cryptocurrency

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Coinbase plots to become the New York Stock Exchange of crypto securities

The future of Coinbase looks something like the New York Stock Exchange. That’s according a vision laid out by CEO Brian Amstrong who was interviewed on stage at TechCrunch Disrupt in San Francisco today.

Coinbase is known for being the most popular exchange for converting fiat currency into crypto — most of the largest traded exchanges are crypto-to-crypto — but he foresees a future in which it plays host to a growing number of cryptocurrencies as it becomes standard for companies to create their own token, which runs alongside equity as an alternative investment system.

“It makes sense that any company out there who has a cap table… should have their own token. Every open source project, every charity, potentially every fund or these new types of decentralized organizations [and] apps, they’re all going to have their own tokens,” Armstrong said.

“We want to be the bridge all over the world where people come and they take fiat currency and they can get it into these different cryptocurrencies,” he added.

Brian Armstrong (Coinbase) says crypto regulation will result in the next version of the stock market #TCDisrupt pic.twitter.com/2kyxAmhPSZ

— TechCrunch (@TechCrunch) September 7, 2018

That tokenized future could see Coinbase host hundreds of tokens within “years” and even potentially “millions” in the future, according to Armstrong. That’s a big jump on the five cryptocurrencies that it currently supports today, and it would make it way larger than financial institutions like the New York Stock Exchange, which is actually a Coinbase investor and is getting into Bitcoin, or the NASDAQ.

One of the critical pieces of making this vision a reality is, of course, regulation. This week at Disrupt, others in crypto space have argued that a lack of clarity around crypto regulation is costing the U.S. as innovation and startups are being developed in overseas markets. As the founder of a U.S.-based crypto startup that is valued at over $1 billion and is hiring hard, Armstrong doesn’t subscribe to that thesis but he did admit that there is “a big open question” over whether the majority of the new rush of tokens he foresees will be securities or not.

Still, Coinbase has made moves to add security tokens to its portfolio with the acquisition of a securities dealer earlier this year.

“We do feel a substantial subset of these tokens will be securities,” he said. “Our approach has always been to be the most trusted [exchange] and the easiest to use. So we want to be the legal compliant place where you can start to trade these tokens that are classified as securities.”

“Web 1.0 was about publishing information, web 2.0 was about interaction and web 3.0 is going to be about value transfer on the internet because now the web has this native currency and so applications can be built that instantly tap into this global economy on the internet,” Armstrong added.

How international can crypto become? The Coinbase CEO thinks that the total number of people in the crypto ecosystem can reach one billion within the next five years, up from around 40 million today.

You can watch the full video from Armstrong’s interview below.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Goldman CFO: the story about us dropping Bitcoin trading was ‘fake news’

It sometimes feels like the price of Bitcoin rises and falls on the turn of a speculative dime, and yesterday we saw one such moment come to pass, when it was reported that Goldman Sachs was planning to drop a plan to build a Bitcoin trading platform, causing the price of the cryptocurrency to crash. But today, at TechCrunch Disrupt, the CFO of Goldman Sachs described the story as “fake news,” and said that in fact the bank is still considering how to offer services that involved physical Bitcoin, but that it has not yet set a timeline for it.

“I was in New York yesterday and I was co-chairing our risk committee, and I saw the news article,” said CFO Marty Chavez, referring to the report yesterday. “It wasn’t like we announced anything or that anything had changed for us… I never thought I’d hear myself actually use this term, but I’d really have to describe that as fake news.”

As Chavez described it, Goldman Sachs had been building a Bitcoin trading platform modelled on a commodities futures trading platform, where there is never any Bitcoin traded, but more the promise of how the currency might move.

“Our institutional clients said, ‘We would love for you to clear these new Bitcoin-linked futures contracts offered by the exchanges,’ so we’ve been doing that, and then clients since May [started to ask], ‘We would like for you also to provide us liquidity and trade the principal as principal the futures contracts, not just clear them,’ and so we’ve been doing that, the next stage of the exploration, what we call ‘non-deliverable forwards.’

“These are derivatives, over the counter derivatives,” he continued. “They’re settled in U.S. dollars and the reference price is the Bitcoin U.S. dollar price established by a set of exchanges, the same one that’s referenced in the futures contracts, and we’re working on that now because the clients wanted physical Bitcoin — something tremendously interesting and tremendously challenging. From the perspective of custody, we don’t yet see an institutional grade custody cases custodian solution for Bitcoin.”

