Crypto Markets See Sharp Rebound, but Total Market Cap Still Below $200 Billion

Sunday, September 9: following the bloodbath after this week’s market crash, Bitcoin’s (BTC) price spiked sharply today. Altcoins have mostly followed suit, making markets a mix of red and green, as data from Coin360 data shows.

Coin360

Market visualization from Coin360

Bitcoin (BTC) jumped over 3 percent in under an hour today, proceeding to trade sideways just under the $6,400 mark for several hours, before dropping again in the hour to press time.

At press time, Bitcoin is up about 1 percent on the day to trade at $6,241, according to Cointelegraph’s Bitcoin Price Index.

Since taking a steep price hit Wednesday, September 5, Bitcoin been trading between $6,400-$6,500 – around $1,000 lower than its intraweek high at $7,391. Today, the top coin has dipped below the $6,400 mark for the first time since mid-August.

On the week, Bitcoin is now down 13 percent, holding fort with 0.64 percent gain on its monthly chart.

btc

Bitcoin’s 7-day price chart. Source: Cointelegraph’s Bitcoin Price Index

Ethereum (ETH) also saw a sudden price spike today, regaining the $200 price point for several hours before slipping back below it. Ethereum dipped under the $200 price point this weekend for the first time since November 2017, and is trading around $194 at press time.

At the start of the month, Ethereum had broken through the $300 threshold, but the altcoin has continued to shed value since its major plummet September 5.

On its weekly chart, Ethereum is down over 34 percent, with monthly losses around 45 percent.

Eth

Ethereum’s 7-day price chart. Source: Cointelegraph’s Ethereum Price Index

Among the other top ten coins on CoinMarketCap, only three are in the red, and only slightly, with the rest seeing 1 to 6 percent growth on the day. Altcoin Stellar (XLM), ranked 6th by market cap, is down the most and only just, seeing a little over 1 percent losses on the day.

EOS (EOS), ranked 5th, is seeing the most growth among top ten cryptos today, up 5 percent on the day to trade at around $4.95. Today’s growth, however, has simply reclaimed some of the ground EOS lost in a further price dip yesterday, September 8.

EOS

EOS’ 7-day price chart from CoinMarketCap

Litecoin (LTC) has also seen relatively solid growth on the day, up 4 percent to trade at $55.10.

Among the top twenty, coins are also seeing mostly green, with the two coins in red down less than 1 percent. Altcoin IOTA (MIOTA) is another relatively strong top twenty player, up 5.41 percent on the day to trade at around $0.559.

Despite the market’s sudden surge today, total market capitalization of all cryptocurrencies is still dropping, currently around $195.5 billion at press time. The current figure is down $44.7 billion from its intraweek high at around $240.2 billion.

Total

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

In an interview with Bloomberg September 8, Ethereum (ETH) co-founder Vitalik Buterin said he believes that explosive growth in the crypto space is “getting close to hitting a dead end,” now that the initial work to raise crypto and blockchain awareness has largely been done:

“If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”

While speculative price surges may be a thing of the past for Buterin, he pointed to the promises of the crypto space entering a stage devoted to “real applications of real economic activity.”

Investor: Bitcoin Fell Due to Regulatory & Sell Pressure, Will Recover Soon

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According to Jonathan Cheesman, a partner at investment firm Distributed Global, Bitcoin has fallen due to five major reasons: macro trend, speculative dominance, regulatory uncertainty, short selling, and scams.

But, as the market and cryptocurrencies as an asset class continue to see improvements in infrastructure and regulation, Cheesman explained that a growing number of investors will recognize cryptocurrencies as robust and legitimate stores of value.

He said:

“For some, things are even more acute now — Venezuela and Turkey being the most obvious examples — and debt sustainability is a real risk to many fiat currencies. In looking for global stores of value gold has served a purpose, but it is archaic. A digital store of value is both more practical and more in touch with the growing millennial generation.”

Regulatory Uncertainty and Weak Infrastructure

bitcoin price

Up until 2018, infrastructure targeted at institutional investors and large-scale retail traders was virtually non-existent. The last barrier between institutional investors and the cryptocurrency market that is custodianship was not eliminated and there were very few publicly tradable instruments that could facilitate the demand for cryptocurrencies from accredited investors.

The weakness in existing infrastructure along with regulatory uncertainty around cryptocurrencies prevented large sums of capital flowing in from the broader financial market to the cryptocurrency sector.

Hence, the speculative bubble of the cryptocurrency market in 2018 was similar in concept to previous bubbles in 2012 and 2016 in that the on-going correction was triggered by the panic sell-off initiated by speculators and individual investors in the market.

The 80 percent correction of the cryptocurrency market occured in a similar way as previous drops, but the expected recovery of the market will drastically differ from previous attempts.

In the past, Bitcoin had failed to secure momentum at major support levels and demonstrated no signs of recovery for over two years. This year, Bitcoin has made three attempts to break out from the $6,000 support level, and, although they were unsuccessful, Bitcoin has not fallen significantly below the $6,000 support level.

But, as regulatory frameworks and trusted custodian solutions in the cryptocurrency market continue to improve, more institutions will be willing to take a big risk to commit to a market that is at its early phase.

Cheesman wrote:

“Regulators across the globe have struggled with how to responsibly police crypto. A decentralized movement poses a lot of complications in classifying the assets and bad actors muddy the water. As a result, things have been moving fairly gradually, but overall regulators have taken a tone that shows they respect the potential innovation. The regulatory uncertainty has in turn slowed institutional investors, as have the lack of custody, insurance, data and risk management solutions.”

Progress in South Korea and Japan

Already, South Korea and Japan have introduced cryptocurrency and blockchain-related legislation to govern the crypto and blockchain industries as legitimate sectors.

On September 8, CCN reported that the government of Uzbekistan has decided to legalize cryptocurrency exchanges, initial coin offerings (ICOs) and digital asset mining.

As billionaire investor Mike Novogratz previously said, it is entirely possible that the next long-term rally of cryptocurrencies will be led by institutions like pension and hedge funds, given that robust custodian solutions are likely to see adoption in the months to come.

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From Qatar to Palestine: How Cryptocurrencies Are Regulated in the Middle East

On Sept. 4, the government of Bahrain, a constitutional monarchy in the Persian Gulf, emphasized the importance of blockchain for the country’s economy. While the kingdom seems to be taking a rather positive approach toward crypto, the Middle East at large has proven to be a difficult region for virtual currencies, as a large chunk of countries there have banned crypto trading. Nevertheless, the Middle East seems to be on its way to become the global blockchain powerhouse: From Dubai to Tel Aviv, the technology is being thoroughly researched and adopted.

The list below is based on thorough news research, but should in no way be considered complete. If you have more detailed information on banks and the crypto relationship in your country, we encourage you to share it in the comment section.

