Can Blockchain-based Cryptobanks Overtake Centralized Competitors?

For a long time, cutting-edge technologies have comprised the flagship achievements of the centralized banking systems across the globe both economically and socially. The technology behind credit cards and online payments have driven business performance, revenue and customer ease-of-access.

Just as early industry disruptors such as PayPal revolutionized the digital commerce landscape of their time, the modern day self-labeled ‘Cryptobanks’ are challenging the offerings provided by the status quo. They are making fully integrated cryptocurrency based banking services and payments accessible to every-day users, enthusiasts and entrepreneurs alike.

We are still in a transitional period between the centralized fiat finance era and what will become of its co-evolution with decentralized e-commerce. In light of this, I wouldn’t suggest that you ditch your brick and mortar account completely just now, but that shouldn’t stop you from reading more and seriously getting involved. There is potentially a great deal to be gained from being an early adopter of disruptive decentralized currency solutions.

Contactless payments and crypto loans

From credit/debit cards to PIN and contactless technologies, advances in payment solutions have been universally lauded for their value delivery to the companies that employ them. Additionally, their ease of use benefits both customer and retailer.

A number of cryptobanks have integrated mobile payment technologies such as NFC, QR, ApplePay, and AndroidPay. They have combined these with decentralized Blockchain based banking to provide global services. These can all be controlled from anywhere using a computer or mobile app.

Additional services offered by cryptobanks include the novel proposition of token-based credit loans. These can be accessed instantly anywhere in the world (pending application) and transferred to a currency of the customer’s choice.

Unrestricted and scalable corporate banking solutions

The benefits for business owners are numerous, when used correctly. For example, you can now create a new business from scratch and use the services on offer from a cryptobank for tailored solutions that can be scaled to almost any model. This could be either online or at a brick or mortar store, offering your customers the ability to pay in either fiat or cryptocurrency whilst enjoying total freedom from capital and government based restrictions. Needless to say, this can manifest in a reduction of regulatory fees and other expenses.

In addition to allowing contactless payment transactions (explained below), some cryptobanks boast seamless integration with retail POS software. This ‘best of both worlds’ approach makes a strong argument that cryptobanks provide a much more competitive solution for business owners than centralized banks.

In conclusion

The explosion of cryptocurrency in the media may make it seem like a dizzying phenomenon that only the most full-time enthusiasts can handle. In reality, the emergence of all-in-one service providers such as these ‘cryptobanks’ appear to put the power of advanced AI systems and real-time world currency metrics in the hands of any savvy individual.

Due to this decentralized nature, cryptobanks provide powerful solutions to a broad range of business and personal users. These include the security benefits of Blockchain without being bound by external regulations that limit their centralized high street rivals.

Gleb Markov, COO and co-founder of the quickly growing Cryptobank Crypterium, identified key attributes of the Blockchain for regulating decentralized finance activities being that:

“Within the Blockchain, nobody can rollback a transaction, identify a user or block a wallet. Everything is decentralized, anonymous and permanent — and we think it is a wonderful universe to live in.”

He continues to explain the multi-faceted benefits of cryptobank providers, which affect both retailers and the customer alike:

“Stores need to be able to accept not only fiat money but also cryptocurrencies (in various forms, i.e. fiat-crypto, crypto-fiat and crypto-crypto).”

The achievements of Markov’s ICO appear to stand testament to his wisdom, as Crypterium currently supports over 50,000 token-holders with operating services across 154 countries (since its launch on Oct. 31, 2017). It also offers variations of the majority of, if not all, the services mentioned in this article and would be a good starting point when researching such ‘cryptobanks.’

Dan Mitchell

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.

South Korea Pushes Monero and Ripple Price Up While Other Cryptocurrencies Fall

Seoul Blockchain
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The Monero and Ripple price has surged over the past 24 hours, while other cryptocurrencies including bitcoin and Ethereum fell by around 5 percent.

