A ‘Segwit2x Working Group’ Has Submitted a Bitcoin Scaling Plan

Just recently Bitcoin.com reported on a Bitcoin Improvement Proposal (BIP) written by Calvin Rechner that was recently submitted to the developer’s mailing list. There is another plan in the works initiated by Bitcoin developer and Bloq CEO, Jeff Garzik, that aims to combine Segwit and a 2MB block size increase. On May 30 Garzik addressed the community detailing his thoughts on bitcoin’s current throughput issues and the proposed scaling solutions’ intentions.

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A Possible Scaling Solution to an ‘Entirely Predictable and Avoidable Outcome’

A 'Segwit2x Working Group' Has Submitted a Bitcoin Scaling Plan
Bitcoin developer, Jeff Garzik.

The bitcoin scaling discussion has been an ongoing ferocious debate that has lasted for years. Now there are multiple conversations taking place discussing different ways to scale like using alternative implementations of bitcoin’s code, a user-activated soft fork, extension blocks, emergent consensus, and just recently Barry Silbert’s idea. The suggestion announced by Silbert’s company the Digital Currency Group (DCG) is an agreement based off of RSK’s chief scientist, Sergio Demian Lerner’s Segwit-2MB proposal. Furthermore, Silbert claims to have backing from 56 companies and over 84 percent of hashrate support.

Garzik has been working on a solution called “Consensus SegWit2x signaling on bit 4” which is available for viewing on Github. At the moment the pull request has quite a few developers discussing the idea and reviewing the code. There are also quite a few programmers that disagree with the concept in its entirety, or parts of the proposal, while there are others who are supportive of the compromise idea. On May 30 Garzik addressed the bitcoin ‘community’ in a personal blog post called “A personal note to the Bitcoin community.”

“An entirely predictable and avoidable outcome — skyrocketing fees and network at max capacity — has come to pass, with the predicted results,” explains Garzik.

Base block size was not increased, despite having years to plan the upgrade, years to avoid the preventable consequences of high fees driving away use cases and users away from Bitcoin. Failure to increase a temporary DoS limit — base block size limit — has direct, measurable, negative economic consequences.

Measurable Data and Outcomes Trump Conspiracies

The developer also says it doesn’t matter who played a particular role but “upgrading base block size did not occur.” Moreover, Garzik details that measurable data has, and always will cut through “silly conspiracy theories.” According to his post, the community should rely more heavily on the outcome of efforts rather than these theories.

The Segwit2x Working Group has a specific charter, with a specific, openly stated goal: Segwit + 2M base block size increase — The community should judge these efforts based on outcome

Garzik concludes by saying he hopes the community can judge by viewing “those who act, and produce measurable outcomes.” He believes doing so is far superior to resorting to personal attacks and spreading conspiracies. “I ask everyone who wants a better, brighter, more positive Bitcoin community to start here: Be Good To Each Other and let’s build good code,” Garzik adds.

An Opportunity to Provide Feedback and Help Improve

The blog post was submitted to multiple bitcoin forums and some of them submitted by Garzik himself. Of course, a few people disliked the idea, while others supported the concept of moving scaling along and bolstering a compromise. One bitcoin developer who has been a staunch supporter of the user activated solution, Eric Lombrozo, detailed his opinion on the proposal stating, “It’s beyond repair. I will continue to support BIP148 (UASF).” However, the DCG founder Barry Silbert immediately disagreed with Lombrozo’s statements.

“Beyond repair?” Sibert says, responding to Lombrozo.

They literally just put it up on GitHub to give everybody the opportunity to provide feedback and help improve

It’s still hard to tell what the “outcome” of the scaling debate will be and if the community will back the Segwit-2MB proposal idea. Nevertheless, it looks as though bitcoin proponents are trying to figure it out more so than ever before.

What do you think about the Segwit2x Working Group proposal? Let us know your thoughts in the comments below.