Bahrain

Bahrain

Cryptocurrencies legal framework: Planned

Willingness to explore blockchain at state level: Yes

Regulation

Bahrain is taking a rather positive approach toward crypto. In September 2017, the Bahrain Central Bank (BCB) announced the creation of a “Regulatory Sandbox.” Its aim is to facilitate the fintech industry in the country, including Bitcoin and blockchain-related businesses.

In June 2018, local media reported that Dubai-based Palmex digital currency exchange was granted an administrative sandbox license by BCB, allegedly becoming “the first and only cryptocurrency exchange in the Middle East and North Africa to receive a regulatory sandbox license.” A Bahrain government official was quoted as saying: “As of now, we recognize cryptocurrency as a commodity that can be traded in the exchanges. We are not considering it as a legal tender in any form.”

Blockchain

Until recently, the Bahrain government had not commented on the matter of blockchain per se, instead mentioning it in the broader context of the fintech industry. However, in September, Abdulhussain Mirza, Bahrain’s minister of electricity and water affairs, confirmed the government’s commitment to supporting the technology:

“Technologies such as blockchain take us a huge step forward in finding a secure way to facilitate transactions… Blockchain’s ability to protect user’s data is a true mark of progress, especially due to the fact that it can be applied in different companies from different industries including cyber security.”

Turkey

Turkey

Cryptocurrencies legal framework: Planned

Willingness to explore blockchain at state level: Yes

Regulation

Cryptocurrencies appear to be popular in Turkey: According to a recent ING Bank report, a whooping 18 percent of Turkish people own cryptocurrencies compared with the eight percent in the United States. That could be attributed to the rising inflation rate of Turkish lira — indeed, the BTC trade volume in Turkish lira reportedly rose from 327,295 to 759,026 between the week ending on July 7 and the one ending Aug. 11.

Following the Venezuelan experiment with Petro, the Turkish government has considered issuing its own state-backed cryptocurrency. In February 2018, Turkey’s Nationalist Movement Party (MHP) deputy chair Ahmet Kenan Tanrikulu revealed a plan to launch a “national Bitcoin” called the ‘Turkcoin,’ as per his 22-page report on regulating the crypto market. Similar plans were also voiced by Turkey’s Deputy Prime Minister Mehmet Simse in an interview with CNN Turk. In June, local media reported that ‘Turcoin,’ a separate project advertised by its creators as Turkey’s ‘national’ cryptocurrency, had been outed as a ponzi scheme.

Previously, in 2017, Turkish lawmakers opined that Bitcoin was “not compatible” with Islam due to the government being unable to control it. They argued that its “speculative” nature meant that trading it was inappropriate for Muslims, according to a local news outlet Enson Haber:

“Buying and selling virtual currencies is not compatible with religion at this time because of the fact that their valuation is open to speculation. They can be easily used in illegal activities like money laundering, and they are not under the state’s audit and surveillance”

Blockchain

Despite the unclear regulatory environment in regard to cryptocurrencies, Turkey has bolstered its underlying technology. In August, the Istanbul Blockchain and Innovation Center (BlockchainIST Center) was inaugurated at Bahçeşehir University (BAU). The country’s first university-level blockchain center aims to close the blockchain expertise gap and ensure wide deployment of the technology, as Daily Sabah reported.

According to the center’s director Bora Erdamar, it is set to be “the most important center of research and development and innovation in Turkey, in which scientific studies and publications are made in blockchain technologies.” He also expressed that Turkey could become the leading country in technology that will “transform humanity.”

Most recently, in September, Turkey’s Borsa Istanbul Stock Exchange (BIST) developed a blockchain-powered customer database, to manage the addition of new customers, documents and edit information.

Qatar

Qatar

Cryptocurrencies legal framework: No/Deemed illegal

Willingness to explore blockchain at state level: Yes

Regulation

Cryptocurrencies are banned in Qatar. In February 2018, the Qatar Central Bank (QCB) published a statement sent to all banks operating in the country, in which it warned the public that trading in Bitcoin is not allowed in the country. The watchdog added that penalties will be imposed on those who fail to comply.

Specifically, the QCB argued that Bitcoin was an illegal currency because “there is no commitment from any central bank or a government in the world to exchange their value for money issued and cleared for payment for the goods traded globally or for gold.” It also cited Bitcoin’s volatility as well as involvement in financial crimes and cyber attacks among other reasons.

Blockchain

Despite that the QCB has prohibited trading cryptocurrencies in the country, Qatar will host a blockchain conference in Doha. Moreover, there are a number of local blockchain-focused startups there: The country considered using the technology after a number of neighboring countries cut ties with it over Qatar’s alleged support of terrorism in 2017.

For instance, in January 2018, a local fintech company QPAY launched a blockchain-powered, e-commerce initiative based on Ethereum blockchain platform. Upon the launch, QPAY’s CEO Ben Aissa declared:

“As an active member of Qatar’s digital and cashless initiatives, and aligned with the National Vision 2030, we see blockchain as a key ingredient in taking leadership in Qatari digital revolution and financial services innovation.”

Saudi Arabia

Saudi Arabia

Cryptocurrencies legal framework: No/Deemed illegal

Willingness to explore blockchain at state level: Yes

Regulation

Cryptocurrencies are deemed illegal inside the Kingdom of Saudi Arabia. On Aug. 8, the Saudi Arabian Monetary Authority (SAMA) officially warned citizens against trading virtual currencies, effectively outlawing them. The regulator’s statement read:

“The committee assured that virtual currency including, for example, but not limited to, the Bitcoins are illegal in the kingdom and no parties or individuals are licensed for such practices. The committee warns all citizens and residents about drifting after such illusion and get-rich scheme due to the high regulatory, security and market risks involved, not to mention signing of fictitious contracts and the transfer of funds to unknown recipients/entities/parties.”

Blockchain

Similarly to Qatar, the local ban on trading cryptocurrencies does not stop Saudi Arabia from experimenting with blockchain within its Saudi Vision 2030 program designed for long-term economic development.

For instance, in July, within that program, Riyadh Municipality chose IBM as its strategic partner. The IT giant will collaborate with Elm Company, the municipality’s technology partner, to put government services and transactions on the blockchain. Earlier in May, the Saudi Ministry of Communications and Information Technology teamed up with ConsenSys, a U.S.-based startup focused on building Ethereum-powered software products. Jointly, they hosted a three-day blockchain bootcamp.

Iran

Iran

Cryptocurrencies legal framework: Planned

Willingness to explore blockchain at state level: Yes

Regulation

Iran, pressed by economic sanctions imposed by U.S. President Donald Trump, is slowly turning to cryptocurrencies. Due to Visa and Mastercard not operating in the country, and the local currency — the rial — plummeting because of high inflation rates, Bitcoin has gained local popularity: In May, local media reported that over $2.5 billion had been sent out to purchase virtual currencies in Iran.

