Month: February 2017

UK Banks Shun Bitcoin !

February 15, 2017 David

Banks in the United Kingdom are turning a deaf ear to bitcoin exchanges, despite the government’s pro-blockchain position, according to financial writer Roger Aitken, writing in Forbes. Unless the situation changes, the banks will undermine bitcoin’s progress and drive Cryptocurrency entrepreneurs out of the banking system.

This fact together with the uncertainty  surrounding the pound due to Brexit could be a disaster for those who live in the UK, the banks are feeling under threat. Hopefully the government will step in and tell them not to be so stupid.

Cryptopay, a bitcoin brokerage, recently informed customers that it will no longer support British Pound deposits and withdrawals on account of new bank policies. Such incidents have increased as bitcoin has gained popularity.

Cancellation of GBP deposit and withdrawal facilities limits people to Single Euro Payments Area (SEPA) transfers, making Cryptopay’s buying and selling useless to most British customers.

U.K. Banks Shun Bitcoin

A dozen or more U.K. brokerages and bitcoin exchanges have suffered over the past three to four years as banking facilities have become unavailable. Some have closed or resorted to awkward arrangements.

Britcoin, which became rebranded as Intersango, started in 2011. It faced problems with U.K. bank transfers before eventually closing. An August 2012 update noted that bridging the gap between bitcoin and the conventional banking system was costly on account of technical issues, missing transfers, and accounts frozen and closed without warning.

In 2014, Bit121 had a promising start, but banks withdrew their support and the exchange closed.

In Bitcoin We Trust suffered the same fate. It resorted to using postal orders before giving up.

Coinfloor, one of the only U.K. exchanges still operating, uses SWIFT transfers, which incur hefty costs and delays. The minimum transfer is £1,000 (c.$1,250).

Banks Pour On The Pressure

CoinJournal, a bitcoin publication, saw its banking services come to an abrupt end after its U.K. banking provider Barclays terminated its business account. CoinJournal received no official warnings prior to its account closure. Even more alarmingly, Barclays still hasn’t given a reason for the extreme action.

CoinJournal believes the decision taken by Barclays to close its business account was an “automated” call, after seeing a pattern of banking transactions involving prominent bitcoin exchange and service provider Circle.

The decision was likely “a result of us using Circle to transfer fiat from ad revenue into bitcoin to pay our writers and some overheads,” a representative for the publication told CCN.

Similar scenarios have played out in Australia and New Zealand.

BitNZ, a New Zealand bitcoin exchange, has announced it is closing due to the refusal of New Zealand banks to allow bank accounts to trade bitcoins, and has advised customers to withdraw all funds before April 15, 2017.

The Australian Competition and Consumer Commission is scrutinizing attempts by Australia’s biggest banks to swallow fintech companies developing technologies like blockchain solutions in the financial sector.

P2P Services Fill The Void

Peer-to-peer services match individual buyers and sellers in the U.K. in lieu of traditional exchanges. Trust is established by reputation.

Once a buyer has paid, usually with a bank transfer the seller sends the bitcoins.

As for other nations, Russia recently relaxed its regulatory position and taken a “wait and see” approach. It has effectively legalized bitcoin and allowed for exchanges to operate.
Switzerland is a more progressive country. It is easy to buy bitcoins through a network of ATMs on the rail system.

In Japan, it is possible to pay electric bills with bitcoin.

The United States has a more complex regulatory framework. But progress is on the horizon since the New York BitLicense took effect in 2015, with other state’s following a similar approach.

Bitcoin is legal in China, although the central bank recently stopped highly leveraged trading.

U.K. Banks At Odds With Government

The banking sector is clearly at odds with the U.K. government, which is openly pro-blockchain. The situation is peculiar, with the government saying the country is open to bitcoin but the banking sector standing in the way.

Since the financial crisis, the taxpayer has become the majority shareholder in the Royal Bank of Scotland, holding at around 82% of the bank. This would normally translate into a certain amount of leverage by the taxpayer.

The U.K. also has a reputation for being a fintech hub, to which the banking sector seems to have taken exception.

For whatever reason, the banks have closed ranks and chosen not to work with bitcoin.

The fact that bitcoin is decentralised and fiat currency is centralised could be at the root of the conflict.

Also read: Blockchain platform Waves raises more than $2m at the start of the crowdsale campaign

What’s To Be Done?

Money cannot flow easily from the blockchain economy to the traditional financial sector and vice versa without banks’ cooperation. The bitcoin sector is not large enough to offer all the goods and services needed to make bitcoin a sufficiently broad means of payment.

Bitcoin’s volatility also makes it an unsuitable unit of account or store of value. While it’s a great transfer medium, its price against fiat fluctuates too much for most people.

The bitcoin economy won’t expand until bitcoin is better suited as a means of payment. But it won’t be better suited without more growth and stability.