India’s Government Divided Over Bitcoin Legalization

As the period for public comments regarding the regulatory framework for bitcoin comes to an end, a debate heats up among members of the Indian Parliament about the legalization of digital currencies. Meanwhile, bitcoin trading volumes remain strong in the country.

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Parliament Members Divided Over Bitcoin

India's Government Divided Over Bitcoin LegalizationAt a Parliamentary Standing Committee of Finance meeting last week, a heated discussion erupted among members of the Indian Parliament about bitcoin.

A number of Parliament members, including BJP member Kirit Somaiya, “cautioned the finance ministry officials present at the meeting against any move to legalise bitcoin,” according to The Economics Times, India’s leading business newspaper.

A source told the publication:

Members feared that it [bitcoin] could become a parallel instrument for cycling black money and dodgy transactions and also be a source of terror financing.

India's Government Divided Over Bitcoin Legalization
Kirit Somaiya

They wanted the government to look into the vulnerability of bitcoin. Somaiya who has repeatedly spoken against the digital currency, calling it “illegal” on numerous occasions, raised a series of questions.

He asked the officials why the government was being ambivalent about this instrument, citing that they have not clarified whether it was a legally permissible instrument or not.

He also demanded to know whether officials are properly briefing the prime minister about the risks of bitcoin.

Bitcoin Could Soon Be Regulated in India

Currently, the same government has been considering legalizing the digital currency. Last week, the Finance Ministry started soliciting comments from the public on how to best regulate bitcoin. The deadline for submissions is May 31, and 3,357 comments have been submitted at press time. The majority of them are in support of regulating bitcoin.

India's Government Divided Over Bitcoin Legalization“Regulating bitcoins will address many such concerns and queries, including market acceptance, customer trust, investment security, money laundering, hawala, etc,” Hesham Rehman, co-founder and CEO of Bitxoxo Bitcoins Online, was quoted by The Times Group as saying. “For instance, regulations like strong eKYC and penalizing bitcoin trading in cash will help proper transaction records which will negate all the chances of any sort of illegal activity.”

Karthik Iyer, India’s Ambassador of the blockchain think tank P2P Foundations, also offered his viewpoint on the situation:

The government should think about treating cryptocurrencies as a commodity if not a full-fledged currency with exchange value. There is a lot of arbitrage in the markets and it can generate a great deal of wealth for India’s crypto traders.

India’s Bitcoin Volume

India's Government Divided Over Bitcoin LegalizationMeanwhile, bitcoin trading volumes in India have exploded. Last week, the price of a bitcoin skyrocketed globally. During that spike, it traded at nearly a $1,000 premium in India as supplies to the country have been limited.

This month, leading Indian bitcoin broker Zebpay announced that it had reached a milestone of over 500,000 app downloads and is adding more than 2,500 users daily. Struggling to keep up with the surge in new users and volume, Zebpay announced, “we have put a temporary buy limit of Rs 50,000 per day due to the shortage of bitcoin stock.”

India's Government Divided Over Bitcoin LegalizationNew user growth was also the cause of the downtime experienced at leading Indian bitcoin exchange by volume, Coinsecure. “We have been experiencing exponential growth of users on our website, causing slowness and stress on our systems,” according to a statement from CEO Mohit Kalra to Coinsecure’s customers.

Meanwhile, on the peer to peer Localbitcoins exchange, trading volumes in Indian rupee hit record highs as well, with nearly double the previous week’s volume of rupees traded for bitcoin.

India's Government Divided Over Bitcoin Legalization

Do you think that the Indian government will listen to their people and regulate bitcoin? Let us know in the comments section below.

Markets Update: Cryptocurrency Prices Rebound After Last Week’s Dip

The price of bitcoin seems to have found some stability over the past 24 hours, after last week’s sharp upward climb in value followed by a 30 percent dip the next day. Since the drop, the price has bounced back and is hovering around US$2250-2300 per BTC at the time of writing.