Currently, cryptocurrencies are outlawed in Iran. However, the situation might change by the end of September. In April, the Central Bank of Iran (CBI) proclaimed that virtual currencies are used for money laundering and supporting terrorism, and banned local citizens, banks and exchanges from trading them. However, in late August, Saeed Mahdiyoun, the deputy director in charge of drafting regulations for Iran’s Supreme Cyberspace Council, declared that the CBI is set to update its official stance on the issue at the end of September.

Similarly to Venezuela, Iran is also preparing grounds for a national cryptocurrency to dodge U.S. sanctions. In May, Mohammad-Reza Pour-Ebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, reportedly met with Russian officials to discuss how crypto can help bypassing the international embargo. In July, Alireza Daliri, deputy for management and investment at the Directorate for Scientific and Technological Affairs, revealed that plans for the creation of a national virtual currency were being developed:

“We are trying to prepare the grounds to use a domestic digital currency in the country…
This currency would facilitate the transfer of money (to and from) anywhere in the world. Besides, it can help us at the time of sanctions.”

Additionally, in September, the Cyberspace Council’s secretary Abolhassan Firoozabadi stated that the mining of cryptocurrencies had been approved as an industry by government authorities, according to local media. However, a legal framework for the industry is yet to be introduced.

Blockchain

Iranian government seems to be bullish on crypto’s underlying technology. For instance, in August, Iran’s Information and Communications Technology (ICT) ministry and the National Library signed a memorandum of understanding (MOU) to use blockchain to digitize the country’s archives.

Arame Bandari, a researcher at Iran Blockchain Labs, has previously told Cointelegraph that there is a established startup ecosystem in Tehran, Isfahan and Shiraz. Moreover, he mentioned that technology parks, incubators, crowdfunding platforms and business accelerators are being set up, “paving the way for the implementation of a technology/knowledge-based economy.”

Iraq

Iraq

Cryptocurrencies legal framework: No/Deemed illegal

Willingness to explore blockchain at state level: No

Regulation

Bitcoin is prohibited in Iraq. In December 2017, the Central Bank of Iraq’s (CBI) information director Aysar Jabbar, reportedly stated that “this currency [Bitcoin] involves several risks that may result from circulation, especially with regard to electronic piracy and fraud, although there is no popularity within Iraq.”

According to a local economic expert, those found using cryptocurrencies may be prosecuted under pre-existing Anti-Money Laundering (AML) laws.

Cryptocurrencies and Blockchain

Kuwait

Kuwait

Cryptocurrencies legal framework: No/Deemed Illegal

Willingness to explore blockchain at state level: No

Regulation

Virtual currencies, including Bitcoin, are banned in Kuwait. In December 2017, Kuwait’s Ministry of Finance declared that it does not recognize cryptocurrencies, and that financial institutions, banks and companies are prohibited from dealing with them.

However, sources from the Ministry of Finance cited by Arab Times disclosed that neither their institution nor the central bank can regulate Bitcoin trading because it is “out of [their] control.” Additionally, they stated: “…the proceeds of Bitcoin that are wired from abroad to Kuwait are considered as illegal and unclean money, because the Kuwaiti law does not consider those currencies.”

Blockchain

In May, the Kuwait Finance House (KFH) joined RippleNet, a major blockchain-powered network designed for cross-border remittance payments. In an accompanying statement, KFH expressed its intention to use Ripple’s “unique tool” for its retail customers:

“With this, KFH can provide instant and secure cross-border money transfers within seconds, with end-to-end visibility over the journey of the payment.”

United Arab Emirates

United Arab Emirates

Cryptocurrencies legal framework: Planned

Willingness to explore blockchain at state level: Yes

Regulation

The United Arab Emirates (UAE) government have been sending mixed signals regarding cryptocurrencies: In early October 2017, the state released its first regulatory guidelines for ICOs and virtual currencies, where they have been recognized as securities and commodities respectively.

However, few weeks later, Central Bank Governor Mubarak Rashid al-Mansouri issued a public warning against the use of virtual currencies as a medium of exchange, citing money laundering and funding terrorism among the reasons. Further, in February, the UAE Securities and Commodities Authority (SCA) additionally warned investors about the risks of ICOs.

Blockchain

The UAE has been experimenting heavily with blockchain. Back in October 2016, Dubai launched a city-wide Blockchain Strategy with the aim of becoming the first blockchain-powered city by 2020.

In April 2018, the prime minister of the UAE and ruler of Dubai revealed the nation’s Blockchain Strategy 2021, with similarly ambitious plans to become the world’s first blockchain-powered government. The new scheme will reportedly focus on citizen and resident happiness, government efficiency, legislation and global entrepreneurship.

More specifically, the strategy aims to have 50 percent of federal transactions being conducted on blockchain by 2021. That transitions implies moving to paperless documentation of visa applications, bill payments and license renewals with the technology, which could potentially save $11 billion annually.

In May 2018, the UAE government announced a partnership with IBM to create a blockchain business registry to ensure businesses operate under its jurisdiction. The initiative will “streamline the process of setting up and operating a business, roll out digital exchange of trade licenses and related documentation for all business activities, and ensure regulatory compliance across Dubai’s business ecosystem,” as per its press release.

Egypt

Egypt

Cryptocurrencies legal framework: No

Willingness to explore blockchain at state level: Yes

Regulation

In January 2018, Egypt’s Grand Mufti Shawki Allam famously claimed that Bitcoin is forbidden under Sharia law. He issued a fatwa arguing that crypto trading leads its users to “fraud, betrayal and ignorance.”

Egypt’s government does not support the use of cryptocurrencies either, although it hasn’t outlawed them. For instance, in December 2017 Egypt’s Financial Regulatory Authority (FRA) stated that urging investors into dealing with cryptocurrencies is considered a “form of deception that falls under legal liability,” while the Central Bank of Egypt has reportedly announced that it does not recognize cryptocurrencies and warned the public from trading them.

Blockchain

In April 2018, Egypt’s first blockchain-focused incubator called NU TechSpace was opened. It has reportedly teamed up with IBM, Novelari, and zk Capital to stimulate blockchain-backed business models. The incubator is also allegedly supported by the state-owned Academy of Scientific Research and Nilepreneurs and aims to help the government gain a better understanding of blockchain.

