A Stronger Foundation for Bitcoin ETF Applications

A Stronger Foundation for Bitcoin ETF Applications

The reasons of failure of Bitcoin ETF applications and the new path that may give regulators the confidence needed to take an application forward.

One of the recurring themes in the digital asset markets across 2018 and 2019 has been the failure of multiple Bitcoin (BTC) exchange-traded fund (ETF) applications to gain the approval of the United States Securities and Exchange Commission.

Each new application was met with anticipation, only to be dismissed for the same reason: concern over how the ETF would derive its price, whether this price could be manipulated, and if the listing exchange could adequately meet section 6(b)(5) of the Exchange Act. This section states, in part, that:

“The rules of the exchange are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade…” (17 USC 78f (b)(5)).

Related: A Brief History of the SEC’s Reviews of Bitcoin ETF Proposals

The common thread between all of these applications was a plan to create the reference price — the price, at which assets are valued and benchmarked — from retail exchange data. For example, the Winklevoss Bitcoin ETF’s reference price was to be based on the results of the Gemini retail exchange’s daily auction for spot Bitcoin. In the case of Bitwise, the reference price was based on a blend of data from several prominent retail exchanges.

We believe that all prior ETF applications have failed to demonstrate their ability to meet the requirements of Section 6(b)(5) for several reasons:

  • The retail Bitcoin market is just that: predominantly retail. Any market with a heavy volume of inexperienced investors trading very small sizes is much easier to manipulate largely because these participants are much more likely to overreact to perceived market pressures.
  • The total volume of retail Bitcoin exchanges is spread over several hundred exchanges worldwide. Any market that is highly fragmented like this is prone to manipulation.
  • Virtually all of the well-known instances of hacks, exchange failures or exchange fraud have been retail exchanges. While some retail exchanges have very good governance, the majority do not.

Related: Crypto Hacks: Crypto Exchange Hacks & Cryptocurrency Hackers

Unless this is addressed in forthcoming applications, we believe that it is extremely unlikely that any Bitcoin ETF that relies on the retail exchange market for a reference price will be approved anytime soon.

A new path forward

Many people, especially those outside of the institutional crypto market, believe that retail exchanges represent the majority of the Bitcoin market. However, that’s not the case.

Alongside retail venues, there is a vibrant, liquid over-the-counter (OTC) market for spot Bitcoin, whose participants are primarily institutional investors and professional market-making firms. While no one has come up with a precise measure of the size of the OTC market — most market makers do not publicly release trading volumes — a major study conducted by the Tabb Group in 2018 found that the OTC market is likely three to four times the size of the retail market. Moreover, this larger volume is spread across an estimated 30–40 active OTC market makers rather than several hundred retail exchanges.

Related: Crypto OTC Trading, Explained

As with other areas of finance, trade sizes vary significantly between the institutional and retail markets. On retail exchanges, most trades are for fractions of a Bitcoin. In the OTC market, market makers have minimum trade size requirements that are typically in the $100,000-to-$200,000 range.

We believe that the OTC market can provide a much more accurate and secure measure of pricing for Bitcoin ETFs, one that is far more likely to satisfy regulators. Above all, the OTC markets are far less susceptible to manipulation:

  • The OTC market has greater volume spread over fewer venues with institutions executing trades of far greater size. This means there is greater available liquidity and pricing inertia, making it difficult to panic the market through malicious actions.
  • Most of the OTC trading desks are staffed with traders who have significant prior trading experience in traditional asset classes. They are far more likely to understand false bids and offers for what they are and, therefore, will typically react less to attempted manipulation.
  • There is no central limit order book — a trading method used by most exchanges and commonly referred to as “CLOB” — for trading in the OTC markets. Market manipulation typically depends on strategies involving the placement of multiple bids and/or offers into order books, which “paint a picture” that there is real market interest at certain pricing levels when, in fact, there is none. OTC markets trade almost purely through a request for quote process.  Without an order book, manipulators are missing their primary tool for manipulation.
  • If a customer of an OTC trading desk is seen frequently indicating an interest at certain price levels and not acting at those levels, the OTC dealers will disfavor that participant.

Beyond the manipulability of the underlying market itself, it will also be critical in any ETF applications to show that the reference price is resistant to manipulation. One way to achieve this is by deriving pricing from a fixing window. Fixing windows is utilized with many traditional assets.

How would a reference price derived through a fixing window of a few hours be secure? With a fixing window, any effects of showing false buying or selling interest to market makers will be highly diluted. The parties overseeing the price will be better positioned to recognize and exclude questionable prices that deviate from the average of all other contributors — again, sourcing pricing from a handful of OTC participants is far less laborious than working with a highly-fragmented retail market.

The sweet spot for the number of OTC contributors to a pricing index is approximately from 10 to 15. At this level, with the right policies in place, even a handful of market makers colluding together would have difficulty influencing the index by more than a non-meaningful percentage.

We believe that the correct path forward in securing approval for a Bitcoin ETF is not to repeat the retail-based pricing model. Continued rejections and the little effort made to address regulatory concerns demonstrate the weakness of this approach. Rather, fund sponsors should look to the much more professional and far less vulnerable OTC markets. A pricing mechanism sourced through OTC markets are far more resistant to market manipulation and may give regulators the confidence needed to take an application forward.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Robert Emerson is the head of quantitative analysis at Tassat, overseeing all aspects of product design and modeling, risk modeling and margin methodologies. A veteran of traditional finance, Robert developed interest-rate derivatives data, analytics and valuation business for one of the market’s leading vendors and traded interest rate derivatives at Lehman Brothers and Solomon Brothers. He is a graduate of MIT University.

