Crypto ATM Growth Proof that Mass Adoption is Underway

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Declining fiat values has prompted many crypto critics to assert that blockchain assets are fundamentally flawed, or far less popular than earlier believed. The truth appears to be more complicated, with blockchain technology thriving, and interest in crypto continuing to grow, despite the drop in prices. One clear indicator of crypto’s increasing popularity is the proliferation of cryptocurrency ATMs, better known as Bitcoin ATMs (BTMs). These machines have become one of the most popular ways to acquire cryptocurrency, and their increasing use during this period of instability indicates that crypto is rapidly moving into the mainstream.

The first Bitcoin ATM went live in 2013, and over the past five years over four thousand have been installed across the globe. There are four primary manufacturers, which sell them to independent operators at a price of around seven thousand dollars, plus a nominal transaction fee. Most BTMs are in small proprietorships such as gas stations, corner markets, or shopping centers.

BTM operators charge a hefty transaction fee, often as high as twenty percent, for the service of converting fiat into cryptocurrency, and business is booming. Many of the machines process over one hundred thousand dollars worth of Bitcoin per month. Most also offer the option of purchasing other platforms, such as Litecoin, Dash, and Ethereum. Monero has recently been added to many European machines.

The popularity of BTMs highlights the fact that interest in cryptocurrency has not decreased as fiat values have fallen. Rather, BTM use demonstrates that crypto is presently finding use cases that are different than initially envisioned. Many users of BTMs are buying cryptocurrency to hold it as a store of value, and are choosing these machines because of their convenience over exchanges. Most notably, BTMs are nearly instant, whereas exchanges often take days, or even weeks, to exchange fiat into crypto. Also, BTMs are becoming popular with foreign workers, who use them to send crypto to families in their home countries.

BTMs are also developing a reputation as convenient tools for laundering money. The extent to which they are used for such illegal activity is debatable, but there is no doubt that criminals find their rapid, and largely anonymous nature of transferring wealth appealing. For example, police in many urban areas have reported that they are becoming popular among drug dealers, and the machines are increasingly being found in areas known for drug trafficking.

Not surprisingly, the machines are getting the attention of regulators. In the United States, where more than half of BTMs are located, operators must hold money transfer permits, and comply with laws requiring positive identification of users. However, compliance with these rules is spotty at best. In many other nations such regulations either do not exist, or are widely ignored. As BTM use grows, an attempt to control their use is all but certain to increase.

The most important takeaway from the growth of Bitcoin ATMs is the fact that the blockchain revolution is a phenomenon that cannot be predicted via traditional means. Bitcoin and cryptocurrency are now household names, regardless of the volatility that has come to define the markets. These machines are likely to become commonplace over the next few years, thus demonstrating that cryptocurrency is now a permanent part of the global financial landscape.

Featured Image via BigStock.

Crypto Recap of the Week Dec 10 – Dec 16, 2018

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Total market cap almost falls below $100 billion

The market has moved in a generally negative direction this week and slipped closer to a total valuation of $100B. The total cap stood at around $114B during the early hours of Monday, and hit $115B before falling back and dipping by $3B to reach $112B. Monday ended with a total cap of $110, as around 3.5% of value was lost over the day. 

The decline continued over Tuesday as the market fell from $111B to $107B as 3.6% was lost. Tuesday ended with a total cap of $109B and the market moved sideways for the majority of the next 48 hours. Wednesday came to an end with the total valuation hovering at around $110B and the next significant drop took place on Thursday evening, when the market slumped from $109B to $104B. The weekend brought the lowest point as the market dropped to $100B on Saturday and threatened to fall below the $100B mark for the first time since August 2 2017. After recovering slightly, the market continues to fluctuate closer to $105B.  

Trading remained stagnant over the week, as the daily trading volume mostly moved within a $1B range and veered between $10B and $11B. This declined over the weekend and the 24 hour daily trading volume currently stands at 8.5B while the total market valuation stands at $103B. 

The overall downtrend had a negative effect on the majority of top projects and the top three of Bitcoin, XRP, and Ethereum all declined by around 5% in value. Bitcoin Cash and Bitcoin SV were the worst performers in the top 10 while XLM also lost close to 17% in value. EOS and LTC were able to withstand the negative trend and grow by 3.7% and 0.9%, respectively.

Further down the table, TenX led the way after it grew by 103% after announcing a new airdrop for PAY token holders. The top five biggest gainers list was completed by WAVES, DEX, DCN and POLY.