Extreme Premiums

Investors in the South Korean cryptocurrency market are driving the price of Ripple and Monero up, given that nearly every cryptocurrency in the local market are being traded with high premiums. Ripple and Monero are two of the few cryptocurrencies that are heavily concentrated in the South Korean market in terms of daily trading volume.

Bithumb alone, the second largest global cryptocurrency exchange based in South Korea, accounts for more than 35 percent of the market share of both cryptocurrencies. Korbit and Coinone, also process 10 percent of global Ripple trades, increasing the market share of the BTC-to-KRW trading pair in the global Ripple market to nearly 50 percent.

Currently, on both Bithumb and Korbit, Ripple is being traded at 1,592 KRW or $1.48. Given that the global average price of Ripple is $1.29, it is a premium of over $12.83. On Bithumb, Monero is being traded at $467, higher than the global average price of $391, with a 16 percent premium.

Price of various cryptocurrencies on Bithumb

Because of the substantial premiums on South Korean exchanges caused by a lack of supply, cryptocurrencies with trading volumes concentrated in the South Korean market tend to surge by larger margins and decline at a slower rate relative to other cryptocurrencies.

Ripple for instance, barely declined on December 23, when the entire cryptocurrency market plunged in value, with bitcoin, Ethereum, and Bitcoin Cash all experiencing over 30 percent drop in prices. While other cryptocurrencies fell drastically, Ripple declined by around 3 percent, remaining above $1.

As CCN previously reported, Litecoin creator and former Coinbase executive Charlie Lee stated that the South Korean cryptocurrency market has been pushing the price of bitcoin and cryptocurrencies like Ripple up for many months. Even bitcoin is being traded at $19,700 in the South Korean market, with a $4,000 premium over the global average price.

“I think increased regulation will help to reduce the volatility of the coin. A lot of the recent gains have had a lot to do with countries like (South) Korea and Japan really getting into the cryptocurrency space. Ever since China banned the bitcoin exchanges, (South) Korea has really taken up the mantle. There is a lot of frenzy in (South) Korea right now and I think that’s driving up the price,” said Lee.

Why are Premiums so High?

Cryptocurrency exchanges based in South Korea are very cautious in regards to the cryptocurrencies integrated on the platforms. Qtum for instance, underwent a rigorous process of market evaluation before the Bithumb development team came to a consensus to implement support for the cryptocurrency.

As such, Bithumb, Korbit, and Coinone, three of the largest cryptocurrency exchanges in South Korea, only support a handful of cryptocurrencies, and the cryptocurrencies that the three exchanges support are often traded with high premiums.

The demand for cryptocurrencies in South Korea is higher than any other regulated markets like the US and Japan, primarily due to the tendency of investors in the South Korean finance market to all-in on an asset which others are either invested in or is trending. The South Korean prime minister Lee Nak-yeon described such surge in demand for bitcoin as “cryptocurrency mania.”

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Director of UK-Based Crypto Exchange Kidnapped in Kiev

Pavel Lerner, the managing director of the cryptocurrency exchange EXMO was abducted by “unknown persons” in Kiev, reports Ukraine-based web publication Strana.ua. According to their sources, Lerner was held while leaving his office in the center of town and driven off in a black Mercedes-Benz.

Currently, multiple investigations are underway to determine why and by whom Lerner was kidnapped.

According to Strana.ua, Lerner is a Russian citizen who holds a residence permit in Poland and is involved in a number of crypto/ Blockchain startups in Ukraine. Lerner’s Facebook page says he is originally from Kursk, Russia. EXMO’s site states that the company is based in Polegate, England.

EXMO representatives told local crypto journal ForkLog that the incident has not affected the company’s functioning and that users’ data and funds have in no way been compromised:

“We are doing everything possible to speed up the search of Pavel Lerner. Any information regarding his whereabouts is very much appreciated. Despite the situation, the exchange is working as usual. We also want to stress that nature of Pavel’s job at EXMO doesn’t assume access either to storages or any personal data of users. All users funds are absolutely safe.”