Waves, a custom blockchain tokens platform, offers a solution – fiat-backed blockchain tokens. It raised $16 million last summer through crowdfunding. Waves can act as a gateway between the blockchain and the fiat world.

Customers pay money into the gateway using a bank transfer or another suitable means, and the gateway issues them the same sum in blockchain tokens

The same exchange occurs in reverse when customers cash out their Waves GBP and have them sent as “real” GBP to their bank account. Waves essentially serves as a toolkit.

Sasha Ivanov, CEO and founder of Waves, noted that Waves can make money more efficient. By putting fiat money on the blockchain, Waves can make it more transparent and faster, and it can reduce the cost of sending it abroad.

Ivanov thinks Waves can introduce competition and encourage banks to become more accountable. If banks in one sector in one country won’t work with Waves, it will work with those in another jurisdiction.

Waves does not immediately solve the problem of U.K. banks’ hostility to bitcoin, but it suggests the roadblocks are not insurmountable. The answer may be to work around them rather than with them.

David Ogden
Entrepreneur

 

David – http://markethive.com/david-ogden

What’s next for blockchain and cryptocurrency

February 11, 2017 David

In May of 2010, someone on a Bitcoin forum by the name of Lazlo claimed to have bought two pizzas for 10,000 bitcoins. It was the first time anyone had purchased anything with the new digital currency, which at that time was valued at practically nothing.

Today, the cryptocurrency market is worth nearly $19 billion and those 10,000 bitcoins would be worth more than $10 million. Most of the cryptocurrency market is in Bitcoin, followed by Ether, the currency used by the smart contract platform Ethereum. Now tech giants, like Microsoft, IBM and Amazon, as well as major Wall Street banks, including JPMorgan Chase and Citigroup, are investing in blockchain technology, the underlying class of technology that started with Bitcoin. Infosys, TCS, HCL, and Accenture are working on blockchain-based products for banks as well.

With the new year, everyone is wondering what’s to come in the next chapter. Based on my work in the field, here are five predictions on major trends in cryptocurrencies for 2017.

Investment funds will look to invest in cryptocurrencies

As an asset class, cryptocurrencies are tough to ignore. As I write this, Bitcoin is trading at just over $1,000. Hedge funds and venture capital firms will look for more ways to tap into the cryptocurrency market. Doing so will remove some of the social stigma around cryptocurrencies—mainly due to Bitcoin’s history of use on the dark markets—and popularize investment in cryptocurrencies.

Global currency disorders are on the rise: Think of what’s happening in India, where the government recently scrapped 86 percent of cash in circulation, and in Venezuela, where currency is so devalued people now need to carry stacks of cash just to buy food. As a result, many retail investors are turning their attention to digital currencies, as well. Cryptocurrencies are free from government control. Governments can’t easily call in bitcoins or halt their movement across international borders without taking drastic actions.

Financial institutions, bound by charters that describe the types of investments they can embark upon, have had few means of putting their money into bitcoins or other cryptocurrencies. But in 2017, we’ll see a greater push towards a diversity of cryptocurrencies as investments, and ETFs, hedge funds, and derivatives will start to act as conduits for institutions to gain exposure and get into the cryptocurrency game.

Private blockchains will start feeling the burn

Private blockchains (like the Hyperledger project from the Linux Foundation, R3CEV’s Corda, and the Gem Health network) will start to feel real friction. To date, private blockchains have gotten the benefit of the doubt, receiving hundreds of millions of dollars in funding with little to show for it in production. Many of their projects are not terribly innovative, and haven’t been subjected to the same rigorous review as more public projects.

Greater scrutiny from analysts, well-informed media, and investors will put some much-needed cold water on private blockchains in 2017.

banker-bitcoin

Bitcoin will see SegWit introduction

Despite the enormous technological and political difficulties involved in upgrading Bitcoin, Bitcoin’s core developers have finally introduced Segregated Witness to the network. The benefits of SegWit are clear: a higher transaction throughput without altering the block size, no transaction malleability and faster block validation. SegWit also makes it easier to develop better wallet software and permits off-chain transactions on the Lightning Network, a protocol for scaling and speeding up blockchains.<

There are no clear downsides to this upgrade, but it’s been taken hostage in the political battle over block size. Some mining pools are refusing to switch to SegWit, holding out for a block size increase instead, which does involve trade-offs. However, the fight seems to be running out of steam, which bodes well for SegWit.

TC_illo

Bitcoin usage will not change significantly

The price of Bitcoin will continue to rise due to increased demand from investors but usage—that is, how many people are using it to actually buy and sell things in the open market—will not change substantially. Arguably the biggest application for Bitcoin over the last few weeks has been as a tool for capital flight. In China, for instance, investors are buying bitcoins as part of a rush to convert their RMB into currencies that aren’t losing value. This means the currency won’t necessarily be trading hands much. Instead people will be holding on to it as a hedge or using it to get money out of their countries.

bitcoin-split

Exchanges will become a source of scrutiny

Regulators will keep a light touch on the technologies behind cryptocurrencies, but they will look more closely at exchanges, which is where traditional banking meets the new world of cryptocurrencies.