Tax Agencies Step Up Efforts to Hone in on Crypto Tax Evasion

Tax Agencies Step Up Efforts to Hone in on Crypto Tax Evasion

The U.K.’s tax agency is stepping up its blockchain analytics operations. If other countries follow, will it spell the end for anonymity in crypto?

The year 2019, for a short while, raised expectations that stablecoins would bring about mass adoption of cryptocurrencies. 2020, however, seems to be dousing those hopes with ever-tightening regulation that is putting pressure on investors and companies alike.

The first complication came only 10 days into the year. In early January, the European Union’s landmark Fifth Anti-Money Laundering Directive, or 5AMLD, was signed into law. The law is the latest evolution of the EU’s response to the Panama Papers scandal, in which a leak of over 11 million documents uncovered the opaque financial networks used by the world’s richest and most prominent individuals to divert wealth overseas.

The era-defining financial scandal shone a light on a controversial characteristic of international finance that would soon spell trouble for cryptocurrency investors and businesses the world over: anonymity.

Lawmakers are constantly striving to tighten the legal loopholes that allow the world’s richest companies and individuals to avoid paying their dues. Try as they might, there are still states, often small island nations in the Caribbean, that willingly provide less legally restrictive environments.

Choosing to divert financial flows offshore is often not illegal at all, but the emphasis that companies such as the now-disgraced Mossack Fonseca place on privacy means that it is difficult for law authorities to bring individuals using such networks for criminal activities, such as money laundering, tax evasion or terrorist financing, to justice.

From the 5AMLD to central bank digital currencies, governments and regulators are acting on their belief that the identities of individuals behind anonymous transactions should be made available to authorities upon request.

Additionally, even though the United Kingdom is set to leave the EU in roughly one week’s time, its anti-money laundering regulations closely match the 5AMLD, and recent events indicate that measures are being increased even further to prevent cryptocurrency from being used to flout the law.

The taxman cometh

One of the criticisms of post-Brexit Britain is that it will relax financial regulation in order to form lucrative trade deals in the wake of its departure from the EU single market. Although the U.K. has seen numerous financial scandals, its tax agency is looking to minimize the blind spots in the defenses against crime involving cryptocurrency.

Her Majesty’s Revenue & Customs announced that it had posted a $130,000 open contract call to develop a tool to help the tax agency gather intelligence through cluster analysis. The announcement is the latest step on behalf of European lawmakers to break through the anonymous qualities of cryptocurrencies, taking aim at both the biggest coins and privacy tokens, such as Monero (XMR), Zcash (ZEC) and Dash (DASH).

As previously reported by Cointelegraph, although most users of such coins use them for entirely honest purposes, both law authorities and regulators are concerned by the potential for privacy coins to be used for nefarious activities, such as the sale of illicit drugs on the darknet, as well as terrorist financing and money laundering.

The regulatory changes and mounting compliance demands did not surprise Dash Core Group Chief Marketing Officer Fernando Guitierrez. In an email conversation with Cointelegraph, Gutierrez put forward his view that the changes will not only be a hindrance to companies but also to the average consumer. He believes that: “This was all bound to happen.” He added that there was little chance that a growing industry would escape unnoticed:

“All these changes will make anonymity more difficult for the average consumer, as more exchanges comply and implement KYC. Those exchanges who don’t will be forced to jump from jurisdiction to jurisdiction, which will impose extra costs that only those committed to anonymity will be willing to pay. For criminals, this will change nothing because they are in that group, among many others who are not criminals, who are willing to pay more.”

The offering of the open contract from the HMRC is a signal that it is committed to effectively ramping up its blockchain forensics capabilities. Rich Sanders, principal and lead investigator at the Cipherblade Ltd blockchain analytics firm, told Cointelegraph that such a small contract is unlikely to shake up the system to any great extent:

“As for this particular initiative, a £100,000 software contract for a year says something but not very much in the grand scheme of things.”

How effective are blockchain forensics tools?

While data about transactions using cryptocurrency is stored on the blockchain, it is not possible to identify individuals from this information alone. Prior to the recent changes in legislation, blockchain analytics companies cooperated with intelligence agencies to link suspicious account activity to the individuals behind them.

Although the powers given to law authorities and compliance organizations under the 5AMLD are likely to radically change the way in which such procedures are carried out, Sanders believes that analytics tools are not a one-time fix for all anonymous crypto activity since: “Blockchain analytics tools do not inherently and directly crack the anonymity,” or, more accurately, the pseudonymity, which is an attribute of blockchains. Therefore, forensic tools are only one element of a comprehensive investigative toolkit. He went on to add:

“The way, in which a blockchain analytics tool can help in linking the pseudonymous blockchain identity to an individual is by tracing cryptocurrency from/to initial/terminal destinations such as exchanges and other services, from which data can then be requested — which will often require a subpoena to be served or, at a minimum, another legally constrained form of data request.”

Sanders explained that, when examining the powers of blockchain analytics tools in bringing tax evaders to justice, it is important to note that there must first be pre-existing suspicion of wrongdoing:

“Blockchain analytics tools are likely to be brought to bear only in cases of existing and substantiated suspicion and are not themselves suited to finding potential tax evaders in the sea of cryptocurrency users. If that’s what you want to do, you’ll have a better time — as I once semi-seriously advised IRS employees — browsing through Reddit and looking at the chest-beating about tax evasion there (by accounts with poor OPSEC).”

Many in the sector welcome the regulatory changes. This chummy approach to cooperation with state organizations is not, however, shared by all. Dash Core Group’s Gutierrez told Cointelegraph that, in spite of their duty to protect, not all governments and intelligence agencies honor this:

“This has happened even in democratic countries, so we can’t assume that everything they do is fair or well-intentioned. Only where there is a real separation of powers, and the judicial one has consented, on a case by case basis, they should have such a right, if technically possible. If that can’t be guaranteed — and it can’t — it is better if they stay away.”

