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What Is ASIC Mining?

ARTICLE ORIGINALLY POSTED ON MUD BY JIE YEE ONG – Source: Makeuseof.com Technology Explained

You cannot mine Bitcoin with your CPU. For that, you’ll need an ASIC miner. Here’s why.

Bitcoin does not appear out of thin air. Cryptocurrency may be a digital entity made out of zeros and ones, but a lot of behind-the-scenes hardware work actually takes place when it comes to producing them.

To obtain a single Bitcoin, you have to mine for them using specialized hardware, known as an ASIC miner.

ASIC Mining and Blockchain

Before you get into ASIC mining, you first need to understand blockchain technology. In very simple terms, blockchain is a technology that generates a hash that is not repeatable or replaceable.

These hashes are then cryptographically linked and “stacked” on one another (hence “block”) to ensure that nothing is repeated, creating a chain (hence “chain”) of codes that guarantee uniqueness and security. Our article on how blockchain technology works explains the entire process in more detail.

All cryptocurrencies, including NFTs and Bitcoins, are built on blockchain technology. So, “mining” for cryptos actually refers to creating blocks and blocks of codes. Therefore, creating blockchains means mining for cryptos, and for that, you need ASIC miners.

Where and When Did ASIC Mining Originate?

ASIC stands for “Application-Specific Integrated Circuit miner.” It is basically a very powerful, high-performance hardware that is designed to mine for cryptocurrency.

The practice of ASIC mining began in 2013, when Chinese hardware company, Canaan Creative, manufactured the first ASIC miner of its kind.

It takes a lot of computational power to mine Bitcoin, so much that traditional CPUs and GPUs were no longer able to do so competitively, hence the need for a new type of hardware that could handle the demands of crypto mining.

Soon after Canaan Creative, companies such as Bitman, Bitwats, and MicroBT started manufacturing ASIC miners.

An ASIC miner typically comprises a few important components: an ASIC chip that runs calculations for codes, a cooling fan, and a backup generator to protect against power disruptions during the mining process.

Technically, anyone can be involved in ASIC mining. If you are an individual looking to mine in exchange for money from the comfort of your own home, you will need to purchase an ASIC miner.

However, this equipment is not cheap. ASIC miners can range anywhere from $200 to over $15,000. Because of this, miners collaborate in “mining pools,” where a group of miners works together to mine for cryptocurrency, pooling the resources of their ASIC miners.

Profits from the activity are then split amongst the group, usually divided by work and energy.

Advantages and Disadvantages of ASIC Mining

The most obvious advantage of ASIC miners is the machine’s efficiency.

ASIC miners are much faster at solving the series of mathematical puzzles required for Bitcoin mining in ten minutes or less (the average time between blocks on the Bitcoin blockchain) when compared to a CPU.

When a puzzle is solved, the programmer behind the screen earns a block reward, which currently stands at 6.25 BTC. Therefore, this high efficiency translates to better money-making potential.

However, the high computational power of ASIC miners also means environmental destruction due to colossal energy consumption. Official estimates vary, but the Bitcoin mining network uses over 120 Terawatt-hours of energy per year, consuming around 0.6 percent of the global energy supply, or the equivalent to the entire energy consumption of Argentina or Norway.

Some people turn to the smaller, less energy-hungry Raspberry Pi to mine for cryptocurrencies in response to this. If the cost of electricity is so high, is it really worth it to mine for cryptos?

It all depends on the kind of crypto you mine for—if it is a mainstream cryptocurrency such as Bitcoin or Ethereum, you may be in for bigger rewards, but it is harder to get your hands on the rewards in the first place.

If it is niche crypto, it may take longer to turn a profit. Energy consumption caused by ASIC mining varies according to location, but regardless, its environmental impact cannot be ignored.

The Biggest ASIC Mining Companies

The biggest publicly traded cryptocurrency mining companies are based in the US and Europe. They include Riot Blockchain, Hive Blockchain, and Northern Data AG. The former two are listed on the Nasdaq stock exchange, whereas Northern Data AG is listed on Xetra, a German stock exchange market.

Besides these companies, several locations across the globe are known as “bitcoin farms.”

These are places where huge warehouses are built, and large numbers of ASIC miners are hauled inside to mine Bitcoin and other cryptocurrencies 24/7.

The largest bitcoin farms include Reykjavik, Amsterdam, Texas, Moscow, and the Liaoning Province in Northeast China (although many Bitcoin mining operations in Northern China are relocating due to environmental rules introduced in 2021).

Is ASIC Mining Worthwhile?

Thanks to surging cryptocurrency investments, ASIC mining is a booming industry, and it seems like the fever is not going away anytime soon. If you’re thinking of investing in an ASIC miner or starting a mining group with your mates, do plenty of research beforehand. After all, like many investments, crypto is still a volatile market.

mining

Refresher-What is Cryptocurrency?

