboration with partners. This will be linked to the commitment with the DSI country-partners such as Swiss Embassy in Pretoria, which has activated the Switzerland based institutions such as the University of Basel to participate in the joint international students' exchange program later in 2020.”
South Africa is catching up
SANBA has made it clear that it wants to be the middleman that connects the various industry players that will drive blockchain development and use in the country. At the same time, it also defines its role as creating a “pre-competitive space” for research and development. Monica Singer, ConsenSys’s lead for South Africa, spoke to Cointelegraph following the online launch.
Having joined ConsenSys in 2017, Singer says she has faced an uphill battle trying to get industry players to warm up to blockchain technology. She said that she had been advocating the use of blockchain systems to heads of various enterprises over the past three years, but was met with disdain in various instances when she used the example of Bitcoin as a starting point to explain the tenets of blockchain technology.
Moving away from any mention of cryptocurrencies, Singer still struggled to get big businesses to open up to the potential benefits of decentralized systems or smart contracts, saying it was too much for people to embrace. Now that a government-backed entity is finally spearheading a collaborative organization that will drive the development of the space, Singer is far more optimistic about the road ahead, telling Cointelegraph:
“I have been so worried that South Africa is falling behind in innovation and not embracing this technology, which has so much potential to eliminate corruption and fraud that has plagued our government in the last 10 years. To witness the birth of a national initiative at the government level from the Department of Science and Technology is a historically much-needed move to ensure that we raise the level of awareness among all our people.”
Singer is positive that South African enterprises, educational institutions and startups will get the necessary support to use blockchain-based solutions in order to drive the country forward:
“The narrative can now be changed to explore the potential that this technology has to improve the lives of the citizens in a country and to bring trust and accountability to the recording of transactions of value using the internet of value we are building in Ethereum and other platforms.”
Impact across industries
As a collaborative initiative, SANBA is made up of a broad range of businesses, startups and institutions. Daniel Visser, a research and development strategy manager for the Council for Scientific and Industrial Research, also weighed in during the online launch on the potential effects that SANBA could have in the country.
Visser explained that the CSIR is an affiliate of the World Economic Forum’s network for the Fourth Industrial Revolution. As a result, the CSIR is constantly looking at issues with policies around emerging technology and how those can be improved to drive adoption. Visser added:
“From a blockchain perspective, there are so many areas to consider. We went through a number of different areas that could benefit. Supply chain is a big factor, green chain, cold chain and the likes. What are the things that need to be in place to adopt the tech?”
Visser also highlighted the fact that South Africa has large areas that don’t have access to traditional financial means, which opens the door for micro-trading and transactional applications. Other major considerations are decentralized-identity solutions, educational certifications and governmental transparency. Visser believes all of these could be greatly improved by blockchain technology.
Meanwhile, Damane opined that SANBA will have the biggest impact in the entrepreneurial space in South Africa. He identifies small enterprises like startups as crucial participants within the blockchain development ecosystem:
“SANBA will become the catalyst — linking startup solutions to government and industry needs, entrepreneurs to VC funding, and so forth. These enterprises have the potential to contribute to economic growth and job creation, which is a major challenge especially among the youth.”
Damane added that SANBA has begun identifying sectors for proofs of concept and use cases that include digital identity solutions, micro-credentials and health care. A wide variety of cross-industry participation should lead to investment:
“This will force the entire ecosystem to leverage the efforts of existing players rather than reinventing the wheel. Hence, we envision public-private partnerships to emerge, with a significant co-investment being made, which will ultimately benefit the startup community.”
A chance to overhaul government systems
While the launch of SANBA signals the beginning of a collaborative effort across industries, the South African government could be a prime candidate for a blockchain-driven overhaul. That is the opinion of Singer, who sees the potential of the technology to improve a number of governmental departments in South Africa.
Singer believes this could be a catalyst in creating more efficient, transparent government departments and addressing wasteful expenditure, which has been a concern in South Africa for many years: “SANBA can take the leadership in guiding the various projects where they are needed the most and to coordinate at a government overall level.” Self-sovereign identity solutions could also help improve the lives of individuals and help the government streamline a variety of essential services for its citizens, according to Singer, who added:
“Once we implement a self-sovereign identity decentralized database of personal records for each citizen, this can be used by various government departments so the passport, the ID, the record of your degrees, your medical information, your title deeds of your property, your driver’s license, your license of your ownership of your vehicle, etc. is all in the data under the control of the citizen.”
The online launch of SANBA was preceded by a personal message from Cardano founder and CEO Charles Hoskinson. The tech entrepreneur was supposed to headline the Blockchain Africa conference last month but was forced to pull out due to travel restrictions due to the coronavirus. Hoskinson applauded the South African government for doing its part to drive the development of new technology in the country and continent, saying:
“It is so important that people focus on foundational research and development, as well as time, effort and money to really chase the future. I’m glad to see that the appetite and ambition for innovation and building public-private partnerships with entrepreneurs and people in emerging industries has not been lost in these sad times.”
Singer echoed those sentiments, telling Cointelegraph that the foundation of SANBA could have lasting effects in driving the development of technological solutions in South Africa:
“SANBA will make a massive difference as we have not made much progress to date, as a country in studying this technology and exploring its opportunities and determining the art of what is possible. Just by creating a forum where parties can share information and encourage students to learn how to code it will have a huge impact. I also hope that SANBA will guide the various government departments as to what are their key pain points that can be resolved with this technology.”
UnionBank head forecasts that the coronavirus will drive banks to shift towards digital currencies, leaving physical cash behind.
Edwin Bautista, president and chief executive of UnionBank of the Philippines, has forecast that the coronavirus outbreak will drive banks to shift towards digital currencies, leaving physical cash behind.
As Euromoney reported on April 3, Bautista noted that the pandemic provoked a heightened demand in online banking services, pushing banks to revise their digitization strategy. “Certainly, this pandemic amplifies the need for all banks to go digital now,” Bautista said.
Going further, the exec projected the beginning of the end of hard cash, especially if central banks fail to deliver notes and coins to banks and automated teller machines. Bautista stated:
“One key realization here is that the longer the disruption, the more tenuous the traditional cash supply chain becomes. Thus I expect that banks will be more open to testing, developing and deploying digital cash and currencies, QR codes and maybe even cryptocurrencies and digital tokens.”
“The crisis will fast track the shift towards digital,” which “represents a tremendous new opportunity for banking,” according to Bautista.
UnionBank’s experiments with blockchain
UnionBank has indeed demonstrated a proactive approach to blockchain-related developments. Last July, the bank launched a payments-focused stablecoin pegged to the Philippine peso. The coin, dubbed PHX, is designed to function as “a stable store of value, medium of exchange and is a programmable token with self-executing logic.”
That same month, UnionBank successfully piloted a blockchain-based cross-border remittance from the Philippines to Singapore. The project eventually aims to provide millions of unbanked Filipinos with the ability to use financial services by connecting rural banks to the country's main financial network.
Meanwhile, other world banks continue to advance the development of their own digital currencies. The Bank of France officially launched an experimental program to test the integration of a central bank digital currency (CBDC) for interbank settlements, while the Bahamas announced plans to adopt a CBDC no later than 2020.