In other news from Ukraine, earlier this month in Odessa, ForkLog reported that both their office and their CEO’s apartment were raided by members of the Ukrainian Security Service. The raid culminated in the seizure of equipment, including those on which personal and corporate cryptocurrency funds were held.

Russia’s Finance Minister Confirms Upcoming Bitcoin Regulations

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The Russian Ministry of Finance has prepared a sweeping regulatory law that will cover many facets of cryptocurrencies like bitcoin in Russia.

In an interview with state-owned television broadcaster Rossiya 24 over Christmas, Russia’s finance minister Anton Siluanov confirmed the ministry’s draft law on a regulatory framework for cryptocurrencies. The regulation, as expected, will cover bitcoin mining rules, taxation laws for adopters and guidelines for exchanges selling cryptocurrencies.

As reported by Russian news source TASS, Siluanov stated:

The Ministry of Finance has prepared a draft law, currently under consideration, which will determine the procedure for issuing, taxing, buying and circulation of cryptocurrency.

In conjunction, the Ministry of Finance is also reportedly preparing amendments to Russian legislation toward the broader regulation of new financial technologies and digital payments.

The developments are a remarkable contrast to legislation proposed by Russia’s Finance Ministry as recently as March 2016. At the time, the ministry proposed a 7-year prison sentence for bitcoin adopters and users.

Earlier in September, Siluanov called for the Russian government to accept and understand “that cryptocurrencies are real.”

“There is no sense in banning them,” Siluanov said at the time, “there is a need to regulate them.”

The new laws, in its draft, is expected to be submitted to the State Duma (the lower house of the Russian Parliament) tomorrow before its anticipated adoption sometime in March 2018. The new laws were fast-tracked by authorities following Russian President Vladimir Putin’s mandate to develop regulations for cryptocurrencies, mining and initial coin offerings (ICOs).

The amendments to existing Russian laws to recognize cryptocurrencies will also aid in the prepping for the launch of Russia’s own national cryptocurrency – the CryptoRuble.

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Bitcoin Boasting Strong Recovery After Post-Dip Volatility

On Friday Dec. 22, in the midst of pre-holiday bustle, the cryptocurrency market was awash in red. Altcoins lost up to 40 percent, and Bitcoin was close behind, suffering a 30 percent drop and reaching as low as $11,833 a coin. In a single day, the total cryptocurrency market cap decreased by more than $200 bln.

Just days before on Dec. 17, Bitcoin reached a record high of $20,078 and leading up to the crash Bitcoin price had been hovering between $16-17,000.

What followed was several days of volatility. Just 24 hours after the frightening dip, the market saw a notable bounce back. The recovery, however, was not stable and was quickly followed by another dip leading into Christmas day.  

Since then, however, Bitcoin has been gaining steadily and has fully recovered its pre-dip heights, trading at an average of just over $16,000 at press time.

BCH

Total market cap, which also spiked and then dipped again over the weekend, has been steadily growing since Monday. At press time total market cap also showed an almost full recovery, at $606 bln.

BCH

Many Bitcoin investors saw Friday’s dip as the perfect chance to buy up more of the leading cryptocurrency at a “discounted” price.

Others pointed out that the overall market correction around the New Year is nothing new, and noted that corrections like the one on Friday are actually just what the market needs.

300-Member Strong Ethereum Enterprise Alliance Launches Three Working Groups

Ethereum Enterprise Alliance Working Groups
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The Ethereum Enterprise Alliance (EEA) has launched three working groups in digital identity, energy and multiplatform interoperability to create and deliver specific advancements in those fields using Ethereum technology.

With over 300 members since its launch in February 2017, the Ethereum Enterprise Alliance is now the world’s largest blockchain consortium. The working group, whose members include the likes of Intel, Microsoft and Mastercard, is a collective of companies and Ethereum development startups – even governments – uniting to leverage open-source Ethereum technology for enterprise blockchain solutions.