Cryptocurrency is a digital based medium of exchange that uses cryptographic functions to conduct financial transactions. Through blockchain technology, it achieves decentralization, transparency, and immutability. Simplified, cryptocurrency can be compared to casino chips or arcade tokens. It’s a form of payment, like the U.S. dollar and can be used to buy goods and services. But, unlike fiat money, it’s digital and uses encryption techniques to control the creation of monetary units and to verify funds that are transferred. Unique to cryptocurrency are the following:

It is decentralized which means that supply is not determined by a central bank.
It has no physical form like a dollar bill or coin, and only exists in the network.
It has no essential value, meaning it can’t be traded and it is not redeemable for another commodity such as gold.
It is nearly impossible to counterfeit or double spend.

The term cryptocurrency is derived from the encryption techniques used to secure the network. They function using blockchain, a decentralized technology spread across many computers that manages and records transactions with immense security. Without blockchain, cryptocurrency would cease to exist. In simplified terms, the “block” is the digital information, and the “chain” is the public database in which it is stored. They are like a spreadsheet containing information regarding a transaction. Every transaction generates a hash, which is a unique string of letters and numbers created by special algorithms to distinguish one block from another. The computers (also known as nodes) in the network will inspect the transaction and either confirm or reject it. If most of the computers approve the transaction, it is written into a block that joins the chain. Once the new block is added to the blockchain, it becomes public information for anyone to view.

Several popular blockchain-based cryptocurrencies include: Ethereum, Litecoin, and NEO. But the first and most recognized digital currency is Bitcoin. An anonymous entity named Satoshi Nakamoto developed Bitcoin in 2008. According to Coinmarketcap.com, there are now thousands of different ones being traded publicly, but Bitcoin remains the single most well-known cryptocurrency to date. So, what is it exactly? Simplified, Bitcoin is like a computer file that is stored in a ‘digital wallet’ app on either a smartphone or computer. You can transfer Bitcoins to your wallet or to other people like you can with real money. However, unlike money you send through your bank or a digital payment service, the transfer goes to a network of computers which confirm your transaction (as explained above). Moreover, cryptocurrencies like Bitcoin are created through a process called mining. This is not the same as mining for gold. This process involves powerful computers solving complicated problems.

Miners are a crucial tool for cryptocurrencies. Without them, transactions would not be verified, and users would not be able to make payments. Miners like Canaan Avalon 1066 and 1047 are remarkable, sophisticated machines designed to mine blocks. Their roles are to secure the network and process every Bitcoin transaction.

For some, the paper dollar is outdated. Cryptocurrency has emerged as the more progressive and secure medium of exchange, though many people have yet to fully convert to the digital eco-system. Nonetheless, since its inception, the debate to shift to cryptocurrency has advanced. Some of the arguments for the digital dollar and against traditional government-based money include:

Overturn corruption: through traditional government-based money, we are giving all our power to one centralized entity to control how it is used and moved. It aims to resolve the issue of absolute power by dispensing power among many people rather than one.
Eliminate extreme money printing.
Return absolute power: All assets are transferred to the government when you die without having a legal will in place or having owned a business. With cryptocurrencies, you and only you have access to your funds.
Eliminate the middleman: Whenever you make a payment or transfer, the middleman (your bank or digital payment service) will take a cut. With cryptocurrencies, all the network members in the blockchain are the middleman.
Serve the unbanked: A large sector of the world has no access to payment systems like banks. With cryptocurrency, the spread of digital commerce around the globe will enable anyone with a mobile phone to begin making payments.

Globally, the economy continues to move toward a digital eco-system. Everything from money transfers to investments, the world is going paperless. Cryptocurrency has become the most promising addition to the digital payment sector. Blokforge is proud to be a part of the economic progression by providing state-of-the-art miners for mining Bitcoin cryptocurrencies. Additionally, Blokforge is currently working to develop nodes. These are computers in the network that communicate with each other to transmit information.

$15.4 Billion of New Cryptocurrency Value Was Created During2018

Markets and Prices

A report recently published by Diar has estimated that nearly $15.42 billion of value was added to the market capitalization of the combined cryptocurrency markets in the form of newly created tokens and crypto asset inflation during 2018.

Also Read: Bitcoin Climbs up China’s First Crypto Ranking of 2019

12 Percent of Current Crypto Market Cap Was Created During 2018

According to Diar’s report, new crypto asset value created during 2018 is estimated to comprise more than 12 percent of the current combined cryptocurrency market cap.

The largest contribution to newly created value during 2018 was new token additions, representing $4.96 billion, or 32 percent of the $15.42 billion that was added to the markets last year.