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Bullish Pressure Returns to Bitcoin Markets After a 30 Percent Dip

Last week was an exciting time for cryptocurrency traders as quite a few digital assets hit all-time price highs on May 24. Bitcoin’s value reached a high of $2760 across global exchanges which was followed by a short-term downtrend to the sub-$2000 mark. Quite a few traders had assumed a significant dip to the $1800-1600 range would take place, but so far these predictions never materialized. Since bitcoin ricocheted from its low, it has since consolidated between $2200-2300 over the past three days. For now, there is a touch of bullish pressure keeping the price going, but it’s significantly weaker than last week.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip

Technical Indicators

Technical indicators still suggest a bear market could continue and what we see now may be an extended ‘dead cat bounce.’ Over the past couple months, we’ve reported that the 100 Simple Moving Average (SMA) was above the longer term 200 SMA in nearly every price analysis. However, things have changed as the 100 SMA is now below the 200 SMA indicating the downtrend may not be over.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip
Bitstamp market depth 5-30-17, 10:30 am EST.

Moreover, the Relative Strength Index (RSI) and Stochastic oscillators still show the price is overbought and bears may take the upper hand in the near future. Bitcoin’s price rebound was unexpected and has shifted traders predictions slightly, but a good majority are still assuming the uptick is merely a bull trap. If an upside breakout breaks the $2400 range, there’s a good chance we could skip the downturn and head towards all-time highs once again.

A Glimpse at Altcoin Markets

Alternative cryptocurrency markets have all seemingly followed bitcoins ups and downs over the past week. One notable altcoin that has been performing quite well is Ethereum (ETH), which is $205 per ETH at press time. On May 30th Ethereum trade volume surpassed BTC markets for the first time in history and currently commands a $19 billion market cap. The third highest market cap held by Ripple (XRP) has taken a significant dive and hasn’t really recovered much as the price hovers around $0.23 cents per XRP.

Markets Update: Cryptocurrency Prices Rebound After Last Week's Dip
Ethereum trade volume surpassed BTC volume for the first time in history.

The fourth highest valued alternative cryptocurrency market NEM retraced a touch and is resting at $0.21 cents per token. Other altcoins have also rebounded since the dip including Ethereum Classic (ETC $17), Litecoin (LTC $25), Dash ($119), Monero (XMR $43), Bytecoin (BCN $0.002) and Stratis (STRAT $4.50). Another coin that has received a bunch of volume is Tether, which currently holds the fifth highest volume as some traders seem to have used the token as a safe haven from the dips.

The Verdict

For now, Bitcoin’s price has appeared to have found a temporary floor and remains relatively stable with a few light swings here and there. Some traders seem pretty confident that a horrible bear market has been avoided, but most traders are still doubtful the downtrend is over. Good news from Russia has seemingly helped push the value of bitcoin upwards. Meanwhile, talks of a scaling compromise has replaced some of the vitriolic energy that has given the bitcoin ‘community’ a bitter taste.

Bear Scenario: It’s possible a second leg downwards could happen in the near future continuing to push the price to lower levels. Bitcoin’s fiat value could dip down to the $1800-1600 range if bulls step away from exhaustion. At the moment looking at order books from popular exchanges shows a strong floor at the $2000 mark for the time being.

Bull Scenario: Bitcoin’s price has jumped back and has shown resilience after last week’s losses. In order to bring the upswing velocity further, it would help if the cryptocurrency crossed over the $2400 range. Breaking this resistance point could bring the digital asset to higher levels and possibly get closer to last week’s top or create a new all-time high.

What do you think about the price of bitcoin retracing to $2250-2300? Do you think bitcoin will continue to rise to higher levels? Or do you expect bears to lower the price further shortly? Let us know in the comments below.

Disclaimer: Bitcoin price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”

A New Bitcoin Improvement Proposal Aims to Compromise

As the price of bitcoin settles down many bitcoiners are now concentrating on the scaling compromise proposed at the Consensus event held last week. Now a few bitcoin developers have decided to work on Segwit-2MB proposals that try to adhere to each side of the debate.