Cyprus

Cyprus

Cryptocurrencies legal framework: No

Willingness to explore blockchain at state level: Yes

Regulation

Cryptocurrencies seem to be in a grey regulatory zone in Cyprus, as no definite regulatory frameworks have been introduced by the local government. Back in 2014, the Central Bank of Cyprus representative was quoted by the Cyprus Mail as saying: “Bitcoin is not illegal, but at the same time, neither is it subject to control or regulation.” Since then, the watchdog has not issued any major updates on the issue.

Nevertheless, in July 2018, Bitcoin Cash (BCH) advocate Roger Ver claimed he met with nation’s president, Nicos Anastasiades, to discuss benefits of the cryptocurrency and merchant adoption across the island. That implies that Cyprus might become more crypto-friendly in the future.

Blockchain

In June, Ripple announced the University Blockchain Research Initiative and donated around $50 million to universities across the planet, including Cyprus’ University of Nicosia (UoN). UoN claims to be the first accredited university in the world to accept Bitcoin payments. It has also launched a Master of Science degree in Digital Currency aimed “to fill an important gap that exists today between the supply of and demand for academic knowledge in the area of digital currency.”

Moreover, Cyprus is home to the Cyprus Blockchain Technologies Ltd., a nonprofit organization founded as a collaboration among academic institutions, including Cyprus International Institute of Management (CIIM), University College London Centre for Blockchain Technologies (UCL CBT) and UoN, local regulators, financial institutions and banks — including Hellenic Bank, Bank of Cyprus and Cooperative Bank.

Israel

Israel

Cryptocurrencies legal framework: Planned/Tax

Willingness to explore blockchain at state level: Yes

Regulation

Israel is in the process of defining its approach toward cryptocurrencies. In January 2018, Deputy Governor Nadine Baudot-Trajtenberg announced that Bank of Israel would not recognize virtual currencies as actual currency.

Moreover, in March, Israel Securities Authority (ISA) Committee for the Examination and Regulation of ICOs published a report “designed to dispel uncertainty and strike a balance between technological innovation and the protection of the investors,” where it essentially argued that virtual currencies such as BTC are considered securities.

Similarly, the Israel Tax Authority (ITA) stated that cryptocurrencies will be taxed by the capital gains as properties instead of currencies.

Blockchain

Cointelegraph has previously covered Israel’s vast blockchain scene in depth: Selva Ozelli, an international tax attorney and CPA, reviewed local blockchain initiatives, including the following: CoaIiChain, an interactive political platform that promotes the policies of an open government and eliminates the communication gap between the elector and the elected; a blockchain drone registry; and a national cryptocurrency.

Additionally, in July, Israeli news outlet The Jerusalem Post reported that Czech investment banking firm Benson Oak had plans to pump “around $100 million” into Israel-based startups with an “emphasis” on blockchain, boosting the local scene.

Jordan

Jordan

Cryptocurrencies legal framework: No/Deemed illegal

Willingness to explore blockchain at state level: No

Regulation

Bitcoin trading is banned in Jordan, as in 2014 the Central Bank of Jordan’s (CBJ) warned locals that virtual currencies are not legal tender “and there is no obligation on any central bank in the world or any government to exchange its value for real money issued by them nor backed by underlying international commodities or gold.”

Additionally, CBJ’s representative told The Jordan Times that the nation’s banks, financial institutions and exchanges had also received a circular “prohibiting them from dealing with virtual currencies, particularly in Bitcoins.”

Blockchain

Jordan is home to a refugee camp that runs on blockchain, with the help of a program called Building Blocks. Founded in early 2017, it helps the World Food Programme (WFP) to distribute cash-for-food aid to over 100,000 Syrian refugees in the country. As MIT Technology reports, if the project succeeds, it could advance the adoption of blockchain at sister U.N. agencies and beyond.

Oman

Oman

Cryptocurrencies legal framework: No

Willingness to explore blockchain at state level: Yes

Regulation

It seems that cryptocurrencies are neither banned nor allowed in Oman. In December 2017, the Central Bank of Oman (CBO) board cautioned the public that they are not responsible for any losses experienced from cryptocurrency investments and reminded that there are no policies or guidelines to regulate the industry in the country.

Blockchain

Oman has been actively showing interest in blockchain. For instance, in May, a government-owned entity called Blockchain Solutions and Services Co. (BSS) was announced. According to its website (unavailable by the press time), BSS is working with the Oman Banks Association, state bodies and local businesses to develop a framework for the nation’s digital advancement.

Moreover, the country’s BankDhofar has joined BankChain, an international banking community focused on the research and development of blockchain solutions.

Palestine

Palestine

Cryptocurrencies legal framework: Planned

Willingness to explore blockchain at state level: No

Regulation

In May 2017, the head of the Palestine Monetary Authority (PMA), Azzam Shawwa, told Reuters that they were planning to launch the country’s own virtual currency called “Palestinian pound” within five years.

The initiative was reportedly designed to shield Palestine against potential Israeli intrusion, as the country does not currently have a stable currency — relying on the euro, U.S. dollar, Israeli shekel and Jordanian dinar.

According to the 1994 Paris Protocol agreement, the PMA serves as a central bank, but does not have the ability to issue currency. The document also recommended the use of the shekel and gave Israel an effective veto over a Palestinian currency, as Shawwa explained:

“If we print currency, to get it into the country you would always need clearance from the Israelis and that could be an obstacle. So that is why we don’t want to go into it.”

Lebanon

Lebanon

Cryptocurrencies legal framework: No

Willingness to explore blockchain at state level: No

Regulation

In December 2013, Lebanon became the Middle East’s first country to issue a public warning regarding cryptocurrency trading, citing volatility, AML and KYC concerns among primary factors.

In October 2017, Lebanese central bank Banque du Liban (BDL) Governor Riad Salameh reiterated that position by claiming that BTC and other virtual currencies are “unregulated” commodities whose use should be prohibited. Additionally, he said that cryptocurrencies are feeble as national currencies because they are just “commodities.”

Blockchain

There is scarce information on existing blockchain infrastructure in Lebanon. However, in September, U.S.-based blockchain startup ConsenSys announced that it would host a five-day blockchain event there starting on Oct. 17.

Dogecoin Creator: “Build it They’ll Come Attitude” in Crypto Doesn’t Work

Jackson Palmer Dogecoin cryptocurrency
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Jackson Palmer, a product developer at Adobe and the creator of Dogecoin, has said that developers in the crypto community will now have to find a way to encourage users of centralized systems to convert to decentralized applications (dApps).

Decentralized systems and applications are significantly less efficient in processing information than centralized platforms. As such, incentivizing users of centralized platforms to switch to dApps could be even more difficult than developing decentralized alternatives.

“The ‘build it and they will come’ attitude simply doesn’t apply to ‘blockchain for X’ because it assumes that the bulk of users are currently so dissatisfied with the centralized version that they’d absorb typically large switching costs,” Palmer said.

