I applied price discovery algorithms to 5 Min OHLCV data from Bitmex and CME contracts and Bitstamp, Coinbase, HitBTC, Kraken, Poloniex, Binance, and OkEx BTCUSD/BTCUSDT markets from March 2016 to May 2020. Some exciting results I got was:
Before the 2017/18 bull run, Bitfinex dominated the price discovery process. They started the run. But as the price increased, trades on other exchanges, Binance and Bitstamp played a more dominant role in leading the price up.
Since then, CME Contracts and Bitmex contracts have had an increasing role in price discovery. Today Bitmex and CME Contracts play the most substantial role in determining the direction of Bitcoin price.
In 2020, market dominance by Bitmex has been negatively correlated with price. Dominance by Bitfinex, Huobi and OkCoin has had high positive correlation with price.
Price discovery is the overall process of setting the price of an asset. Price discovery algorithms identify the leader exchanges whose traders define the price. Two approaches are most famous for use in Price Discovery. Gonzalo and Granger (1995) and Hasbrouck (1995). But they assume random walk, and a common efficient price. I do not feel comfortable assuming random walk and common efficient price in Bitcoin Markets. So I used this little know method by De Blasis (2019) for this analysis. This work assumes that "the fastest price to reflect new information releases a price signal to the other slower price series." I thought this was valid in our market. It uses Markov Chains to measure Price Discovery. Without going into the mathematical details the summary steps used was:
Data is first grouped into a daily interval. Then inside each daily interval's 5-minute candles, the change in prices between the current time t and previous time t-1 is calculated. The difference across the same time t across all exchanges in a given day is juxtaposed to create an initial matrix.
The initial matrix is used to create a Transition Matrix, which measures the probability of price changing to something else at time t+1 for its state at t.
Then other Markov Chain based algorithms are used to measure the influence an exchange at time t had over all other exchanges' price movement at time t+1 individually.
Reduction and normalization is done to this data. In the end, each exchange receives a single number that sums to 1 for a given day.
De Blasis (2019) names this number Price Leadership Share (PLS). High PLS indicates a large role in price discovery. As the sum of the numbers is 1, they can be looked at as a percentage contribution. I recommend reading the original paper if you are interested to know more about the mathematical detail.
Andersen (2000) argues that 5 Minute window provides the best trade-off between getting enough data and avoiding noise. In one of the first work on Bitcoin's Price Discovery, Brandvold et al. 2015 had used 5M window. So I obtained 5M OHLCV data using the following sources:
Poloniex, Bitfinex, Binance and HitBTC: Exchange's API through CCXT.
CME: Okay, this was was supposed to be tricky and expensive. I broke a TOS and scraped the data for free, removing the expensive part from the equation. I will not go into detail about where I scraped this data.
Futures data are different from other data because multiple futures contract trades at the same time. I formed a single data from the multiple time series by selecting the nearest contract until it was three days from expiration. I used the next contract when the contract was three days from expiration. This approach was advocated by Booth et al ( 1999 )
I can't embed the chart on reddit so open this https://warproxxx.github.io/static/price_discovery.html In the figure above, each colored line shows the total influence the exchange had towards the discovery of Bitcoin Price on that day. Its axis is on the left. The black line shows a moving average of the bitcoin price at the close in Bitfinex for comparison. The chart was created by plotting the EMA of price and dominance with a smoothing factor of 0.1. This was done to eliminate the noise. Let's start looking from the beginning. We start with a slight Bitfinex dominance at the start. When the price starts going up, Bitfinex's influence does too. This was the time large Tether printing was attributed to the rise of price by many individuals. But Bitfinex's influence wanes down as the price starts rising (remember that the chart is an exponential moving average. Its a lagging indicator). Afterward, exchanges like Binance and Bitstamp increase their role, and there isn't any single leader in the run. So although Bitfinex may have been responsible for the initial pump trades on other exchanges were responsible for the later rally. CME contracts were added to our analysis in February 2018. Initially, they don't have much influence. On a similar work Alexandar and Heck (2019) noted that initially CBOE contracts had more influence. CBOE later delisted Bitcoin futures so I couldn't get that data. Overall, Bitmex and CME contracts have been averaging around 50% of the role in price discovery. To make the dominance clear, look at this chart where I add Bitmex Futures and Perp contract's dominance figure to create a single dominance index. There bitmex leads 936 of the total 1334 days (Bitfinex leads 298 days and coinbase and binance get 64 and 6 days). That is a lot. One possible reason for this might be Bitmex's low trading fee. Bitmex has a very generous -0.025% maker fee and price discovery tend to occur primarily in the market with smaller trading costs (Booth et al, 1999). It may also be because our market is mature. In mature markets, futures lead the price discovery.