In an announcement recently, the EEA has now added three specific member-driven working groups in digital identity, multiplatform interoperability and energy, bringing to the total number of working groups and committees within the consortium to 17.

“Identity, energy and multiplatform interoperability are three areas where EEA members see real advantages to using Ethereum technologies in 2018,” explained EEA founding board member Jeremy Millar. “Working groups allow them to innovate, test new ideas and stay competitive.”

Elaborating further, the Digital Identity Working Group will focus on researching the role of Ethereum blockchain technology in developing a digital identity taxonomy that can be implemented throughout the tech sector.

The Energy Working Group will delve into defining blockchain standards for Ethereum applications in oil and gas, refineries, trading, utilities, mining and other use cases within the energy industry. The group will also develop the necessary infrastructure for the widespread implementation of Ethereum tech in the energy space.

Lastly, the Multi-Platform Working Group will cast an eye and dye on making the Ethereum platform available and usable across multiple operating systems and physical hardware. The ultimate goal? To make the Ethereum blockchain platform universally adoptable, whatever the platform may be.

“EEA’s member-driven working groups focus on solving the real-world challenges of deploying and using Ethereum in the enterprise,” Millar added. “The output of the working groups is a key component of EEA’s mission and active participation is something our members find valuable to their businesses.”

The three new working groups join the recently launched Legal Industry Working Group – a collective of 14 law firms and academic institutions working to educate the legal industry about the advantages of blockchain technology.

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After BlockShow: How Achain’s Fork Theory Has Worked in Real Life

It’s been less than a month since Achain introduced its Fork Theory at BlockShow Asia 2017. The project has recently released light-speed ABitcoin (ABTC) and the global cloud computing service token Acute Angle Coin (AAC).

Achain is the public Blockchain platform that allows users of any skill level to issue tokens, smart contracts, create applications and Blockchain systems. Its fork theory is a bold attempt at gearing the current forking technique towards an end goal of technological innovation instead of just financial profiting, lifting Blockchain industry from mutual exclusiveness onto the air of open collaborations. This system would require a process of requesting, approving and executing through mutual agreement of participants. The newly created sub-chain will have its consensus method, data storage and block capacity available for free customization.

How did it begin

On Nov. 23, Achain founder Tony Cui posted on BitcoinTalk Forum to unveil the basic framework of the freshly designed Fork Theory on chain-split. Cui’s purpose of this posting was
to gather public feedback in preparation for his keynote which was later presented at BlockShow Asia 2017.

The posting included several bullet points highlighting the main aspects of the theory. According to Cui, a development such as this is made necessary by the abiding concern of technical qualifications restricting Blockchain accessibility to mass commercial marketplaces. Tony Cui commented:

“How could new developers quickly develop secure Blockchain applications? And where could they even start to find their first customers?”

Inspired by the recent trends of Bitcoin forking, Cui’s theory proposed a coexistence of a main chain and several sub-chains derived from the main. The former is committed to the basic Blockchain infrastructure, while the latter could be customized to the various needs of their applications.

The theory

Achain’s Fork Theory is a company’s bold attempt at gearing the current forking technique towards an end goal of technological innovation instead of just financial profiting. To new
developers of future Blockchain applications, it solves the problem of their initial lack of customers, since the sub-chains inherit the reservoir of existing users directly from the main
chain database. Furthermore, it avoids disruptions of communications, as all information and value exchange will be shared among all chains following a universal VEP 1.0 (Value Exchange Protocol). Finally, the theory requires the type of forking – whether hard or soft – to be considered according to the scenarios required by each application and be voted on by the wide majority of the Achain community.

ABitcoin, approaching the Speed of Light

ABitcoin was forked at the height of 498888 at BTC on Dec. 12 and will initiate forking at 1498888 at ACT on Jan. 12, 2018. It inherits Achain’s DPoS consensus algorithm and features light-speed contracts of mega-level TPS with 0.00001 USD transaction rate. Oriented to the technological future, ABitcoin strives to integrate concepts of AI, Big Data, game industry and the Internet of Things in Blockchain application and fully protect against quantum attacks by 2019.

