Former US Presidential Candidate Ron Paul Says Cryptocurrencies Should Be Exempt From Taxes

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Former US Presidential Candidate Ron Paul Says Cryptocurrencies Should Be Exempt From Taxes

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Ron Paul, an American author, physician, and former US Republican congressman, recently wrote in a blog post that people should not be required to pay taxes on their crypto asset holdings.

In his blog, Paul criticized the US Federal Reserve’s decision to increase interest rates, while adding that those expressing concerns about the high volatility of digital assets should understand that fiat money can also potentially be “anything but stable.”  

Paul further argued: 

Central banks constantly increase and decrease the money supply in an attempt to control the economy by controlling the interest rates … [which causes] individuals to misread market conditions, leading to a misallocation of resources … [and it also gives the] illusion of prosperity.

Quantitative Easing To Blame For Financial Crisis

Notably, the bitcoin whitepaper published by Satoshi Nakamoto almost ten years ago tries to address, or resolve, these same issues. They include problems related to the quantitative easing measures (“introduction of new money into the money supply by central banks”) that the world’s financial institutions used in order recover from the global financial crisis of 2008.

Paul also criticized central banks for continuing to print money and noted that when it “reaches the middle class and working class, inflation has set in, so any gain in purchasing power is more than offset by the increase in inflation.”

In contrast, bitcoin (BTC) is a deflationary form of currency as there will only be a finite number of bitcoins (21 million) that may exist.

According to Paul, “central banking causes income inequality”, and because of issues partially related to the US federal reserve’s poor monetary policies, “it is likely that the next … recession will come sooner rather than later.”

Nouriel Roubini Also Critcized US Fed’s Monetary Policies

He added that a potential financial crisis can be avoided if the Fed’s operations are audited, and by “allowing people to use alternative currencies, and exempting all transactions in precious metals and cryptocurrencies from capital gains taxes and other taxes.”

Notably, renowned economist Nouriel Roubini also criticized the federal reserve’s monetary policies during the US senate hearing on “Exploring the Cryptocurrency and Blockchain Ecosystem.”

However, Roubini has always been extremely skeptical about cryptocurrencies, and even blockchain technology, as he has often referred to them as “the mother of all scams.”

Very Complicated To File Crypto Taxes

As CryptoGlobe reported, filing taxes on capital gains from cryptocurrencies is currently a very complicated process. The US tax authority, the Internal Revenue Service (IRS) considers digital currencies to be property, or an asset class similar to traditional stocks (in some cases).

However, to accurately report gains for tax purposes, crypto investors have to go through all the different transaction logs from their personal wallets and the exchanges they have used for trading. This has become a very cumbersome process for many crypto traders, and a more efficient, or simpler, method of filing taxes for crypto earnings is required.

 

Featured Image Credit: “Ron Paul” by “Gage Skidmore” via Flickr; licensed under “CC BY 2.0”

Have All ICOs Sold Out? A Look At The Altcoin Survivors

The initial coin offering frenzy took over a young and inexperienced crypto market in 2017. People were putting in a large amount of money in projects that had no legal, banking or regulatory approvals. Releasing a mere whitepaper and a website could ensure entrepreneurs easy access to capital. But whether they would release their product – or not – remained a different mystery altogether.

Big Bucks for Blockchain Startups

Since the ICO boom, Forbes reported, over 800 blockchain projects have raised around $20 billion via the sale of their bitcoin-like own tokens. But how much of this money has survived or have been put to use has little-to-no evidence. MobileGo, for instance, raised a whopping $53 million in tokenized crowdfunding to build a video betting and e-sport platform. The project has reportedly removed the cryptocurrency aspects from its nucleus altogether. And the project founders, Sergey and Maxim Sholom, have not conducted any independent audit yet to show where the $53 million has gone.

Losses incurred from the projects like MobileGo somewhat equal many small ICO projects that have abandoned their development plans. According to Deadcoins, a website that indexes non-functional coins, there are over 1,000 ICOs that have already bitten the dust. Though not all the projects were failures. Many among the listed projects, including Enigma and CoinDash, reported hacks, while others like Onecoin or Paycoin were outright scams.

But, there are still a few ICOs that have survived the day and are developing their blockchain projects actively. Moreover, the return on investments out of these projects have outperformed expectations, validating that not all is bad in the world of cryptos and ICOs.

The NXT project came before the ICO boom. Launched in 2013 by an anonymous developer, the blockchain project held the sale of its NXT tokens in September 2013 to develop a proof-of-stake consensus mechanism. It managed to raise about $16,800 worth of Bitcoin at a per NXT value of $0.0000168. The NXT/USD rate at the time of this writing is $0.064521, according to CoinMarketCap.com. That marks a 383953.58 percent return off each NXT token.