More than 700 new crypto assets entered into circulation during 2018, a more than 50 percent increase when compared with the start of 2018, and an addition of 110 percent of the number of circulating cryptocurrencies as of the start of 2017.

BTC and ETH Added 27 Percent of Newly Created Value Last Year

BTC added roughly $2.63 billion to the combined crypto asset market cap during 2018, with inflation and newly mined BTC comprising 17 percent of new value added to the cryptocurrency markets, forming the largest contribution made by a single virtual currency.

New value created in the form ETH comprised the second largest contribution from a single market to the combined cryptocurrency capitalization during 2018, adding $1.55 billion, or 10 percent of new value.

Inflation on all other cryptocurrency tokens that were circulating as of the start of 2018 added a further $4.17 billion to the combined market cap, comprising 27 percent of last year’s newly created crypto asset value.

Burned Tokens Removed $195 Million From Combined Market Cap in 2018

Newly issued stablecoins comprised a significant contribution to the cryptocurrency market cap, adding more than $1.26 billion in value. The BSV fork also comprised a notable source of new crypto asset value, adding $1.04 billion to the combined cryptocurrency market cap.

Finally, burned tokens comprised $195 million in value that was removed from the combined cryptocurrency market cap during 2018.

Are you surprised that $15.4 billion of last year’s newly created cryptocurrency value survived to see 2019? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, Diar

At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

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Analysis: Why Crypto Derivatives Are Considered Dangerous

Finance

There is a new generation of cryptocurrency-based derivatives being launched in 2019 which could significantly increase overall trading flow and attract a new breed of investors. Derivatives are not without their controversies however. Over the years, they have acquired a negative reputation in some quarters, exacerbated by movies such as “The Big Short.”

Also read: Market Slump Puts Crypto Derivatives in the Spotlight

Understanding the Danger of Derivatives

Analysis: Why Crypto Derivatives Are Considered Dangerous — The Big Short, 2015.

Derivatives are financial securities that are based or tied in some way to another asset. The majority of derivatives are sold over-the-counter (OTC) and the primary danger associated with trading these is counterparty and liquidity risks. The movie “The Big Short,” released in 2015, is useful in understanding the hazards of derivatives. But in that particular case, the mechanism under scrutiny was credit default swaps (CDS), a type of derivative which helped upset the global economy in 2007-2008. Due to the opaque nature of derivatives, as well as other inherent risks, world leaders have been taking increased interest in the products.

Currently there are a number of major players in finance offering crypto derivatives. These include NASDAQ, Cboe Global Markets, and Goldman Sachs. Lars Seier Christensen, chairman of Concordium and founder of Saxo Bank, has said that the introduction of new cryptocurrency-based derivatives in 2019 will hinge on the overall trading flow.

Christensen said: “If the primary cryptocurrency exchange market continues to be in trouble there will be little appetite for launching new trading vehicles. On the other hand, if trading picks back up, it is quite likely that we will see a slew of new initiatives being launched — perhaps even some that have already been planned and gone through due diligence but where the offering party have been waiting for a better time to launch.”

UK’s FCA Is Considering Banning Crypto-Based Derivatives

Before the crypto market gets ahead of itself with further launches of complex products, financiers should note that regulators are cracking down in some quarters. The U.K.’s Financial Conduct Authority has expressed concern and is considering banning some cryptocurrency-based derivatives. This move by the U.K. regulator has been noted as the first major intervention in the cryptocurrency market.

Christopher Woolard, executive director of strategy and competition at the FCA, delivered a speech at the Regulation of Cryptocurrencies event in London, in which he said:

“We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues. Given this, the FCA will also consult on a prohibition of the sale to retail consumers of derivatives referencing certain types of cryptoassets, for example, exchange tokens, including contracts-for-difference, options, futures and transferable securities.”

Frank Wagner, CEO of INVAO, a blockchain asset pool leveraging automated trading for active portfolio management, explained the concern with cryptocurrency based derivatives is that retail investors may be sold unreliable derivatives products, such as contracts for difference, options and futures.

Derivatives Have a Poor Reputation

Wagner said: “The nature of the crypto market being fast-moving and volatile in comparison to the traditional market has led to it attracting a measure of concern. Making accurate predictions on prices in the cryptocurrency market is difficult. This is combined with the fact that derivatives themselves have a poor reputation.”

On the plus side, Wagner explained, derivatives can offer some insulation from market uncertainty and therefore an opportunity for new investors to get involved.

“There’s a lot of anticipation that crypto derivatives will actually make the market more reliable and legitimate by boosting investor activity, mainstream attention, and thus liquidity and trading volumes,” said Wagner.