Table 1: Days Lead
Out of 1334 days in the analysis, Bitmex futures leads the discovery in 571 days or nearly 43% of the duration. Bitfinex leads for 501 days. Bitfinex's high number is due to its extreme dominance in the early days.
Table 2: Correlation between the close price and Exchange's dominance index
Binance, Huobi, CME, and OkCoin had the most significant correlation with the close price. Bitmex, Coinbase, Bitfinex, and Bitstamp's dominance were negatively correlated. This was very interesting. To know more, I captured a yearwise correlation.
Table 3: Yearwise Correlation between the close price and Exchange's dominance index Price movement is pretty complicated. If one factor, like a dominant exchange, could explain it, everyone would be making money trading. With this disclaimer out of the way, let us try to make some conclusions. This year Bitfinex, Huobi, and OkEx, Tether based exchanges, discovery power have shown a high correlation with the close price. This means that when the traders there become successful, price rises. When the traders there are failing, Bitmex traders dominate and then the price is falling. I found this interesting as I have been seeing the OkEx whale who has been preceding price rises in this sub. I leave the interpretation of other past years to the reader.
My analysis does not include market data for other derivative exchanges like Huobi, OkEx, Binance, and Deribit. So, all future market's influence may be going to Bitmex. I did not add their data because they started having an impact recently. A more fair assessment may be to conclude this as the new power of derivative markets instead of attributing it as the power of Bitmex. But Bitmex has dominated futures volume most of the time (until recently). And they brought the concept of perpetual swaps.
There is a lot in this data. If you are making a trading algo think there is some edge here. Someday I will backtest some trading logic based on this data. Then I will have more info and might write more. But, this analysis was enough for to shift my focus from a Bitfinex based trading algorithm to a Bitmex based one. It has been giving me good results. If you have any good ideas that you want me to write about or discuss further please comment. If there is enough interest in this measurement, I can setup a live interface that provides the live value.
I was searching for a trading bot for Bitmex, and thought I had found one with some Telegram channels. At first glance, it looked legit. I found it on CryptoCurrencyTrading: link directed to there TG: Link I've fallen for a scam before so I was really careful not to make this mistake again. My first one was the scam with IOTA, I made a wallet with the online wallet generator and got scammed out of my coins. This is how I got scammed this time: there was only 1 person to reach on Telegram from the group - @BitmexSpecialist. I started the chat and they had a special offer that was only valid until new year: joining the VIP group and getting the bot cost $100 (instead of initial $200). So I paid that and got skeptical right after: they were still receiving $100 from different addresses days after new year (even today). I asked many times when I am to receive the bot, and they kept delaying it and making excuses like "Yeah buddy there is a delay because we had 80-90 Bots being processed". That was obviously a lie, here is the chat I had: https://imgur.com/a/nvdePeN Looking back at it now, I see the obvious things that indicate a scam: their Youtube channel defines the location in India, that says enough... It feels so stupid that I fell for this obvious scam, and I want to warn other people. Luckily it was only $100, but people still pay 0.027 BTC (see link below) to them right now, given that the 'special offer' should've expired already. People are still falling for it and it needs to be said. And is there a blacklist to report their bitcoin addresses? Telegram 3 channels and the ones behind it: 1: Their VIP Group Link: /AAAAAEwGBQU6L_Jqh6-gJQ 2: Their Free Insider Info Bot: /AutoCryptoNews 3: Their Insider Club: /AAAAAFCupv0W1du9cKHGJw The ones behind it: @BitmexSpecialist and @geniuscrypty Every payment of around 0.026-0.028 and 0.004-0.005 BTC is a victim of their scam: Their Bitcoin Address: https://bitref.com/1ERgM4wd876BVyX4tTsQvtGxtAa3kKPWoz Their videos on Youtube with fake bots posting: Youtube Channel: https://www.youtube.com/channel/UCJE2LGpk6cHlPdsu1mMh7Ew/featured Their Email: [[email protected]](mailto:[email protected]) EDIT: The person blocked me on telegram now, so I changed my name and went to the other group they had, So I just found out there other channel promoted by the post: Link is promoted to by the same scammer, Same bitcoin address and with the name @geniuscrypty, there taking 20$ from people to join their "Crypto Trading Signals" channel. UPDATE: Surprisingly this post did make some bells ring on their side, they unblocked me and started talking to me again. They started bribing/intimidating me saying that they'd pay me if I deleted this post. Sadly, I can't show the chats, because they disappeared and so did all their channels! So I only said: "First pay, then we talk", so guess what, they actually paid me back. But I'll let nobody silence me for money because the truth cannot be bought/sold. Still, so many people fell and are still falling for their scam, its sickening and these people need to be caught! And scammer changed his name now to @BpExpert! Be careful and report them! Thanks for reading my post and spread this awareness!
