Sale of Ripple (XRP) Tokens Blamed for Collpase in Value

Sale of Ripple (XRP) Tokens Blamed for Collpase in Value

According to an article published by Bloomberg on August 23, the reason why XRP price has been falling during 2019 could be due to a continuous sale of XRP by Ripple. In response, people have started an online petition on change.org called “stop Ripple dumping”.

What Happened to Ripple?

Bitcoin along with most of the other cryptocurrencies have shown excellent signs of recovery through 2019 so far, according to data from CoinMarketCap. The overall cryptocurrency market rose from around $125 billion from January 1, 2019, to a maximum of $387 billion by June 26, 2019, an increase of more than 200 percent. Though this has changed significantly with the current total capitalization is hovering at $262 billion.

However, not all cryptocurrencies benefited from this recovery. In particular, it seems that the bear market for XRP never came to an end. Even though its market position remained stable in third place with a capitalization of $11.5 billion, the token has recorded a loss of 20 percent since the beginning of the year.

Cause and Effect

XRP is a “cryptocurrency” (only by name) that got increasingly popular as big financial institutions would start to use it as an alternative for international settlements. Apparently, that is what Ripple Labs, the primary firm behind the development of the Ripple Payment Protocol, is working on. They are making dozens of partnerships with financial institutions all over the world in order to establish Ripple technology as a standard for cross border payments.

But then, why is the price collapsing?

To better understand this step we must first analyze the structure on which the XRP token was created.

Ripple was initially conceived in 2011 by Arthur Britto, Jed McCaleb, and David Schwartz with the aim to optimize the weaknesses of Bitcoin, namely the risk of 51% attacks, speed in transactions and transaction capacity. The project was actually implemented in 2012 but the team made very different choices than that of Bitcoin, as set out in the original Bitcoin whitepaper.

The company in fact decided to create the totality of the tokens in advance by distributing:

  • 80 billion XRP to Ripple Labs
  • 9 billion to Jed McCaleb
  • 7 billion to Chris Larsen
  • 4 billion to other founders

One of the fundamental pillars of cryptocurrencies is that they do not have a central issuer or a regulating authority as those two characteristics would make it much more similar to a security that hence would be regulated.

Over time, Ripple has distributed the tokens to its users, but still holds a majority of XRP (around 58 percent) as it uses them as a natural part of its revenue model. This distribution gives enormous power to the company and its creators who could decide from one day to the next to flood the market with a massive sell of XRP and crush its price.

For this reason, the company announced publicly to move 55 billion XRP to escrow in May 2017, with a promise to not manipulate XRP market price. The transition was effectuated in December 2017. To add transparency to the use and sale of XRP, the company publish quarterly XRP market reports, accounting for how much is spent of the escrow fund, on what, and how much is returned to escrow.

But as we can see this requires a certain level of trust towards the company, and this trust is starting to wane.

Many investors believe that the 2019 price drop is mainly due to an increase in monthly XRP sales which prevented a price recovery. The company denies this, but according to a report by Coin Metrics, Ripple’s reports have differed from actual sales numbers at least twice and the unspent funds that should have been returned to the escrow were used differently.

According to Eric Turner, director of research at Messari:

“Ripple has been more aggressive in their selling lately…Last quarter’s $251.5 million was up almost 50% from the $169.4 million sold in Q1.”

This implies that the company violated the promise made in 2017 which pledged that Ripple would have access to a maximum of one billion XRP per month.

Control over Money Supply

Despite that Ripple has been on a mission to dispel the notion that it is responsible for the XRP currency it issues, this latest dose of reality indicates that the company has control over the token and its supply.

This sheds some light on an astonishing facet of the technical accomplishment that is Bitcoin. Bitcoin’s supply is strictly limited, no matter how many people use the network, how much its value rises, or how advanced is the mining equipment, there can only ever be 21 million bitcoins in existence. That is why Bitcoin is an asset that is well-suited for playing the role of a store of value.