While companies like Coinbase are trying to tap into that demand by offering custodial services aimed squarely at institutional money, but Goldman itself still has no timeline for when its own offering might be ready.

“We’re interested in having that exist, and it’s a long road and so I would just be speculating. Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical Bitcoin, and as they got into realizing that that’s part of the evolution but it’s not here yet.”

Bitcoin — and the crypto market generally — suffered significant price losses this week off the back of reports of Goldman’s aborted plans, but that wasn’t the sole trigger. Reuters also reported that EU is looking into regulating crypto and is preparing a report that proposes to regulate exchanges and ICOs.

Bitcoin hit a record valuation of nearly $20,000 in January, and it has struggled to return to those highs during the rest of this year. The cryptocurrency was priced at $6,536 at the time of writing, some way short of a months-long high of $8,266 on July 26, according to information from Coinmarketcap.com.

Coinbase now supports buying and selling Ethereum Classic

Coinbase has added a new buying option for its customers after the crypto exchange introduced Ethereum Classic to its collection.

The addition was first announced in July but Coinbase took its time to implement its newest addition following criticism over the way it added Bitcoin Cash last year. Allegations of insider trading led the company to investigate the incident which saw service outages and wild price fluctuations for Bitcoin Cash right after its addition to the exchange. It later introduced a framework for adding new tokens.

Nonetheless, Ethereum Classic’s value spiked 20 percent on last month’s news. Today, though, it is down two percent over the last 24 hours, according to Coinmarketcap.com.

Coinbase has taken a conservative approach to adding more crypto. Today’s addition takes it to five tokens — Bitcoin, Ethereum, Litecoin and Bitcoin Cash are the others — but that’s likely to change this year. Last month, it announced it is “exploring” the addition of another five tokens while CTO Balaji Srinivasan hinted that the selection would grow further when I interviewed him at the recent TechCrunch blockchain event in Zug.

“We hear your requests, and are working hard to make more assets available to more customers around the world,” Dan Romero, who heads Coinbase’s consumer business, said in a blog post published today.

A note on Ethereum Classic — it was created in June 2016 following a major hack on The DAO, a fundraising vehicle for the project. In short: the Ethereum Foundation created a new version of Ethereum — known today as Ethereum — that rescued the lost funds, while those who opposed continued on with the original chain which was known as Ethereum Classic.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Tim Draper has a song about Bitcoin for you

Down in the dumps while the cryptos are getting rekt? Quirky billionaire and long-time Bitcoin bull Tim Draper is here for you with what is apparently called a rap song.

The song you have all been waiting for by Kelley James and me #bitcoin #bitcoinhustle. Free to share. #freedom https://t.co/VbPM5iM7yh https://t.co/VbPM5iM7yh

— Tim Draper (@TimDraper) August 9, 2018

Draper performed a version of this thing at The Next Web’s event earlier this year… yes, I had to listen to both. Anyhow, we wish it had ended there. It didn’t.

[Blame @drew for making us aware of this]

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Blockchain media project Civil turns to Asia with fund to kickstart 100 new media ventures

Civil, the blockchain-based journalism organization, is casting its eye to Asia after it set up a $1 million fund that’s aimed at seeding 100 new media projects across the continent over the next three years. The organization has teamed up with Splice, a Singapore-based media startup which will manage the fund, according to an announcement.

There’s been a lot of attention lavished on Civil for its promise to make media work more efficiently using blockchain technology and its upcoming crypto token, CVL. The organization has raised $5 million in financing from ConsenSys, the blockchain corporation led by Ethereum co-creator Joe Lubin, and its ICO takes place next month with the goal of raising around $32 million to launch its network and actively onboard new media companies worldwide.

But the company is waiting around. Civil has already actively jumped into the media space — providing financial backing to the newly-formed The Colorado Sun — but the scope of the project in Asia is different in trying to kickstart a wave of new media organizations by giving them money to get off the ground.

Alan Soon, co-founder and CEO of Splice, told TechCrunch that it hasn’t been decided whether the financing will be in the form of grants or equity-based investments. Despite that, he said deals will be “pre-seed, micro-investments to help entrepreneurs take their ideas to prototype stage.”

Soon said that all kinds of media are in play, ranging from the more obvious suspects such as publishers, reporting websites and podcasts to behind-the-scenes tech like automation, bots and adtech.

Notably, though, he clarified that the beneficiaries of the fund will be under no obligation to adopt Civil’s protocol, the technology that will be funded by the upcoming ICO. Splice itself, however, has committed to doing so which will mean it gains access to the network’s content, licensing opportunities and more.