Further Regulation Will Give Investors Security

According to Wagner, the concern that crypto derivatives are unregulated, and therefore unstable, can be solved through welcome government regulation of digital assets.

“If an exchange is to offer crypto derivatives, it must be regulated, legitimate and secure for investors, which is one of the many reasons why regulation is needed. Crypto derivatives will help to mature and stabilise the industry,” he added.

The most eagerly anticipated crypto derivative in 2019 is Bakkt’s physical bitcoin futures. The success of this product, particularly in terms of investor uptake, will help to determine the rate at which subsequent derivatives are launched. Unlike in “The Big Short,” crypto derivatives do not threaten the global economy. Nevertheless, they remain a controversial financial product whose effects upon the cryptocurrency market have yet to be fully assessed.

What are your thoughts on cryptocurrency derivatives? Let us know in the comments section below.

Images courtesy of Shutterstock and Paramount.

Need to calculate your bitcoin holdings? Check our tools section.

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Over 900 Retailers Worldwide Now Accept Bitcoin Cash

News

The number of online retailers accepting bitcoin cash (BCH) has swelled to more than 945 stores in the last few months. According to Marco Coino, which provides a directory of merchants that accept payments in BCH, more than 670 bricks and mortar retailers also now handle transactions in the cryptocurrency. In October, that figure stood at just over 500.

Also read: Australian Crypto Company Rapped for Paying Bounty Hunters for Glowing Reviews

Low Fees and Faster Settlements Draw Merchants to BCH

Europe is home to the greatest concentration of merchants that welcome BCH as a form of payment, with about 337 locations in total accepting the P2P digital currency. About 134 physical stores in North America, 120 in Australia and 75 in Asia also take payment in bitcoin cash, data from Marco Coino shows.

Bitcoin cash offers reliable, fast and inexpensive cryptocurrency transactions when compared to traditional means of sending money. For example, credit and debit card providers generally charge fees that can be as much as 3.5 percent of every transaction. That compares with transaction fees of around $1 or less for cryptocurrency-based purchases, regardless of the value of each transaction. In the case of BCH, fees tend to be lower still, typically in the region of a few cents.

In Africa, the cryptocurrency, which split from bitcoin core over a year ago, has seen steady growth as a payment means for goods and services. BCH payments are currently established at three physical points in two countries on the continent – Kenya and South Africa – and it continues to flourish elsewhere in the world.

The number of stores accepting bitcoin cash is growing, including a few established privately owned enterprises. Jewelry maker Marks Jewelers, one of the biggest retailers of its kind in the U.S., began taking BCH for payments in October, joining a growing list of jewelry retailers including Samer Halimeh New York and Reeds.

Marks said at the time that the new payment methods, established in partnership with ecommerce platform Shopping Cart Elite, will help to expand access to its jewelry range for buyers throughout the world. “This will allow us to make our fine jewelry available to the global market while paying lower fees and avoiding chargebacks,” Joshua Rubin, director of marketing at Marks Jewelers, said at the time.

Bitcoin Cash Bounty Program

Adoption has been hastened by the appeal of low fees and faster settlement times that are a hallmark of the Bitcoin Cash network. Acceptance by payment processors like Bitpay, used by leading retailers such as Overstock and Newegg, has also helped the cause to move forward.

In November, the Bitcoin Cash Association (BCA) and Spendbch.io started a bounty to spread BCH merchant acceptance in multiple south American countries. The BCA, which describes itself as a “community-driven, grassroots project to accelerate the adoption of bitcoin cash,” said more than 250 new businesses in Venezuela and Colombia were now being onboarded to accept BCH.

The Spendbch bounty offers funds to users who spread merchant adoption in Venezuela, Colombia and Mexico, granting them BCH rewards for helping local businesses accept bitcoin cash.

What do you think about the growing acceptance of BCH as a means of payment? Let us know in the comments section below.

Images courtesy of Shutterstock and Marco Coino.

Need to calculate your bitcoin holdings? Check our tools section.

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The Daily: Electrum Users Targeted by Hackers, Huobi DM’sDaily Volume Exceeds $1B

The Daily

Electrum developers have confirmed reports of an attack against the popular cryptocurrency wallet. Also covered in The Daily, Huobi Derivative Market’s daily trading volume has reached $1 billion, and one of the founders of Brazil’s leading crypto exchange Foxbit has died in a car crash.

Also read: UFC 232 to Have Official Crypto Partner, 5% of Israelis Use Bitcoin

Electrum Developers Scramble to Stop Phishing Attack

Users of the Electrum bitcoin wallet have been targeted in a new phishing attack, the project’s developers confirmed on Twitter. The team notes that the wallet’s official website is electrum.org and warns against downloading the software from any other source.

