Grayscale Receives FINRA Greenlight to Trade Large Cap Fund

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Peter Thiel Backs $200 Million Valuation for Renewable Bitcoin Mining in the US

One company is driving its business plan straight into the “bitcoin wastes too much energy” argument and has raised $30 million to do so.

That’s according to Layer1 co-founder and CEO Alexander Liegl, which plans to bring wind-powered bitcoin mining rigs to West Texas early next year. The company is raising a total of $50 million at a $200 million valuation, he said.

The idea of bitcoin crowding out other uses for clean energy reflects a misunderstanding of the market, Liegl explained in a phone call:

“Renewable energy is still primarily under-utilized so you don’t actually have a zero-sum game.”

The company has so far raised funds for its series A from Peter Thiel, Shasta Ventures and other cryptocurrency investors that it has declined to disclose. This round follows a previous $2.1 million seed round that also included Thiel, as well as the Digital Currency Group.

Further, Liegl questioned the whole premise that the use of electricity to power the bitcoin network is a waste.

“Bitcoin is the only thing we believe in and that’s what we think can lead to disrupting the financial system,” he said, adding:

“We think electricity directed to the bitcoin mining network is certainly a net positive for society.”

The company is vertically integrated, in that it plans to run its own bitcoin mining facilities in the United States, using mining rigs that the company designed and built in-house and running its own power procurement.

“We actually own electricity substations and land-property in Texas already,” Liegl explained. “We own everything up to our own power plant, but I can tell you that is certainly on the agenda.”

The company has co-founders with prior expertise in hardware and mining, such that they believe they can execute a sophisticated strategy that makes mining in the U.S. profitable again.

“The last seven years we think of as mining 1.0,” Liegl said, with firms doing little more than racing to deploy the most capital. He added:

“Going forward, the market is shifting to a game of operational expenses.”

Don’t mess with Texas

Texas has a major advantage as a cryptocurrency mining location, with energy prices among the very lowest in the nation (particularly for industrial electricity), according to the U.S. Energy Information Agency.

“I love the place. It’s so private-market-friendly,” Liegl said. “Bitcoin mining is pretty compelling to people out there because it’s pretty analogous to how oil and gas works.”

Further, 16 percent of power in Texas comes from wind, according to the Department of Energy. Over 25,000 megawatts have been built with almost 8,000 currently under construction.

While Liegl acknowledges that any operation like his will need a backup power supply for times when wind is not strong enough, the company still expects to deliver a very high proportion of its hashrate via renewable electricity.

The problem for Texas, Liegl explained, is cooling the miners.

Air-cooled miners in Texas would burn up, he explained, so they had to devise a way to liquid-cool the miners. That’s what Layer1 has created with its proprietary mining equipment, each unit of which runs on two megawatts of power.

The first facility will be set up in an open area about 90 minutes west of Midland, Texas.

How big is enough?

“The United States’ hash rate share is currently below 5 percent,” Liegl said. “Our goal is to bump that up to at least over 15 percent.”

As the company notes in an announcement shared with CoinDesk in advance, 60 percent of bitcoin’s hash rate and all of its hardware production is in China. The announcement describes the scale of Layer1’s ambition:

“With this funding, we are positioned to own the whole Bitcoin mining stack by designing, producing, and operating our entire mining infrastructure, including proprietary: ASIC chips, liquid-cooled mining containers and power procurement and development.”

By securing a large amount of funding early, Jacob Mullins of Shasta Ventures said that Layer1 can pursue a more ambitious vision than most startups could, pursuing unit economics that make it attractive as a long-term investment. Further, he believes that as a producer of bitcoin in the U.S., taking a pro-regulator approach, Layer1 will have an advantage when domestic institutions finally move into bitcoin.

“I think that’s another bold way of going at the market and I think over time will create a moat of quality for the business,” Mullins said.

Of course to meet institutional demand – if it ever comes – will take a lot of bitcoin.

There’s no question that Layer1 is going for scale and quickly, but Leigl declined to disclose expected wattage used in 2020, though he said he expected it to be “many hundreds of megawatts.” He added:

“Going forward to 2021, we’re talking gigwatts.”

Wind turbines in West Texas image via Shutterstock

CipherTrace’s Blockchain Forensics Service Now Covers 700 Crypto Assets

The transactions of over 700 cryptocurrencies are now searchable via the blockchain analytics offering from CipherTrace.

That means more than 87 percent of the top 100 cryptocurrencies by volume can now be traced through the API service, the company said Tuesday.

Backed by notable firms like Galaxy Digital, CipherTrace has most recently been involved in the push towards addressing regulatory guidance issued by the Financial Action Task Force in June.

With some 522 million data attribution points, CipherTrace says its platform is uniquely situated to tackle real-world applications like terrorist financing.

“Until now, large swaths of the cryptocurrency ecosystem have remained opaque to AML and CTF monitoring,” CipherTrace CEO Dave Jevans said in a statement.