NXT also stuck to its path to developing a blockchain-as-a-service (BaaS) platform, eventually building an active community of developers. In light to the recent developments in the public ledger space, NXT has the potential to deliver, which can be confirmed by its sustainability in the market.

The project that kick-started the ICO frenzy in the first place, Ethereum started a new wave of decentralized applications and smart contract developments on the top its open-source distributed ledger platform. The project had its ICO round in mid-2o14, in which it raised $16 millions after selling 11.9 million Ether tokens at a price of $0.311 per unit. At press time, the same token costs around $200. That is 64,209 percent more than the initial value.

Many other ICO projects that survived the FUD with active development and impeccable accountability include NEO, a digital asset ownership platform originally known as Antshares, Spectrecoin, a privacy-centric digital currency network, and Stratis, an enterprise-grade BaaS platform. Ark, Stroj, Lisk, EOS, and the list continues.

The key takeaway is that the projects that vastly focus on offering BaaS, privacy, and decentralization fared better. The ICO industry, as a whole, is surviving with the survival of good projects.

 

Image from Shutterstock

Ethereum Foundation Donates $134k to Ethereum Classic Co-op Amid ‘Thawing Tensions’

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Ethereum Foundation Donates $134k to Ethereum Classic Co-op Amid ‘Thawing Tensions’

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The Ethereum Foundation has donated 15,000 Ethereum Classic (ETC) tokens – or about $134,000 as of press time – to the Ethereum Classic Cooperative, after coming across the bounty in “old Foundation wallets,” according to a Foundation Medium post.

The Ethereum Foundation and Ethereum Classic Cooperative are largely similar organizations, both being semi-autonomous support vehicles for their respective chains, providing financial backing and fostering community engagement and growth. The Ethereum Foundation, for example, is currently hosting Devcon4 in Prague.

The Ethereum (ETH) and ETC development communities have been cooperating as of late on some technical challenges shared by the two chains, explained the Foundation’s Virgil Griffith. The donation seems to come as a sort of peace offering for “thawing tensions” in Griffith’s words. The two chains famously split more than two years ago amid the controversy of the DAO refund (full background here).

No obligation to ETH Foundation/ETC Co-op

Igor Artamonov who is lead developer at ETCDEV, a principal ETC development group, almost immediately took to twitter to clarify the nature of the donation, stating that ETCDEV is independent from both the ETC network and the Cooperative, and “is not funded in any way” by the latter; that it is not collaborating with the Foundation; and that ETCDEV is under no obligation to collaborate with either the Foundation or the Cooperative as a result of the disbursement.

All of these statements are consonant with the spirit of ETC, whose genesis as a result of the DAO hack emphasizes a decidedly laissez-faire approach to official oversight and control; as put by the mission statement of ETC’s Github page, “the classic version [preserves] untampered history; free from external interference and subjective tampering of transactions.”

Ethereum’s Devcon4 bore fruit this week, as the Ethereum Enterprise Alliance released an updated version of its standardized specifications, which are aimed at streamlining integrations of ETH into a host of downstream applications.

EY Reveals Zero-Knowledge Proof Privacy Solution for Ethereum

“Big Four” accounting firm EY has announced a tool that it says will bring private transactions to ethereum – that’s the public blockchain, not a permissioned, enterprise version of the network.

The firm announced in a press release Tuesday that its EY Ops Chain Public Edition prototype (“with patents pending”) is the “world’s first” implementation of zero-knowledge proof (ZKP) technology for ethereum.

A ZKP is a cryptographic technique which allows two parties to prove that a secret is true without revealing the actual secret. In the case of cryptocurrencies and blockchains, this is most often data about transactions.

EY’s privacy prototype is aimed to allow companies to create and sell product and service tokens on the public ethereum blockchain while keeping access to their transaction records private. The firm said that the prototype supports payment tokens that are “similar” to ethereum’s ERC-20 and ERC-721 token standards.

“Private blockchains give enterprises transaction privacy, but at the expense of reduced security and resiliency.” said Paul Brody, EY’s global innovation leader for blockchain, adding:

“With zero-knowledge proofs, organizations can transact on the same network as their competition in complete privacy and without giving up the security of the public Ethereum blockchain.”

Also included with the ZKP prototype is another solution – EY Blockchain Private Transaction Monitor – that captures transaction history.

Coming after the launch of the firm’s blockchain apps and services platform EY Ops Chain in April 2017, the now prototypes are aimed to improve transaction efficiency and scalability, and address reluctance among enterprises to use public blockchains. The privacy offering is slated for production release in 2019, according to EY.