Bitcoin tested a new yearly low

Bitcoin started out trading at a price of approximately $3,590 and fell away to end Monday at a price of $3,465. The decline continued over Tuesday as BTC lost $100 and moved from $3,470 to $3,370 later in the evening. However, the midweek appeared to bring the start of a revival as BTC climbed to reach $3,465 early on Wednesday, and a later jump saw BTC hit $3,505 during the evening. 

However, the rally didn’t last long as BTC fell away once gain on Thursday and dipped from $3,340 to $3,294 after losing 1.3%. Further price swings towards the end of the week saw BTC dip slightly below the $3,200 mark and the price hot $3,193 on Saturday afternoon. However, the price has recovered slightly and BTC looks set to trade closer to $3,275 as the week closes out.

Bitcoin trading declined over the week and the daily volume stayed close to $3B on Monday and Tuesday. From then on, the daily volume remained below $3B a day and dropped below $2.5B on Saturday. The 24 hour trading volume currently stands at $2.35B while BTC is trading at $3,280 and retains a market cap of $57.17B. Bitcoin also enjoys a dominance of 55%.

Ethereum managed to stay above $80

Ethereum opened up trading at close to $95 and fell by 4.2% to hit $91 during Monday morning, and after declining further, Monday ended with ETH trading at around $90 as 5% in value was lost over the day.

 ETH then declined by around 4.4% as the price fell from $91 to $87 during the late afternoon, and the day ended with ETH trading at $88.  Wednesday saw ETH close out trading at over $90, however, the price went on to stagnate as the weekend drew near. ETH fell by 5.5 % to hit $85 on Thursday, and dipped to $84 on Friday before falling to $82 on Saturday. However, an overnight rally has seen ETH recover to trade close to $85 once again. 

Ethereum trading also declined over the week and the daily volume stood at around $1.4B on Monday, This fell away to stand at close to $1B on Thursday and dipped below this figure at the weekend. The 24 hour trading volume currently stands at $990M and ETH is trading at $86 and retains a market cap of $9B. 

People’s Bank of China Officially Bans Security Token Offerings

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During the last couple of months, China has often reiterated its aggressive position towards digital currencies. A similar event recently took place, after the People’s Bank of China (PBoC) decided to ban security token offerings, also known as STOs.

Banning the Successor to ICOs

For those who do not know, STOs are considered the successors to ICOs. They’re quite similar in purpose, yet there are a couple of differences between the two crowdfunding methods. As such, an STO investment is financially-backed via a company’s assets, revenue or profits. On the other hand, ICOs do not offer any investment backing, yet start-ups give investors value and utility tokens.

It seems that the move was fuelled by the fact that despite the bans on Initial Coin Offerings, numerous start-ups were still holding token sales within the country. Pan Gongsheng, who is the deputy governor of the PBoC, stated that both ICOs and STOs are illegal activities, and they’re still quite prevalent in China. According to him, “the STO business that has surfaced recently is still essentially an illegal financial activity in China […] Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

Additionally, the deputy governor stated that most of the ICOs and STOs taking place in China fail to abide to the regulatory framework, and thus tend to conduct activities such as pyramid schemes, fraud and more. According to him, if the PBoC and Chinese government failed to take action back in September 2017, the ICO and digital currency market would have massively hurt the country’s economy. Of course, there aren’t too many studies that can determine whether this is true. However, it is important to keep in mind the fact that before the crackdown took place, China was the world’s biggest hub for ICOs and digital currency transactions. In fact, a study showcased that over 80% of crypto-related activity was taking place in the Asian country.

The chief of an important Chinese financial regulator also recently warned crypto-related start-ups and the international community to avoid promoting and holding STO and ICO activities in Beijing. Failure to do so would lead to prosecution and deportation for the foreigners involved.

Based on everything that has been outlined so far, it seems like the fintech market in China is no longer a viable option for either start-ups looking to promote their services, or potential investors. However, activities such as holding cryptocurrency for a profit aren’t yet considered illegal. After all, completely banning a decentralized cryptocurrency would be a difficult endeavour.


Featured Image via BigStock.