“I’m with Civil because I really believe in their values,” Soon added. “They want to do the right thing for this space.”

Crypto visa card company Monaco just spent millions to buy Crypto.com

Highly-prized domain name Crypto.com has been sold!

Registered in 1993 by Matt Blaze, a professor of computer and information science at the University of Pennsylvania who sits on the board of directors of the Tor Project, the domain has attracted a vast amount of interest as you’d expect given the explosion of crypto in recent years. However, Blaze has turned down all offers.

In January, Blaze repeated that the domain was “not for sale” and that people shouldn’t both to contact him — as The Verge noted —  however fast forward to July and he has parted with it after Monaco, a crypto project best-known for developing a crypto debit card, bought the domain in an undisclosed deal.

Experts told The Verge that Crypto.com could have attracted as much as $10 million, however Monaco CEO Kris Marszalek declined to go into the specifics.

“If it was only about money he’d have sold it a long time ago,” he told TechCrunch in an interview.

Hong Kong-based Monaco’s ICO finished in June 2017 with the company raising what was then worth $25 million in crypto. Fast forward today and Marszalek said the firm has close to $200 million on its balance sheet thanks to a surge in the valuation of cryptocurrencies like Ether, but he suggested that, more than money, the sale was about finding the right home for the domain.

“This is a very powerful identity that we are taking on. It’s representative of the entire category so it comes with a huge responsibility on us to carry the torch. We don’t take it lightly and this is one of the things that I think we conveyed successfully, that, as a company, we do have a higher purpose,” he said.

“Fundamentally, blockchain and crypto will enable [the next generation] to control their money, to control their data and to control their identity, these are the three fundamental things that weave the fabric of society. For us this is the purpose, we want to acceleration the world’s adoption of cryptocurrency,” he added.

The splashy purchase of the domain is part of a rebrand for Monaco that will see the parent company become Crypto.com and its Monaco services — which the upcoming Visa card, peer-to-peer transfer and a wallet app — become MCO, the same name as the company’s cryptocurrency.

The Monaco card itself just entered testing for a small group of users, primarily the MCO team, and Marszalek said it will be available for all customers in Singapore and Europe this summer, with a rollout for those in the U.S. likely in Q4. That’s covering a backlog of over 70,000 waiting users, but the company has sweetened the appeal of a card for new people by adding a number of perks, most notably cashback on transactions and a concierge, which vary based on the level.

At around $7 per MCO token, the commitment for a card isn’t cheap. The top of the range ‘Obsidian Black,’ which has the highest rate of cashback and perks, requires a customer to hold around $350,000 in MCO tokens. However, there’s a selection to cater to different budgets.

MCO is well-known for its card project, which has been two years in the making and it captured the attention of early crypto enthusiasts, but Marszalek said the company is cooking up other services in a bid to offer a more rounded product line. (That also explains the rebrand.) Among things to expect, he said MCO is opening to introduce lending that uses crypto as collateral, a low-rate credit service, and a robo trading investment feature.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Europe’s ‘biggest ever’ LSD bust nets more than $5 million in seized cryptocurrency

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Not cool. 

A combined task force of the Spanish Guardia Civil, the Austrian Federal Police, and Europol yesterday announced what they’re calling “Europe’s biggest ever LSD bust” and oh man in unrelated news I totally need to rethink my July 4 plans to just sit back and stare at fireworks for hours while contemplating life.

According to the press release, the bust went down in the Spanish cities of Granada and Valencia, and resulted in the seizure of approximately €4.5 million (around $5.25 million) worth of bitcoin, lumens, and IOTA. Read more…

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Korean crypto exchange Bithumb says it lost over $30M following a hack

Just weeks after Korean crypto exchange Coinrail lost $40 million through an alleged hack, another in the crypto-mad country — Bithumb — has claimed hackers made off with over $30 million in cryptocurrency.

Coinrail may be one of Korea’s smaller exchanges, but Bithumb is far larger. The exchange is one of the world’s top ten ranked based on trading of Ethereum and Bitcoin Cash, and top for newly-launched EOS, according to data from Coinmarketcap.com.

In a now-deleted tweet, Bithumb said today that 35 billion won of tokens — around $31 million — were snatched. It didn’t provide details of the attack, but it did say it will cover any losses for its users. The company has temporarily frozen deposits and trading while it is in the process of “changing our wallet system” following the incident.