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The Compatibility-Oriented Omnibus Proposal

A New Bitcoin Improvement Proposal Aims to Compromise It is still hard to envision that everyone in the bitcoin community will be pleased with a compromise. There are still some bitcoin proponents who vehemently oppose Segwit, and then there are those who fully disagree with a 2MB hardfork. On May 29 a developer named Calvin Rechner submitted a new bitcoin improvement proposal (BIP) that aims to cohere to the recent Barry Silbert scaling concept.

“This proposal is written under the assumption that the signatories to the Consensus 2017 Scaling Agreement are genuinely committed to the terms of the agreement, and intend to enact the updates described therein,” Rechner’s BIP details.

This document describes a virtuous combination of James Hilliard’s ‘Reduced signalling threshold activation of existing segwit deployment’, Shaolin Fry’s ‘Mandatory activation of segwit deployment’, Sergio Demian Lerner’s ‘Segwit2Mb’ proposal, Luke Jr’s ‘Post-segwit 2 MB block size hardfork’, and hard fork safety mechanisms from Johnson Lau’s ‘Spoonnet’ into a single omnibus proposal and patchset.

UASF and a 2MB Hard Fork Deployment in Six Months

Rechner explains that Shaolin Fry’s UASF is included so the existing Segwit deployment can be activated without creating a new release. Following the UASF implementation, the BIP explains that a 2MB hard fork deployment will occur six months after Segwit activation.

“The intent of this proposal is to maintain full legacy consensus compatibility for users up until the hard fork block height, after which backwards compatibility is waived as enforcement of the hard fork consensus ruleset begins,” details Rechner.

‘A Possible Win if the Community Will Accept It’

Following Rechner’s BIP submission, bitcoiners on social media and forums discussed the recent proposal. Throughout the conversations concerning the new BIP, a good portion of people seemed to like the idea. Some explained the reason they supported this proposal is because it includes UASF and the block size increase has safety nets in place to avoid divergent consensus.

“The Spoonnet-based improvements need clarification IMO, but otherwise it looks like a possible win if the community will accept it,” explains bitcoin developer Luke Jr. “Provided there is reasonable consensus from the community, a soft-hardfork (aka MMHF aka Spoonnet) can be theoretically made pretty safe. But I’m not sure it can really be ready within six months.”

Even though there still seems to be a lot of people hell bent towards not compromising at all, there are definitely signs of people looking to find the right compromise. It’s not certain this new BIP will be taken further, but it shows the growing trend to find consensus is important to most people from both sides of the debate.

What do you think about Calvin Rechner’s new proposal? Do you think the bitcoin community can find a compromise? Let us know what you think in the comments below.

Japan’s Bitpoint to Add Bitcoin Payments to 100,000+ Stores

Bitpoint has recently partnered with Peach Aviation to provide bitcoin payment tech to the company, and now plans to do the same at “hundreds of thousands of Japanese retail outlets.”

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From Peach Aviation to 100,000+ Stores

Japan's Bitpoint to Add Bitcoin Payments to 100,000+ StoresPeach Aviation Ltd announced last week that it will be the first Japanese airline to accept bitcoin for tickets. Peach is Japan’s first Low-Cost Carrier (LCC) and is majority owned by the country’s largest airline, All Nippon Airways Co. Ltd (ANA).

To accept bitcoin, the low-cost airline has partnered with Bitpoint Japan Co, a bitcoin exchange and payments startup founded on March 3, 2016. In addition to allowing Peach to accept bitcoin for flight tickets, the companies are working together to add bitcoin Japan's Bitpoint to Add Bitcoin Payments to 100,000+ Storespayment options to souvenir shops, restaurants, and hotels at travel destinations. Furthermore, “we will jointly install bitcoin ATMs where customers can withdraw cash from bitcoin,” their partnership agreement reveals.

