Lightning Torch Reaches Final Destination, Over 0.4 BTC Donated to Humanitarian Aid

Lightning Torch Reaches Final Destination, Over 0.4 BTC Donated to Humanitarian Aid

Charity-focused group Bitcoin Venezuela tweeted that the Lightning Torch had reached its final destination, with all accumulated Bitcoin donated to the organization.

Charity-focused organization Bitcoin Venezuela tweeted on April 10 that the so-called Lightning Torch had reached its final destination, with all accumulated Bitcoin (BTC) donated to the group.

By the time it got to the organization, the Lightning Torch had grown to exactly 0.4108021 BTC, which is currently equivalent to over $2,000.

The Torch is an experiment first initiated by anonymous Twitter user Hodlnaut. The Lightning Torch is passed by sending the same BTC from user to user adding a little every time via the scalability solution, Lightning Network (LN).

Bitcoin Venezuela is reportedly responsible for the humanitarian initiative “Bitcoin for Venezuela,” recently reporting it had given away meals to people in the country during a power outage.

The organization also seemingly partnered with the donation-funded Locha Mesh Network development initiative. The project aims to develop cheap and open source do-it-yourself devices capable of maintaining an independent, decentralized and censorship-resistant network, allowing its users to communicate securely and send Bitcoin without access to the internet.

The Twitter user who first initiated the Lightning Torch relay has recently become embroiled in a conflict with Craig Wright — the industry figure behind the coin Bitcoin Satoshi Vision (BSV) who is also known for proclaiming himself to be Satoshi Nakamoto on multiple occasions.

Pro-BSV media outlet Coingeek reported on April 11 that Wright has set a $5,000 bounty in BSV for information regarding the identity of Hodlnaut, after the latter allegedly posted “highly defamatory and abusive tweets” about Wright.

The CEO of major cryptocurrency exchange Binace Changpeng Zhao then stepped in with a tweet on April 11, saying that if Wright does not change his conduct, Binance delist BSV from its platform.

In February, the Lightning Torch was passed on by LinkedIn co-founder and former PayPal exec Reid Hoffman. Before him, Twitter co-founder and CEO Jack Dorsey also passed the Torch, as did many other high-profile figures in crypto and finance.

Bitcoin, Ethereum, Ripple, Litecoin, EOS, Bitcoin Cash, Binance Coin, Stellar, Cardano, TRON: Price Analysis April 12

Bitcoin, Ethereum, Ripple, Litecoin, EOS, Bitcoin Cash, Binance Coin, Stellar, Cardano, TRON: Price Analysis April 12

While fundamentals in the sector are improving, it still lacks the full-fledged involvement of institutional players.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Market data is provided by the HitBTC exchange.

The launch of the eagerly awaited platform Bakkt has been postponed a few times, but the firm has continued to focus on building its team. It recently hired a former engineering executive at PayPal and Google as its chief product officer. These appointments show that the firm is able to attract talent from the traditional heavyweights, which is positive.

Blockstack is planning to launch a $50 million token sale that is SEC-qualified. If approved, this will be the first sale under the SEC Regulation A+ framework. Harvard Endowment fund is expected to participate in the purchase.   

While the blockchain and cryptocurrency space has a lot of potential, their adoption is still not widespread. A survey of 90,000 developers by the website StackOverflow shows that 80 percent of organizations are still not using blockchain. However, Frank Xiong, vice president of blockchain product development at Oracle expects 50 percent of all companies to use blockchain within the next three years.

The developments in the sector are encouraging, but the industry still lacks the full-fledged involvement of institutional players. Goldman Sachs CEO David Solomon has denied that the bank ever wanted to open a crypto trading desk, as reported by the media a few months back.

After the recent spell of profit booking, let’s see what the charts project.

BTC/USD

We were expecting Bitcoin (BTC) to rally to $5,600 and above it to $5,900 following the breakout above $5,309.31. But the digital currency turned down from $5,404.82. It is currently attempting to hold the support at $4,914.11. The 38.2 percent Fibonacci retracement of the recent upswing is also located close to this level. If the price rebounds from the current levels, it will indicate that sentiment has changed from sell on rallies to buy on dips. The immediate target on the upside is $5,600 and above it $5,900.

BTC/USD

Both the moving averages are sloping up and the RSI is close to the overbought zone. This shows that the bulls are in command and the trend remains up.

The BTC/USD pair will turn negative if it turns down from the current level and slides below the 20-day EMA. Therefore, we suggest traders keep the stop loss on the remaining long positions at $4,600.

ETH/USD

Ethereum (ETH) declined below the breakout level of $167.32 on April 11. This is a bearish sign. After a breakout of a major pattern like the ascending triangle, we expected the $167.32 level to hold. However, the bulls are trying to defend the 20-day EMA. If they can push the price back above $167.32 quickly, it will indicate buying at lower levels.

ETH/USD

The ETH/USD pair will pick up momentum if the bulls scale above $187.98. The target remains $251.64. Our bullish view will be invalidated if the pair turns around from the current levels or from $187.98 and plummets below the 20-day EMA. Such a move will confirm that the breakout was a bull trap. For now, traders can retain the stop loss on the remaining long positions at $150.

XRP/USD

Ripple (XRP) broke below the immediate support of $0.350 and the 20-day EMA on April 11. It has again re-entered the descending channel, which is a bearish sign. The bulls are presently trying to defend the 50-day SMA.

XRP/USD

Both the moving averages have flattened out and the RSI is close to 50. This points to a consolidation in the short-term. If the XRP/USD pair rises above the resistance line of the descending channel, it might move up to $0.37835. A breakout of this level will signal a change in trend that can be bought.

However, if the pair breaks down of the 50-day SMA, it can drop to $0.27795. We do not find any reliable buy setup at the current level; hence, we are not suggesting any trade in it.

LTC/USD

Litecoin (LTC) witnessed profit booking as it failed to climb above $91 on April 10. The correction stalled at the 20-day EMA. Currently, the bulls are trying to stabilize the price around the 20-day EMA and resume the recovery.

LTC/USD

The 20-day EMA is flattening out and the RSI has dropped to just above the midpoint. This suggests consolidation in the short term. However, the long-term trend remains up as the 50-day SMA is still trending higher.

The LTC/USD pair will face resistance in the $91 to $100 zone on the upside. If this zone is crossed, the next targets to watch are $159 and above it $180. On the other hand, if the pair sinks below the 20-day EMA, it can fall to $62.450. We will watch for a couple of days before recommending long positions once again.

BCH/USD

Bitcoin Cash (BCH) dipped below the range of $272.41 to $332.58 and triggered our suggested stop loss of $265 on the remaining long positions. Currently, it is attempting to bounce back from the 20-day EMA, which is a positive sign. This shows that the bulls are keen to defend the first major support of the 20-day EMA.

BCH/USD

The BCH/USD pair can now move up to $332.58 and above it to $363.30. If the bulls push the price above this resistance, the rally can extend to $451.32. There is a minor resistance at $400 but we expect it to be crossed. Both the moving averages are trending up and the RSI is in the positive zone. This indicates that the bulls have the upper hand.