Swift v. Ripple: How The Looming Fight Over Financial Services, Will Define The Future Of Blockchain

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In recent months Ripple Labs has made significant progress toward its goal of creating a system for efficient, cross-border fiat currency transfers. Although the company is certainly not without its critics, there is no doubt that if successful, its products could revolutionize much of the financial sector. Now, the team behind SWIFT, Ripple’s primary competitor, is responding with an improved system of its own. The looming fight between these two organizations for dominance in this field represents how blockchain technology threatens to disrupt large, established institutions. In some ways the outcome of this competition will shape the future of mainstream blockchain adoption.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) began in 1973 as a computerized system for banks to securely transmit global transaction data. Today it is by-far the largest network of its kind, managing more than fifteen million messages per day among its eleven thousand member institutions. Although it has been periodically upgraded, it retains a centralized architecture, and is frequently criticized for delays, errors, and inefficiency. SWIFT-based financial transfers often take days to complete, with a failure rate sometimes reaching ten percent.

Ripple Labs’ products are specifically designed to perform the functions of SWIFT with vastly more efficiency and security. Using the XRB cryptocurrency as an intermediary, the company has demonstrated the ability to send fiat currency in minutes instead of days, and for a tiny fraction of the cost. Banks have taken notice, with more than one hundred partnering with Ripple Labs for future use. Ripple CEO Brad Garlinghouse has made no secret of his company’s intention to replace SWIFT, and has brushed off rumors of partnership or cooperation with the legacy institution.

SWIFT’s response has been the creation of a new service, entitled Global Payments Innovation (GPI), which is designed to be faster, and result in far fewer errors. Although still in its pilot phase, more than $100 Billion is presently sent by GPI per day. GPI is centralized, but SWIFT is exploring blockchain solutions for future upgrades.

By challenging SWIFT’s hegemony in this space, Ripple has turned what until now has been a relatively mundane banking practice into a competitive market. More than five trillion dollars worth of fiat currency crosses borders every day, and now the privilege of providing that service is up for grabs. The reward for the winners will no doubt be very lucrative. In addition to Ripple, IBM is creating its own cross-border service entitled Blockchain World Wire, and intends to utilize Stellar. JP Morgan is also entering the space with its Interbank Information Network (IIN). More players are all but certain to soon emerge.

These competing systems have very different architectures, some utilizing open, permissionless blockchains and others using closed, privately managed networks. In this sense, this issue is a microcosm for many questions that will need to be resolved as blockchain goes mainstream. The types of blockchain systems used, the role of corporate management in the process, and the regulatory issues involved are still unknown, and extremely important. In other words, there is little doubt that blockchain technology will soon be used to move fiat currency across borders. However, the means by which it will be used is still very much undecided. The same holds true for almost every other sector that distributed ledgers will impact.

Partner banks are expected to begin using Ripple for cross border transfers by early 2019, and many institutions, companies, and governments will certainly be watching. The extent to which Ripple, or some other enterprise, can successfully challenge SWIFT in this space remains unknown. However, there is no doubt that in some capacity blockchain will play a future role in how money is moved around the globe.

Wanchain Releases 3.0. Upgrade, Enabling Bitcoin-Ethereum Cross-Chain Transactions

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Blockchain interoperability project Wanchain has released their 3.0 upgrade, which allows for cross-chain transactions between the Bitcoin and Ethereum networks. The WanChain team gives an example of a cross-chain transaction:

“An example Bitcoin-to-Ethereum cross-chain trade is enabled by Wanchain through locking the native tokens on the respective chains with smart contracts and Storeman nodes, creating a proxy token on Wanchain (e.g. Wanchain-ETH), then releasing the smart contracts for redemption of the coins on the original chain.”

The Wanchain 3.0 upgrade gives Ethereum-based decentralized exchanges the ability (through Wanchain) to list BTC pairs, potentially expanding their userbase and liquidity. 

Wanchain also integrated the DAI stablecoin

Apart from BTC – ETH cross-chain transactions, Wanchain now also supports the MKR and DAI tokens, which are powering the MakerDAO ecosystem. In the future, when multi-collateral DAI becomes available (at the moment, only ETH can be used as collateral), this would make it possible for Bitcoin to be used as collateral for the DAI stablecoin. 

According to the Wanchain team, more supported ERC20 tokens will be annnounced in the near future. 

The “crypto winter” is not too friendly too friendly for tokens issued by blockchain projects, even if they are making significant progress. When Wanchain 3.0. was released on December 11, the token saw some positive price action, but proceeded to tumble on December 13. The WAN token is currently trading at $0.29 with a market capitalization of $31.6 million. 

TenX Announces New Token to Be Airdropped to PAY Holders

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The PAY token issued by crypto payments project TenX has been rallying tremendously in the last few days thanks to the company announcing an airdrop program. After dropping all the way to $0.23 to kick off the week, the PAY token has rallied all the way up to $0.36, a +36% weekly performance. 