How will regulation affect crypto?

Cryptocurrency is still a young industry and faces many challenges on the road to becoming a mature sector that can compete with wider mainstream finance, should that ever happen. The steady increase in regulatory and compliance demands are only to be expected as the nascent crypto industry inches closer to being used by a greater customer base.

Regardless of the titans of the tech industry toying with the idea of starting cryptocurrencies of their own, even some of the larger financial companies simply cannot take on the high level of risk associated with crypto at its current stage.

Some industry leaders recognize this turn as a welcome sign that digital currencies are being taken more seriously by regulators and lawmakers around the world. For others of a more anarchistic philosophical standing, the loss of anonymity is a loss of one of the core precepts behind the entire reason for cryptocurrency’s being.

Gutierrez says that, while regulation is bound to happen to any growing financial industry, the costs associated with being regulated to an extreme level could well choke out smaller players and lead to an eventual stagnation:

“The constant introduction of new regulations is already changing the industry. Compliance costs have grown so much that only big players can afford them. This is only going to get worse. We will have fewer new projects and that will hinder innovation. I foresee a future, in which the blockchain industry resembles more and more the financial industry it proclaimed it would replace: well-funded players, slow change and lawyers everywhere.”

While Gutierrez foresees a slowdown in the near future, Andrew Adcock, CEO of the London-based crowdfunding platform Crowd for Angels, told Cointelegraph that the firm has not picked up on any discernible change in investor behavior in the wake of the regulatory changes:

“We haven’t seen a large change in investor and consumer attitudes, however, there has been a notable increase from companies seeking to implement changes and abide by the new regulation. I believe this is positive and will provide great protection for investors.”

Although any kind of attempt to hinder the supposedly essential core characteristics of cryptocurrency will create intense debate among investors, industry leaders and regulatory bodies, not all people are so fussed about the changes.

Adcock said that many of the clients at Crowd for Angels are not overly interested in the topic. Despite the doomsayers of the crypto industry, Adcock maintained his view that regulation is something to be encouraged and does not believe that this will alienate investors: “There will always be those who seek anonymity, and this might be challenged by regulation, but harmony between both positions can co-exist.”

Blockchain and 5G: Greatest Promise Is to Transform the Developing World

Blockchain and 5G: Greatest Promise Is to Transform the Developing World

The potential of new emerging technologies has its limits: Imagine the combination of the next-generation techs, such as blockchain and 5G, what would that really mean?

The biggest topic in the mobile industry over the last few years has been 5G. In an industry that has been starved for innovation in this interregnum between the launch of the iPhone and the full-scale integration of next-generation technologies like augmented reality, artificial intelligence and blockchain, the introduction of the 5G network has become a sort of catch-all for carriers and handset manufacturers to lean on as the promise of the future of innovation being just around the corner — a feature worth paying a premium for and upgrading that smartphone you bought just a year or two ago. 

Related: The Implications of Fusing 5G and Blockchain

Qualcomm President Cristiano Amon has recently declared that 2020 would be the year 5G goes mainstream, predicting approximately 200 million 5G smartphones will ship next year. Amon also suggested that: 

“5G [would] become broadly available across major metropolitan areas in 2020, then spread thoroughly throughout developing countries in 2021.” 

While this year might be an important one for carriers and smartphone manufacturers to sell the latest model of the iPhone or Samsung Galaxy, the more crucial year for 5G might be 2021 when those networks aim to roll out their products to the developing world. 

Amon has additionally said he expects mid-band 5G to spread into Peru, Nigeria, smaller European markets and developing countries in Asia, ranging from Cambodia to Sri Lanka. In terms of real-world practicality for 5G, this might be when the rubber really hits the road for the technology.

The mobile payments alpha test: M-Pesa

Despite all the promises of a sci-fi reality from self-driving cars to better AI-powered insights, the most immediate promise of 5G is how it might support the technology we already have in place: our mobile phones. Aside from moonshots in automation or artificial intelligence, or more practical use cases like better on-the-fly computer graphics and video processing, 5G’s biggest advantage will be the exponential improvements it makes to the mini-computers we already have in our pockets and how they talk with each other on these networks. In the developing world especially, 5G could be the most ground-breaking of game-changers. 

Related: 2019 to 2020: The Insiders, Outsiders and Experimenters in Crypto Regulation, Part 2

Thus far, the smartphone boom has largely missed the developing world, though it remains a significant part of the global mobile market. While smartphone usage in the developing world ranges from about 24% in India to just over 50% in Brazil, the millions in the developing world still heavily rely on feature phones or “dumb phones” — more people have access to a mobile phone than they do to electricity.

When 5G does finally enter the developing world, it will be most useful in servicing what will probably remain a limited infrastructure. Perhaps the most important thing? The future of payments.

Just look at the impact of something like M-Pesa in Kenya. Launched in 2007, M-Pesa is a robust and diverse mobile money transfer service that allows users to pay for a variety of services through technology that is compatible with feature phones. M-Pesa is so ubiquitous that 96% of Kenyan households have at least one M-Pesa user. The technology has also helped many Kenyans living in extreme poverty move above the poverty line, with rural households increasing their incomes by as much as 30%.

M-Pesa was able to become so successful and widely spread in Kenya due to a number of factors, including strong marketing, relaxed regulation and the lack of other viable options. Perhaps the strongest of all was that tautological commandment of the “viral” — as M-Pesa became more popular, it became, well, more popular. 

There’s no reason to think the process can’t repeat itself across the world in the 2020s, but it will require 5G to get those robust, localized networks running, along with improved front-end interfaces across a variety of mobile experiences to support those networks.