However, if the bulls fail to push the price above $332.58, the digital currency might remain range bound between $255 and $332.58 for a few days. We shall wait for a reliable buy setup to form before proposing long positions once again. The trend will favor the bears if the cryptocurrency dives below $239.

EOS/USD

As the RSI was deeply overbought, we had recommended trailing the remaining long positions with a close stop loss in our previous analysis. EOS reversed direction from the resistance line on April 10. Due to the fall, the RSI has dropped out of the overbought zone.

EOS/USD

The bulls are trying to bounce off the 20-day EMA. If successful, the EOS/USD pair might again move up to the resistance line and if that is crossed the up-move can extend to $6.8299. With both the moving averages still sloping up, the bulls are at an advantage.

Our positive view will be invalidated if the bears sink the pair below the 20-day EMA. In such a case, the digital currency might consolidate in a large range of $4.4930–$6.8299 for a few more days.

BNB/USD

Binance Coin (BNB) broke down of the ascending channel and the 20-day EMA on April 11, but buying on dips has again pushed the price back above the 20-day EMA, which is a positive sign. It shows that the bulls continue to buy on every dip and have been defending the 20-day EMA aggressively.

BNB/USD

With the recent correction, the 20-day EMA has flattened out and the RSI has dipped back into neutral territory. This points to a range formation in the short term. Nonetheless, the long-term trend still remains up as the 50-day SMA is sloping up.

The BNB/USD pair might rise to $22 after it closes above the downtrend line. On the downside, it has strong support at the 50-day SMA. We remain positive on the pair and will suggest long positions once again at the first available opportunity. Our bullish view will be negated if the bears sink the price below the 50-day SMA.

XLM/USD

Stellar (XLM) continues to trade inside the wedge. It slipped below the 20-day EMA and triggered our recommended stop loss of $0.1130 on the remaining long position. Currently, the bulls are trying to defend the 50-day SMA.

XLM/USD

Both the moving averages are flattening out and the RSI has dipped back to the neutral zone. This points to a consolidation in the near term. The XLM/USD pair has support at the uptrend line and resistance at $0.14861760. It will pick up momentum and signal a trend change if it sustains above $0.14861760. Until then, we remain neutral on the digital currency.

ADA/USD

Cardano (ADA) turned around from the overhead resistance of $0.094256 and plunged below the support at $0.082952 on April 11. The down move triggered our suggest stop loss at $0.080 on the remaining long positions. It is currently attempting to bounce off the 20-day EMA, which is a positive sign. The bulls will again try to ascend the overhead resistance of $0.094256. If successful, the target on the upside is $0.20 with a minor resistance at $0.112598

ADA/USD

But if the ADA/USD pair turns down and dips below the 20-day EMA, it can decline to the 50-day SMA. However, with both the moving averages still sloping up and the RSI in positive territory, the path of least resistance is to the upside. We shall watch for a couple of days and recommend entering long positions once again if we find a reliable buy setup.

TRX/USD

Tron (TRX) plunged back into the range on April 11. This is the third time the digital currency has re-entered the range after breaking out of it this year. It shows that demand dries up at higher levels.

TRX/USD

After the sharp fall on April 11, the TRX/USD pair is trying to take support close to the 50-day SMA. If the bulls push the price back above $0.02815521, it will be a positive development. The pair will pick up momentum after it crosses $0.03575668. The target levels to watch on the upside are $0.040 and above it $0.0480.

However, if the price fails to bounce off the current levels, it can plummet below the 50-day SMA to $0.02094452. Therefore, we suggest traders retain the stop loss on the long positions at $0.0240.

Мarket data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.

Tim Draper to Meet with Facebook to Discuss Investing in Rumored FB Coin

Tim Draper to Meet with Facebook to Discuss Investing in Rumored FB Coin

Venture capitalist Tim Draper plans to meet with Facebook to talk about investing in the firm’s much rumored crypto project.

Billionaire VC investor Tim Draper is planning to meet with Facebook execs to discuss investing in the social media’s rumored crypto project, Bloomberg reports April 12.

According to the report, Draper revealed to Bloomberg that he is “interested to hear the story” around the project, claiming that he is ready to “see if it is a fit.”

The move comes on the heels of recent news that the social media giant is reportedly seeking a $1 billion investment from various venture capital firms to develop its supposed cryptocurrency project. On April 8, New York Times tech reporter Nathaniel Popper revealed that the reported project is a stablecoin that would be pegged to a basket of foreign currencies held in bank accounts, citing people familiar with the matter.

While Facebook has not officially confirmed the rumors so far, Bloomberg was the first to report on the alleged crypto-related development by the social network in December 2018.

Following Bloomberg, The New York Times published another article in late February suggesting that Facebook is working on a highly secretive crypto project, planning to introduce a stablecoin that would incorporate Facebook’s three fully-owned apps — WhatsApp, Facebook Messenger and Instagram, with total exposure of 2.7 billion users.

According to this week’s report from Bloomberg, Facebook is “still far from releasing the coin,” since it is reportedly trying to find a solution to how best to secure the funds that would back the stablecoin.

At press time, Draper has not replied to Cointelegraph’s request for comment on his plan to meet with the firm.

Meanwhile, Facebook’s office in Menlo Park, California has recently opened five new positions in its blockchain department, following a previously posted position for a senior lawyer with experience in both blockchain and payments.

Japan: Resona Bank Ends Partnership With Ripple-Based Payment App MoneyTap

Japan: Resona Bank Ends Partnership With Ripple-Based Payment App MoneyTap

Major Japanese bank Resona withdrew from Ripple-powered blockchain payment project MoneyTap without specifying the reasons.

Major Japanese bank Resona will withdraw from Ripple-powered blockchain payment project MoneyTap on May 13, the bank announced on April 11.

A subsidiary of Resona Group, the fifth largest banking group in Japan as of 2012, Resona Bank joined the project in October 2018, along with SBI Sumishin Net Bank and Suruga Bank.

Launched on Oct. 3, MoneyTap payment service uses Ripple’s blockchain solution xCurrent, which claims to offer instant domestic bank-to-bank transfers. The project was co-developed by Japanese financial services giant SBI Holdings and blockchain firm Ripple, the firm behind XRP, the third top cryptocurrency by market cap.

In the recent announcement, Resona claimed that the bank will cancel its cooperation with MoneyTap, noting that the cooperation started on October 4. The bank did not provide any specific details to explain its decision to withdraw from the partnership, only adding that it will continue to improve its services for clients.

Recently, MoneyTap received an undisclosed investment from 13 Japanese banks and financial institutions including Kiraboshi Bank, Shinsei Bank and Hokuriku Bank.

Prior to MoneyTap’s official launch in October, SBI Holdings received a license from Japanese regulators to handle electronic payments as an Electronic Settlement Agency Service Provider.

Earlier today, David Solomon, CEO of major global investment bank Goldman Sachs, declared that the bank has never had any plans to launch a crypto trading desk, denying previous reports.

Tom Lee’s Bitcoin Misery Index Hits Highest Value Since 2016 in Possible Bull Signal

Tom Lee’s Bitcoin Misery Index Hits Highest Value Since 2016 in Possible Bull Signal

Fundstrat’s Thomas Lee revealed that his “Bitcoin Misery Index” has recently hit its highest figure since June 2016, in what he suggests could be a good or a bad sign.