The attack, which began about a week ago, has been conducted through malicious servers. When asked to broadcast a transaction through a legitimate Electrum wallet, these servers reply with an error message, directing users to download a fake ‘security update’ from an unauthorized Github repository.

At startup, the malicious software asks users for a two-factor authentication code, an unusual request as the 2FA codes are needed only when sending funds. The app then uses the code to transfer the stolen digital cash to addresses controlled by the attacker.

Electrum is one of the most popular cryptocurrency wallets with support for major coins such as bitcoin core, bitcoin cash, litecoin, and others. According to a report by Zdnet, the unknown hacker or hackers have so far managed to misappropriate over 200 BTC.

Electrum developers released an update, version 3.3.2, after they were notified of the attack. However, they admitted in a blog post that “This is not a true fix, but the more proper fix of using error codes would entail upgrading the whole federated server ecosystem.” Gitub admins have also taken down the attackers’ repository.

In January of this year, Electrum issued an emergency patch for another bug. The vulnerability exposed passwords allowing websites hosting the wallets to potentially steal cryptocurrency belonging to their users.

Huobi DM’s Daily Trading Volume Surpasses $1 Billion

Huobi Derivative Market’s daily volume has exceeded $1 billion within a month after the launch of the trading service, the Singapore-based cryptocurrency exchange announced. The threshold was reached on Dec. 25, which was also a strong day for the company’s main trading platform, Huobi Global, with the combined trading volume of both Huboi’s platforms amounting to $2 billion on Christmas day. Huobi Global CEO Livio Weng commented:

This just goes to show the market demand for more sophisticated crypto trading tools, particularly those that allow traders to control risks in volatile markets. Huobi DM is a priority for us and we will continue to enhance it over the coming months.

The cryptocurrency contract trading feature offered by Huobi Derivative Market allows users to buy or sell bitcoin core (BTC) and ethereum (ETH) at predetermined prices and specified times in the future. That provides traders with a number of options such as arbitrage, speculation, and hedging. Huobi also plans to offer support for more cryptocurrencies, with EOS contracts already scheduled to go live on Friday.

Foxbit Co-Founder Gustavo Schiavon Dies in a Car Crash

Gustavo Schiavon, one of the founders of the leading Brazilian cryptocurrency exchange Foxbit, has died in a road accident. While driving between Marília and São Paulo, the young entrepreneur reportedly lost control over his car and ran into a cargo truck. Gustavo’s girlfriend, Ariadny Rinolfi, has survived but has been hospitalized in serious condition. Another victim died in the crash that involved a total of two passenger cars and two large trucks.

Schiavon established Foxbit in 2014 with three other partners – João Canhada, Marcos Henrique and Felipe Trovão. In the following years, it became Brazil’s largest digital asset trading platform. This past March, the exchange lost to hackers 1 million Brazilian real (approximately $260,000), however, restored customers’ balances with the company’s own reserves.

This year Foxbit was also involved in a lawsuit against a commercial bank that closed its account citing concerns over money laundering. Without presenting evidence in court, the bank claimed it had the right to shut down accounts which it determined to be risky, which was later confirmed by Brazil’s judiciary.

What are your thoughts on today’s news tidbits? Tell us in the comments section.

Images courtesy of Shutterstock, Electrum, Foxbit.

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Seven Cryptocurrency Trends to Look out for in 2019

News

Another year is coming, filled with fresh optimism and newfound determination to make 2019 the year when cryptocurrencies take over. Having gotten their calls badly wrong for 2018, so-called experts will be hesitant to make bullish price predictions for 2019. That’s probably for the best since there are far more interesting things to focus on than price action. Here are seven trends that should dominate the cryptosphere over the next 12 months.

Also read: Bitcoin History Part 6: The First Bitcoin Exchange

2018 Didn’t Play Out the Way it Was Promised

This time last year, all kinds of bold predictions were being issued for what 2018 would hold for the crypto space. In the event, the biggest trend of the year was one which few futurologists foresaw – stablecoins. 2018 will go down as the year the markets went south and ICOs died off, leaving a new wave of digital assets to shine – dollar-pegged stablecoins.

Love, hate or tolerate them, there’s no denying that stablecoins were a recurring motif this year. Whether they will continue to dominate in 2019 depends to a large extent on how conventional crypto assets perform. Should the current bear market persist, or bite deeper still, stablecoins will remain ubiquitous. If more favorable market conditions return, however, stablecoins will be forced to take a back seat, leaving the following trends to joust it out in 2019.

New Privacy Protocols Will Gain Traction

With the Mimblewimble-powered Grin and Beam cranking into life, the stage is set for 2019 to be the most private year in crypto in a long time. The last few years of encroaching blockchain surveillance have stripped away a lot of the anonymity that cryptocurrency users once took for granted, but the fight back has begun. It’ll take more than a single privacy protocol to restore the imbalance of course, so it’s just as well there’s a host of privacy-minded tools set to come onstream.