On Monday, Bloomberg reported that Bitpoint is “planning to give hundreds of thousands of Japanese retail outlets the ability to accept the digital currency.” The company’s president, Genki Oda, said, “We’re holding discussions with a retail-related company,” adding that:

We’re also talking to a big convenience store operator about using it [bitcoin] … By going through a company providing payment terminal services to shops, we have the possibility of increasing its use at one stroke. It’s easier than talking to lots of individual retailers.

Japan's Bitpoint to Add Bitcoin Payments to 100,000+ StoresBitpoint currently has ties with several retailers and plans to expand that number, Oda told the publication. The aim is to promote the use of bitcoin in retail stores instead of as a speculative investment, he detailed.

Oda also runs Bitpoint’s parent company, Remixpoint Inc., a publicly-traded conglomerate with a market value of about 21 billion yen ($189 million).

400,000+ Stores Could Accept Bitcoin

Japan's Bitpoint to Add Bitcoin Payments to 100,000+ StoresSince April 1, when the Japanese government started recognizing bitcoin as a legal method of payment, a slew of Japanese companies have started considering accepting bitcoin. The first major retailer to do so following the government’s move was Bic Camera, one of the country’s biggest electronics retailers. The company partnered with Japan’s largest bitcoin exchange by volume, Bitflyer, to accept bitcoin.

Also in April, another bitcoin exchange, Coincheck, announced that it had been working with Recruit Lifestyle to bring bitcoin payments to over 260,000 stores by this summer. Claiming to hold 99% of the bitcoin payment market share, Coincheck said that about 5,000 stores already accept the digital currency using its payments system.

Japan's Bitpoint to Add Bitcoin Payments to 100,000+ StoresThen last week, Bitflyer CFO, Midori Kanemitsu, independently told Nikkei that the number of stores accepting bitcoin “is expected to rise to 300,000 or so in 2017.”

If Kanemitsu’s estimation is added to Monday’s announcement by Bitpoint, then the total number of stores that could start accepting bitcoin soon could rise to 400,000+.

Do you think Bitpoint will successfully add bitcoin payments to 100,000+ stores? Also, how many stores do you think will accept bitcoin in Japan this year? Let us know in the comments section below.

Use of Bitcoin in Ecuador Continues to Grow Despite Government Ban

Before issuing their own digital currency, Ecuador banned all others including bitcoin back in July 2014. However, today bitcoin’s use continues to grow in the country.

 

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Use of Bitcoin in Ecuador Continues to Grow Despite Government BanAs part of a reform to the country’s monetary and financial laws, Ecuador banned bitcoin and other digital currencies in July 2014. The then-President Rafael Correa, who served from 2007 to 2017, introduced the bill that made bitcoin illegal and signed it into law.

This law demands Bitcoin businesses “shut down their operations immediately.[…] Those who defy the ban will face prosecution, and all bitcoins circulated and assets in bitcoin trades face confiscation,” Panam Post reported at the time.

State-Run Digital Currency

Use of Bitcoin in Ecuador Continues to Grow Despite Government BanPart of the aforementioned law calls for the creation of an Ecuadorian state-issued digital currency backed by the assets of the Ecuador’s Central Bank (BCE).

Soon after banning bitcoin, the government rolled out its own digital currency, called Dinero Electrónico. It is pegged one-to-one to the US dollar, which is the country’s official currency.

However, Ecuador’s private banks did not have confidence in the central bank’s electronic money system. Julio José Prado, President of the Association of Private Banks (ABPE) said at the time:

We cannot at this point support any financial program that is administered by the BCE since we have no confidence that it is secure.

Alexandra Veloz is an attorney based in Quito, the capital of Ecuador, and a member of the Ecuadorian Bar Association. She is currently the legal counsel for the Antigua Report. Referring to the state-run digital currency program, she said last week that “the new system has garnered plenty of criticism, and adoption from banks and customers has been limited at best.”