5G and blockchain: secure mobile banking? 

On the front end, it’s hard to argue with SMS and text as an interface in the developing world, even as messaging apps like WhatsApp are gaining steam in popularity. SMS has decades worth of familiarity to billions of users, grandfathered in with the earliest cell phones, but it is still quick and nimble enough to work on modern networks without a huge data load. It can also easily, securely, quickly and safely pay merchants, buy goods or services, and make deposits or send remittances. It offers the holy grail of digital banking, especially for the world’s nearly two billion unbanked: Your identity, and the associated number, can work as both bank and clearinghouse. 

On the back end, 5G and blockchain offer the promise of a potent combination. Blockchain can secure mobile banking networks that will have to secure transactions on a very granular level, while 5G itself will make sure these complex networks don’t strain under the weight of blockchains.

If crypto networks can deliver payments solutions to these populations, it will be a major stride forward for both the unbanked and underbanked. This evolution in banking could be the first step in additional needed changes for the developing world, such as providing better and more reliable access to electricity and high-speed internet, reducing the high fees associated with transactions and remittance payments, and limiting government corruption and general economic volatility. 

If that’s all 5G ends up doing, it may be a greater leap forward than what has already been envisioned and promised by all those in the mobile industry. 

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Richard Dennis is the founder and CEO of TemTum, the efficient, quantum-secure, ultra-fast and environmentally friendly cryptocurrency. He is a globally recognized cybersecurity and cryptography expert and one of the world’s leading lecturers on secure networks, blockchain and encryption.

Litecoin Creator Proposes Miners Voluntarily Donate 1% for Development

Litecoin Creator Proposes Miners Voluntarily Donate 1% for Development

Litecoin creator Charlie Lee recently posited the concept of LTC miner pool donations to help boost funding.

Litecoin (LTC) founder Charlie Lee proposed mining pool donations as a new funding method for cryptocurrency development.  

“I think a better way to fund development is mining pools voluntarily donate a portion of the block reward,” Lee said in a tweet on Jan. 24, adding:

“How about Litecoin pools donate 1% (0.125 LTC) of block rewards to the @LTCFoundation? If every miner/pool does this, it amounts to about $1.5MM donation per year!”

With 1% donated on a consistent basis, Lee’s suggested solution would provide enough funding for Litecoin permanently going forward, Lee confirmed to Cointelegraph.

He explained:

“At current LTC price, 1% of block rewards is about 7x Litecoin Foundation’s yearly expenses. Even if a small percent of miners are generous enough to donate, the foundation would be able to put it to good use by funding developers to work on Litecoin Core, Mimble Wimble, LiteWallet, LN wallet, hosting the yearly Litecoin Summit, and pushing for adoption of Litecoin by merchants and users.”

Lee also confirmed such donations are voluntary, adding, “It wouldn’t be right if it wasn’t voluntary.” 

Funding issues

Garnering enough capital to run and operate a business can be difficult. The situation becomes more complicated when the business or project aims for decentralization. 

Rumors circulated in late 2019 regarding the Litecoin Foundation’s potential bankruptcy, which Lee denied in an Oct. 13 tweet. “Don’t listen to stupid fud and lies,” Lee said. “We have enough money to last 2 years.”

Lee’s 1% voluntary donation proposal comes after Bitcoin Cash (BCH) proponents Roger Ver and Jihan Wu suggested an “infrastructure funding plan,” requiring miners to pay 12.5% of block rewards to an operation in Hong Kong, Cointelegraph reported on Jan. 24. 

New concepts

In response to 51% attack concerns, Dogecoin merged its mining with Litecoin in 2014, enabling simultaneous mining of the two assets. Notably, this joint Litecoin and Dogecoin mining impacts Lee’s new mining pool donation concept. 

“Currently with merged mining of Dogecoin and other Scrypt coins, miners make 105%+ of block rewards,” Lee noted in a second tweet. “So 1% is a reasonably small amount to give back towards funding a public good.” 

Finally, Lee also toyed with the idea of miners choosing which Litecoin project their funds will go toward, asking the community for their opinions on his ideas as a whole.

“It’s important that miners can choose to support other Litecoin organizations as well,” he told Cointelegraph. “Miners should donate to the organizations that want to help out.”

CV Summit United Blockchain Leaders and Enthusiasts in Davos

CV Summit United Blockchain Leaders and Enthusiasts in Davos

CV Summit offered Davos attendees the chance to go deep on blockchain.

If you wanted to go deep on blockchain at the World Economic Forum, you needed to attend the conference’s side events.

Perhaps the largest of these crypto-friendly events was CV Summit, an all-day conference organized by CV Labs. The Switzerland-based organization (operated by CV VC) endeavors to offer crypto entrepreneurs whatever resources they need to succeed, from fundraising help to coworking space. On Thursday, January 23, that meant offering a full agenda of speakers and panel presentations to crypto-hungry Davos attendees.

The docket was loaded with speeches by high-profile crypto people, from MakerDAO’s Rune Christensen to IOHK’s Charles Hoskinson and many more. The day’s events were hosted by Daniel Ramamoorthy, and panelists picked apart topics like the hype versus reality of digital assets, how corporations can benefit from tokenization, how different jurisdictions regulate their crypto industries, and beyond.

CV Summit had the vibe of a day-long TedX event devoted to crypto. This was the event’s third year, and we learned that its first edition was a small, casual crypto meetup. It’s clear that they’ve gained a lot of momentum since then. Whatever your specific niche interest is within the space, CV Summit had experts on hand to take you several layers deeper. Even Nouriel Roubini was there to deliver a polarizing keynote titled “Why Bitcoin Is The Mother Of All Scams.”