Days prior to the hack, Bithumb said on Twitter that it was “transferring all of asset to the cold wallet to build up the security system and upgrade” its database. It isn’t clear whether that move was triggered by the attack — in which case it happened days ago — or whether it might have been a factor that enabled it.

[Notice for the restart of service]
We are transferring all of asset to the cold wallet to build up the security system and upgrade DB. Starting from 15:00 pm(KST), we will restart our services and notice again as soon as possible. Appreciate for your support.

— Bithumb (@BithumbOfficial) June 16, 2018

A tweet sent days before Bithumb said it had been hacked

There’s often uncertainty around alleged hacks, with some in the crypto community claiming an inside job for most incidents. In this case, reports from earlier this month that Bithumb was hit by a 30 billion won tax bill from the Korean government will certainly raise suspicions. Without an independent audit or third-party report into the incident, however, it is hard to know exactly what happened.

That said, one strong takeaway, once again, is that people who buy crypto should store their tokens in their own private wallet (ideally with a hardware key for access) not on an exchange where they could be pinched by an attacker. In this case, Bithumb is big enough to cover the losses, but it isn’t always that way and securely holding tokens avoids potential for trouble.

Coinbase opens its crypto index fund to accredited U.S. investors

Fresh from revealing plans to add Ethereum Classic to its exchange, crypto giant Coinbase today announced that its cryptocurrency index fund — first revealed in Marchis open to investors in the U.S..

The company said in a blog post that it has see “overwhelming” interest from investors, and now it is reaching out to those who want to invest between $250,000 and $20 million. For now, the company said, participation is limited to the U.S. and those who are accredited investors.

That’s a pretty big caveat since crypto, by default, is open to anyone — although many ICOs tread carefully in markets like the U.S. — but Coinbase is very specifically target institutional capital, having recently added services for Wall Street-like professional investors.

The pitch is that it knows the market, its service covers the most stable assets and it won’t charge the kind of rates that existing funds do, as Coinbase CEO Brian Armstrong explained on Twitter.

Investing in Coinbase Index Fund is the easiest way to get exposure to a broad range get of crypto assets.
Much cheaper than 2 and 20% charged by most crypto hedge funds, and you get new assets automatically added to the fund as they become available on Coinbase. No rebalancing. https://t.co/TyOnDuFMT9

— Brian Armstrong (@brian_armstrong) June 13, 2018

Here’s more:

Coinbase Index Fund gives investors exposure to all assets listed on our exchange, weighted by market capitalization. As we announced yesterday, the fund will be rebalanced to include Ethereum Classic, and more assets when they are listed by Coinbase in the future.

Coinbase did say that it is working to launch other funds that are “accessible to all investors and cover a broader range of digital assets” so, if you’re not an accredited U.S. investor, there might yet be opportunities for you depending on what comes next. However, given that Coinbase is striving to be SEC-compliant — and the SEC is in the middle of a major crypto investigation — it might take some time to reach the longer tail of retail investors.

Stay tuned, though, we’ll be asking questions to two key people at Coinbase over the coming months and this topic is sure to be on the menu. CTO Balaji Srinivasan will appear at our blockchain event in Zug next month, while CEO Amstrong is among the guests who will take to the stage at TechCrunch Disrupt San Francisco in September.

India just cracked down on cryptocurrency. Hard.

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Indian officials are not here for your cryptocurrency games. 

Government officials with the Reserve Bank of India announced on Thursday that, effective immediately, banks would be prohibited from “dealing with or providing services to any individuals or business entities dealing with or settling virtual currencies.”

Essentially, that means people in India are now unable to move money from bank accounts to exchanges in order to buy cryptocurrency. What’s more, if you’ve sold your fat gains for cash, you are no longer able to move that money back to your bank account. Read more…

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Crypto exchange Coincheck, still recovering from $400M hack, sold to online brokerage

Japanese crypto exchange Coincheck, made famously after hackers made off with more than $400 million in digital token NEM, has been acquired.

The company announced today (in Japanese) that Tokyo-based online brokerage Monex Group will buy it in full. The transaction will see Coincheck become a wholly owned subsidiary of Monex.

The deal is a reaction of the NEM hack, with Coincheck recognizing that it needs to strengthen its management system and organization as a whole. That’s in direct response to Japan’s Financial Services Agency, which requested that the exchange make changes in the wake of the January hack — which saw Coincheck reimburse affected users.