I was searching for a trading bot for Bitmex, and thought I had found one with some Telegram channels. At first glance, it looked legit. I found it on CryptoCurrencyTrading: link directed to there TG: Link I've fallen for a scam before so I was really careful not to make this mistake again. My first one was the scam with IOTA, I made a wallet with the online wallet generator and got scammed out of my coins. This is how I got scammed this time: there was only 1 person to reach on Telegram from the group - @BitmexSpecialist. I started the chat and they had a special offer that was only valid until new year: joining the VIP group and getting the bot cost $100 (instead of initial $200). So I paid that and got skeptical right after: they were still receiving $100 from different addresses days after new year (even today). I asked many times when I am to receive the bot, and they kept delaying it and making excuses like "Yeah buddy there is a delay because we had 80-90 Bots being processed". That was obviously a lie, here is the chat I had: https://imgur.com/a/nvdePeN Looking back at it now, I see the obvious things that indicate a scam: their Youtube channel defines location in India, that says enough... It feels so stupid that I fell for this obvious scam, and I want to warn other people. Luckily it was only $100, but people still pay 0.027 BTC (see link below) to them right now, given that the 'special offer' should've expired already. People are still falling for it and it needs to be said. And is there a blacklist to report their bitcoin addresses? Telegram 3 channels and the ones behind it: 1: Their VIP Group Link: /AAAAAEwGBQU6L_Jqh6-gJQ 2: Their Free Insider Info Bot: /AutoCryptoNews 3: Their Insider Club: /AAAAAFCupv0W1du9cKHGJw The ones behind it: @BitmexSpecialist and @geniuscrypty Every payment of around 0.026-0.028 BTC and 0.004-0.005 BTC is a victim of their scam: Their Bitcoin Address: https://bitref.com/1ERgM4wd876BVyX4tTsQvtGxtAa3kKPWoz Their videos on Youtube with fake bots posting: Youtube Channel: https://www.youtube.com/channel/UCJE2LGpk6cHlPdsu1mMh7Ew/featured EDIT: The person blocked me on telegram now, so I changed my name and went to the other group they had, So I just found out there other channel promoted by the post: Link is promoted to by the same scammer, Same bitcoin address and with the name @geniuscrypty, there taking 20$ from people to join their "Crypto Trading Signals" channel. UPDATE: Surprisingly this post did make some bells ring on their side, they unblocked me and started talking to me again. They started bribing/intimidating me saying that they'd pay me if I deleted this post. Sadly, I can't show the chats, because they disappeared and so did all their channels! So I only said: "First pay, then we talk", so guess what, they actually paid me back. But I'll let nobody silence me for money because the truth cannot be bought/sold. Still, so many people fell and are still falling for their scam, its sickening and these people need to be caught! And scammer changed his name now to @BpExpert! Be careful and report them! Thanks for reading my post and spread this awareness!
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In case you missed it: Major Crypto and Blockchain News from the week ending 12/14/2018
Developments in Financial Services
A cryptocurrency exchange-traded product (ETP) that trades on Switzerland’s Six Exchange saw record trading volumes on Thursday and Friday last week, suggesting that institutional investors may be buying the dip in cryptocurrencies. Four major cryptocurrencies underlie the HODL ETP, including Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). While HODL ETP’s one-month average daily trading is 20,000 shares, on Thursday, December 6th, and Friday, December 7th, 53,233 shares and 62.986 shares were traded, respectively.