Examples of Successful Alternatives

On Google Play Store and Apple App Store, mobile applications that compensate users based on their activity are becoming increasingly more popular. Some apps reward users based on the intensity of their workout while others directly compensate users for watching ads and microtasks.

These applications have succeeded in finding a native user base for their tokens because users have a reason to use decentralized alternatives. But, for the majority of applications in the blockchain sector, the same cannot be said and most projects have a “build it and they will come” attitude, as Palmer noted.

As an example, decentralized cryptocurrency exchanges have been highly anticipated since 2017 to the point to which Binance, the world’s largest digital asset trading platform, has publicly disclosed its intent to develop a decentralized exchange.

Yet, according to Dapp Radar, IDEX, ForkDelta, and Bancor, three of the most popular decentralized crypto exchanges on the Ethereum protocol, have less than 4,000 active daily users and a daily volume that does not even compare with a top 100 centralized crypto exchange.

Ethereum DappSource: Dapp Radar

Major cryptocurrencies like Bitcoin and Ethereum have seen significant growth in daily volume and user base because the they operate as stores of value. The “killer” application of Bitcoin is its ability to retain value without being affected by the broader financial market.

“Meanwhile, stand-alone ‘base’ currencies such as Bitcoin and Ethereum are increasingly being perceived by the masses as investment vehicles rather than actual currencies due to retail investor apps such as Robinhood etc… so BTC or ETH is ‘just another stock’ to a lot of people,” Palmer added.

What Can Developers do?

Already, the open-source developer community of Ethereum are seeing progress in protocol-based scaling solutions like Sharding and Plasma that are expected to scale the Ethereum blockchain network rapidly.

In regards to front-end and UI, dApps still need to improve massively in order to streamline the process of shifting from centralized platforms to decentralized alternatives.

Even then, dApp operators will need to find ways to incentivize users to switch to dApps, like how Brave Browser has done so by directly compensating users with BAT, its native token.

In July, the Brave team announced that it has surpassed 3 million monthly active users, achieving the highest number of active users out of all dApps.

Featured Image from Kevin Rose/YouTube

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Vitalik Buterin: Crypto, Blockchain Space Won’t See ‘1,000-Times Growth’ Again

There is no chance that the cryptocurrency and blockchain space will see “1,000-times growth” again, Ethereum (ETH) co-founder Vitalik Buterin stated in an interview with Bloomberg September 8.

At an Ethereum and blockchain conference in Hong Kong, Buterin told Bloomberg that the rapid growth of crypto and blockchain industry is now reaching a “ceiling,” and is moving from “just people being interested” to the stage of “real applications of real economic activity.”

Buterin explained that the period of explosive growth in the sphere is likely coming to an end because the level of superficial awareness about the industry has significantly grown, and is likely to plateau:

“If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”

According to Buterin, the initial strategy seen over the past six or seven years in the crypto community – based on marketing coins with the goal of widespread adoption – has resulted in massive growth price and market capitalization of many cryptocurrencies, but that it is now “getting close to hitting a dead end.”

Crypto markets have seen a dramatic decline in terms of total market capitalization of all cryptocurrencies during 2018. In January, total market cap of all cryptocurrencies hit $828 billion point. The peak in total market cap has been followed by a gradual downturn – with a rebound upwards in May – that has led to the current figure of $198.8 billion, the lowest point since  early November 2017, according to CoinMarketCap.

1-year total market capitalization of all cryptocurrencies chart

1-year total market capitalization of all cryptocurrencies chart. Source: CoinMarketCap

However, while crypto markets have seen a significant decline in 2018, the current figures are still much more than those in the beginning of 2017, when total market capitalization stood at around $17-20 billion, and major cryptocurrencies such as Bitcoin (BTC) and Ethereum were mostly trading below $1,000 and $12, respectively.

In this regard, “Bitcoin Jesus” Roger Ver recently told Cointelegraph that the recent bear market “feels like the opposite of a crash,” since “BTC is up 58% for the last year, and 1048% for the last two years.”

In the bearish marketplace, various experts have suggested different scenarios for the dynamics of crypto prices at the end of 2018. In late August, Fundstrat’s Tom Lee claimed that the BTC “could end the year explosively higher,” citing a correlation between it and emerging markets and predicting that Bitcoin’s price could surge to as high as $25,000 this year.

In July, Alexis Ohanian, co-founder of both Reddit and VC firm Initialized Capital reiterated his stance that Bitcoin and Ethereum will be trading at $20,000 and $1,500 by the end of 2018, respectively.

Also in July, Julian Hosp, co-founder and president of crypto startup TenX claimed that he was still “quite confident” that Bitcoin can hit $60,000 in 2018.

Coinbase Joins Race For A Crypto ETF, Seeks Help From BlackRock

Coinbase app
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Coinbase has thrown its hat in the ring to launch a cryptocurrency exchange-traded fund (ETF) and has approached BlackRock for help, according to unnamed sources interviewed by Business Insider. BlackRock, which manages $6 trillion in assets, has pioneered ETFs and has a blockchain working group.

Coinbase, which announced a cryptocurrency index fund for accredited investors in March, joins VanEck, Bitwise Asset Management and Gemini in bidding to introduce the first crypto ETF. The Securities and Exchange Commission recently rejected nine bitcoin ETF proposals.

A Coinbase ETF would monitor different cryptocurrencies, according to one source who claimed to be familiar with the matter.

BlackRock: No Interest In Issuing Crypto Funds

BlackRock, which launched its blockchain working group in 2015, has claimed it has no interest in issuing crypto funds. Larry Fink, BlackRock CEO, said the company’s clients have shown no interest in digital currencies and have referred to bitcoin as a money laundering index.

BlackRock created its blockchain working group with the goal of determining blockchain applications in financial services, according to an unnamed source. The working group has employees involved in the company’s multiple businesses.

BlackRock’s blockchain representatives offered no recommendations to Coinbase, the source said, and it was uncertain how extensive the conversations have been.

Banks Explore Crypto Custody Products

A host of banks, meanwhile, are developing custody products for cryptocurrencies.

Goldman Sachs has been working on a product that would allow banks to hold crypto assets and would monitor price changes for its clients. JPMorgan and Fidelity are also reportedly exploring similar products.

ICE, meanwhile, which operates the New York Stock Exchange, announced a cryptocurrency trading platform called Bakkt in August.

The outlook for a bitcoin ETF remains uncertain.

The appointment of Elad Roisman to the SEC has given some people hope that the SEC will be more likely to approve a bitcoin ETF since Roisman is known for having a strong position on regulating cryptocurrencies.

Bill Barhydt, the founder of Abra, a bitcoin payment startup, said he believes a bitcoin ETF will be approved with a year providing the SEC is confident in the applicant’s caliber.