Wall Street strategist and co-founder of Fundstrat Global Advisors Thomas Lee revealed on April 11 that his “Bitcoin Misery Index” (BMI) recently hit its highest figure since June 2016. He suggested the data could be a good or a bad sign.

The BMI — which Lee designed with the aim of informing investors of how “miserable” Bitcoin (BTC) holders are based on the coin’s price and volatility — reportedly hit a value of 89 on April 2. The Index assigns a value of 100 to positive sentiment and 0 to outright misery.

Historical BMI chart 2011-2019, with Tom Lee’s analysis

Historical BMI chart 2011-2019, with Tom Lee’s analysis. Source: Thomas Lee’s Twitter, April 11

According to Lee, the fact that Bitcoin has reported its highest reading since June 2016 provides a mixed signal. He proposed two interpretations of the index, writing that:

“Good–> Since 2011, BMI >67 only seen during $BTC bull markets. More evidence bull starting. Bad –> BMI >67 after peak, $BTC falls ~25% = Profit taking ST.”

In a further tweet in the same thread, the strategist argued that “the main takeaway is that BMI reaching 67 is further evidence the bear market for Bitcoin likely ended at $3,000.”

As Cointelegraph has previously reported, Lee — a well-known Bitcoin bull — has used the BMI as a measure of investor sentiment as well as to assess Bitcoin’s price resilience and immediate prospects since he first launched the index in March 2018.

Bitcoin is currently up half a percent on the day and is trading around $5,079 by press time, having hit a multi-month price high of over $5,420 earlier this week on April 10.

Binance CEO CZ: Whether It’s an ICO or an IEO, Regulatory Compliance Is Still an Issue

Binance CEO CZ: Whether It’s an ICO or an IEO, Regulatory Compliance Is Still an Issue

CZ, the CEO and founder of Binance, has emphasized that crypto exchange-hosted token offerings are no less subject to regulatory hurdles than their ICO predecessors.

Changpeng Zhao, the CEO and founder of top crypto exchange Binance, has underscored that exchange-hosted token offerings are no less subject to regulatory hurdles than their initial coin offering (ICO) predecessors.

The CEO, better known in the industry as “CZ,” made his remarks in an interview with Bloomberg on April 10.

As previously reported, so-called initial exchange offerings (IEOs) have latterly emerged as an alternative model of token offering wherein a centralized crypto exchange acts as a form of underwriter. The exchange generally operates sales and ostensibly vets both the projects themselves and prospective investors.

In the interview, CZ emphasized that while IEOs may indeed offer the benefit of having a third-party do due diligence on projects, regulatory compliance issues are no less onerous for the new model of offering than for ICOs:

“Regulatory compliance does not change regardless of if you do an ICO or IEO. If you issue a token representing shares of your company, then it is a security (in most countries), and you need to do some work on compliance.”

He also corrected the narrative that Binance itself spearheaded the concept of an IEO, noting that he is not aware of the roots of the new “IEO” term, and that Binance’s Launchpad has not formally presented itself as such. He added:

“Back in 2017 when ICOs were hot, there were other ‘centralized ICO’ websites. We borrowed the idea from there. Exchange-facilitated initial sales is not a new concept. The only minor tweak is using cryptocurrencies instead of fiat.”

As Cointelegraph has reported, Binance’s token sales platform Launchpad hosted a high-profile token sale for the Tron-based BitTorrent token (BTT) this January, followed by another IEO for AI and smart contract project Fetch.AI in February, as well as for Celer Network in March.

In mid-March, crypto exchange Bittrex’s Malta-based counterpart cancelled its first IEO token sale just two days after its announcement. It later conducted a different inaugural IEO in April.

Earlier this week, industry critics and advisors weighed in on the potential drawbacks of the IEO trend. One securities lawyer noted that the exchange-hosted model could make regulators even more likely to deem offerings to be securities sales. Others pointed to the paradox of introducing intermediaries to a space that prizes decentralization, as well as criticizing exchanges for allegedly using IEOs as an opportunity to push sales and use of their own native tokens.

Facebook, Twitter and Telegram: A New Crypto Paradigm or a Glorified Voucher Program?

Facebook, Twitter and Telegram: A New Crypto Paradigm or a Glorified Voucher Program?

Facebook and Telegram’s launch of coins will be more of a game changer for social media and banking than for crypto.

Facebook is controversial, if nothing else. The world’s fifth-biggest company by market cap, it’s also the biggest social network by a comfortable margin. Yet, despite the fact that most of us use it, we’ve become increasingly suspicious of what it’s been doing with our personal data. Ever since the Cambridge Analytica scandal (and probably long before), we’ve feared that such data isn’t particularly secure or private, so we’ve been pushing back against the social media giant, as witnessed with last year’s #DeleteFacebook campaign.

But at the same time, those with an interest in cryptocurrency also have an appreciation that, for crypto to enter the mainstream, it will need the backing of a big corporation or two. This is why recent news of Facebook’s apparent plans for its own cryptocurrency is something of a bittersweet pill to swallow. There’s little doubt that the promotion of a digital currency by one of the world’s largest companies will put crypto firmly on the map. Yet, given Facebook’s reputation, it’s hard to shake the suspicion that what Mark Zuckerberg and Co. end up offering won’t be a cryptocurrency in the proper, decentralized sense of the word.

Still, even if Facebook and other social networks won’t be producing the next Bitcoin or Monero, their dalliances with blockchain could be a game changer not only for crypto, but for other industries. Finance could be irrevocably altered, as banks and other financial institutions race to accommodate the use of digital currencies by social networks. Similarly, a new ecosystem of crypto-related services and platforms could emerge, as they attempt to capitalize on the creation of new digital money by the likes of Facebook.

Facebook, Twitter and Telegram

Rumors that Facebook is planning its own cryptocurrency have been circulating since at least last May, when anonymous inside sources told media website Cheddar that the social media giant was “very serious” about launching an in-app digital currency. Despite remaining unconfirmed, such reports have been bolstered in recent months, with a February article from The New York Times claiming that Facebook has been promoting its soon-to-be-revealed coin to a number of crypto exchanges.

The Times report corroborated a December piece from Bloomberg, which once again cited anonymous insiders and which affirmed that the cryptocurrency would be a fiat-pegged stablecoin used with WhatsApp, potentially with a focus on money transfers. Regardless of whether the coin would be used by WhatsApp, Facebook or Instagram (all owned by Facebook), it’s readily apparent that Facebook is working on some kind of crypto-related project, since, in May 2018, it formed a blockchain group headed by David Marcus (a one-time member of the Coinbase board) to explore how its platforms could use crypto.

It’s therefore only a matter of time before Facebook officially involves itself, in one way or another, in the cryptocurrency and blockchain space. And for those working within crypto, such involvement could have significantly positive implications for the industry. As Nigel Green, the CEO of deVere Group, tells Cointelegraph, Facebook’s arrival “would indicate that digital money, as a concept, is fully mainstream and inevitably the way the world is going. This is something we have been arguing for a long time now — despite protestations from the likes of Warren Buffett.”