Use of Bitcoin Continues in Ecuador

Regarding the prohibition of bitcoin and other cryptocurrencies, Veloz explained that:

The prohibition, however, does not ban digital currency outright.[…] Ecuadorian officials have neglected to punish defiant bitcoin use.

Use of Bitcoin in Ecuador Continues to Grow Despite Government BanShe noted that the government’s move was “more precisely, a monopoly privilege: the Ecuadorian state has the exclusive power to put its own digital money into circulation via the central bank.”

Despite the government making bitcoin illegal, its use has not halted in Ecuador, Veloz shared. There are buyers and sellers in the country who list themselves on Localbitcoins.com and bitcoin can also be purchased via Paypal like other online purchases, the attorney detailed. At press time, the cost of a bitcoin in Quito on the Localbitcoins market carries at least a $200 premium. Veloz added:

A small number of businesses have also taken the risk of establishing bitcoin as an alternative for payment. The national taxation and invoicing system do not integrate these transactions, but they remain an available option.

The Ecuadorian Bitcoin community even gathered to celebrate Bitcoin Pizza Day on May 22.

Use of Bitcoin in Ecuador Continues to Grow Despite Government Ban
Ecuadorian Bitcoin community (Photo\bitcoinecuador.org)

Do you think the Ecuadorian government will allow Bitcoin to thrive? Let us know in the comments section below.

Russian Bankers Push to Legalize Cryptocurrency

Russian bankers released a statement May 26, saying that cryptocurrency should be legalized for circulation. This message comes from German Gref, who is head of the Russian Sberbank. Gref said there needs to be an honest and intelligible conversation about cryptocurrencies, because attempts to ban it have only caused problems in the past. 

 

A Russian news article Russian Bankers Push to Legalize Cryptocurrencymentioned Greff’s commentary: “Gref stressed that they now engage in a constructive dialogue about cryptocurrency, the Central Bank are trying to understand – what is it and what to do next. ‘Attempts to introduce bans will only lead to the loss of existing competitors,’ said the head of the financial institution.”

Cryptocurrency May Become “Digital Product” in Russia

In another article by the same Russian news outlet, the Russian government’s Deputy Chairman Regulator of the Central Bank, Olga Skorobogatova, said government is preparing amendments regarding cryptocurrencies and the tax code. Skorobogatova went on to admit that government cannot control how many cryptocurrencies can be created. The Russian news page said,

Skorobogatov noted that virtual assets continue to be emitted, no gold reserves, they are not provided, there is no control over their number.

The Russian news outlet went on to say that government or the “financial market” does not necessarily see cryptocurrency as a threat, because government considers it a “digital product.” This is likely why government is seeking to create amendments for it in their tax code.

The article said, “Therefore, financial market electronic money does not consider it a threat. But, if you do not begin to deal with this issue, you can skip a significant risk increase.”

Russian Officials Want to Understand and Accept Cryptocurrency

Between bankers and government Russian Bankers Push to Legalize Cryptocurrencyofficials changing their perspective, it appears there could be a movement toward more political acceptance of cryptocurrency in Russia. This information comes as bitcoin’s popularity has surged over recent weeks and Japan has classified bitcoin as a payment method along others.

It looks like some governments and bankers are trying to understand cryptocurrency rather than react against it.

Do you think that Russia will accept and legalize cryptocurrencies? Let us know in the comments section below.

Japanese Internet Giant GMO Postpones Launching Bitcoin Trading Platform

Japanese conglomerate GMO Internet Group previously announced that its full-service bitcoin exchange and trading platform would open its doors to the public on May 24. The company has postponed the launch to May 31.

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One Week Delay

Japanese Internet Giant GMO Postpones Launching Bitcoin Trading Platform to May 31Z.com Coin is GMO Internet Group’s full-service cryptocurrency exchange. Its launch was announced on May 9 as the platform opened for account pre-registration. Bitcoin.com reported on the announcement with details of the trading platform at the time.