Featured image from Coinbase.

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Hodler’s Digest, September 2-9: Goldman Sachs Says ‘No Thanks’ to Crypto Trading Desk, While India Sends Officials to ‘Crypto College’

Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

Top Stories This Week

Business Insider: Goldman Sachs Scraps Crypto Trading Desk Plans

Goldman Sachs Group Inc. is halting its plans to open a cryptocurrency trading desk, Business Insider reported this week, but will focus on a custody product for crypto, which will allow it to hold cryptocurrency on behalf of large clients and track its price. According to unnamed sources, the bank has lowered the priority of its crypto trading desk project due to the lack of regulatory clarity. It might take many steps before a regulated bank could trade digital assets, most of them outside Goldman Sachs’ control, sources reportedly reveal. Goldman’s CFO later suggested that the excitement over a potential trading desk may have been premature.

Alibaba And IBM Ranked Top Internationally For Most Blockchain-Related Patents Filed

Tech giants Alibaba and IBM are vying for the top spot on a new list that ranks global entities by the number of blockchain-related patents filed to date, using consolidated data as of August 10 from across China, the EU, America, Japan and South Korea. The list also used information from the International Patent System from the World Intellectual Property Organization (WIPO). China’s Alibaba came in first place, having filed a total of 90 blockchain-related patent applications, whereas IBM has to date filed a total of 89.

Google’s Big Data Analytics Warehouse Adds Ethereum Blockchain Dataset

The Google Cloud team has officially made the Ethereum (ETH) dataset available in BigQuery, the company’s big data warehouse for analytics, after having done the same for the Bitcoin blockchain in February. The Ethereum blockchain data is posted in the dataset and updated on a daily basis, with BigQuery’s OLAP features helping to aggregate such types of data and and visualize it. According to Google, the BigQuery ETH addition was created to help make business decisions, prioritize improvements to the Ethereum architecture itself (for example, to prepare updates), and balance sheet adjustment.

India Sends Officials Abroad To Learn More About Cryptocurrencies And ICOs

The Securities and Exchange Board of India (SEBI) has been organizing tours to countries including Japan, the UK, and Switzerland for their officials to study cryptocurrencies and Initial Coin Offerings (ICO). India’s regulator refers to the trips as “study tours,” noting that its officials have already gone to consult with Japan’s Financial Services Agency (FSA), the U.K. Financial Conduct Authority (FCA) and the Swiss Financial Market Supervisory Authority (FINMA). The regulator notes that the goal of the trips is to help officials “engage with the international regulators and gain deeper understanding of the systems and mechanisms.”

Greece’s Supreme Court Rules To Extradite Alleged BTC-e Owner To Russia

The Supreme Civil and Criminal Court of Greece has ruled to extradite alleged BTC-e owner Alexander Vinnik to Russia to face several cyber fraud charges, after the U.S., France, and Russia had previously argued over the location of Vinnik’s extradition. In July 2017, Greek police arrested Vinnick as the U.S. Department of Justice convicted him of fraud and money laundering around $4 billion worth amount of Bitcoin (BTC) and France charged Vinnik with “defraud[ing] over 100 people in six French cities between 2016 and 2018.” If extradited to Russia, Vinnick would reportedly face a fraud charge equal to 667,000 rubles (around $9,800).

Most Memorable Quotations

Most Memorable Quotations

Brian Kelly

“We have a new technology that disintermediates a lot of industries. That’s important, and that’s going to be something that’s here for the rest of my career at least and likely a lot longer than that,” — Brian Kelly, founder and CEO of digital currency investment firm BKCM LLC

Luigi de Magistris

“Before a government with obvious anti-south traction, which is strengthening the Lombard-Veneto axis … and is working to hijack most of the resources towards the rich, giving only alms to the south, we must launch an historic challenge, never thought nor implemented so far,” — Luigi de Magistris, the mayor of Naples on the need to launch an autonomous municipal cryptocurrency

Laws And Taxes

Laws And Taxes

Philippines To Release Draft Cryptocurrency Regulation This Month

The Philippines Securities and Exchange Commission (SEC) will be revealing its draft cryptocurrency regulation by the middle of this month. Local media confirmed cryptocurrency exchanges could soon be considered as traditional “trading platforms,” under the new framework. The Philippine SEC also revealed it had been working in tandem with the central bank, the Bangko Sentral ng Pilipinas (BSP), in order to establish what Amatong terms “cooperative oversight.”

China: Supreme Court Rules Blockchain Can Legally Authenticate Evidence

China’s Supreme Court this week ruled that evidence authenticated with blockchain technology is binding in legal disputes. This new ruling comprises part of a series of more comprehensive rules that clarify litigation procedures for internet courts across China, and comes into force immediately. The ruling notes that “Internet courts” must recognized digital data if it is stored on a blockchain with “digital signatures, reliable timestamps and hash value verification or via a digital deposition platform.”

Adoption

Adoption

IBM Brings “Near Real-Time” Blockchain World Wire Payment Network Out Of Beta

Tech giant IBM has released its Blockchain World Wire (BWW) payment network from beta this week. BWW, which uses digital currency on Stellar’s blockchain to facilitate international settlements between banks in “near real-time,” is the latest step forward for IBM and Stellar, which have been eyeing blockchain payment options since October last year.

Los Angeles Dodgers To Hold First “Digital Bobblehead Night”

The Los Angeles Dodgers, a U.S. professional baseball team, will hold a giveaway of crypto-based athlete tokens at the end of this month. The first 40,000 tickets fans in attendance at the San Diego Padres game on September 21 will receive a card with a unique code that can be unblocked and transferred to an Ethereum wallet, with each card containing tokens of such athletes as pitcher Clayton Kershaw, third baseman Justin Turner, and Curaçaoan pitcher Kenley Jansen.

Luxury Automobile Retailer Of Bentley, Bugatti, Rolls-Royce Accepts Bitcoin

Post Oak Motor Cars, a luxury automobile retailer is reportedly the first Rolls-Royce, Bentley, and Bugatti dealership in the U.S. to accept Bitcoin (BTC) and Bitcoin Cash (BCH) as payment. American businessman Tilman Fertitta, who owns the auto retailer, has announced he will integrate crypto payment service provider BitPay, accepting purchases in crypto from customers worldwide.

Swiss Blockchain Startup Wins Regulatory Approval, Seeks Banking License

Smart Valor, a Swiss blockchain startup, has gained approval this week from Switzerland’s Financial Services Standards Association (VQF) — rather than the national regulatory agency — to operate in the local financial market. Smart Valor, which plans to launch an online platform for alternative investments, including cryptocurrencies, in the fourth quarter of 2018, is also applying for a banking license.