Green adds that crypto’s place within the mainstream has already been proven by the fact that Facebook and other social networks have been looking into the use of cryptocurrencies for some time. Indeed, aside from Facebook, Twitter has also been flirting with crypto. While there isn’t any reliable indication that it’s planning its own currency, the platform has become increasingly supportive of Bitcoin in recent months, despite temporarily banning crypto-related ads in March 2018 (as did Facebook). For example, CEO Jack Dorsey declared in a couple of statements from February that he believes Bitcoin will become the internet’s “native currency,” and that Bitcoin is the only crypto he owns.

What’s more, Twitter itself has been supporting a number of initiatives related to the Lightning Network, such as signing the Lightning Torch (aka LN Trust Chain), a project aimed at raising awareness of the network and testing its capabilities. And given that Dorsey is also the founder and CEO of Bitcoin-supporting Square, it’s perhaps inevitable that Twitter will begin integrating cryptocurrencies into its platform sooner or later.

Even more inevitably, it’s likely that the Russian-founded Telegram will release its own GRAM cryptocurrency by October (at the latest), as the popular messaging network plans for the launch of the Telegram Open Network (TON), a blockchain platform set to rival Ethereum and EOS for the development and deployment of DApps. Telegram already boasts over 200 million monthly active users (as of a year ago), so it’s likely that a large number of people are going to have the chance to use crypto on a daily basis once TON goes live.

Centralized or decentralized?

Much the same applies to the recently launched VK Coin from Vkontakte, another social network and the third most popular website in Russia. Combined with the movements from Telegram, Twitter and Facebook, such designs could see the world’s social media titans become some of the biggest players in the crypto industry, if not the biggest players. And according to Green, this should give existing cryptocurrencies and platforms serious cause for concern.

“Facebook and Twitter have enormous influence, resources and reach, and it could be that they would take away some market share from existing cryptocurrencies.”

However, while it’s hard to shake the impression that Facebook (and other social media giants) would make big inroads into the cryptocurrency space, it still isn’t obvious that the digital currency it’s looking to launch will be a truly decentralized cryptocurrency. In light of how Facebook’s whole business model revolves around controlling the data generated by its users, casual observers might be forgiven for assuming that it won’t entrust the operation and validation of its currency to a scattered network of users, particularly when this currency will apparently be a stablecoin intended for use within the Facebook ecosystem.

“Facebook or Twitter coin is not a cryptocurrency,” Arthur Hayes — the CEO and co-founder of BitMex — told Cointelegraph. Hayes went on, saying:

“These will be tokens that ride in their ecosystems. Users must trust these companies to operate the network in good faith and protect their privacy. The only thing any of these tokens will have in common with Bitcoin is that the word “coin” might possibly be used in their names. These will have little to no effect on Bitcoin and other similar cryptocurrencies that operate on a public peer-to-peer network.”

Such doubts regarding decentralization have been reinforced by the news that Vkontakte’s recently launched VK Coin doesn’t appear to make use of blockchain technology in any appreciable way. However, despite such early blows against the credibility of social media coins, there are mixed opinions among experts and commentators as to how centralized any currency from Facebook, Twitter or anyone else would be.

Iqbal V. Gandman — the managing director of eToro United Kingdom — believes that Facebook’s coin will be mostly centralized, although this doesn’t necessarily disqualify it from being a “real” cryptocurrency. “Cryptocurrencies can be both centralized and decentralized,” he told Cointelegraph. “The sheer nature of platforms like Facebook and WhatsApp, means their cryptocurrencies will be centralized. Facebook and Whatsapp are like walled gardens, i.e. you have to login to access them, so I think people will probably only be able to use their coins within those platforms, rather than elsewhere.”

CryptoOracle’s Lou Kerner is mostly in agreement with such an assessment. “Facebook is likely to have decentralized elements and centralized elements, as Facebook is obviously centralized and there is no functional decentralized governance system,” he said to Cointelegraph. But other figures involved in crypto think such skepticism is misplaced, especially since Facebook has been so eager recently to polish its tarnished image.

“As far as I can tell, these cryptocurrencies would be decentralized, as Facebook is seeking to capitalize on the phenomenon of crypto, and part of cryptocurrencies’ inherent appeal is the decentralized status,” says Green. “After the recent Facebook furor regarding user privacy, I think we can expect them to double down in regard to this area as the scrutiny will be immense.”

Of course, the debate over the true meaning of “decentralized” could last until the end of time, yet it’s likely that control over Facebook’s coin won’t be entirely centralized. Not only would this defeat the purpose of launching a cryptocurrency (as opposed to some system of digital credits or vouchers), but it would contradict the aforementioned reports that claim that Facebook has been talking with crypto exchanges. If Facebook is planning to put its coin on exchanges, then clearly it’s comfortable with the idea of it being traded and disseminated outside of its jurisdiction.

User experience = adoption

Besides decentralization, another big question surrounding the prospect of social media cryptocurrencies is whether they might overcomplicate the user experience. Platforms like Facebook, WhatsApp and Telegram are popular largely because they’re so simple to use. Introducing cryptocurrencies and crypto payments could therefore be a delicate business, seeing as how a lay person still doesn’t really understand how crypto works.

Such fears might seem superficially rational, but they’re likely to be unfounded. “Companies like Facebook and Twitter are conscious that the key to a good product is a user-friendly interface,” explains eTor’s managing director, Iqbal V. Gandam. “Introducing their own cryptocurrencies should not make these platforms more complicated for users, it will simply be another service for them to use.”

This seems to be the consensus among other commentators, all of whom point to the storied history such platforms as Facebook have in making their interfaces addictively simple to use. “Anything Facebook or WhatsApp does will be drop dead simple,” affirms Lou Kerner. “That’s why they’re Facebook and WhatsApp.”

In fact, it’s likely that the user experience of a Facebook or Twitter Coin would be so simple that, rather than turning people off Facebook or Twitter, it will actually turn more people onto cryptocurrencies by making them realize that crypto needn’t be complicated. “The impact of these platforms launching cryptoassets on the crypto industry will be much bigger,” says Gandam. “It will help take the utilization of crypto by the public a step forward. Just as Paypal raised its awareness and usage by working with eBay.”

And because crypto and blockchain are already riding a wave of adoption, it’s likely that the two processes could converge in a way that creates a kind of positive feedback loop, thereby accelerating overall adoption. “More and more people are becoming used to cryptocurrencies and mass adoption is increasing momentum all the time, so I don’t think it will be an issue,” says Green, who believes that, far from overcomplicating things, crypto will “enhance the user experience” for Facebook and other adoptive platforms.

New economies

So, there’s a general consensus that Facebook and other social media platforms are planning to launch their own cryptocurrencies, and that such currencies would be positive for the platforms concerned and for their users. The question is: What kind of wider ramifications would a Facebook Coin, Twitter Coin or GRAM have?

Most significantly, it’s possible that such coins could spark a shift in personal banking and finance, especially when Facebook’s likely crypto will be a stablecoin pegged to the value of a number of fiat currencies. “All cryptocurrencies and wider fintech solutions are already taking business away from traditional banks,” Green explains. “They are filling a gap left by the traditional way of doing things as the world speeds up and becomes increasingly globalized and digitalized.”