Aside from the Mimblewimble coins, there’s the prospect of Bitcoin Core getting Schnorr signatures next year, which could open the door to privacy tech such as Coinjoin at some point. Before then, we’ll be seeing a lot of other pro-privacy platforms, apps and protocols gaining traction. Wasabi Wallet, a privacy-focused BTC wallet, will hoover up new users, while Ethereum may get its own take on confidential transactions courtesy of Aztec protocol. Stablecoins could get private too should Zkdai – zero-knowledge DAI transactions – become a thing. Pro-privacy projects like Dust and Loki should also make progress, while new projects such as Resistance, a privacy coin and accompanying DEX, are in the works.

STOs Will Replace ICOs

2018 was meant to be the year of security tokens until it wasn’t. That prediction can be rolled over to 2019, however, when it might just come true provided the technical and regulatory hurdles can be cleared by enough applicants. What’s beyond dispute is that 2018 killed the ICO, and no one is tipping the crowdfunded utility token model to rise again. The increased legal and compliance costs of holding an ICO, which now average around $1 million, have put paid to the vast majority of initial coin offerings.

Seven Cryptocurrency Trends to Look out for in 2019 — The ICO market died off dramatically in 2018.

Amazix head analyst Jose Macedo believes the security token offering (STO) will become the standard model most crypto-based projects deploy. “While utility tokens are far from dead, what the industry has now realized is that few of these token economic models actually made sense in terms of long-term value capture,” he explains. “As a result, we’re seeing a lot of projects come to us looking for help in either launching their STOs or restructuring their ICOs as STOs,” adds Macedo. He continues:

We’re also seeing a lot more STO infrastructure be built out in terms of quality legal, token sale platforms, book-building firms, exchanges etc … As of right now, we have about $1B worth of STOs partnered with us looking to launch in 2019.

While security token projects are poised to launch in proactive territories like Malta and Gibraltar, where regulatory frameworks have been drawn up, slower progress is expected in the U.S., where fundraising options are limited. There, the SEC will likely deem most ICOs to be issuing securities. American crypto-based projects are no closer to being granted Reg A+ approval to launch an STO, despite some, such as Gab, having filed the paperwork over a year ago.

Decentralized Credit Networks Will Take Off

Decentralized credit networks made huge strides this year in terms of infrastructure development. The tools necessary to facilitate collateralized loans, social credit and open finance have been fine-tuned and proven to work. 2019 will be when they scale up and start to serve the sort of users they were envisioned for – global citizens who’ve been excluded by the current financial system.

Crypto debt markets and credit networks will be bolstered by the growth of projects like Dharma Protocol, GEO Protocol, Nexo, and Maker DAO. Maker’s system of multi-asset over-collateralization will be emulated, having proven its robustness through extreme market volatility this year. Multi-collateral dai will see a wide range of applications in 2019, as the number of users grows with the number of assets that can be collateralized. 2018 was all about ETH, but in 2019 Maker will accept BTC, ERC20s and other crypto and non-crypto assets.

Other Trends to Expect in 2019

It’s possible that 2019 could be the year when one or more dapps finally sees mass adoption, but don’t count on it. It may also prove to be the year when the first viral blockchain game arrives. At the very least, crypto collectibles and virtual reality projects will attract fresh investment, with non-fungible tokens (NFTs) tethering them to public blockchains to facilitate the trading of digital assets. Once Decentraland’s virtual world launches in 2019, a meeting ground for all kinds of crypto games and projects will be established.

The Bitcoin Cash community will continue to find new ways to spend and receive peer-to-peer cash, while the BTC brigade will have optimism that 2019 will finally be the year when the Lightning Network proves its suitability for something more than purchasing stickers. Custodial services for institutional investors will improve, bringing new money into the crypto space (but probably not propelling crypto assets to new highs). NYSE’s Bakkt will launch, bringing physical BTC futures contracts, and there’s an outside bet the SEC might approve a bitcoin ETF.

Stripped of much of the greed that characterized the dawn of 2018, and with 12 months of robust infrastructure work completed, 2019 is shaping up to be an exciting time for cryptocurrency users from all tribes, countries and continents.

What other trends do you expect to see in 2019? Let us know in the comments section below.

Images courtesy of Shutterstock and Tokendata.

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Markets Update: BCH Up Over 100% in a Week, BTC Breaks Above$4,000

Market Updates

The cryptocurrency markets appear poised to post the strongest week of trading in months, with BCH up over 115% since Dec. 16. BTC is also on the cusp of posting its strongest weekly candle since February after breaking above $4,000.