Mergers, Acquisitions, And Partnerships

Mergers, Acquisitions, And Partnerships

South Korean SBI Savings Bank Signs MoU With AI, Blockchain Specialist

South Korea’s SBI Savings Bank has signed an MoU with DAYLI Intelligence, a expert in AI and blockchain technology, to improve its fintech business. DAYLI Intelligence, which provides blockchain solutions and AI-based tech infrastructure for financial institutions, will reportedly assist SBI in implementing both blockchain and machine learning to maximize work efficiency and reduce costs across various financial products and services.

Intel And SAP Partner For Deeper Collaboration On Blockchain Technology

Intel and software multinational company SAP have announced a partnership intended to address “gaps in the market” for solutions that power enterprise blockchain systems. Intel and Sap, who have collaborated for 25-year on enterprise infrastructure platforms, have recently expanded their joint work to encompass blockchain technologies — spearheaded by the creation of a SAP-led global industry blockchain consortium — including the development of the SAP HANA Data Management System.

Electric Company ENGIE Partners With Consulting Firm For Blockchain Development

ENGIE, a French electric utility company, has partnered with consulting firm Maltem Consulting Group in order to create a blockchain development firm for commercial customers. The new Blockchain Studio, which received around $2.1 million in seed funding, will focus on the development of smart contracts and creating cloud- or server-based blockchain infrastructure.

ConsenSys Partners With Online Education Platform For Blockchain Tech Course

Blockchain startup ConsenSys has partnered with online education platform Coursera to offer a blockchain technology course entitled “Blockchain: Foundations And Use Cases.” The course, which is designed to provide students an introduction to the technology and develop the skills needed to understand how blockchain is changing certain industries, is designed for students of varying skill levels, including individuals who lack a technical education.

Winners And Losers

Winners And Losers

Winners And Losers

The crypto markets have suffered losses this week, with Bitcoin just below $6,400 and Ethereum inching towards $200. Total market cap is around $198 billion.

The top three altcoin gainers of the week are AsiaDigicoin, ZenGold, Webcoin. The top three altcoin losers of the week are Protean, Internet Of Things, Regalcoin.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

FUD Of The Week

FUD Of The Week

Chrome Extension MEGA Taken Over To Steal Users’ Monero

The MEGA Chrome extension version 3.39.4 has reportedly been compromised and can now steal user’s Monero in addition to other sensitive information, according to recent posts this week from various users on Twitter and Reddit. The extension, when working correctly, claims to improve browser performance by reducing page loading times, in addition to providing a secure cloud storage service.

Malaysia Beauty Guru’s ICO Stopped By Securities Commission

Malaysia’s Securities Commission (SC) of Malaysia has ordered an immediate halt to all promotional activities for the recently-launched Lavidacoin (LVC) pending further review. Lavidacoin, created by Malaysian cosmetics mogul and beauty guru Datuk Seri Hasmiza Othman, aka Dato’ Vida, was reportedly meant to raise $1.5 billion in an ICO to create an “entrepreneur-focused” online entertainment channel, an LVC payment gateway, and even a “non-profit” mosque.

Crypto Exchange Bittrex To Remove Bitcoin Gold After May’s $18 Mln Hack

Crypto exchange Bittrex will delist Bitcoin Gold (BTG), a hard fork of Bitcoin (BTC), by September 14 following an $18 million hack of the BTG network in May. BTG reportedly suffered a combination double spending and 51 percent attack on several exchanges, including Bittrex. The Bitcoin Gold team has claimed that they are “is not responsible for security policy within private entities like Bittrex,” adding that the exchanges “must manage the related risks and are ultimately responsible for their own security.

Thai Anti-Money Laundering Agency Considers Creating Digital Wallet To Prevent Crime

Thailand’s Anti-Money Laundering Office (AMLO) has put forward the idea of creating its own digital wallet in order to investigate crypto-related cybercrime. According to Witthaya Neetitham, secretary for AMLO, the Thai watchdog wants to adapt to the new technology by making it possible for the government to confiscate crypto involved in fraud, as currently Thai officials can only jail or extradite those who were convicted of cybercrime or confiscate their physical assets.

Belgian Financial Regulator Adds 28 Sites To Crypto Fraud Blacklist

Belgium’s Financial Services and Markets Authority (FSMA) has added 28 new sites to its crypto-related fraud blacklist, noting that it continues to receive complaints from consumers scammed by fraudsters despite previous warnings. The agency notes that the updated list is not comprehensive, and has been assembled largely as the result of victims’ reports, adding a request for any information about crypto-related scams in Belgium.

Best Features

Best Features

The Bitcoin Boom Reaches a Canadian Ghost Town

What happens when a remote British Columbian town that lost its paper mill — for all intents and purposes turning into a ghost town with a population of less than 100 — accepts the offer of an out-of-towner to come in and use their excess hydroelectric power to mine for Bitcoin? The answer? Not that much, currently, as Bitcoin mining facilities don’t bring in a large workforce, and the price of Bitcoin is lower than the mining facility was planned for.

Bitcoin’s Path to Method of Payment

Bitcoin developer Jimmy Song explains the multiple reasons that people want to use Bitcoin (which seems to be mainly as a store of value rather than a method of payment, according to Song), and what the evolution of Bitcoin may look like in the future (i.e. how can one make merchants want to keep Bitcoin a store of value?).

Ethereum Falls to $185: What’s Causing ETH to Drop Harder Than Other Cryptos?

MyEtherWallet
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Earlier today, on September 9, the price of ETH, the native cryptocurrency of Ethereum, fell to its yearly low at $185.

While ETH has rebounded above the $200 mark after an unforeseen recovery of Bitcoin from $6,190 to $6,450, since July, ETH has seen a steeper decline in value than other major cryptocurrencies.

How Much is it Due to ICO Sell Off?

In late 2017, the price of ETH surpassed the $1,500 mark and investors of ERC20 tokens on the Ethereum protocol achieved 10 to 100-fold returns from their initial coin offering (ICO) entry.

Investors in tokens like EOS, Ontology, ICON, Zilliqa, and 0x had seen massive gains in late 2017, at the peak of the cryptocurrency market.

But, in the past few months, the price of ERC20 tokens have fallen substantially against Bitcoin, which has also experienced a 70 percent fall against the US dollar. Ontology and ICON have seen 75 to 80 percent losses against Bitcoin, losing out by more than 95 percent against the US dollar.

The majority of analysts in the cryptocurrency sector have attributed the decline in the price of ETH to the sell off of ERC20 blockchain projects that have raised millions of dollars in ETH in their token sales.

As the price of ETH started to fall and the cryptocurrency market entered a major bear market, analysts have said that ERC20 projects started to sell their ETH holdings, causing ETH to experience a more intense downtrend than other major cryptocurrencies.