It’s still not certain how, exactly, Facebook’s coin will work. But if rumors that it will enable money transfers are true, then this will provide one area in which the likes of Facebook will be directly competing with banks and other financial institutions. And because a fiat-backed stablecoin will require Facebook to hold a commensurate amount of USD (or whatever fiat currency ends up being used), Facebook’s entry into crypto will force it to act like a bank in holding the necessary reserves. It would therefore be a game changer, not just for crypto, but for Facebook itself, which would be transformed by cryptocurrency from a social network to something much bigger and influential.

The implications of this for banking (and for Facebook itself) could be huge, depending on the uses Facebook is planning for its coin. With over 2 billion monthly active users, the social network could provide finance to millions of the 1.7 billion unbanked people in the world (two-thirds of whom own a mobile phone). It could succeed where countless numbers of companies and institutions have failed, and while some experts are still uncertain as to how far Facebook and other networks could go in this direction, others think the financialization of social media is one of the logical endpoints of collecting so much finance-relevant user data.

“Social media companies with large active user bases will displace traditional banks in the distribution of financial products,” says Hayes. “They own the attention of the younger generation and have a deep understanding of their behavior from the data they collect. This makes social media companies best placed to sell loans, credit cards, and investment products. They need not actually become a chartered bank, rather they can use a traditional bank’s regulated pipes and create a revenue stream from large origination fees.”

Despite such radical possibilities, some commentators don’t expect it to replace banks anytime soon. “As with every evolutionary stage in money, the stage prior to that never disappears,” says Gandam. “With the onset of digital banking, cash hasn’t disappeared. In the same way, I don’t see crypto replacing fiat. Banking also provides other services aside from transferring and storing money.”

But even if social media cryptocurrencies don’t lead to the disappearance of “traditional” banking, they will nonetheless impact other significant areas. For one, they’ll result in the creation of a new ecosystem of services and products built to capitalize on the appearance of new money, while they could also change how social networks monetize themselves and become profitable. “Ads are not the final frontier for Facebook and social networks,” Max Tsaryk — the CEO at Monfex — told Cointelegraph. “A native cryptocurrency has the power to create a whole new economy where users can store value and pay for paid content or subscription services. We believe that Facebook and Telegram are going to show to the world that cryptocurrencies allow to embrace an entirely new monetization model, radically different from the current status quo.”

The creation of a new ecosystem for a Facebook Coin, for GRAM or for any other new crypto is obviously the other side of the coin of adoption. In other words, if a Facebook Coin is to gain widespread adoption and use, companies will need to provide services and products with which people can use the cryptocurrency. Otherwise, the circulation, utilization and adoption of the corresponding crypto will remain limited and siloed. But because the reach and resources of Facebook are so considerable, it’s likely that many companies and platforms will take the plunge to provide services to new holders of the social network’s coin.

And what’s also likely is that, if Facebook, Telegram and other social networks do find success with their new cryptos, other social media sites will be forced by competitive pressure to also take the plunge. “It is highly likely that where the likes of Facebook lead, other social networks will follow,” says Green, who’s not alone in his predictions. “Everyone will have their own cryptocurrency,” Kerner agrees, even if he isn’t sure how worthwhile most social media cryptocurrencies will be. “It’s just frequent flier miles for the most part. Other than the few actually trying to be currencies.”

But regardless of whether a majority of the coins launched by Facebook and other networks are or aren’t really cryptocurrencies, Kerner believes that their launch will be a good thing for crypto overall. As does Gandam, who points out that they aren’t likely to ever compete directly with existing cryptocurrencies, insofar as they’ll be mostly confined to their respective platforms. “Any ‘traditional’ and well-known company, such as Facebook and Twitter, becoming involved in the crypto industry is a good thing,” he says. “It not only increases awareness and appetite for people to explore other cryptoassets, but also adds credibility to the industry. This should have a positive impact on Bitcoin, especially if the FB coin is only for use on the Facebook platform, vs Bitcoin being used on all other platforms.”

Coinbase Loses 3 Senior Executives in 6 Months as Dan Romero Quits Position

Coinbase Loses 3 Senior Executives in 6 Months as Dan Romero Quits Position

Dan Romero, who held various positions at Coinbase, is stepping down after five years.

United States cryptocurrency exchange Coinbase has lost another senior executive as its head of international, Dan Romero, announced his resignation in a blog post on April 12.

Romero, who worked for five years at the company in various positions, follows director of institutional sales, Christine Sandler, and ex-vice president and general manager, Adam White in quitting the firm.

Sandler left in March to join pro-crypto financial services giant Fidelity Investments, while White sought new pastures in October last year.

Romero had also worked in White’s role, and his departure continues a winding down of institution-focused activity at Coinbase.

While continuing its expansion, retail and cryptocurrency industry business now forms a priority for the exchange.

“After 5 years, I’m leaving Coinbase at the end of the month,” Romero confirmed in his post, adding:

“I’m planning to take some time to figure out what’s next, but I remain as optimistic as ever about the potential of cryptocurrency and Coinbase.”

“An increasing number of cryptocurrency entrepreneurs are quietly building the infrastructure necessary for a more open, permissionless and decentralized version of the Internet and the global financial system,” Romero continued.

As Cointelegraph reported, Coinbase branched out into international payments at the start of this month, followed this week by the launch of a dedicated cryptocurrency Visa card for its United Kingdom market.

LinkedIn included Coinbase in its list of top 50 most popular U.S. companies in April, the company being the only one from the crypto sector to make the latest rankings.

Crypto Exchange Emphasizes Privacy by Offering Coin Conversions Without an Account

Crypto Exchange Emphasizes Privacy by Offering Coin Conversions Without an Account

A crypto exchange says it is prioritizing the privacy of its users by enabling them to convert coins without requiring them to open an account first.

A cryptocurrency exchange says it is prioritizing the privacy of its users — eliminating the “tedious” registration steps imposed by other websites.

BitConvert argues that some rival platforms ask for too many personal details when they are bringing new users on board and says this can make consumers uncomfortable when they are in pursuit of absolute anonymity.

The company also claims such excessive registration procedures actively undermine the purpose of coins that were designed to deliver privacy.

According to BitConvert, its users have the ability to “instantly exchange coins” without being required to register an account with the website. At present, it supports the exchange of Bitcoin and ZCash (ZEC).

ZCash — which, at the time of writing, is the 22nd-largest cryptocurrency in terms of market capitalization, according to CoinMarketCap — describes itself as a “privacy protecting digital currency built on strong science.” The coin’s founders say that its infrastructure ensures personal details remain completely confidential — all without compromising transaction data being posted to a public blockchain. “Selective disclosure features” also enable consumers to share transaction details for audit or compliance purposes.

BitConvert says that it plans to support more cryptocurrencies in the not-too-distant future, all while remaining loyal to its mantra of “anonymous, fast, safe.” Ethereum — along with Monero, another coin that places an emphasis on privacy — are specifically named as two coins that are in the pipeline.