Also Read: Russian Parliament Postpones Adoption of Digital Assets Bill

BCH Price Doubles in One Week

As of this writing, bitcoin cash (BCH) has posted the strongest percentage daily performance of the top 90 cryptocurrencies by market capitalization, with a 24-hour gain of over 35%. This rally has been driven by the third-strongest daily volume in the history of Bitstamp’s BCH market.

Markets Update: BCH Up Over 100% in a Week, BTC Breaks Above $4,000 — BCH/USD – Bitstamp – 1D

Since posting an all-time low of approximately $73, BCH has gained approximately 132% and is currently trading for around $180. Bitcoin cash has also reclaimed its rank as the fourth-largest cryptocurrency by market cap after languishing at the bottom end of the top 10 just last week.

When measuring against BTC, BCH bounced roughly 83% from a record low of approximately 0.024 BTC on Dec. 15 to now trade for 0.0434 BTC, with the last two days comprising the second and third-strongest 24 hours of BCH/BTC trading on Bitstamp.

The market capitalization of BCH is currently $2.95 billion, comprising 2.25% of the capitalization of the combined crypto market.

BTC Poised to Post Strongest Weekly Candle Since February

BTC has broken above $4,000 for the first time in 10 days, driven by gains of more than 26% in less than one week. Should BTC close the week with a gain of more than 22%, it will be the strongest seven-day candle posted since Feb. 12.

After posting a yearly low of approximately $3,200 on Bitfinex and $3,120 on Bitstamp on Dec. 15, BTC has rallied back above $4,000, posting an intraday top high of $4,200 on Bitfinex and $4,100 on Bitstamp.

BTC currently has a market dominance of 54% and total capitalization of $71.15 billion.

XRP Market Cap Over $15 billion

The second largest cryptocurrency by market cap, XRP, has gained roughly 32% in five days, bouncing from approximately $0.3 to currently test resistance at $0.385.

When measuring against BTC, XRP appears to be producing an ascending wedge pattern, with price action consolidating at the neckline area of between roughly 0.00009 BTC and 0.0001 BTC for the past five days.

As of this writing, XRP has a market capitalization of approximately $15.25 billion, comprising 11.6%.

ETH Bounces Back Above $100

After a year-to-date low of approximately $83, ETH has rebounded 31% in roughly one week to currently trade for $112 at local resistance.

When measuring against BTC, ETH has chopped between approximately 0.025 BTC and 0.028 BTC for the last two weeks, excluding a brief capitulation down to a 2018 low of 0.0245 BTC on Dec. 7.

Ethereum now has a market cap of $11.4 billion and a market dominance of 8.7%.

Do you think that the cryptocurrency markets can continue to rally? Or are lower lows incoming? Share your thoughts in the comments section below!

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The Daily: Yellow Vest Coin Created, Security Token TradingPlatform Launched

The Daily

In The Daily on Monday, a new digital coin project targeting the ‘Yellow Vest’ protesters is promising censorship-free crypto transactions. Also, a regulated security token trading platform is now live in the U.S., South Korean internet giant Kakao invests in an Israeli startup, and crypto exchange Abra is giving away bitcoins for Christmas.

Also read: Trump Chooses Bitcoin Advocate as Chief of Staff, Congressman Proposes Wall Coins

‘Get Your Freedom Back!’

A new digital token project using symbols associated with the Yellow Vests (Gilets Jaunes) protestors in France has been devised. The creators of the Gilet Jaune Coin (GJCO) claim their main goal is to support what has become an international movement “in the legitimate struggle of nations to self-determination, and the reconquest of their economic, territorial, and monetary sovereignty.”

The coin’s website is littered with slogans such as “Get your freedom back,” “Long live the Gilets Jaunes” and “The people will not be sacrificed on the altar of debt!” It also abounds in promises and calls like “We will be listed on exchanges soon,” “To stay united, you should mine on our own pool” and “We invite you to buy a Gilet Jaune Coin wallet.”

The project’s team claims the coin is inspired by Bitcoin and based on Ethereum, and insists GJCO is easy to use and “perfect for transactions… at ridiculously low costs.” The developers of the new crypto further assure the public that the Gilet Jaune Coin is censorship-free and fraud-resistant, stating that its use is “recommended during the fight against the banking oligarchy, seeking to enslave us!”

It’s unclear whether the digital coin is actually related to the Yellow Vests Movement. The social media links on its website do not lead to real accounts, but coin’s Telegram channel now has over 90 members. The Mouvement des Gilets Jaunes demonstrations, which started as a protest against increased fuel prices in France this past November, have spilled over to other EU countries and even Turkey and Iraq. Protesters have also raised a number of demands related to socio-economic problems such as low incomes and government corruption.