While exchanges are an excellent resource, allowing people to conveniently buy and sell digital currencies with ease, they also centralize risk. This makes them a virtual honeypot for hacks and thefts. So increasingly we will see governments stepping in to oversee how they operate with an eye on consumer protection. Some regulation will include new ways to confirm identities and block money laundering—and in extreme cases, block exchanges all together. Take the case of Colbitex, the first bitcoin exchange in Colombia, which the Colombian government closed down in August, claiming bitcoin was not real money and therefore unregulated.

Over a relatively short amount of time, we’ve watched cryptocurrencies evolve from relative obscurity to a point where governments and financial institutions are taking it seriously and making huge investments in blockchain technologies for their own use. Through 2017, we’ll see that evolution continue as serious blockchain platforms begin to emerge and people begin using cryptocurrencies, not just for capital flight and a hedge against hyperinflation, but for real day to day trading—and we’re not just talking pizza here.

Bryan Tuck
Partner
Markethive Inc.
(231) 487-2032

bryanhead

Join our Cryptocurrency Group. Time is running out.
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Originally published at www.techcrunch.com – Jan 23, 2017 by 

David – http://markethive.com/david-ogden

Will $1,000 become new baseline for Bitcoin

February 6, 2017 David

Recently, the price of bitcoin surpassed US$1,000 for the first time since the first few days of January. It stabilized at the $1,020 margin in most global markets and exchanges. Some regions like South Korea, Japan and China demonstrated arbitrage opportunities, with bitcoin being traded at around 7~8% premium.

bitcoin being traded at around $1,100 in South Korean #bitcoin exchanges including Korbit & Coinplug. Nearly 7% premium. pic.twitter.com/NeuWFzhn9f

— Joseph Young (@iamjosephyoung) February 3, 2017

Although many factors can be analyzed to explain the recent price surge of bitcoin, the most evident factor is the decline in the value of US dollars. Previously, when both the mainstream and bitcoin media reported that the Chinese market controlled approximately 93% of the global bitcoin exchange market, analysts and investors closely looked at the development of the Chinese market and regulations. As such, events like the devaluation of the Chinese yuan or introduction of tightened policies such as the imposition of regulation on Wealth Management Products were perceived as major factors behind the increasing value of bitcoin.

However, due to the requests of the Chinese central bank, Chinese bitcoin exchanges came to a consensus to add trading fees. As a result, inflated volumes were eliminated and the Chinese bitcoin exchange market began to demonstrate legitimate trading volumes.

Upon the “clean up” of Chinese bitcoin exchanges as the People’s Bank of China (PBoC) like to describe it as, it was revealed that the USD/BTC pair is more liquid than the USD/CNY pair. In other words, major USD supporting exchanges like Bitfinex, Kraken and Bitstamp represent a larger trading volume to that of the Chinese bitcoin exchange market.

According to bitcoin trading data providers like CoinMarketCap, the BTC/USD pair is currently demonstrating a daily volume of $41 million, while the BTC/CNY pair is demonstrating roughly half of that, at around $21 million.

Therefore, it can be said that economic uncertainty, financial instability or political events in the West or the US in particular will have a larger impact on the price of bitcoin and its trend.

There is also news that Bitcoin’s price jumped by around $30 just yesterday shortly after it became clear that Bitcoin Unlimited had overtaken segwit in hashrate share.

In other news Infinity Economics opened it new wallet to some 80,000 owners, who can now send and recieve XIN to one another. The next stage to be implimented with be the voting system, which will allow owners to formulate the direction of the coin.

David Ogden

 

David – http://markethive.com/david-ogden

Bitcoin is back above $1,000

February 4, 2017 David

 

Bitcoin is back above $1,000

Bitcoin is is back above $1,000 for the first time since January 5. The cryptocurrency was higher by 1.5% at $1,000.10 a coin as of 11:39 a.m. ET.

It's been a wild year for bitcoin. It began 2017 with a 20% rally during the first five days of the year before crashing 35% on concerns of a crackdown on trading in China.

Thursday's gains have extended bitcoin's winning streak to a sixth straight session as trade appears to be benefitting from uncertainty surrounding Donald Trump's presidency. The cryptocurrency has gained nearly 10% since Trump was inaugurated on January 20.

I believe that is the $1,000 level can be maintained  we will see a rise again later in the year. The recent trend has been upwards but it wil peak and then fall again.

I have been earning free bitcoins at Bitearn , by completing surveys, the rewards are not great , the equivalent of less than a pound a day, which I transfer to my wallet. This adds interest to tracking the market both in Bitcoin and other Cryptocurrencies.

Today Infinity Economics Launched thier wallet to members. The next few weeks will see added functions, as it is much more than a wallet.

David Ogden

Earn Free Bitcoins Here

 

 

David – http://markethive.com/david-ogden