Having improved the operation rate and network huff-and-puff movement performance of smart contract, ABitcoin represents a Blockchain+ platform that runs free of barrier. By the end of 2018, it will complete automatic discovery and organization of clusters to improve concurrency rates.

The smart contract platform will be launched in January 2018. BTC holders will obtain ABTC following a ratio of 1:100, and ACT holders following 1:1.

Acute Angle Cloud: IaaS experience powered by Blockchain

Acute Angle Cloud is a globally distributed IaaS platform. Its cloud computing service platform encompasses Acute Angle PC, Acute Angle Chain and IPFS system. The project plans to achieve its goal through Acute Angle Chain, Acute Angle Cloud 1.0 and Acute Angle Cloud 2.0.

Acute Angle PC was launched on its official website on Dec. 12th. It is a universal host based on IPFS P2P hypermedia protocol storage and Acute Angle Chain digital assets management. And it can formulate reward system for all the users according to smart contract. It significantly differs from Xunlei’s previously released device OneCloud. Acute Angle PC functions as a genuine PC, which means that mining will be automatically implemented once the users boot into the system. Its digital currency Acute Angle Coin can be gained through sharing idle disk space and bandwidth, providing its users with an efficient private mining experience.

Victor Gao, founder of Acute Angle Cloud, has 17 years of experience in PC, intelligent hardware product definition and development, supply chain production and brand marketing
management. He shows optimism of building with Achain a new ecosystem of the Blockchain community and promoting the advancement of human information technology in the service of society.

Achain’s Founder Tony Cui remarked that Blockchain has reshaped current business scenarios, removed unnecessary middleware and optimized the efficiency and cost of the entire
transaction. Achain’s technical philosophy and structure root from the perspective of smart contracts, which neatly fits into the Acute Angle Cloud’s program and vision.

Japan’s Biggest Financial House MUFG Prepares to Secure Bitcoin Adopters

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Japan’s largest financial group, MUFG, is preparing a service that will secure bitcoin adopters’ holdings against any failure or losses suffered by the cryptocurrency exchanges they use.

In what could be the first trust service of its kind anywhere in the world, the Mitsubishi UFJ Trust is preparing to offer bitcoin holders a service wherein their bitcoins are placed in a trust, separate from their cryptocurrency exchange’s assets. Japan has emerged among the world’s largest bitcoin trading markets despite the seismic collapse of Mt Gox in 2014, once the world’s largest bitcoin exchange.

In the event of any failure, mishandling or wrongdoing by the exchange’s operator, the security of holders’ bitcoins will be guaranteed by the trust bank. Mitsubishi UFJ Trust, a member of the Mitsubishi UFJ Financial Group, has already applied for the relevant patent protection, the Nikkei reports.

Bitcoin traders will need to opt-in for the service while trading at exchanges, allowing Mitsubishi UFJ Trust to monitor their accounts. The trust bank will reportedly flag suspicious activity and examine pending transactions. “A late-night sale of a huge amount of bitcoins, for instance, would get flagged for inspection instead of being processed immediately,” an excerpt from the report explains.

Mitsubishi UFJ trust will maintain logs of users’ transactions that used to guarantee will be ‘used to guarantee the safety of holders’ bitcoins’ in the event of any operator-based incident leading to losses. However, holders will not be secured from losses against price volatility.

While the service will entail a fee for users signing up with the financial giant, “customers will feel peace of mind knowing that a trust bank is managing their assets,” explained Noriyuki Hirosue, CEO of Tokyo-based bitcoin exchange.

The trust bank’s service will only be available to bitcoin traders at launch, tentatively in April 2018. Notably, the asset management service will only take shape after Japan’s Financial Services Agency – the country’s financial regulator and watchdog – recognizes cryptocurrencies as an asset akin to real estate or securities that can be placed in a trust.