Regulated Security Token Trading Platform Now Live

Open Finance Network (OFN), a security token trading platform regulated in the U.S., announced it’s transitioning from beta to full trading functionality. According to a blog post on Medium, one of the security tokens available to trade at launch is Blockchain Capital (BCAP). Blockchain Capital is a tokenized venture capital fund focused on digital assets. OFN notes that this is a compliant security token offering.

The platform is now available to both accredited and non-accredited investors in the United States and other markets. It implements a one-time verification procedure through an application called Investor Passport that allows users to invest based on their eligibility. Open Finance Network has also developed its own security token standard called the Smart Securities Standard in order to be able to offer both token issuance and secondary market trading.

Kakao Invests in Israeli Startup Orbs

South Korean Internet giant Kakao Corp. has invested in the Israeli crypto startup Orbs through its venture arm, Kakao Investment, Reuters reported. Kakao, which is South Korea’s largest messaging app operator, announced earlier this year its plans to establish a unit focused on blockchain technology. Orbs, which did not disclose the size of the investment, said the funds will help it grow and build on its existing partnership with the Kakao blockchain subsidiary Ground X. The two companies are already working together to develop applications of crypto technology.

Abra Giving Away Bitcoins for Christmas

Digital asset exchange and crypto wallet provider Abra has decided to cheer up crypto enthusiasts during the bear market with a Christmas promotion. The platform is now giving away $25 of BTC to new investors for its ETF-style token called Bit 10. To be eligible for the crypto cashback, however, users have to buy at least $1,000 worth of tokens before the end of this month. And there’s another catch, according to The Next Web – Bit 10 is a market tracking index token that can be purchased and sold only through the Abra app. The token tracks the top 10 cryptocurrencies each month, which means its value will only go up in a bull market, but may struggle in the current one.

What are your thoughts on today’s news tidbits? Tell us in the comments section.

Images courtesy of Shutterstock, Gilet Jaune Coin.

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Transnistria Welcomes Crypto Miners, Plans to Expand theIndustry

Economy & Regulation

The government of Transnistria has recognized the importance of cryptocurrency mining for the territory’s economy and budget. The unrecognized republic in Eastern Moldova now plans to expand the industry by attracting more miners with a crypto-friendly business climate and favorable regulations.

Also read: CEO of Romanian Exchange Coinflux Arrested on US Warrant

Tiraspol Plans for 100 MW of Mining Capacity

Earlier this year, the Pridnestrovian Moldavian Republic (PMR) adopted legislation that legalized crypto mining and provided incentives for foreign investors to set up mining farms within its borders. Under its provisions, a free economic zone was established for these companies and authorities promised to provide the necessary infrastructure, including unrestricted access to the Transnistrian electrical grid.

The new law “On the development of information blockchain-technologies in the PMR” also allowed tariff-free imports of mining equipment and exempted mining incomes from taxation. As a result, facilities with a total consumption of between 5 and 7 MW of electricity are now operating in the country.

But the government in Tiraspol doesn’t want to stop there. According to its prime minister, Transnistria plans to increase that number to 100 MW and has already managed to secure the needed investments. In an interview recently broadcasted by two local TV channels, Aleksandr Martynov stated:

We adopted a fairly liberal law that stimulates mining activities in Transnistria. We also isolated them from our tax system.

The head of the executive power further emphasized that Pridnestrovian authorities do not exercise any control over the revenues from the production of cryptocurrencies and don’t claim any portion of the income generated by entities that operate mining facilities. He added that the main goal set by the government is to sell more electricity to the bitcoin farms, and Transnistria can offer a lot of it at a low price.

Miners Utilize Excess Generating Capacity

The largest producer of electricity in the region is the Russian-owned Moldavskaya GRES, a thermal power station built on the shores of Lake Kuchurgan on the Ukrainian border. It has an installed capacity of 2,520 MW. The station burns mainly Russian natural gas which the self-proclaimed republic does not even pay.

The fuel is billed to Moldova which claims sovereignty over the separatist territory in a frozen conflict with the government in Tiraspol that dates back to the dissolution of the Soviet Union in the early 1990s. The $6 billion of money owed by the Kuchurgan power station are considered part of Moldova’s debt to the Russian supplier, Gazprom.

Cryptocurrency miners help to utilize the excess capacity of the power plant. And more mining farms means higher revenues for the station, which translates into increased budget receipts for Transnistria, Prime Minister Martynov explained. He added that the projected income, which he described as significant, has already been included in PMR’s draft budget for the next year.

What do you think of Transnistria’s policies towards the crypto mining industry? Share your thoughts on the subject in the comments section below.

Images courtesy of Shutterstock.

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