Quick transactions

The privacy-led exchange says that most transactions can be fully completed and confirmed within an hour — and in many cases, execution times can be as little as five to 30 minutes. While two block confirmations are required for Bitcoin, a total of five are needed for ZCash.

BitConvert is available here

BitConvert stresses that its rationale behind eliminating the need for creating a user account is to “fully protect privacy” — and to this end, no personal information is collected when a transaction is taking place, including IP addresses. The company says that it promises these features will not change “so long as our platform is operating,” in an attempt to build trust among users. Data such as the transaction hash, address and amount are kept on record — but this is only to ensure that support can be provided to the consumer in the event there is a complication with a payment.

The company says it hopes to blend anonymity with simplicity. It monitors the best rates for Bitcoin and ZCash on a plethora of other platforms, such as Binance and Bitfinex, to ensure its users get the best deal.

Given how BitConvert users do not have their own account, the platform says it has taken a strong stance on security — making sure that its services are protected using strong security protocols, while also striking partnerships with dependable trading platforms.

Send and go

BitConvert sets out the procedure for using its exchange in three simple steps. Firstly, users select the crypto trading pair they wish to use (at present, it is limited to Bitcoin and ZCash). From here, they set out how much crypto they wish to convert along with their wallet address. Finally, the user can send their funds to BitConvert and complete the exchange. When it comes to the destination for converted coins, the company recommends its clients “only use trusted services in order to avoid losing their funds.”

Privacy has long been a buzzword in the crypto world — and contrary to popular belief, Bitcoin does not necessarily offer its users the anonymity they might expect. Instead, the leading cryptocurrency delivers something known as “pseudonymity,” meaning that consumers only have the opportunity to obfuscate their real identities rather than hide them altogether.

Learn more about BitConvert

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Bitcoin Holds Near $5,100 as US Stocks Stand Still

Bitcoin Holds Near $5,100 as US Stocks Stand Still

Most of the top 20 cryptocurrencies are reporting moderate gains as Bitcoin fights to stay over $5,000.

Friday, April 12 — most of the top 20 cryptocurrencies are reporting slight to moderate gains on the day by press time, as Bitcoin (BTC) approaches the $5,100 mark.

Market visualization courtesy of Coin360

Market visualization courtesy of Coin360

Bitcoin’s price is up close to half a percent on the day, trading at around $5,085 by press time, according to CoinMarketCap. Looking at its weekly chart, the current price is close to two percent higher than the price at which Bitcoin started the week.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: CoinMarketCap

Today Fundstrat Global Advisors founder Thomas Lee pointed out that the Bitcoin Misery Index reached 89, which is its highest reading since 2016, which according to him is both good and bad. He points out that it has reported values over 67 only during bull markets and that he believes it is more evidence that the market is becoming bullish.

Ethereum (ETH) is holding onto its position as the largest altcoin by market cap, which is at about $17.4 billion. The second-largest altcoin, Ripple (XRP), has a market cap of about $13.7 billion by press time.

ETH also gained about half a percent of its value over the last 24 hours. At press time, ETH is trading around $165. On the week, ETH has gained just under one percent, but reported a mid-week high of $183 on Monday.

Ethereum 7-day price chart

Ethereum 7-day price chart. Source: CoinMarketCap

Second-largest altcoin Ripple has lost just about one percent over the 24 hours to press time and is currently trading at around $0.328. Looking at the coin’s weekly chart, its current price is almost 10% lower than what it reported one week ago.

Ripple 7-day price chart

Ripple 7-day price chart. Source: CoinMarketCap

Among the top 20 cryptocurrencies, the one reporting the most notable losses is Maker (MKR), which is down over six percent. The most notable gains, on the other hand, have been seen by Bitcoin Cash (BCH), which is over six percent up.

The total market cap of all cryptocurrencies is currently equivalent to $172.7 billion, which is just slightly lower than $173.9, the value it saw a week ago.

Yesterday, members of the United States Congress sent a joint request to the Internal Revenue Service to provide clarity on reporting crypto taxes, ahead of the April 15 tax deadline.

Also yesterday, a filing dated April 11 revealed that decentralized computing network Blockstack has applied to the U.S. Securities and Exchanges Commission (SEC) to launch a $50 million token sale which — if approved — would be the industry’s first SEC-qualified offering. If approved, the sale would notably see Harvard’s endowment fund, among others, directly involved in the purchase

In traditional markets, the United States stock market is seeing little change so far today, with the S&P 500 seeing no change and Nasdaq down 0.21% to press time. The CBOE Volatility Index (VIX), on the other hand, has lost a solid 4.30% on the day to press time.

Major oil futures and indexes are showing mixed movements today, with WTI Crude up 1.35%, Brent Crude up 1.12% and Mars US down 1.42% to press time. Opec Basket is also down a slight 0.06% and the Canadian Crude Index has not seen its value change in the 24 hours to press time, according to OilPrices.

Chainalysis Urges FATF to Rethink Data Demands on Crypto Exchanges

Chainalysis Urges FATF to Rethink Data Demands on Crypto Exchanges

The FATF has required what the company calls “onerous” reporting and record-keeping of exchanges.

Blockchain analysis firm Chainalysis has hit back at recommendations from intergovernmental financial anti-crime organization the Financial Action Task Force (FATF) in a direct letter dated April 8.

The letter, which Chainalysis sent to the FATF, criticizes the organization’s demands to make cryptocurrency exchanges identify and keep records of senders and recipients involved in cryptocurrency transactions.

These demands had surfaced at the end of February, with the FATF subsequently inviting public feedback on its literature.

According to Chainalysis, such requests would place exchanges, which the FATF calls “Virtual Asset Service Providers (VASPs),” in an almost impossible position.

Should exchanges shut down due to non-compliance, illicit activity would be driven underground to decentralized platforms, making fighting crime harder, not easier, for authorities, Chainalysis argues.

“There is no infrastructure to transmit information between VASPs today, and no one has the ability to change how virtual asset blockchains work,” the letter reads. It continues:

“Forcing onerous investment and friction onto regulated VASPs, who are critical allies to law enforcement, could reduce their prevalence, drive activity to decentralized and peer-to-peer exchanges, and lead to further de-risking by financial institutions. Such measures would decrease the transparency that is currently available to law enforcement.”

The FATF has meanwhile kept up pressure on governments on its list of countries making insufficient progress fighting issues such as money laundering and terrorist financing.

As Cointelegraph reported this month, Pakistan announced that it would implement cryptocurrency regulations in response to criticism that an unregulated landscape facilitates financial crime. Pakistan’s central bank banned cryptocurrency trading in April 2018.

Goldman Sachs CEO Refutes Bank Ever Had Plans to Open Crypto Trading Desk

Goldman Sachs CEO Refutes Bank Ever Had Plans to Open Crypto Trading Desk

Goldman Sachs CEO David Solomon has refuted that the bank ever had any plans to open a crypto trading desk.

Goldman Sachs CEO David Solomon has categorically refuted that the bank ever had any plans to open a crypto trading desk and stated that earlier media reports suggesting otherwise were incorrect.  Solomon made his remarks before the United States House of Representatives Financial Services Committee on April 10, during a hearing entitled “Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 years after the Financial Crisis.”