The new token bears the name of the company itself and has been assigned the TENX ticker. TenX says the new token is a “rewards token”, and outlines which factors the rewards will be based on:

“Depending on factors such as TenX Pte Ltd’s earnings, financial position, cash flow, capital needs and general business condition, rewards on the TenX token may be paid in the form of a tradeable cryptocurrency (i.e. PAY).”

To be eligible for the airdrop, a user has to hold the already existing PAY token at the time of the December 30 snapshot (the tokens must not be held on a cryptocurrency exchange). After the snapshot, users will have to complete a KYC process before they can claim the tokens. The TenX team warns users to not share their private keys with anyone, as they are not required at any point in the airdrop process.

Notably, users from the USA and China are not eligible to receive the TENX airdrop, but some other countries are excluded as well. 

The new TENX token will be based on ERC-1462, a proposed standard for securities tokens on the Ethereum blockchain. 

Even though the market seems to be excited by this news, it will be interesting to see how regulators across the world will react to TenX’s program, as the “rewards” granted through ownership of the TENX token appear to be a similar concept to dividend payments. 

"What Is Bitcoin" Was 2018's Most Popular "What Is" Question on Google

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Internet industry giant Google has published a recap of the most popular terms users looked up through the company’s famous search engine.

In the United States, “what is Bitcoin” was the most popular phrase starting with “what is…”. In relative terms, however, the popularity of the “what is Bitcoin” search term went down along with the price of BTC.

Google Trends chart for "what is Bitcoin" search term

Are you also asking yourself “what is Bitcoin”? Here’s how we tried to answer that question here at CoinCodex.

For the “Bitcoin” search term in particular, we can see a more pronounced bump in interest that accompanied BTC’s price crash in mid-November.

Google Trends chart for "Bitcoin" search term

Also worth noting is that among phrases starting with “How to…”, “how to buy Ripple” was the fourth most popular query. Ripple has been trying to create some distance between itself and the XRP token, even proposing a new distinct branding for the token. In 2019, it will be interesting to see if “how to buy XRP” will be a more popular search term than “how to buy Ripple”.

In 2017 and early 2018, cryptocurrencies managed to captivate a mainstream audience thanks to their rapid increase in value. With prices cooling down, will cryptocurrency-related searches still remain this relevant in 2019?

Crypto Mid-Week Recap – December 13, 2018

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Crypto market has been recording a negative week so far

The market has moved in a generally negative trend so far this week and the week commenced with the total valuation standing at around $114B during the early hours of Monday, and this soon rose to $115B before falling back. The market retraced by $3B to hit $112B in the morning, and despite recovering to touch $113B later on, Monday ended with a total cap of $110, as around 3.5% of value was lost over the day. 

Tuesday displayed a similar pattern as the market jumped slightly to hit $111B during the morning, before going on to decline over the day as the total valuation hit fell to $107B as 3.6% was lost. Despite dropping to its lowest value since August 5 2017, the market recovered to hit $109B as Tuesday ended.

Wednesday brought some signs of positivity as the total cap rose over the day to climb by 1.8% and reach $111B during the afternoon. The day came to an end with the total valuation hovering at around $110B and the market has started to dip once again overnight. 

Trading has stagnated so far this week, with the daily trading volume moving staying close to $10B.  This has declined over the last 48 hours and the 24 hour daily trading volume currently stands at 9B while the total market valuation stands at $109B. 

Bitcoin hit its yearly low on Monday

Bitcoin has declined consistently in value so far this week, and started out trading at a price of approximately $3,590. BTC soon climbed to around $3,615 before going on to fall until Monday evening when it fell to around $3,430 after losing 5.1%.

After recovering slightly, BTC ended the day at a price of $3,465 and Tuesday brought further drops. After showing signs of life earlier in the day, BTC lost $100 and moved from $3,470 to $3,370 later in the evening and a slight jump saw BTC end the day above the $3,400 barrier. 

Things improved on Wednesday as BTC climbed to reach $3,465 before pulling back, and a further jump saw BTC hit $3,505 during Wednesday evening. The price has begun to retrace since then as BTC looks set to trade closer to the $3,400 barrier as we enter the second half of the week. 

Bitcoin trading has declined over the week so far as the daily volume stayed close to $3B on Monday and Tuesday. Trading has since fallen below $3B a day and the 24 hour trading volume currently stands at $2.65B while BTC is trading at $3,440 and retains a market cap of $59.94B. Bitcoin also enjoys a market dominance of 55.1%.