Perhaps the largest announcement to come out of the event is that CV Labs will open a new operation in Dubai. “We’ll have another CV Labs in Dubai in Q2 or Q3 of this year,” said CV VC founder Ralf Glabischnig. “Dubai has a clear blockchain strategy from the government, so we want to support it with the technology we have here in the Crypto Valley.”

Glabischnig described plans to open another CV Labs in Asia after that, perhaps in China or Singapore. “The idea is to expand our ecosystem around the world,” he said.

The event also marked the release of CV VC’s newest Top 50 report, which offers a visual representation of how Switzerland’s crypto sector works, as well as ranks the country’s blockchain companies by the specific sector they operate in.

The speculation about cryptocurrency and blockchain technology is that it’s going to reshape the world economy in the long term. Yes, the proper World Economic Forum program did address these topics a bit, but it was by no means a focus or highlight of the agenda.

For the enthusiasts and true believers who are all-in on crypto, CV Summit was like a one-day WEF devoted to crypto.

Bitcoin ‘Needs More’ PR from People Like Peter Schiff: Binance CEO

Bitcoin ‘Needs More’ PR from People Like Peter Schiff: Binance CEO

Fresh from his dubious week in the spotlight after claiming to “lose” his BTC holdings, Schiff is still saying Bitcoin investors are blind to gold’s benefits.

Bitcoin (BTC) skeptic and gold bug Peter Schiff is unwittingly advertising the cryptocurrency’s virtues over other investments, says the CEO of exchange Binance.

In a tweet on Jan. 25, Changpeng Zhao (known as “CZ” in crypto circles) argued Schiff was failing in sewing distrust of Bitcoin among social media followers and beyond.

CZ: We need more “negative voices”

“I think Peter is doing great to promote bitcoin. He probably does not realize that given his illogical reasoning, most people will do exactly opposite of what he says,” he wrote.

CZ concluded: 

“We need more of these types of ‘negative’ voices.”

The Euro Pacific Capital hedge fund manager was already somewhat notorious for his posts attacking Bitcoin which claim gold to be superior.

Last week, however, Schiff was already undermining his credentials after blaming wallet provider Blockchain for “losing” his Bitcoin holdings worth 0.21 BTC ($1,750) he received in the form of donations in 2019. In the event, Schiff had simply confused his pin with his password. 

Nonetheless, he continued to allege that Bitcoin investors were the true ignorant party for choosing cryptocurrency over the precious metal.

“Bitcoin bugs are saying I’m not qualified to give advice about Bitcoin because I don’t know the difference between a pin and a password. I know the difference now and my advice hasn’t changed,” the tweet which inspired CZ read.

Schiff added: 

“But those Bitcoin bugs still don’t know… the difference between #Bitcoin and #gold.”

Doing the opposite

CZ’s tone meanwhile resonated with other evidence of Schiff’s track record which emerged as part of the Blockchain fallout. 

Currently doing the rounds on Twitter is a selection of client reviews for Euro Pacific Capital, many of which claim Schiff failed to react to market movements and lost them money. 

“Just stick with bonds or S&P, or if you must have international stock, then find a more reputable international stock dealer. This company is a loser, except for Peter Schiff and the brokers who work there,” one review reads.

As Cointelegraph reported, gold itself has failed to deliver for investors in 2020 already, firmly flagging while Bitcoin boomed.

Bitcoin Risk-Return a ‘Different Beast’ Compared to Amazon: Analyst

Bitcoin Risk-Return a ‘Different Beast’ Compared to Amazon: Analyst

Even $AMZN performance in the 2010s keeps it firmly in line with traditional investments, while Bitcoin outperforms by an order of magnitude.

Bitcoin’s (BTC) risk-return is a “different beast” compared to even the darling of the stock market of the 2000s, Amazon.

That was the conclusion drawn by one of the cryptocurrency industry’s best-known analysts and the creator of a uniquely accurate Bitcoin price model.

PlanB: Amazon “normal” compared to BTC

Uploading a chart showing BTC risk-return versus Amazon stocks, U.S. bonds, gold and the S&P 500 on Jan. 24, PlanB showed Bitcoin behaved completely differently as an investment. 

Amazon’s significant losses in the year 2000, combined with its revered recovery ever since still keeps it far below Bitcoin’s risk-reward ratio. 

“Bitcoin… is a different beast!” PlanB summarized, describing Amazon’s position on the chart as “much closer to normal.”

Amazon’s share price appeared to shake off revelations involving Saudi Arabia allegedly hacking CEO Jeff Bezos this week. Both $AMZN and BTC nonetheless fell over the past seven days, with the latter potentially reacting to uncertainty stemming from China.

Bitcoin risk-return vs. major investments

Bitcoin risk-return vs. major investments. Source: PlanB/ Twitter

A volatile winning bet

The impressive contrast comes days after Cointelegraph reported on Bitcoin’s risk-adjusted returns outperforming every major investment offering based on a four-year investment.

Then, PlanB appeared to hint that four-year periods — the time between each reduction in the new Bitcoin supply — could continue to boost performance. 

Further, cryptographer Nick Szabo added, the susceptibility of traditional instruments to react to government and central bank meddling in currency markets meant Bitcoin was a natural fit for long-term, or low-time preference, investors.

PlanB’s price model, stock-to-flow, has correctly called much of Bitcoin’s historical behavior and continues to forecast a level of $100,000 for BTC/USD in 2021.

At current levels, markets continue to conform to stock-to-flow, at $8,300 trading just below its suggested range. Before the next halving in May, $8,300 is, in fact, the average price the model says Bitcoin will trade at before moving significantly higher.

‘Nothing Special’ — Bitcoin Slumps 6% on Coronavirus, Chinese New Year

‘Nothing Special’ — Bitcoin Slumps 6% on Coronavirus, Chinese New Year

A double whammy of uncertainty in stocks and a New Year sell-off could be at the heart of BTC/USD erasing gains last week, analysts say.