Providing a view into this data is vital for the future of the industry, Jevans argued, saying:

“Only by helping virtual asset service providers rid their networks of criminals and terrorists will the industry achieve the level of trust required for widespread adoption and government acceptance.”

With the update, the complete financial transaction histories of top cryptocurrencies by market cap such as ethereum, litecoin, and bitcoin cash have become available. Support for ERC-20 tokens and smart contracts has also been added, including transaction and counterparty information, CipherTrace said.

Through features such as transaction alerts for flagged accounts, CipherTrace is marketing its product to government and law enforcement agencies, as well as crypto and blockchain firms that seek to align with increasingly tough international rules.

Code image via Shutterstock

South Korea Aims to Put Trade Finance on the Blockchain by 2021

Trade finance in Korea is headed to the blockchain according to a CoinDesk Korea story and other local press reports.

The transition could be completed by 2021, while foreign-exchange transactions are set to be conducted using the technology within months.

In terms of trade finance, relevant documents will be shared on the blockchain so they can be accessed by financial institutions while export bonds will be made available in the same way so that banks can check for duplicate issuings.

These efforts are key elements in the country’s Development Plan for Digital Trade, which was introduced by Finance Minister Hong Nam-ki on Oct. 14. Under the plan, blockchain, along with 5G and AI, will be utilized to transform the trade environment and strengthen exports.

“We will build a digital trading platform that can be easily and conveniently used in all stages of export, such as contracts, customs and logistics,” Hong said.

A Digital Trade Blockchain Council will be assembled, with a membership including banks, banking associations, trade associations, and the Korea Trade Network (KTNet), which specializes in the automation of trade processes.

The document also mentions that one of the goals of the initiative is to promote blockchain-based foreign exchange transactions. It sets a target of bringing together seven banks by December 2019 to establish the service.

Another element of the plan that will utilize blockchain is the u-Trade-Hub 2.0 (uHT 2.0) initiative. It will use the technology to bring together information on exports, foreign investment and international projects, which will be made available to companies wishing to build up their overseas presences.

Blockchain in trade finance is an area of intense interest globally, and considerable progress appears to have been achieved already. Voltron has brought together some of the world’s largest financial institutions, China Construction Bank is claiming that it is already processing huge volumes on its blockchain trade-finance platform, while UBS took we.trade live earlier this month.

In Korea, HSBC earlier this year said it was looking for local banks as partners in developing its blockchain trade finance efforts.

Image via Shutterstock.

Blockchain and the Classroom — How DLT Can Improve Education

What can I do to prevent this in the future?

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Nasdaq Lists AI-Powered Crypto Index for Top 100 Coins

What can I do to prevent this in the future?

If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware.

If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices.

MaGIC with MBA has Launched Blockchain Researcher Lab Program in Malaysia

MaGIC with MBA has Launched Blockchain Researcher Lab Program in Malaysia

MaGIC in collaboration with Malaysia Blockchain Association has launched a new program for Blockchain enthusiasts who wants to learn the component of the technology from basic layer to the application layer. The objective of the program is to spread awareness and knowledge on applying blockchain technology into business component.

Dato Rayson Wong, Chairman of the Malaysian Blockchain Association , delivered a speech at the launching ceremony of the Blockchain Researcher Lab. He said that the development of the blockchain  requires the government’s strong support and promotion to succeed, so he is especially grateful to the Malaysian Entrepreneur Development Minister (MED). ) YB Datuk Seri Mohd Yusof Md Redzuan  traction, contributed to the MaGIC Malaysian global innovation and creativity Center jointly launched the scheme, so that Malaysia played a key role in the block chain economy, promote the development of industry 4.0.

The highlight of this program is its Exploration Lab, where participants or researchers are allowed to play around with different cryptography algorithm, consensus mechanism and even run their blockchain solution.

TriveAcademy founder Tan Ji-Sheng   explained the main purpose of the blockchain researcher lab program, hoping to cultivate more blockchain professionals, while also allowing more small and medium-sized enterprises and innovation teams to better understand the blockchain and embrace the blockchain. And the blockchain technology will be incorporated into the application and create more value gains.

Companies are taking notice of these business benefits and embracing blockchain technology for its wide-reaching possibilities. From manufacturing to healthcare to supply chain and beyond, blockchain has much to offer. Therefore, they encouraged many industries to come and have the hands-on of the technology which will be exposed by expert only.

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About MaGIC

At MaGIC , we believe in inspiring movement. Our mission is to build a Sustainable Entrepreneurship Ecosystem by catalysing Innovation & Creativity for driving Long – term nation impact.