As previously reported, Goldman Sachs’ alleged plans to create a crypto-focused unit by the end of June 2018 were originally covered in a December 2017 report from Bloomberg. In September 2018, unnamed sources told Business Insider that the project had been put on hold. Several days later, the firm’s chief financial officer, Martin Chavez, told reporters that the recent reports were “fake news.”

In his remarks, Solomon said that Goldman Sachs has engaged with clients that are involved in clearing physically-settled crypto futures, but that alleged trading desk plans were false:

“The first [Bloomberg article] wasn’t correct. Like others, we are watching and […] doing work to try to understand the cryptocurrency market as it develops […] but we never had plans to open a cryptocurrency trading desk.”

Notably, the CEO did not rule out such a move from the bank in the future, stating that:

“We might at some point in time, but there’s no question, when you’re dealing with cryptocurrency, it’s a new area […] it is unclear from a regulatory perspective, it’s unclear whether […] in the long run, as a currency, those technologies are going to work and be viable.”

Ohio Republican Congressman Warren Davidson, who was questioning Solomon over the media reports, himself voiced his belief that the U.S. is lagging behind other countries and failing to “take advantage of this thriving sector [crypto]” due to regulatory uncertainty.  

As Cointelegraph previously reported, other CEOs in attendance at the hearing included JPMorgan Chase CEO Jamie Dimon, who affirmed the value of blockchain technology but reiterated his belief that decentralized cryptocurrencies do not have any intrinsic value.

A bipartisan bill to exclude cryptocurrencies from being classified as securities and foster more regulatory clarity for crypto — first proposed by Rep. Davidson and Democratic Congressman Darren Soto in December 2018 — was reintroduced in a revised form to Congress this week.

Blockchain-Powered Job Marketplace Platform to Migrate 700K User Profiles to Eos

Blockchain-Powered Job Marketplace Platform to Migrate 700K User Profiles to Eos

Blockchain-powered freelancers marketplace Moonlighting is set to migrate its 700,000 user accounts to Eos developer Block.one’s Eos.io protocol.

Blockchain-powered freelancers marketplace Moonlighting is set to migrate its 700,000 user accounts to Eos (EOS) developer Block.one’s Eos.io protocol. The development was announced in a press release shared with Cointelegraph on April 11.

Moonlighting’s move comes as part of a new strategic partnership with Block.one’s venture capital fund Eos VC Fund and fintech incubator and VC fund FinLab AG. A joint venture between the two funds, FinLab Eos VC Fund, led a $5 million investment round to back Moonlighting’s move to the Eos blockchain and grow its user base, Coindesk further reports.

The press release specifies that the new partnership will see Moonlighting incorporate Eos.io — a blockchain protocol designed to support decentralized apps (DApps) at scale — into its existing Blockchain Profile Management System.

In using the Eos.io protocol, Moonlighting user profiles will reportedly preserve key hiring data such as reviews, referrals and endorsements, as well as verification of users’ qualifications.

The Eos-powered blockchain profiles will also support Moonlighting’s mobile management tool set, which enables freelancers to generate proposals, invoices and mobile payments.

As previously reported, a fresh analysis has indicated that the number of active DApp users on Eos was eclipsed by Tron (TRX) in Q1 2019, with the latter now seeing the fastest-growing DApp user base. Ethereum (ETH), where the DApp user base growth has reportedly recently been shrinking, nonetheless continues to host the highest number of DApps overall, although the analysis claimed that many are inactive.

In contrast, an earlier report — based on data from January — suggested that the Eos network accounted for 48% of DApp users, Tron 24% and Ethereum 28%.

ICC to Support Blockchain Adoption Among Its 45 Million Member Businesses

ICC to Support Blockchain Adoption Among Its 45 Million Member Businesses

Perlin will assist the world’s largest business organization to get to grips with the technology’s potential applications.

Singapore blockchain startup Perlin is helping the world’s largest business organization, the International Chamber of Commerce (ICC), roll out the technology, the company confirmed in a press release on April 12.

Perlin, which is already involved in blockchain pilots for various major businesses, including Asia Pacific Rayon, will now gain access to ICC’s members as the organization attempts to bring innovative technologies to the fore.

Now one hundred years old, the ICC counts 45 million businesses under its wing, including Amazon, CocaCola, FedEx, McDonalds and PayPal.

“In collaboration with Perlin, […] we can help facilitate practical and truly disruptive transformation for businesses across every conceivable industry sector,” John Denton AO, secretary general of the ICC, commented in the press release.

The partnership will take various forms, but will focus on value chain traceability — tracking goods through their stages of production and delivery.

The area has already seen considerable uptake from the blockchain sector, with solutions aiming to improve the provenance of entire supply chains from food to metals.

Singapore itself will also benefit, with Perlin and the ICC pledging to advance regional initiatives to improve its status as a tech hub.

As Cointelegraph reported, the city state continues to position itself as a blockchain-friendly jurisdiction. The central bank is set to begin rolling out its Project Ubin initiative among others next year.

Will China Ban Crypto Mining?

Will China Ban Crypto Mining?

Chinese government is considering the elimination of crypto mining.

On April 9, Reuters reported that a Chinese government agency is considering the elimination of crypto mining in the country. Given that China has been hosting the majority of mining pools on its soil, the global crypto industry might be poised to take a massive hit. However, the plan is not written in stone at this point, and part of community has dismissed it as casual FUD.

Brief introduction to China’s relationship with crypto

Chinese authorities have been spearheading the “blockchain before Bitcoin” approach since September 2017, when the infamous crackdown on local initial coin offerings (ICOs) and crypto exchanges occurred. As of now, people in China can hold cryptocurrencies, but they are prohibited from trading them.

The local mining industry specifically has also been subject to repressions. In February 2018, CNN Money reported that the Chinese government pushed crypto miners to make an “orderly exit” from the industry due to tax issues and mining being generally dangerous for the environment.

Indeed, according to a separate article published by Quartz a month earlier, the country’s top internet-finance regulator, the Leading Group of Internet Financial Risks Remediation, ordered local authorities to use all available options — such as “measures linked to electricity prices, land use, tax, and environmental protection” — to force miners to shut down their business. In addition to that, the agency had allegedly obliged regional authorities to submit regular progress reports, detailing the existing mining facilities in their jurisdictions.

In response to the intensifying crackdown, some of China’s largest mining players chose to move shop or even change their main line of business. Thus, Chinese ASIC chip manufacturer and mining outfit Bitmain, once the industry’s most profitable company, which is now experiencing significant difficulties caused by the bear market, decided to turn to artificial intelligence (AI) as an alternate revenue source. “As a China company, we have to be prepared,” Bitmain’s former co-chief executive, Jihan Wu, explained at the time. The company also planned to run a major mining operation in Rockdale, Texas, but had to suspend the plan due to the market collapse earlier this year.

However, China remains a mining superpower. According to data from Blockchain.com, most of the largest Bitcoin mining pools are controlled by Chinese organizations. An earlier study conducted by the University of Cambridge argued that the Chinese dominance in the mining market was made possible by the cheap electricity and land available in provincial areas such as Xinjiang, Inner Mongolia, Yunnan and Sichuan. Reports issued around the same time indicated that over two-thirds of global mining pools were based in China.