Also moving to adopt blockchain privacy technology in a traditional finance setting, ING Bank earlier this month launched a simplified zero-knowledge proof technology for potential use within banking processes.

EY image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Facebook is Shutting down Cryptocurrency Startup Ads, but only of Competing Products

On October 30, 2018, Yahoo! Finance reported that Facebook recently banned ads from Bloom, an online identity management service which focuses on online identity protection. According to the report, Facebook said this By merely as the firm was offering deceptive financial services products.

However, Bloom claims that although users can apply for loans using its service, the company doesn’t actually have any financial products to sell. The company believes that this is in part because Bloom competes with Facebook’s identity service “Login.”

Facebook’s Crackdown

In January 2018, Facebook imposed a ban on cryptocurrency-related ads and removed all ads related to. As part of this crackdown, the company removed lots of misleading content including hundreds of pages that were spamming users on Facebook to drive traffic to their websites.

The move was so harsh that there was even collateral damage as Facebook blocked dozens of advertisements for being political. While the company had blocked all ads related to cryptocurrency, it changed its policy to allow ads in June 2018. 

A Facebook representative said:

“While we loosened the policy this summer, it remains restrictive. We will continue to listen to feedback, look at how well this policy works and continue to study this technology so that, if necessary, we can revise it over time.”

Facebook Trying to “Eliminate Competitors”

Bloom, is a company that is building technology which helps people keep control over their data as they sign into various online services and apps. The company’s co-founder, Jesse Leimgruber believes the ban was due to his company being a direct competitor with Facebook’s own identity management platform, Facebook Login (formerly Facebook Connect).

Leimgruber says the company spent hundreds of thousands of dollars on Facebook ads until suddenly being ads earlier this month. Answering to Bloom, Facebook stressed the company ads were taken out as part of a crackdown on ads that might be financial products and services related to cryptocurrency.

Despite Bloom not having anything to do with cryptocurrencies or financial products or services it uses blockchain technology, and as such the company’s official website contains keywords that are usually associated with these industries. Simply by having words like “Ethereum” and “blockchain,” Facebook ordered the ban.

Bloom Appeals the Ban

Leimgruber said Bloom already appealed to the ban. Recently, Facebook also created its internal blockchain department led by former Facebook Messenger chairmen and PayPal President David Marcus. Up until now, there are no reports to what the company might be planning, but everyone expects to be something very similar to what Bloom is doing. This has led Leimgruber to believe this is a direct attack from Facebook to his company.

Bloom offers a service called BloomID that can be used to sign into apps and online services, with controls over precisely which data the user wants to share. The BloomID app also allows users to apply for loans while Bloom receives affiliate fees when users sign up for a loan. According to Leimgruber, this is a legit business model which has nothing to do with financial services or products.

Leimgruber says that since Aug. 2017, Bloom has spent about $300,000 on Facebook ads and now the company suddenly sees its ads being banned for an absurd reason. Leimgruber thinks this dispute shows how Facebook’s is quietly trying to clean competitor. According to Yahoo, Facebook has been purging pages, accounts, and advertisers in a clean-up effort after more than a year of scandals involving misleading content and the misuse of personal data. Over and all Bloom was just one more company affected by Facebook.

Ethereum Price Analysis: ETH/USD’s Previous Support Now Resistance

Key Highlights

  • ETH price started a short term upside correction and moved above $196 against the US Dollar.
  • There is a key connecting bearish trend line formed with resistance at $198 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair recently tested the previous support at $198, which acted as a solid resistance.

Ethereum price is slowly recovering against the US Dollar and bitcoin. However, ETH/USD is likely to face a lot of hurdles near $198 and 100 hourly SMA.

Ethereum Price Analysis

Yesterday, there was a major downside move below the $198 support in ETH price against the US Dollar. The ETH/USD pair declined below the $195 level and traded towards the $190 level. It traded as low as $190.91 settled below the 100 hourly simple moving average. Later, the price started an upside correction and traded above the $194 and $195 levels.

Buyers also pushed the price above the 23.6% Fib retracement level of the last drop from the $204 swing high to $190 swing low. The price also moved above the $196 level, but it faced a strong resistance near the $198 level. The stated $198 level was a support earlier and now it is acting as a resistance along with the 100 hourly simple moving average. Besides, the 50% Fib retracement level of the last drop from the $204 swing high to $190 swing low is also near the $198 level. More importantly, there is a key connecting bearish trend line formed with resistance at $198 on the hourly chart of ETH/USD.