Bitcoin (BTC) has shed 6% in a week thanks mainly to Chinese New Year and uncertainty over coronavirus, commentators are suggesting.

Analyzing Bitcoin price data along with Chinese stocks’ performance on Jan. 24, social media resource Light said a slump in performance had spread to cryptocurrency.

Cryptocurrency market daily overview

Cryptocurrency market daily overview. Source: Coin360

Stocks correlation shows Bitcoin’s “global stage”

Over the past several days, it notes, Bitcoin has in fact broadly correlated with stocks. Such behavior is reminiscent of what many perceived as a reaction to another global event — the Iran crisis — earlier this month.

“China coronavirus-driven risk-off blanketing Chinese equities… and Bitcoin. Iran correlation, now Chinese equities,” Light commented.

The analysis summarized:

“If there was ever a statement to the effect, Bitcoin has now made it to the global stage.”

Bitcoin vs. Chinese equities

Bitcoin vs. Chinese equities. Source: Light/ Twitter

Chinese New Year pressure returns

Coronavirus continues to spread beyond China, despite authorities’ attempts to contain it by imposing travel bans and boosting healthcare provision. 

BTC/USD has lost just over 6% in the past seven days and at press time trading at $8,300. The virus “factor” comes at a sensitive time historically, data reveals, with Chinese New Year traditionally creating sell pressure for Bitcoin.

Compiled by trader and analyst Alex Krueger, figures circulating on Twitter show that in the run-up to the celebrations, Bitcoin returns often turn out negative. 

In 2019, they averaged around -0.2% losses for the week prior, but Krueger himself appeared unperturbed by the results.

“Nothing special,” he summarized on Jan. 22. 

As Cointelegraph reported, critics have protested against the theory that Bitcoin price action is directly influenced by geopolitical or other world events. 

Nonetheless, issues involving China tend to impact the market conspicuously, against the backdrop of a blanket crypto trading ban imposed by Beijing in 2017. The country still accounts for the majority of Bitcoin mining activity. 

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

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

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

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

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

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

CDC argument in a nutshell

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

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

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

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

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

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

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

What is the CDC proposing?

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

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

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

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

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

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

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

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

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

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

Do token sales constitute an investment contract?

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

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

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

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

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

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

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

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

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

Conclusion

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

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

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

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

Is Tron’s DApp Market Dependent on Gambling?

Is Tron’s DApp Market Dependent on Gambling?

Tron’s protocol predominantly runs gambling DApps, showing a possible lack of interest in other network use cases at present.

Tron has made a name for itself in the crypto asset space and DApp world, although a huge portion of the protocol’s transactions rely on the gambling industry.

A hefty 17 of the top 25 most-used Tron DApps fall in the gambling category on DappRadar’s list of most popular Tron protocol-based DApps.

Top 25 lists

The eight non-gambling Tron-based DApps on the list fall in several other categories, such as High-Risk, Exchanges and a general “games” tag.

These non-gambling DApps, however, host significantly less volume than their gambling counterparts, with the exception of two other applications listed as exchanges.

In contrast, the top 25 Ethereum-based DApps counted only three gambling applications.

Tron prevalence

April 2019 showed Tron touting the most rapidly expanding group of DApp users.

Ethereum, Tron and EOS ran the show in 2019 in terms of DApp usage, taking a combined 98.65% of the total DApp transaction volume for the year, as Cointelegraph reported in January 2020.

Tron’s ecosystem posted a staggering $4.4 billion in volume in 2019, with its gambling DApps filtering approximately 89% of that money flow, DappReview said in its 2019 DApp write-up, calling Tron’s decentralized application ecosystem, “Las Vegas on the blockchain.”

Meanwhile, Tron founder Justin Sun pulled up a chair next to Apple co-founder Steve Wozniak for lunch earlier this week, tweeting about the meal after the fact on Jan. 24.

Cointelegraph reached out to Justin Sun for comment but received no answer as of press time. This article will be updated accordingly upon receipt of a response.

ConsenSys to Build Global Trade Platform for Agribusiness Giants

ConsenSys to Build Global Trade Platform for Agribusiness Giants

Covantis, a blockchain initiative backed by global agribusiness giants like Cargill, has selected ConsenSys as a technology partner.

Covantis, a blockchain initiative backed by global agribusiness giants like Cargill, has selected major Ethereum-focused firm ConsenSys as a technology partner.

Within the partnership, ConsenSys will build an Ethereum-based blockchain platform to digitize the post-trade finance industry and bring efficiencies and cost savings to the international agribusiness supply chain, Covantis said in a Jan. 23 press release.

Four agribusiness giants established the initiative in 2018, while Covantis’ name came out months ago

The concept of Covantis was established in October 2018, when four of the biggest global agribusinesses companies announced a joint initiative to digitize their global shipping transactions using blockchain and artificial intelligence. Covantis’ founding members include Cargill, Archer Daniels Midland (ADM) Company, Bunge and Louis Dreyfus Company.

While the companies have been investigating ways to standardize and digitize global agricultural shipping transactions since 2018, the official branding of the project was revealed about two months ago.

On Dec. 4, the founding members announced that their joint effort will be called Covantis, also launching a new website for the initiative, covantis.io. Additionally, the project announced that former ADM president and chief risk officer Stefano Rettore will lead the project as an independent advisor until the initiative has a CEO appointed.

ConsenSys will help to launch the Covantis digital platform in 2020

As the company plans to launch its digital platform in 2020, the recent addition of ConsenSys will apparently accelerate the anticipated launch. Initial focus will be on automating grain and oilseed post-trade execution processes, the press release notes.