However, the company has delayed the launch for a week, due to the growing number of bitcoin and blockchain transactions since its May 9 announcement, stating that (loosely translated):

We will provide customers with a stable trading environment and judge whether it is necessary to conduct additional service verification and system adjustment for the platform to be used with confidence. The start date of the service has been postponed to May 31, 2017.

The company apologized to customers who have pre-registered for accounts. “We deeply apologize for the inconvenience caused to customers who have already applied and are waiting for our service to open.”

Trading on GMO’s Bitcoin Exchange

GMO-Z.com Coin Ltd was established as GMO Wallet Co. Ltd in October 2016 with the purpose of developing a cryptocurrency exchange. In November 2016, the company began testing the system in preparation for the full-scale operation.

Japanese Internet Giant GMO Postpones Launching Bitcoin Trading Platform to May 31Two types of trading will be available at launch; Virtual Currency FX trading and Virtual Currency trading. The former is GMO’s bitcoin margin trading service, which the company described as similar to traditional over-the-counter foreign exchange (FX) margin trading. The latter is a bitcoin exchange service, allowing customers to buy and sell bitcoins.

The company states that trading fees are “0 yen” for all orders. Customers can trade 24-7 on the Z.com Coin exchange, starting at 0.001 bitcoin.

GMO already owns the world’s largest FX brokerage, GMO Click Securities. Bitcoin.com recently reported on a significant group of potential new bitcoin traders. This group is called “Mrs. Watanabe” or retail investors who currently favor FX margin trading, which is a $40 trillion market. Many of them are already trading on GMO Click FX platform, so Z.com Coin bitcoin exchange will offer them a convenient way to start investing in bitcoin. Other Japanese forex brokers that have applied to operate bitcoin exchanges include Money Partners Group and Kabu.com.

How popular do you think GMO’s bitcoin trading platform will be? Let us know in the comments section below.

SEC Wants Companies Issuing Tokens to Protect Their Investors

The Securities and Exchange Commission has not said much about crypto companies issuing new tokens, usually called “ICO’s”, Initial Coin Offerings. The issue has remained silent. Now SEC provided a statement on May 23, saying they want ICO’s to be fair. They want cryptocurrency startups to protect their investors. 

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A Reuters article quoted SEC officials, ‘Whether or not you are regulated by the SEC, you still have fiduciary duties to your investors,’ said Valerie Szczepanik, the head of the SEC’s distributed ledger group. “If you want this industry to flourish, protection of investors should be at the forefront.”

This commentary comes as more and more ICO’s are starting to crop up in the bitcoin space, and crypto lovers are calling some of these companies frauds or fakes, who are just trying to scam investors and customers.

Lack of Oversight and the Problem with New Tokens

Allegedly, many of these companies have caused alarm bells to sound off because they are not being regulated by any institution or organization. The SEC said just because a company may not be regulated, it does not mean their monetary responsibilities are negated. The Reuters announcement said,

These ICOs have raised red flags due to a lack of regulatory oversight. Some market participants say ICOs could be illegal because the companies are selling tokens that can be considered securities, which fall under the SEC’s jurisdiction.

In a humorous statement, Peter Van Valkenburgh, director of research at cryptocurrency advocacy group Coin Center, says that calling a new coin an “ICO’ is a bad idea anyway, because that sounds too close to the regulated “IPO.” In other words, it is not intelligent wording for these companies to use. It brings them unwanted regulatory attention.

The Reuters article also quoted him, ‘It’s like painting a target on yourself. Because, what does an organization like the SEC regulate? They regulate IPOs,” said Van Valkenburgh, referring to initial public offerings. ‘Why would you adopt the terminology of the regulator when you’re building a thing you hope they don’t regulate?’

What do you think about SEC getting involved in ICO’s? Is ICO an accurate name to describe new token generation? Let us know in the comments below.