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Mark Carney: Cryptocurrencies Could Overtake the U.S. Dollar as World’s Reserve Currency

Mark Carney: Cryptocurrencies Could Overtake the U.S. Dollar as World’s Reserve Currency

Bank of England (BoE) Governor, Mark Carney, in a meeting with central bankers worldwide in Wyoming, has predicted that a cryptocurrency backed by several nations could overtake the U.S. dollar as the world reserve currency. As such, it will end the fiat’s hoarding by governments and enhance global trade, reports The Guardian on August 23, 2019.

Global Cryptocurrency to Replace the U.S. Dollar

Per sources close to the matter, Mark Carney is of the opinion that a global digital currency could dethrone the dominating U.S. dollar as the world reserve currency, a scenario that would significantly help to improve global trade and reduce the volatility of capital flows in emerging markets.

The BoE governor says the dollar’s exclusive control of the international money markets and its level of dominance in these markets makes it a barrier to a sustainable recovery.

Also, governments around the world have stockpiled the dollars to protect against the swings in the U.S. economy, which has been on the rise of late.

On the other hand, hoarding the fiat has had an adverse effect on the economy, which is evident in a decade’s long low inflation rate, low-interest rates, and significant increment in the cost of borrowing.

Cryptos to Rescue World Economy

To that effect, Carney firmly believes that a possible solution that will reduce the domineering influence of  USD on global trade, dampen its control on global financial conditions, and stimulate the economy is a global blockchain-based digital currency.

A virtual currency of this nature, according to Carney, will be one that is backed by several nations and it will help to unlock the USDs reserved as an insurance policy in times of economic turbulence.

“If the share of trade invoiced in a digital currency were to rise, shocks in the US would have less potent spillovers through exchange rates, and trade would become less synchronized across countries,” he said.

Reportedly, the crypto version of the Chinese currency, renminbi, and Facebook’s Libra, are being cited as the potential currencies that could replace the dollar.

However, the Carney has pointed out that neither of these can become an alternative to the dollar; instead, the use of new technologies to develop a new cryptocurrency could create a worthy rival to the U.S. dollar.

Furthermore, Carney noted that the world is rapidly advancing, thanks to DLT, and more retail payments are taking place online through electronic payments instead of the major use of cash as was the case in the past.

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Gran West Agreed to Comply with Judge to Reimburse £900,000 worth of Bitcoin to his victims

Gran West Agreed to Comply with Judge to Reimburse £900,000 worth of Bitcoin to his victims

According to news published by The Guardian on August 23, 2019, cybercriminal Gran West has agreed to collaborate with justice to reimburse the victims of his crimes. The amount to be paid as a way of compensation to the losers equals to £915,305.77 pounds. 

Spontaneous Collaboration

Gran West, the 27-year old hacker behind more than 100 cyberattacks to companies, including supermarkets, gambling shops, and cellphone companies between July and December 2015 was subject to a confiscation order under the Proceeds of Crime Act at Southwark Crown Court on Friday, August 23, 2019.

The seizure was not contested by “Courvoisier,” the nickname used by the hacker, who agreed to collaborate with the justice system in order to reimburse the victims of his crimes for a total of 82 bitcoins, around £915,305.77 pound. If West had not cooperated he would have spent an additional four years in jail.

West was initially arrested and charged in September 2017 following a two-year investigation and consequently sentenced on May 2018 at Southwark Crown Court for 10 years and eight months.

West’s Methods

West was also the author of a massive phishing scam attack masquerading as the online takeaway service Just Eat. Between July and December 2015 he was able to collect the personal details of 165,000 people which cost the firm approximately £200,000 even though no financial information was obtained.

The operations were conducted mainly through the laptop of Rachael Brookes, the girl of West, also sentenced to two years of community service.

According to Officers from the Met’s Police Cyber Crime Unit (MPCCU), the device contained personal financial information, also known as “fullz”, belonging to more than 100,000 people and an SD card with 78 million individual usernames and passwords as well as 63,000 credit and debit card details stored on it.