New plans: NDRC to dismiss mining as an eco-unfriendly activity

Now, China’s central state planning agency, the National Development and Reform Commission (NDRC), has revealed it might curb crypto mining in the country altogether. Notably, the news was first broken by state-owned newspaper the Securities Times, who reported that the NDRC’s draft list “distinctly reflects the attitude of the country’s industrial policy” toward the cryptocurrency industry, as per Reuters.

Thus, the NDRC has reportedly included crypto mining as part of its draft for a revised list of industrial activities the agency intends to shut down because they “lacked safe production conditions, seriously wasted resources, polluted the environment,” among other issues.

The move forms part of the NDRC’s wider Catalogue for Guiding Industry Restructuring, which has been issued since 2005 and determines which industries are to be encouraged, restricted or eliminated in the country.

The agency has reportedly not set a proposed deadline for eliminating crypto mining industry, postulating instead that it should be dwindled with immediate effect. The public now has until May 7 to comment on the draft.

As local newspaper South China Morning Post reported, the new plan brings uncertainty not only to local miners, but to the makers of cryptocurrency mining rigs as well. That would include the aforementioned Bitmain, which, in 2017, controlled an estimated three-quarters of the global market, as well as Canaan Creative, another large Chinese mining hardware manufacturer. Both companies had filed for initial public offerings (IPOs) in Hong Kong, but were met with skepticism by the local watchdog.

Additionally, according to its IPO filing, by mid-2018, Bitmain operated as many as 11 mining farms in China, and hence would be largely affected by the NDRC’s reported plans. The company has declined to comment on the issue, as per various media reports.

Community reaction

Historically, big news from China tends to affect the crypto market. For instance, when local regulators introduced yet another restraint on cryptocurrencies in January last year, Bitcoin swiftly dropped to its lowest level in more than a month, with Ethereum (ETH) declining 19% and Ripple (XRP) collapsing 29%.

Similarly, the new ban, if implemented, is likely to have a strong impact on the global crypto industry, argue some crypto mining consultants, such as Mark D’Aria of Bitpro Consulting LLC. “Short term, it could be extremely disruptive,” he told Cointelegraph. He went on to say:

“There will certainly be many winners and losers in the mining industry, as non-Chinese miners would benefit in the short term from significantly reduced difficulty, and from inexpensive surplus hardware as it filters out of China.”

However, the ultimate effect largely depends on how, if and when the ban is implemented, D’Aria argues, which is unclear at this time:

“If it was decreed that all miners were to shut down immediately, all of that hashrate lost in an instant could significantly disrupt the technical operation of the Bitcoin blockchain, slowing it down significantly until the next difficulty reduction. If this ban was implemented shortly after the last difficulty adjustment, this transitional period could last months.”

In the worst-case scenario, D’Aria explains, it could take months for the network to bounce back — but either way, the Bitcoin blockchain should be safe in the long run.

“It’s yet another example of how resilient Bitcoin actually is — it can be disrupted in the short term, but long term it adjusts to compensate.”

He elaborated:

“Difficulty is adjusted every 2016 blocks. This takes approximately every two weeks at a stable hashrate. If 80% of the hashrate were to go offline 16 blocks after the adjustment, the next 2000 blocks would take 5x as long to mine (assuming the hardware wasn’t rapidly redeployed outside of China.) This two week period would stretch out to over two months. During these two months transaction rate would also be slowed down by 80%, confirmations that used to take minutes will take hours and fees will likely rise dramatically due to competition for block space. At a time when Bitcoin is still widely criticized for being slow and expensive to use, it’s hardly going to do Bitcoin any favors. […] But if China allows miners to wind down over a few weeks, difficulty adjustment will gracefully handle the loss in hash rate, and there would be little noticeable change to the functioning of the Bitcoin blockchain.”

If the ban does come through, however, part of the mining economy could move underground, but the overall scope of mining operations won’t be the same for China, which might be dethroned by other countries in that case, D’Aria said:

“It [cryptocurrency mining in China] can continue at a very small scale — a basement here, a shed there, etc. However, it is not plausible that large mining farms would be using megawatts of electricity without the authorities noticing. Even if a few chinese miners try to carry on at a small scale, on a global level it would be insignificant. The US, Canada, Scandinavia and a few Eastern European nations would then comprise the lion’s share of mining power — and in all likelihood the mining hardware would eventually filter outside of China to those who can still use it.”

“China FUD”?

Other parts of the crypto community don’t see any reason to panic whatsoever. For instance, Dovey Wan, founding partner at blockchain-focused Primitive Ventures, pointed out that the NDRC’s purview in regard to the industries it wants to eliminate seems limited:

A similar viewpoint was expressed by an independent crypto industry analyst Katherine Wu, who told Wired that this clampdown seems to be more indirect compared to previous crypto regulations in the country, and many industries on the commission’s list of wasteful activities are still far from what’s described under “immediate elimination.”

“It is categorized as an industry that is not encouraged or allowed to expand, but it is not a ban,” Zhao Qianjie, a former employee at BTCChina exchange, told The New York Times, arguing that the government might not impose strict sanctions for local miners.

Emin Gün Sirer, creator of the world’s first cryptocurrency to deploy a proof-of-work (PoW) concept and professor at Cornell University, argued that the news “doesn’t mean the end of Bitcoin” in a series of tweets.

“It just means that most of the hashpower will move across a border, some will go ‘underground’ in China, tucked into backrooms of old factories. Cost of coin production might go up, but that doesn’t affect coin price at all.”

Sirer then categorized the media reports as “China FUD.” “Though as far as consumer-affecting FUD goes, this is pretty weak,” he tweeted. “The impact is on miners, not regular users.”

Instead, Sirer referenced the reports to talk about the status of proof-of-stake (PoS) in the global crypto market, which, in his opinion, has far more advantages compared to PoW.

“It’s high time some adult looked at what was happening with PoW mining, namely, racks of machines performing useless calculations whose sole purpose is to hold back other racks of machines, and said ‘this is a waste of electricity.’ […] The coming year will be the year of Proof of Stake systems. They are green, sustainable and quiescent. They do not leak any value from the store of value to the power company. There’s no dependency on a state energy commission for their security.”

Notably, last week, in the United States, Montana’s county of Missoula adopted new regulations for cryptocurrency mining, requiring miners to use only renewable energy.

Nevertheless, while PoS is indeed generally considered to be much more power-efficient than PoW, it might have its own shortcomings as well, warns D’Aria:

“Arguably the core difference between PoW and PoS is that PoW is an inextricable link between the blockchain and the ‘real world’, for better or worse. Whereas PoS exists purely as a computational and societal construct, no one has to give up anything extrinsic to the system in order to keep it running, and with nothing to physically anchor it’s value to the real world a crisis of confidence in the value of the currency could potentially lead to a death spiral where security becomes so compromised by loss of coin value that it is effectively destroyed. Just because we haven’t seen something like that happen to a PoS blockchain yet doesn’t mean it can’t — there’s a first time for everything.”