Bitcoin Experiences an Intense Flow of New Money and Mainstream Attention

Over the past month, mainstream media has given Bitcoin the spotlight due to the digital currency’s recent jumps in value. Multiple news reports featured in prominent publications and on television are saying mainstream investors are flocking to cryptocurrencies in great number.

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‘The Laughter is Fading’

Mainstream media is giving Bitcoin a lot of attention because the digital asset’s market value has gained significant value in a short period of time. To put the jump in value into perspective, bitcoin’s price has risen by 87% in just thirty days. Now many broadcasts and publications are reporting on bitcoin nearly every day giving the technology quite a bit of exposure.

Bitcoin Experiences an Intense Flow of New Money and Mainstream Attention
John Bollinger, the inventor of the financial analysis indicator Bollinger Bands, mentions bitcoin to his 11,000 Twitter followers.

Bitcoin can be seen on television as news broadcasts such as Fox, NBC, and CNBC are reporting on the subject regularly. Additionally, the decentralized currency is being featured in editorial publications such as Market Watch, Time Magazine, Forbes, Business Insider, Bloomberg, and the New York Time. For instance, on May 26 the investment news outlet Market Watch headline reads;

Wall Street laughed at a call for bitcoin at $25,000 — but after a 400% surge, the laughter is fading

Bitcoin the Mother of All ‘FOMO Trades’

Bitcoin Experiences an Intense Flow of New Money and Mainstream Attention
IG financial analyst Chris Weston.

More mainstream exposure happened last week as the American socialite and professional poker player, Dan Bilzerian, told his 22.3 million Instagram followers he was buying a lot of bitcoin.

“Just bought a sh*tload of bitcoin — it’s so crazy watching that sh*t f**king go up it’s like… betting a bunch of money on the Super Bowl,” explained Bilzerian.

The well known IG financial analyst Chris Weston also notes the new money flowing into bitcoin is huge. “I genuinely can’t wait to see young tech heads driving down Collins Street in a new Aston, because they had the stones to be able to hold their exposure through what has been an exponential move without ever having taken profit,” explains Weston.

Bitcoin is the mother of all ‘FOMO (Fear of Missing Out) trades’ — Perhaps the fact I am putting so much focus on bitcoin suggests a top has been seen and I am the taxi driver contrarian indicator. We shall see but flows into bitcoin have been huge.

Replacing the USD and a Whole Lot of Smart Money Coming In

Moreover, on the Australian Broadcasting Corporation’s (ABC) nightly news brief the host detailed that bitcoin could possibly replace the U.S. dollar. During the newscast, ABC said there is a chance alternative monetary systems like cryptocurrencies can become the next de facto world currency in the future.

Bitcoin Experiences an Intense Flow of New Money and Mainstream Attention
Australian Broadcasting Corporation’s (ABC) nightly news host says Bitcoin could replace the U.S. Dollar.

Additionally, many investors were quite surprised to hear how much the Boston-based Fidelity Bank, CEO Abigail Johnson liked bitcoin. Fidelity has added Coinbase accounts to their online banking platform, and the firm has been mining bitcoin with 21 Inc. computers as well. Nick Kirk, a former IBM Researcher, explains, “They basically let the world know they are looking at it.”

The smart money is starting to come in now.

Enormous Momentum

These days there is significant interest in cryptocurrencies stemming from Asia and not just from China anymore. India, Japan, and South Korea are starting to become dominant players within bitcoin trading markets. There definitely seems to be a whole lot of money moving towards cryptocurrencies like never before as the entire market capitalization commands a whopping $83 billion. These valuable currencies are also trading over $4.6 billion USD worth of cryptocurrencies daily, and bitcoin is capturing half this share all by itself. Last but not least another mainstream mogul also is very optimistic in regards to bitcoin adoption. The Former anti-virus tycoon John McAfee believes bitcoin’s price velocity will continue to rise.

“Bitcoin has enormous momentum,” McAfee notes.

Do you think a whole lot of mainstream investors and new money is flowing into cryptocurrencies? Let us know what you think in the comments below.