The Police Keep an Eye on the Dark Web

Head of the Met’s Cyber Crime Unit, Detective Chief Inspector Kirsty Goldsmith, said:

The MPS is committed to ensuring that individuals who are committing criminality on the Dark Web are identified, prosecuted and their criminal assets are seized.

The investigation was long and complex but represents a clear warning to all criminals who think they can continue to exploit Bitcoin and the dark web to commit crimes.

The public nature of

bitcoin

makes it a bad tool for this type of activity.

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Hsbc Carries out the First Transaction on the Blockchain-Based Open Trade Platform

Hsbc Carries out the First Transaction on the Blockchain-Based Open Trade Platform

According to a press release dated August 22, 2019, HSBC has successfully fulfilled a transaction on we.trade platform, a blockchain-based solution that allows open trade between SME’s of different bank accounts and other trade opportunities thanks to smart contract technology.

The Transaction

HSBC, the British multinational banking and financial services company, has successfully handled a transaction on we.trade, a European platform for open account trade between SMEs based on the blockchain technology. The initiatives were part of the second round of pilots kicked off in June.

We.trade platform is a digital one-stop-shop for trade. The platform is built on the IBM Blockchain Platform using Hyperledger Fabric and offers banks’ customers access to a simple user-interface, leveraging innovative smart contracts and opening up potential new trade opportunities. We.trade was created from a bank consortium led by twelve shareholders: CaixaBank, Erste Group, Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Société Générale, UBS and UniCredit. 

HSBC transaction was carried out by its customer Beeswift, an English manufacturer of working accessories, which was dealing with a sell order to a Netherlands-based company banked by Rabobank. We.trade allowed both parties to manged the deal online and check the status of the trade.

The Platform

We.trade can be used by SMEs in many ways throughout its trading activities. First of all, the platform lets users to easily find counterparties and also allow them to transact directly online. The platform digitalizing the whole process from the creation of the order to the fulfillment of the payment, all while giving users the chance to follow the progress of the trade.

Another peculiar feature of we.trade platform is the bank payment undertaking (BPU), a sort of the online equivalent of a letter of credit. In other words, during a trade, the seller receives a formal irrevocable undertaking from the buyer’s bank to settle the invoice at the expiry date.

Lastly, the platform allows users to ask its own bank to discount the BPU by supply early financing.

According to HSBC, the Beeswift transaction to Rabobank has been the first trade involving BPU overtaking of we.trade platform. Compared to a traditional Letter of Credit, which is still very bureaucratic and paper-based, BPU allows the digitalization of the whole process: speeding up the process from more than 10 days to less than 24 hours while giving the chance to both parties to easily check the status of the deal.

We.trade is just one of the several innovative projects HSBC is developing to disrupt its business model. Earlier this year, HSBC signed a strategic partnership with South Korean Banks in a bid to make its Voltron, a distributed ledger technology platform based on Corda, commercially available for the settlement of trade invoices and letter of credit.

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Circle Hiring a General Partner to Raise $100M Venture Fund

Circle Hiring a General Partner to Raise $100M Venture Fund 

Circle Internet Financial, a leading fintech company offering institutions and individuals a platform to trade cryptos and raise capital, is looking to hire a general partner to help raise and deploy a new $100 million venture fund in collaboration with SeedInvest, according to reports on August 23, 2019.

Circle to Raise $100 Million

According to its LinkedIn post, Circle is interested in adding a qualified General Partner to its team.

The firm says the General Partner will be responsible for raising and establishing a new $100 million venture capital fund in collaboration with the senior leadership team at SeedInvest.

As reported by BTCManager earlier in March 2019, Circle completed the acquisition of SeedInvest, as part of larger plans to put in place a robust token marketplace that would enable institutions as well as individuals to easily raise capital.

At the time, Circle made it clear that despite the acquisition, SeedInvest will keep operating in line with its existing business model, just that it will now be receiving additional support from the former.