ConsenSys will provide Covantis with a number of its enterprise-grade blockchain tools and services, including PegaSys Orchestrate, Kaleido and MythX to build the blockchain network on Ethereum. Specifically, the firm will build a secured platform based on Quorum, a permissioned Ethereum-based blockchain developed by major global financial holdings company JPMorgan.

Rettore highlighted the ConsenSys’ outstanding technology expertise, expressing confidence that the company would be a perfect tech partner for their initiative:

“ConsenSys presented prototypes that demonstrated excellence in its field and has a track record of using blockchain technology to digitize processes in the commodity trade finance industry. We are confident this partnership will allow us to build a first-class product, centered around unparalleled functionality, security and privacy.”

ConsenSys confirmed the news in a Jan. 23 tweet, while Joseph Lubin, Ethereum co-founder and ConsenSys CEO, noted that Covantis’ platform is proving the huge potential of blockchain tech:

“The strength of the Covantis initiative’s commitment to leverage innovative, best-in-class technologies to transform global trade operations for agricultural commodities is inspiring. […] This platform is evidence that blockchain technology has started to deliver on its promise of unlocking value through collaboration and removal of information silos within and across industries.”

Agribusiness is one major direction of blockchain implementations. In late 2019, Big Four audit firm KPMG launched a blockchain-based track and trace platform that is designed to increase transparency and traceability of processes in agriculture and other industries. Previously, Cargill — the United States’s largest privately held company by revenue — invested in digital engineering resources to develop Hyperledger Grid to streamline supply chains by using blockchain technology.

Effect of CME Futures Options on BTC Price Depends on Halving

Effect of CME Futures Options on BTC Price Depends on Halving

CME’s recent launch of BTC options on futures is already generating significant volume, but will it have any effect on Bitcoin’s price?

CME Group launched new Bitcoin options on Jan. 14, which was revealed by the company’s global head of equity products Tim McCourt. The introduction of crypto options by a derivatives heavyweight in CME will further uplift the institutional infrastructure supporting the asset class.

Over the long term, investors generally anticipate improvements in the infrastructure surrounding Bitcoin (BTC) to have a positive impact on the cryptocurrency market.

CME Bitcoin options is a net positive for crypto

Speaking to Cointelegraph, cryptocurrency technical analyst Eric Thies said that CME options will bring in more stability in the market over the long run. Accredited and institutional investors will have a diverse selection of vehicles to use to enter into the cryptocurrency market. That variety will strengthen the foundation that would take cryptocurrencies from an emerging to an established asset class. He said:

“I’m optimistic it’s bullish for longer-term stability and that it also signals something more significant once you compound it with several other events around the market.”

Up until mid-2019, hedge funds and institutional investors did not have sufficient infrastructure to properly invest in Bitcoin and other crypto assets. There were trusted custodians, like Coinbase and Xapo, operating independent custodial services, but other than that, services like Bakkt were non-existent.

Related: CME’s Futures Options Sprinted Out of the Gate but a Marathon Lies Ahead

In the long term, Thies believes that the availability of CME options will synergize with the progress of other key players in the crypto industry, in the likes of United States-based exchange Gemini. Throughout the past year, Gemini has placed heavy emphasis on compliance and securing insurance for cryptocurrency investors in the U.S. Such improvements contribute to the overall prosperity of the cryptocurrency market.

Thies explained that such developments are building up baseline assurances that any hedge fund would need before joining what was previously an incredibly volatile space, adding:

“Institutions being handed a key to an on ramping BTC during a halving year sure seems like a good recipe for fireworks for the year or so after the actual event.”

Is options volume relevant to the current cryptocurrency exchange market landscape?

An option typically works like a discounted buy order of an asset at a certain time. For instance, if a trader believes the price of Bitcoin will be at $4,000 by the end of 2020 and buys an option for it, the trader will pay a premium of around 30–40% to obtain the right to buy Bitcoin at $4,000 by that certain period.

In futures and options markets, total open interest refers to the total amount of positions open. In the futures market, it merely means the combined value of all active long and short contracts. In the options market, it means the value of all options calls combined.

In the short term, the options market is unlikely to have any significant impact on the price trend of Bitcoin. Based on data from the Skew research team, Deribit accounts for $224 million of the total BTC open interest.

By nature, the volume of the options market is not likely to surpass the volume of the futures market. As such, for short-term price movements, margin trading platforms, like BitMEX and Binance, will have a stronger effect on the price of Bitcoin.

Over time, however, Three Arrows Capital CEO Su Zhu said that the options market is expected to see record-high volumes throughout 2020: “Near-record volume on BTC options yesterday, I expect this record to be broken several times over the course of the coming year.”

It shows the confidence CME has in the Bitcoin market

CME, as a multi-billion dollar derivatives company, has no incentive to push for Bitcoin options and other investment vehicles if there simply is no traction or demand from the market. As the company’s executive Tim McCourt said, CME’s Bitcoin futures market facilitated around $270 million per day:

“We’re pleased our CME Bitcoin futures have rapidly evolved over the last two years to become one of the most liquid, listed Bitcoin derivatives products in the world, averaging nearly 6,400 contracts (equivalent to 31,850 Bitcoin) traded each day in 2019.”

31,850 BTC at the current price of $8,500 is equivalent to $270 million and that is similar to the spot volume of major exchanges in the global market.

For CME, Bitcoin futures and derivative products are established revenue streams for the company, and it indicates that there is enough demand from investors for CME to continue focusing on the cryptocurrency market. On Jan. 21, Cointelegraph reported that the CME Bitcoin options volume doubled to $5.3 million merely seven days after their launch.