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Bitcoin Mining Can Power Neuroscience, Says Matrix Chief AI Scientist

At this year’s BlockShow Asia, Yangdong Deng, chief AI scientist of Blockchain startup Matrix, explained how inserting Artificial Intelligence (AI) into the Blockchain ecosystem would make it possible to use Bitcoin mining computational power for scientific innovation.

According to Deng, the current computing power being used in Bitcoin mining operations is 8.23×10²² floating point operations per second (FLOPS for short), while the total computing power in the world is 1.2×10²³ FLOPS. According to these calculations, Bitcoin mining is consuming 17 percent of total global computing power, justifying the frequent accusations that Bitcoin mining is wasteful.

Matrix is seeking to reinvent mining algorithms by including AI into the equation through a Bayesian mining system that utilizes a Markov chain Monte Carlo algorithm (MCMC). Because these computations function similarly to traditional mining functions, they work well for Bitcoin mining.

As Deng argues, using AI, the computing power used to verify transactions on the Bitcoin network can be leveraged for other uses outside the world of cryptocurrencies.

One example he gave his scientific research — a brain network simulation requires approximately 1018 FLOPS, while a complete human metabolic network simulation requires 1025 FLOPS.

According to Deng, other important non-crypto use cases that require massive computing power are chemical reaction simulations, medical diagnoses and complex finance modeling.

Intel recently filed a patent for a Blockchain-based system that also works to harness the energy used in cryptocurrency mining for scientific development – in this case particularly for genetic sequencing.

The BlockShow Asia conference this November included a number of innovative projects in addition to Matrix. 1,500 entrepreneurs and experts gathered at the event in Singapore to share and discover the latest developments in the industry.

Better Late than Never? Bitcoin Segwit2x Scheduled for December 28th

Segwit2x Bitcoin hard fork
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Last week, the Segwit 2x team indicated in a CCN press release that they were planning to move forward with their proposed hard fork in the coming weeks.  Now, Segwit 2x lead developer Jaap Terlouw has confirmed on the project’s website that the team will finally execute the fork on December 28th.

Originally scheduled for November, the development team cancelled the fork amidst controversy and schisms in the community.  In an official statement, the team recognized that they had “not built sufficient consensus for a clean blocksize upgrade at this time,” foregoing the fork in an effort to “[keep] the community together.”

The project’s updated roadmap now lists December 28th as the set date for the fork, and in his recent announcement, Terlouw confirmed these developments:

“Our team will carry out the Bitcoin hard fork, which was planned for mid-November,”

Arguing that “[c]ommission and transaction speed within the Bitcoin network has reached extraordinary values,” Terlouw believes that “[i]t is almost impossible to use it as a means of payment.”

In hopes of fixing these issues, the Segwit 2x fork will reduce block times to 2.5 minutes and increase block size to 4MB.  

‘Tis the Season to be Forking

Bitcoin already forked four times this year, giving us Bitcoin Cash in August, Bitcoin Gold in November, and Bitcoin Diamond and Super Bitcoin in December.  All of these currencies marched into the scene with their own scalability, privacy, and mining centralization solutions.  

Shockingly, this list doesn’t even begin to touch the unvetted forks rumored for the coming months, which includes Bitcoin God (yes, really), Bitcoin Silver, Bitcoin Uranium, Lightning Bitcoin, and Bitcoin Cash Plus.

Unlike these unconfirmed forks, however, it seems certain now that Segwit 2x will join the forked fold. For months, only “trading of [2x] futures has been carried out on some exchanges,” according to Terlouw, the most notable being HitBTC.  Including HitBTC, Binance, GDax, and BTCC have confirmed their support of the fork.

Come forking day, Jaap Terlouw promises “that all BTC holders will receive not only B2X in the ratio of 1 to 1, but also a proportional number of Satoshi Nakamoto`s Bitcoins as a reward for their commitment to progress.”

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