Ethereum dips well below $100

Ethereum has also declined so far this week and opened up trading at close to $95. The price dropped by 4.2% to hit $91 during the morning, and despite a slight improvement, the price then fell to $89 in the evening, and Monday ended with ETH trading at around $90 as % in value was lost over the day.

After brushing past $91 briefly during the early hours of Tuesday, ETH went on to decline by around 4.4% as the price fell to $87 during the late afternoon. A late rally threatened some improvement but the day still ended with ETH trading at $88.

Things improved on Wednesday as the price of ETH rose to over $91 once again and the day closed out with ETH trading at over $90. However, the price has declined overnight and Ethereum continues to fluctuate at around $90.  

Ethereum trading has also declined over the early week and the daily volume stood at around $1.4B on Monday, This has retraced and the 24 hour trading volume currently stands at $1.02B and ETH is trading at $90 while retaining a market cap of $9.4B.  

Mastercard aims at keeping crypto private

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In the race of fiat and crypto payment processors trying to outperform one another, Mastercard has rolled out a futuristic idea of keeping crypto transactions private.

They recently filed a patent and according to the US Patent and Trademark Office, the industry giant has proposed a method of executing the transaction on the blockchain. As a result of the system discussed below, the procedure would keep the amount and its sender private.

Basically, they have presented the idea of an intermediary address. While executing a transaction, this intermediary address will act as a proxy for the public key, hence thwarting any efforts to trace the amount and sender. As soon as the data interacts with this ‘proxy’ address, the information is temporarily withheld until the system generates a new proposal and digital signature to interact with the receiver’s end.

Therefore, even if someone intends to investigate the route or channel of a transaction, the original sender will remain anonymous and pretty much every wallet will receive the funds through a ‘pool’ of ‘proxy’ nodes. Since these intermediary addresses will be interacting with an array of other senders and receivers, the data would almost be impossible to crack and expose.

It is worth noticing that huge amounts may be transferred by splitting into smaller numbers and utilizing multiple addresses aimed at receiver’s wallet.

The patent application also states that crypto usage is surging and many fiat users are rushing towards blockchain-based solutions. Therefore, in order to provide a truly ‘anonymous’ and secure environment, it is important to protect the identities.

Mastercard also mentioned that some platforms do provide the anonymity to a limited extent, while other blockchain ventures do not even bother to address the core concern.

The patent application also states that the primary aim of blockchain is to offer immutability and therefore, it is possible to trace back the transactions to their senders through public data. Even if we consider the Bitcoin network, one of its basic requirements for completing a transaction is to identify the users at both ends.

In a brief yet comprehensive conclusion, Mastercard’s patent application clarifies that there is a dire need to keep the transactions and user data secure. If the current trend continues and the authorities keep on bombarding the users by tracking the public data, eventually, there won’t be anyone using cryptocurrencies.

Mastercard also mentioned Monero and Zcash in the application and identified their core anonymity features. It also clarified that the goal they achieve is pretty much similar to what Mastercard is trying to deliver. However, the procedure is different.

Will the government stay quiet?

I don’t think so. There is already a huge debate going on within the Department of Homeland Security to track privacy coins. A couple of days ago, the agency rolled out a proposal, outlining the sheer need to study forensics in order to track such coins.


Featured image via BigStock.

Crypto Market Snapshot – December 12, 2018

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The cryptocurrency market recorded a mostly positive day, as the total market cap has seen a 2.1% uptick to hit $110 billion. 83 of the top 100 cryptocurrencies have gained value during the last 24 hours, with 13 increasing by 5% or more. In the top 10, EOS stood out, growing by 7.7%. While EOS is seeing some relief from its recent woes, Bitcoin Cash is still dealing with considerable selling pressure. While the market showed some encouraging signs today, the overall negative trend of the last 30 days remains untouched for now.

After starting the day at around $3,400, Bitcoin slowly gained throughout the day, but eventually topped out at $3,500. 24-hour trading volume was relatively low, as it fluctuated between $2.7 and $3 billlion. Bitcoin dominance, which is now sitting at 55.1%, is at its highest levels since mid September. As the 2018 crypto bear market intensified, we have seen BTC dominance increase considerably as confidence in smaller coins, which are generally perceived as riskier, has dropped. The last time Bitcoin’s market cap represented less than 50% of the crypto market was on August 10.

As is usually the case, today’s biggest gains came from more volatile smaller market cap coins. Bitcoin Private, which corrected significantly after hitting $3 at the end of November, found some new momentum. PPT and WAVES joined BTCP as the best performers and REP, the token powering the Augur prediction marketplace, impressed as well.