How rising demand for institutional Bitcoin products plays in with BTC halving approaching

According to Alistair Milne, the chief investment officer at Atlanta Digital Currency Fund, the upcoming Bitcoin block reward halving in May 2020 is not priced into the price of Bitcoin. Google Trends data shows that search interest for the phrase “halving” has surged to November 2016 levels.

Google searches for "halving" over the past five years

As the increase in the volume and open interest of CME’s futures and options markets show, the institutional demand for Bitcoin is already on the rise. Studies have shown that most institutional investors are not aware that the block reward halving will take place in about four months. A report from Grayscale read:

“The halving is close enough that it’s time to start talking about it more seriously, but far enough out in the future that it’s unclear whether it’s priced into the market efficiently.”

Whether the high demand for Bitcoin futures and options products throughout the past three months indicate that institutions are anticipating the halving have an impact on the price of BTC remains to be seen.

Historical data indicates that a halving does not cause an immediate price spike for BTC. Rather, in the previous two halvings, it took Bitcoin about 6–12 months for a properly extended rally to begin. That goes in line with the tendency in the crypto market to “sell the news,” which refer to investors selling cryptocurrencies following a large event like an important network upgrade or halving.

But, the argument in favor of the halving affecting the Bitcoin price in the medium term has been that any event that impacts the supply of an already scarce asset in Bitcoin can have a significant effect on the price trend of BTC.

The options market alone may not have enough volume or total open interest to sway the Bitcoin price. When it is put together with major events like halving and institutions becoming growingly aware of it, it can have a bigger effect on BTC than many anticipate.

Research Firm and Environmental Watch Dog Test World’s First Air Quality Ledger

Research Firm and Environmental Watch Dog Test World’s First Air Quality Ledger

Citing inadequate weather data collection, an international partnership is testing an air quality ledger and trying to stem a global crisis.

Citing the inadequate weather data collection, an international partnership is testing the world’s first air quality ledger and trying to stem a global crisis.

Air quality as public health crisis

PlanetWatch announced earlier today the battle-testing of air quality monitors linked to research firm Algorand’s blockchain.

“It is currently operating in several Italian cities (fixed installations and mobile ones on trolleys and buses), plus a long-term installation test in the Arctic,” Algorand’s Kati Callaghan told Cointelegraph.

According to a PlanetWatch post on Jan. 23, the current state of air monitoring is unresponsive to today’s needs. Large government stations occur are available in cities and transport hubs. Data might not be released for a whole day. Yet poor air quality poses dire health issues, especially for children — infant mortality, asthma, neurodevelopmental disorders, and childhood cancers, according to PlanetWatch.

Looking ahead

The goal for the partnership is “a global network of air quality sensors and environmentally-conscious people.” The sensors can be installed in private homes or even carried on one’s person, which allows data to be uploaded in real time.

“The sensors have been thoroughly tested and the data is publically available,” PlanetWatch founder Claudio Parrinello, a former research scientist, told Cointelegraph.

The sensors collect data using Boston-based Algorand’s blockchain, “creating the first global, open, immutable $225 historical air quality repository.” The validated data will then be transcribed onto the blockchain. This database will then be readable to all users. Sensor owners will receive PLANET tokens in exchange for collecting data.

PlanetWatch is reportedly in talks with institutional investors about where the token will function. “Ultimately,” Parrinello said, “streaming air quality data to PlanetWatch will be the main mechanism to get PLANET tokens. Sensing is mining!”

The big question, of course, is whether there will be much interest.

“We’ve been getting a lot of interest already,” Parrinello said. “We might be taking pre-orders.”

UK’s Lancashire Cricket Club Now Uses Blockchain Platform to Sell Tickets

UK’s Lancashire Cricket Club Now Uses Blockchain Platform to Sell Tickets

The UK’s legendary Lancashire Cricket Club will sell tickets for all domestic and international fixtures at Emirates Old Trafford in 2020 through a blockchain-based platform.

The United Kingdom’s legendary Lancashire Cricket Club will sell tickets for all domestic and international fixtures at Emirates Old Trafford in 2020 through a blockchain-based platform.

In a news release on Jan. 24, the club revealed that it will use a blockchain-powered mobile tickets platform dubbed TIXnGO. The platform has been jointly developed with Lancashire’s ticketing service provider, SecuTis, and was successfully tested during the 2019 season.

Eliminating fake tickets

By deploying the platform, the club intends to eliminate fake tickets and track ticket distribution among their supporters. Lancashire’s head of ticketing and digital systems, Jonathon Nuttall, claimed that the club became the first in the sport to use the new blockchain secure mobile ticket technology, and added:

“During the 2019 season, over 80% of tickets bought at Emirates Old Trafford have been made online, compared to less than 50% in 2018 so it’s vitally important that we continue to improve the digital ticking technologies to ensure we make things as easy, and as enjoyable, as possible for those supporters booking with us.”

David Hornby, UK MD of SecuTix, said that “blockchain technology addresses many of the ticketing issues that both sports organisations and fans alike face. TIXnGO creates a unique, encrypted ticket for smartphones that is completely traceable, removes the risk of counterfeit tickets and simplifies the process of transferring or reselling tickets for the customer.”

Blockchain becomes more popular in sports

Blockchain has gained traction in the world of sports in recent months. Earlier in January, news broke that the National Basketball Association’s Sacramento Kings will tip off a live auction for gear with a blockchain-based app. The platform reportedly authenticates auction items, patching problems that have long bedeviled gear-hungry fans.

Last year, Italian luxury sports car brand Lamborghini began using Salesforce Blockchain to trace, certify and authenticate heritage Lamborghini cars faster and more securely using its blockchain platform.

On Jan. 23, Malta-based sports blockchain venture Chiliz revealed that it is launching a cryptocurrency exchange for sports and entertainment tokens.