A report published last week by global anti-money laundering policymaker, the Financial Action Task Force (FATF), indicates that cryptocurrency exchanges in the United Kingdom pose a, “low risk,” for money laundering and terrorist financing activities. The report, however, does highlight that such activities on UK cryptocurrency exchanges are an, “emerging risk,” although there is not yet enough evidence to suggest that these activities are occurring through cryptocurrency exchanges. In its report, the FATF urged UK regulators to, “Continue to develop an understanding of emerging risks (such as virtual currencies) and intelligence gaps, and take appropriate action.”
Andreas Utermann, CEO and CIO of Allianz Global Investors, called on global financial regulators to ban cryptocurrencies while speaking at a panel discussion in London. According to a report by Reuters, Utermann said, “You should outlaw it,” while participating in a panel alongside Andrew Bailey, the head of Britain’s Financial Conduct Authority. Bailey responded by saying that Utermann’s comments were, “quite strong,” before adding that cryptocurrencies have, “no intrinsic value.”
Basis, a major US-based stablecoin project, is shutting down its operations and returning most of its funds to investors, according to a report by crypto news outlet The Block. The report by The Block cited, “multiple people with direct knowledge of the situation,” in claiming that the algorithmic stablecoin project, which generated UDS$133mm of funding through private investments in April, will return funds to investors. According to the Co-Founder and CEO of competing stablecoin project Nevin Freeman, Basis’ shutdown is due to regulatory concerns around one of its token types. Freeman explained, highlighting that algorithmic stablecoins implement a “secondary token”, known as a “bond token”, to help maintain the primary token’s peg. In many cases, regulators like the US Securities and Exchange Commission (SEC) consider these secondary tokens to be securities.
Binance, the world’s largest cryptocurrency exchange by daily trading volume, announced that it has added Circle’s US dollar-pegged stablecoin, USD Coin (USDC), to its combined Stablecoin Market. Circle, a company backed by Goldman Sachs, first released its stablecoin in September of this year. Binance’s combined Stablecoin Market features other notable stablecoins, like Tether (USDT), that trade against cryptocurrencies as interchangeable base pairs.
Coinone, a South Korea-based cryptocurrency exchange, has officially launched Cross, a cross-border payments application that leverages Ripple’s xCurrent product to increase efficiencies. The application, released by Coinone’s payments subsidiary, Coinone Transfer, targets unbanked or underbanked South Koreans by enabling the transfer of funds to Thailand or the Philippines at a low cost.
Gemini, a cryptocurrency exchange heralded by the Winklevoss twins, released an official company blog post this weekend announcing that the firm will support Bitcoin Cash (BCH) custody and trading. The exchange will support only the Bitcoin Cash ABC network at this time, adding that they, “are continuing to evaluate Bitcoin SV over the coming weeks or months, and we may or may not choose to support withdrawals and/or trading of Bitcoin SV in the future.” Additionally, the company detailed that its listing of BCH is pending regulatory approval by the New York State Department of Financial Services.
Gemini, the cryptocurrency trading platform founded by the Winklevoss twins, announced the launch of a mobile crypto trading application in an official blog post today. Accompanying the launch of the crypto trading app is a new investment vehicle, dubbed, “The Cryptoverse,” that is comprised of a basket of cryptocurrencies weighted by market capitalization. While speaking to Bloomberg today, Cameron Winklevoss said that, “A lot of our decisions have perhaps given off a perception that we’re more institutional-based. The reality of the situation is that we have a diverse customer base. And the retail story is just beginning.” The Winklevoss twins went on to detail of a goal to expand reach to Asian markets by 2019’s end.
Good Money, a US neo-banking platform, has closed its Series A investment round that generated USD$30mm led by cryptocurrency-focused merchant bank Galaxy Digital and the founder of EOS (EOS) Block.one. Good Money aims to provide a variety of banking service and certain financial instruments to US account holders while exploring innovative changes to traditional banking practices. “Modern banking is a primary driver of so many issues we as a society face – from economic inequality, institutional racism, environmental destruction to political corruption,” said Good Money founder Gunnar Lovelace. Specifically, Good Money eliminates ATM fees while offering each bank user equity in the company.