Japan is the world’s first market to regulate cryptocurrencies, and the country has given its approval to over 26 exchanges that operate there, both locally and international. The Coincheck incident seems to serve as a wakeup call, however, and authorities clamped down on six others who were told to beef up their organizations to prevent more scandals or security issues. Added that, a number of regulated exchanges have announced plans to team up to create a self-regulatory body to add further scrutiny.

Editor’s note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Coinbase addresses Ripple rumors, says it has made no decision on adding new coins

 Coinbase just threw a bit of cold water on Ripple enthusiasts eager to see their coin hit the popular mainstream exchange.  Rumors that Ripple’s XRP would be next in line after Bitcoin Cash reached a fever pitch this week among coin hype types, with some reading between the lines of a Tuesday segment of CNBC’s Fast Money that’s set to feature Ripple CEO Brad Garlinghouse… Read More

Telegram has raised an initial $850M for its billion-dollar ICO

 It looks like Telegram’s billion-dollar ICO has reached its first milestone after the chat app company raised an initial $850 million, according to a filing. A document submitted to the SEC earlier this week states that the money was raised “for the development of the TON Blockchain, the development and maintenance of Telegram Messenger and the other purposes.” The security… Read More

Coinbase acqui-hires Memo.AI technical team management tool

 Coinbase, the white-hot cryptocurrency exchange, is bringing on more engineering talent to help it continue to capitalize on the crypto boom.
The company has announced that it’s bringing on the engineering team from Memo.AI, a two-year-old startup that built a Slackbot for helping technical teams manage notes and instructions.

Excited to announce the @MemoAIHQ team is joining Coinbase! Read More

Bitconnect, which has been accused of running a Ponzi scheme, shuts down

 Bitconnect, the lending and exchange platform that was long suspected by many in the crypto community of being a Ponzi scheme, has announced it’s shutting down. In a release on its website the platform said the shutdown is attributed to “continuous bad press” surrounding the platform, two cease and desist letters from both Texas and North Carolina’s securities boards,… Read More

Crunch Report | South Korea Announces New Cryptocurrency Regulations

South Korea announces new cryptocurrency regulations coinciding with the drop in bitcoin prices, YouTube gets pulled from Fire TV and SoftBank will now own about 15 percent of Uber. All this on Crunch Report. Read More

Bitcoin is over $9,000

 Well, it’s over $9,000. Even as you recoup from attempting to explain Bitcoin to your family over the Thanksgiving dinner table, the value of the cryptocurrency is growing at an increasingly hefty pace. As of the time of this writing, the value of a single Bitcoin was above $9,143, climbing nearly 6 points in the past 24 hours. At a certain point, news of clearing these incremental… Read More

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Bitcoin just passed $4,000

 What a day for Bitcoin. 24 hours ago the cryptocurrency was trading below $3,700. About an hour ago it surged passed $4,000 and has no signs of stopping. It’s now trading around $4,135.00. For reference, a week ago Bitcoin hit an all-time high as it passed $3,000 for the first time. Check out the chart below to see what the price has done in the last 24 hours. So the million… Read More

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This ethereum-based project could change how we think about digital art

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Someone owns this picture.

Image: Cryptopunk

No, not the copyright to the picture. They own the picture itself. You can, of course, download a version, but that’s just a copy. Someone owns the original. It is art, and it has an owner.

What does that mean in the digital age? That’s what the guys at Larva Labs want to find out.

The image above is just one of 10,000 pieces of art released last week as part of an experiment called CryptoPunks. What makes this project unique is that each image is tied to a piece of computer code on the blockchain-based Ethereum platform. That means the owner of each piece of art is clear—and that ownership can be transferred.  Read more…

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Messaging platform Kik is launching its own digital currency

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Kik is venturing into new territory.

The messaging service announced on Thursday that it was launching its own digital currency, called “Kin” that can be used to buy services on its platform. 

Users will be able to use Kin to buy games, live video streams and other digital products.

Kin will be created on the Ethereum blockchain — a rival to Bitcoin — and is expected to make its debut some time this year.

“Kik will be the largest install base of cryptocurrency users in the world,” said Kik’s CEO Ted Livingston, according to a Bloomberg report.

“Kin, on day one will be the most-used cryptocurrency in the world.” Read more…

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China's capital controls are working, and that's bursting the global real-estate bubble

More news on the Chinese crackdown on money-laundering and its impact on the global property bubble: the controls the Chinese government has put on “capital outflows” (taking money out of China) are actually working, and there’s been a mass exodus of Chinese property buyers from the market, with many abandoning six-figure down payments because they can’t smuggle enough money out of the country to make the installment payments.
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