It is evident that the decision of ERC20 projects on Ethereum to sell large amounts of ETH in panic largely contributed to the downtrend of ETH.

Can it be Prevented in the Future?

Earlier this week, Augur co-creator Joey Krug responded to some of the criticisms made by investors in the cryptocurrency community on the decision of the Augur team to sell ETH at $0.7 to fund the operation of the project.

Krug stated that Augur sold all of the ETH it raised in its token sales immediately after its ICO to fund its development, adding that Augur is not a hedge fund but a project working to create a sophisticated decentralized system.

If Augur had sold its holdings as ETH reached $1,000 in late 2017, instead of $700,000, Augur could have raised a billion dollars.

But, as Krug emphasized, investors in the ICO market do not provide capital to blockchain projects to operate as hedge funds but to maximize their resources to create a successful decentralized application or protocol.

Linda Xie, 0x advisor and Scalar Capital co-founder, said that her team has been advising projects to liquidate their ETH upon their token sale to fund operations.

“You and the Augur team did the right thing and I have been advising projects to do the same. It’s easy to view all of this in hindsight as the price of ETH could have easily gone the other way while you were building,” Xie said.

The massive sell off of ETH initiated by ICOs occured because ICOs wanted to avoid missing out on a rally like Augur did in 2016. But, not only is it extremely difficult to measure the peak and bottom of assets, investors did not raise millions of dollars for ERC20 projects to trade and invest in the cryptocurrency market.

The approach of Augur, Xie, and other prominent projects, investors, and accelerators to prevent blockchain projects from operating like hedge funds to open-source developer communities could prevent an intensified downtrend for ETH in the future.

Featured image from Shutterstock. Charts from TradingView.

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Ethereum Creator Believes Days of 1000x Crypto Growth is Gone

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According to Vitalik Buterin, the co-creator of Ethereum, the days of 1000x growth as seen in 2017 in the cryptocurrency sector is gone.

Speaking to Bloomberg, Buterin emphasized that the awareness of cryptocurrencies and blockchain technology has already achieved its high point in Dec. 2017, when the price of major cryptocurrencies like Bitcoin, Ethereum, Ripple, and Bitcoin Cash demonstrated 10 to 300-fold returns.

“The blockchain space is getting to the point where there’s a ceiling in sight. If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore,” he said.

Moving From Promotion to Real Adoption

The speculative bubble of last year has led the vast majority to take interest in cryptocurrencies as an emerging asset class. In the upcoming years, Buterin stated that the industry will focus on improving the usability and accessibility of decentralized systems rather than promotion and gathering interest.

Buterin explained that the strategy of promoting blockchain technology and cryptocurrencies to the broader consumer base is hitting a dead end and that it is time to improve the infrastructure of decentralized systems, applications (dApps), and protocols to encourage consumers to commit to blockchain-based platforms.

“Go from just people being interested to real applications of real economic activity,” he stated, adding “that strategy [promoting the blockchain to the broader consumer base]is getting close to hitting a dead end.”

ethereum priceVitalik Buterin believes that the days of turning a few bucks into millions of dollars worth of cryptocurrency are over.

In the upcoming months and years, to reach true mainstream adoption, developers of dApps will have to ensure that the utilization of decentralized systems is as seamless and efficient as centralized platforms.

For instance, apps like Peepeth, a decentralized alternative to Twitter, which was recently discussed on the Joe Rogan Podcast, require users to send Ether or gas every time a piece of information has to be broadcasted to the Ethereum mainnet.

The simple shift from cash to cryptocurrencies can already be difficult and technically challenging for the majority of people. Then requiring users to utilize MetaMask to process gas on a dApp through the Ethereum mainnet could be highly complicated for most.

As decentralized cryptocurrency exchange Kyber Network CEO Loi Luu previously said, in the near future, dApps will have to improve their user interface to refine and simplify the process of utilizing blockchain-based systems.

“I think it’s because the UI isn’t good enough. The users aren’t familiar with the Decentralized Exchanges; they’re more familiar with Binance or Bittrex. So that’s why we wanted to make it really easy for the user to use. So we don’t focus on the decentralized aspect of it. We focus more on the usability aspect of it,” Luu said, recognizing that the current UI of decentralized exchanges and dApps is not efficient enough.

Improvements on Protocol and dApps

On the protocol side, the open-source developer community of Ethereum is working on the implementation of Sharding and Plasma, two solutions that are expected to massively increase the scalability of the Ethereum network.

Other projects like Cardano and Zilliqa are working on proof-of-stake (PoS) and Sharding-related solutions as alternatives to Plasma and Ethereum-based solutions.

Still, the front-end and UI side of dApps and decentralized systems in general need significant improvement, especially if dApps intend to target the consumer base of widely utilized centralized platforms.

Featured Image from TechCrunch/Flickr. Charts from TradingView.

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South Africa’s Central Bank Wins Award for its Ethereum Payments Blockchain

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Central Banking, a global central banking forum, has bestowed its FinTech & RegTech Award for Best Distributed Ledger Initiative to South Africa’s central bank for its successful Project Khokha, which successfully used an Ethereum blockchain platform to process interbank payments and settlements.

The test demonstrated that distributed ledger technology (DLT) can enable digital as opposed to analog transaction processing, offering significant improvements for global transactions. Central Banking noted on its website that the test’s success demonstrates the need for regulators to address banks’ security and privacy concerns to improve global transaction processing.

Test Simulated Realistic Conditions

The South African Reserve Bank designed and executed Project Khokha in under three months to test the proficiency, resilience, confidentiality, finality and scalability of a DLT solution for processing transactions under realistic conditions on a wholesale payment system. The bank used JP Morgan Chase’s Quorum network with Istanbul Byzantine fault tolerance and Pedersen commitments and range proofs.

The participating banks created their own nodes and were able to pledge, track and redeem the tokenized rand on the distributed ledger.

The project’s main goal was to successfully process the transactions while abiding by the Principles for Financial Market Infrastructures. The project also established measurable goals for performance, transaction time, security and privacy.

One goal was to scale from 70,000 to 200,000 daily transactions, based on real-time gross settlement needs for South African banks. Another was to process one day’s trading in two hours while coping with a one-day loss of processing.

Test Used Established Benchmarks

The central bank established a goal of 95% of transactions validated in less than one second, and 99% of transactions validated under two seconds. While the central bank retained visibility of all transactions, the participating banks could not view one another’s transactions.

The network managed the daily volume under two hours and provided settlement finality and complete transactional privacy. The central bank maintained regulatory oversight of transactions processed under two seconds across a network of nodes that were geographically distributed.

Central Banking noted that regulators need to work together to protect the financial system in ways that will not stifle innovation.

Featured image from Shutterstock.

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