Established in May 2011, SeedInvest is an equity crowdfunding platform that claims to provide investors with access to juicy, highly-vetted startup investment opportunities. 

Since its launch, SeedInvest has made an impressive 162 investments in various startups including TrailFork, with a network of 15,00 accredited investors that includes family offices and highly reputed institutions.

Key Requirements 

Per Circle, the ideal General Partner must have previously functioned as a Principal or Partner at a leading venture capital firm, as he/she will be expected to be able to formulate robust investment thesis that will take advantage of SeedInvest’s deal flow and network of 250k to maximize returns.

Circle says:

The Ideal General Partner will be in charge of running the day-to-day operations of the fund, lead fundraising efforts, a source for investment opportunities, while also building and managing the entire investment team.

It’s worth noting that Circle is one of the firms working hard to ensure broader adoption of bitcoin and other cryptocurrencies.

In September 2018, Circle partnered with Centre.io to launch the USD Coin (USDC), a genuine stablecoin. 

Despite its sterling track record, Circle has also experienced its fair share of turbulence. 

Earlier in March 2019, when the crypto market was still struggling to overcome the prolonged “crypto winter,” Circle announced plans to raise $250 million in funding to enable it to survive the market crash.

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Waves (WAVES) Decentralized Exchange Announces ERC-20 Support

Waves (WAVES) Decentralized Exchange Announces ERC-20 Support

Waves, a decentralized platform building operability for Web 3.0 protocols, has officially announced support for the ERC-20 token standard for projects launched on Ethereum. As per the press release, voting for the first listing occurred last year, and Bancor (BNT) won by a significant margin. As of August 22, 2019, BNT was trading on the Waves DEx with support for Ethereum coming next.

Can Decentralized Exchanges Go Mainstream?

Decentralized exchanges were touted to be the next big thing as the transfer of crypto assets is one of the key points of centralization within the decentralized economy.

While DEx’s didn’t pick up much traction, they still continue to develop their platforms to cater to the large amount of liquidity that comes into the market during bull runs.

Waves DEx is a fresh approach to a trustless exchange of assets, and possibly the most successful ones outside the Ethereum ecosystem.

The platform plans to add support for more liquid assets by September 2019, including but not limited to ether and bitcoin. The new ERC-20 gateway has brought a revamp to the platform and gives users the added advantage of lower fees.

New ERC-20 tokens will be listed in the near future; which tokens get listed will be decided through a community vote. The WAVES token itself was recently announced to have been listed on Kraken.

Waves has had a surge in development since it launched smart contracts on their network.

Growing Competition in the DEx Space

By now, it’s common knowledge that Ethereum is trying to maximize development and refinement in their open financial protocols.

In the subset of DEx’s, Uniswap is more or less positioning itself to become the central pool of liquidity for token exchange.

As of now, IDEX is the single largest decentralized exchange with nearly 60 percent of the market share. Uniswap, however, is gaining market share at a rapid rate and has many planned upgrades for the future.

Waves faces a ton of competition, even while operating in such a focused niche. It’ll take something extraordinary for them to be able to usurp IDEX as the largest exchange or Uniswap as the fastest-growing token transfer mechanism.

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Coinbase Wallet Launches Support for dApps on Desktop via WalletLink

Coinbase Wallet Launches Support for dApps on Desktop via WalletLink

In a bid to make it possible for users of Coinbase Wallet to enjoy their favorite decentralized applications (dApps) on desktop browsers such as Chrome, Brave, Mozilla, Opera, and others, in a secure and frictionless manner, Coinbase has launched WalletLink, according to a blog post on August 22, 2019.

Coinbase Supporting dApps on Desktop Browsers 

As stated in its blog post, Coinbase crypto exchange has launched a new feature to make life easier for its users.

With WalletLink, users of Coinbase Wallet will now be able to have access to their favorite decentralized applications on a vast array of desktop browsers by simply scanning a Wallet Link QR code with their Coinbase crypto wallet app.