About Malaysia Blockchain Association

Malaysian Blockchain Association [MBA] is an international Non-Profit social enterprise established with a global vision to build a sustainable blockchain community through Malaysia cooperation

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Asia is Establishing Itself as a Cryptocurrency Marketforce Super Power

Asia is Establishing Itself as a Cryptocurrency Marketforce Super Power

Whilst it’s true that the United States is the single largest country in terms of exchange-based purchasing volume, China has surged past them in terms of over-the-counter (OTC) Bitcoin and Tether trading volume. Ignoring Asia as one of the frontlines of crypto is no longer viable. According to Bloomberg, the continent accounts for nearly 90 percent of cryptocurrency futures and options traded, October 14, 2019.

China and Stablecoins

Earlier this year it was revealed that stablecoin Tether (USDT)- not Bitcoin – is the most traded and utilized cryptocurrency in the world and a majority of this volume came from China.

China’s love for stablecoins stems from the authoritarian regime that is currently in charge of the country. Capital flow restrictions and stringently imposed reporting have stopped citizens of the country from removing a large portion of their wealth from the country.

With the emergence of stablecoins, the Chinese have been able to bypass these restrictions with ease and peace of mind.

Chainalysis’ chief economist, Phillip Gradwell, believes investors should pay close attention to price formation in Asian countries – especially China. The amount of liquidity accruing at these avenues and the sheer size of OTC trades will be incredibly vital data points to understand how the market is shaping up.

Binance has just launched P2P payment remittances through certain channels and unofficial trading via WeChat has been the defacto standard of exchange for over a year now.

China is setting the stage; it just isn’t visible because it isn’t done through a formal cryptocurrency exchange.

Derivatives in Asia

Asian market participants are known for their fascination with derivatives. It’s just that they haven’t toyed with them and created as many innovative structures as the Western financial world has.

CME predicts that Asia will turn out to be the largest market for its Bitcoin options launch. Options allow for a much more robust risk management and hedging set up, and most major miners are based on the continent.

In general, Asia is shaping up to be a crypto force to be reckoned with. With the exception of a few countries like India and Bangladesh, Eastern governments have been far more perceptive with regard to virtual currencies. It makes sense because they have the least to lose and most to gain if the global financial system morphs into an equitable structure.

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Libra is ‘Catalytic Event’ for Central Banks, Says Head of Sweden’s Riksbank

The Libra cryptocurrency payments project is shaking up central banking, according to the head of Sweden’s central bank.

Speaking on CNBC’s “Squawk Box Europe,” Riksbank governor Stefan Ingves said the Facebook-led project has been an “incredibly important catalytic event” forcing central bankers to reconsider their primary product: money.

Ingves said the Riksbank – which is working toward piloting an e-krona in the near future – has had to reconsider its own development in light of private currency alternatives. The development of a new kind of currency is a near-unprecedented event, happening only once every few centuries, he added.

“Part of my job is to produce a good/service called the Swedish krona which is convenient to use for Swedish citizens, and if I’m good at that in a technical sense then I don’t have a problem,” Ingves told CNBC, “But if I were to start issuing 20-kilo copper coins the way we did in 1668, then we soon would be out of business.”

Ingves cautioned, though, that most private sector money initiatives “have collapsed sooner or later.”

The Libra Association gathered in Geneva, Switzerland Monday to sign a formal charter among its now 21 initial members. Last week, multiple money providers such as Visa and MasterCard dropped out of the project after pressure from U.S. lawmakers.

Stefan Ingves image courtesy of Riksbank

Large Investors’ Interest in Bitcoin Futures Is Growing, Says CME

The CME Group, a Chicago-based exchange operator that’s been offering bitcoin futures contracts since December of 2017, has revealed big investors are gaining interest in the product.

According to CoinDesk, the exchange revealed through a statement that the number of open contracts is up 61% since last year thanks to growing demand from intuitional investors. The number of outstanding positions rose to 4,629 contracts from 2,873 in the third quarter of last year.

This despite a significant drop in the price of bitcoin this quarter, as the flagship cryptocurrency is currently trading at around $8,300, down from a $13,800 peak this year. The average daily volume of contracts traded this quarter was of 5,534, or the equivalent of 27,670 bitcoin – $around $290 million.

CME added the volume is up 10% from the same period last year, and that institutional flow has been remaining strong.

Institutional flow remained strong, with 454 new accounts added, compared with 231 added in the third quarter of 2018.

The exchange reportedly further added that its investors holding more than 25 bitcoin, equivalent to around $200,000, rose to 47 from 45 in the second quarter of the year, and from 34 in Q3 of last year.

Around 50% of the trading volumes CME’s bitcoin futures contracts have been getting comes from outside the United States, with 26% being from Asia and 21% from Europe and the Middle East.

At the time CME launched its bitcoin futures contracts so did Cboe, another regulated exchange that suspended its BTC offering in March of this year. Presumably it dropped the offering because of low trading volumes.

The exchange now faces competition from Bakkt, however, the Intercontinental Exchange’s crypto venture that launched earlier this year. It offers physically-settled bitcoin futures contracts and has been seeing its trading volumes grow.

Featured image via Pixabay.