Ethereum Price Analysis ETH Chart

Looking at the chart, ETH price is facing a tough challenge near the $198 and $199 levels. As long as the price is below these resistances, it could resume its decline below $196. On the downside, the $190 level is a solid support followed by the $185 level.

Hourly MACDThe MACD is currently placed in the bullish zone.

Hourly RSIThe RSI is back above the 50 level.

Major Support Level – $190

Major Resistance Level – $198

Ethereum Enterprise Alliance Debuts New Interoperability Spec

In an news piece posted on October 29th, the Enterprise Ethereum Alliance (EEA) announced the release of their Enterprise Ethereum Client Specification V2 document. This standard aims to improve interoperability and certification processes, which will “accelerate the adoption and deployment of Enterprise Ethereum solutions worldwide.” The specification identifies unique requirements relevant to each application or industry to make development smoother.

The goal of this standard is to help companies use the Ethereum network more fluidly, and connect with other applications and communities more easily.

Applications certified by the EEA are aimed to be “plug and play” solutions, meaning that everything EEA approved will connect seamlessly.

Ron Resnick, Executive Director of the EEA, wants Ethereum software to be as easy as using a SIM card. “If I buy a phone in one country and a SIM card in another, I know they are going to work together.” He continues to explain:

Using the EEA Specification, Ethereum developers can write code that enables interoperability, thus motivating enterprise customers to select EEA specification-based solutions over proprietary offerings…With the EEA Enterprise Ethereum Client Specification V2, enterprises and startups can develop interoperable offerings, from low-to high-end based, enabling enterprises and startups to easily mix and match applications cost-effectively, even as their needs change over time.

EEA at Devcon

The Enterprise Ethereum Alliance will be presenting more details on this specification at this year’s Devcon. Devcon, a well-known Ethereum conference, started today (October 30, 2018) in Prague, Czech Republic and runs all week.

Devcon is the “annual Ethereum family reunion,” as described by its hosts. “We at the Ethereum Foundation host Devcon to educate and empower our community to build decentralized applications, and to bring Ethereum protocols, tools, and culture to the world.”

Enterprise Ethereum Alliance, launched in February 2017, “is a member-led industry organization based on the goal of empowering the use of Ethereum blockchain technology as an open standard for the betterment of all industries, focused on the needs of enterprises.” Members include developers, technology vendors, start-ups, and Fortune 500 companies. More information, including membership criteria, is available on the EEA’s website.

Former Fed Chair Janet Yellen Is ‘Not A Fan’ of Bitcoin

Former U.S. Federal Reserve chair Janet Yellen is “not a fan” of bitcoin.

Speaking at the Canada Fintech Forum on Monday, Yellen, who served as chairman of the Board of Governors of the Fed between 2014 and 2018, outlined a number of concerns she has with bitcoin in general and the idea of central bank-issued cryptocurrencies specifically. Yellen spoke about price volatility, investor risks and the threat of hackings in a five-minute speech, according to a video posted online by Francis Pouliot.

“I will just say outright I am not a fan, and let me tell you why,” Yellen said. “I know there are hundreds of cryptocurrencies and maybe something is coming down the line that is more appealing but I think first of all, very few transactions are actually handled by bitcoin, and many of those do take place on bitcoin are illegal, illicit transactions.”

Yellen has previously described bitcoin as a “highly speculative asset” in testimony before Congress. Months prior, a separate (and unrelated) appearance by Yellen before a Congressional committee featured a now-infamous “Buy Bitcoin” sign appearing behind the former Fed chair.

Referencing to bitcoin’s use as a payment method, she said on Monday:

“It is one … thought that for something to be a useful currency, it needs to be a stable source of value, and bitcoin is anything but. So it’s not used for a lot of transactions, it’s not a stable source of value and it’s also not an efficient means for processing payments. It’s very slow in handling payments.”

This is due in part to bitcoin’s decentralized nature, she said.

Moreover, Yellen argued bitcoin’s energy use is “very high” when compared to traditional payments rails, which she believes is another sign that bitcoin is not an effective form of currency or a stable source of value.

Regarding central bank digital currencies, Yellen took aim at other perceived issues. For one thing, central bank-issued cryptocurrencies “could have negative impacts on financial stability,” she said.

She added that “in introducing essentially a digital version of cash, first of all, cash is anonymous and again the terrorist financing, money laundering, Bank Secrecy Act concerns would become enormous if you had something digital that is also anonymous.”

Other concerns revolve around cybersecurity, Yellen contended. Global anonymous currencies “would be an obvious target for cyberattacks,” according to the former Fed chief.

Janet Yellen image via Wikimedia

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.