The team says the WalletLink feature acts as a secure bridge between the Coinbase Wallet app and a desktop browser, enabling Coinbase customers to use dApps anywhere without exposing their hard-earned cryptoassets to external threats.

The Journey so Far 

In August 2018, Coinbase rebranded Toshi, a user-controlled Ethereum wallet reportedly built by its team, transforming it into Coinbase Wallet, a tool that enables users to seamlessly use dApps and explore the decentralized web on their smartphones.

Coinbase says since Toshi became Coinbase Wallet, the wallet has gained significant traction, with hundreds of thousands of users professing their love for its intricate features which includes biometric authentications, support for dApps and collectibles and more.

Against that backdrop the Coinbase team decided to extend the exciting functionalities of Coinbase Wallet to desktop, to allow users enjoy the Coinbase Wallet experience without having to “install clunky browser extensions and copying and pasting private keys across devices.”  

To try the WalletLink feature, users are required to update their Coinbase Wallet app to the latest version (version 19.1 on iOS and 18.0 on Android).

In addition to the numerous desktop web browser as well as dApps such as dYdX, IDEX, Maker Compound which are already compliant with WalletLink, the team has hinted that it plans to add support for native mobile apps and more currencies shortly.

Importantly, Coinbase has made it clear that the WalletLink solution will be open-sourced, to make it available to dApp developers and entities interested in integrating it into their products.

Coinbase remains one of the crypto exchanges building innovative products and services to promote broader adoption of cryptos.

As reported by BTCManager earlier in April 2019, Coinbase announced the launch of its crypto debit card, to facilitate easy spending of bitcoin.

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Bollinger Bands Creator Believes the Crypto Market Has Less Noise

Bollinger Bands Creator Believes the Crypto Market Has Less Noise

John Bollinger, the creator of the widely used Bollinger Bands, has revealed that he has been in the crypto market for over three years. In an interview with Forbes, August 22, 2019, Bollinger revealed he entered cryptocurrency because he saw that it operated with less noise than the stock market. Bitcoin in 2016 was reminiscent of the stock market before S&P futures contact launched, according to Bollinger.

Technical Analysis in Cryptocurrency

The entire notion of price charts and trading cryptocurrencies has become a taboo within the inner circle of bitcoin maximalists. But by zooming out of this limited perception, one can see that the lack of complex financial infrastructure allows the spot market to dominate, rendering technicals all the more useful.

John Bollinger opines that the lower degree of high-frequency trading and scalper in comparison to traditional markets has helped the price action reflect demand and supply without being heavily skewed.

Three years ago, Bollinger tested his theory and it turned out he was correct. His interest in the asset class grew as he realized it was a vehicle behaving in line with classical technical analysis.

According to Bollinger, the stock market is riddled with noise, and it has been since the introduction of futures and ETFs. He pinpoints ETFs, claiming that they weld the price action of many companies together – companies that otherwise would have independent price action.

Over the past year, Bollinger believes the number of trade-worthy cryptos has fallen.

When asked for his view on the current market, he said bitcoin is looking to consolidate and set its range low between $9,000 – 10,000, and that altcoins may continue to go lower.

The Case for Technicals

Contrary to the prevailing view by crypto enthusiasts, technical analysis is not just drawing lines on a chart and praying for a sacred symmetry to show up.

Points of support, resistance, trendlines, volume, and candlestick analysis is simply to break down the behavioral aspect of the market.

These regions help traders identify high liquidity zones where whales and institutions are either buying or selling. Additionally, methods like Elliot Wave explain the behavior of price through by integrating socionomics and human psychology.

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Rwanda Studies CBDCs To Minimize Transaction Cost and Maximize Output

Rwanda Studies CBDCs To Minimize Transaction Cost and Maximize Output

The Rwandan Central Bank is interested in exploring central bank digital currencies to reduce the costs associated with transacting by optimizing efficiency. As per BNN Bloomberg, August 22, 2019, Rwanda’s Central Bank looks to authorities in Canada, Singapore, and Holland for inspiration as they have successfully studied the applications of blockchain.

More Central Banks Come On-Board

Monetary authorities across the globe have been struggling to understand and regulate digital currencies like bitcoin and ether. Since they have realized that regulation of bitcoin is a tricky issue, they are increasingly accepting the possibility of launching their own cryptocurrency on a permissioned ledger only accessible by them.

In fact, CBDCs would be much better if they weren’t launched on a blockchain. Blockchains help introduce decentralization and censorship resistance; since these would be centralized ledgers anyway, the network could scale a lot faster with regular servers.

Rwanda’s biggest concerns are with respect to digitizing the entire supply of currency. Moreover, the Director General of Financial Stability for the country is worried about the side effects of an outage on the network.

Many central banks have been exploring the effects and nuances of CBDCs. While nobody has implemented one yet, China looks to be the furthest along the timeline.

Rwanda could be the first African country to issue digital fiat currency, which would be a huge stride forward for the entire region as they tackle the issues plaguing the payments sector.

CBDCs Would Spell the End of Privacy

Transacting via bank transfers, plastic cards, and most cryptocurrencies intrinsically kill user privacy by creating a detailed digital trail that can be tracked by any authority and even some private entities.

Cash is by far the most private form of money that exists today, as it has the greatest fungibility and no single note has a history of where it was spent and why it was spent.

CBDCs would reduce the circulation of cash in an economy, effectively destroying financial privacy.

If the interest shown by central banks to issue CBDCs comes to fruition, privacy coins like Monero will be paramount to establishing individual financial privacy.

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White House Issues Circular on Deep Web Opioid Market, Targets Cryptocurrencies

White House Issues Circular on Deep Web Opioid Market, Targets Cryptocurrencies

The White House issued a notification stating their desire to take on a multi-faceted approach to shutting down the marketing efforts of illegal opioids being sold over the deep web. Synthetic opioids like Fentanyl have been selling like hotcakes over the dark web. Throughout the circular, they constantly talk about virtual currencies – mostly Bitcoin – stating they are used for money laundering and to facilitate illicit trade, August 22, 2019.

Pharmaceutical Opioids Thrive on Dark Markets

As explicitly stated in the circular, there needs to be more awareness regarding the depth of the issue on behalf of pharmaceutical companies, e-commerce platforms, communications companies, and social media applications. The White House also acknowledges that a significant amount of illicit drug trade happens through inter-personal connections or on the street.

Online dark markets offer people a wide variety of drugs from those with legitimate medical applications that are being diverted from real patients who require it to extremely harmful substances with no medical value.

Technology is advancing and the popularisation of Silk Road led to a number of drug traffickers looking at the internet as a prime source of sales. These individuals/entities were previously restricted to their own geographical region; now that the internet allows them to reach a massive amount of people, they are milking the opportunity for all it’s worth

Targeting Bitcoin and Lessons To Be Learnt

In several places in the notification, the White House has specifically pinpointed Bitcoin, calling it a facilitator of illicit trade and a money-laundering tool. This comes as no surprise given President Trump’s stance on cryptocurrencies.

At least the White House acknowledges that a major chunk of this happens through cash in a face-to-face setting, unlike Steve Mnuchin who thinks that cash isn’t used for any criminal activities.

The U.S. governments war on drugs pushed a number of medications with medical value outside the bounds of the law. By doing so, the government helped enable robust black markets where anyone could get anything – just as before – but the exchanges are done quietly without any tax revenue being accrued to authorities.

If the “War on Drugs” taught us anything, it’s that banning something doesn’t reduce demand or supply for the commodity or service, it simply pushed the trade out of the legal system and reduces fiscal revenues. By taking a note from their past mistakes, the governments would do well to understand that banning cryptocurrencies will end with them as the net loser.

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