Kraken, a notable cryptocurrency exchange, is seeking to raise funding with a USD$4bn valuation for the company and a USD$100,000 investment minimum, according to CoinDesk. In an email to investors, Kraken CEO Jesse Powell wrote, “There is presently a limited time opportunity available to a very small select number of clients to purchase shares.” The email goes on to detail that the exchange will close its offer on December 16th.
OKEx, the second-largest cryptocurrency exchange by daily trading volume, will begin listing Bitcoin Cash ABC under the original Bitcoin Cash ticker (BCH), as per an official announcement Tuesday. Additionally, OKEx will change the Bitcoin Cash SV ticker from BCHSV to BSV. The announcement by OKEx comes after other notable cryptocurrency exchanges have made the same switch, including Coinbase and Gemini.
PayPal, an online payments portal, has launched its own internal private blockchain platform that will allow staff to trade and exchange tokens while generating ideas and participating in programs to foster innovation, as per a report by news outlet Cheddar. The private blockchain network, which was built by 25 PayPal employees in just 6 months, will allow employees to earn more for enrolling in learning and development programs. The PayPal tokens are not tradeable, or worth anything for that matter, outside PayPal’s blockchain.
PricewaterhouseCoopers (PwC), a big four consulting firm, is partnering with Bitfury Group, a large blockchain software and mining firm, to develop a blockchain accelerator specific to Russian businesses. As per an official press release by PwC, the partnership will leverage Exonum, Bitfury’s open source framework to build blockchain applications, for educational courses and seminars. The partnership aims to meet the, “current needs,” of PwC’s enterprise clients in Russia.
Revolut, a digital banking alternative with an in-application cryptocurrency exchange, announced that it has been awarded a European banking license. Seeking to become the, “Amazon of banking,” the license will allow Revolut to offer traditional banking services alongside its current cryptocurrency offerings to European customers. Nikolay Storonsky, Founder and CEO of Revolut, said in regards to the newly acquired license that, “With the banking license now secured, commission-free stock trading progressing well, and five new international markets at final stages of launch, we are living up to our reputation as the ‘Amazon of Banking’. Our vision is simple: one ap with tens of millions of users, where you can manage every aspect of your financial life with the best value and technology.”
Shinhan Bank, the second-largest commercial bank in South Korea, is launching a new project to implement blockchain technology in its internal processes with a goal of eliminating human error. According to a report by news outlet The Korea Times, Shinhan also recently completed a training program for its staff to increase their knowledge of blockchain technology across various applications. After Shinhan implemented blockchain technology for interest rate swap transactions on November 30th, South Korea’s second-largest bank is now aiming to apply the technology in its record-keeping process to enhance overall efficiencies.
SolarisBank, Germany’s second-largest and Europe’s ninth-largest stock exchange, is partnering with Stuttgart Exchange Group, a German fintech company, to jointly develop a cryptocurrency exchange. As per a report by Cointelegraph Germany, the joint cryptocurrency exchange venture, “is scheduled to launch in the first half of 2019.” This news comes after SolarisBank announced plans to launch a zero-fee cryptocurrency trading application this past May.
The Canadian city of Calgary is becoming the first city in Canada to launch a digital version of its local currency, according to a report by the Global News. Dubbed as the Calgary Digital Dollar, the digital currency will be exclusive to Calgary and operate alongside the country’s Canadian Dollar. Calgary-based businesses will now be required by law to accept at least 10% of a payment in digital currency, although they are allowed to accept up to 100%.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is launching a pilot of its Global Payment Initiative (GPI) to combat growing blockchain and fintech solutions, according to an official announcement last week. Currently, the SWIFT Network is used by global financial institutions to conduct global financial payments and cross-border transfers of fiat currency. Although the project is still in its early stages, the GPI pilot hopes to, “build the foundation of a new integrated and interactive service that will significantly improve efficiencies in the payments process and which will ultimately be made available to all 10,000 banks across the SWIFT network.”
The United Arab Emirates’(UAE) central bank is partnering with the Saudi Arabian Monetary Authority (SAMA) to develop a cryptocurrency to facilitate cross border transactions between the two countries, according to a report by news outlet GulfNews. In a meeting pertaining to global banking standards and regulation in the Arab region, Mubarak Rashed Al Mansouri, the governor of the UAE’s central bank, said, “This is probably the first time ever that witnesses the cooperation of monetary authorities from different countries on this topic and we hope that this achievement will foster similar collaboration in our region.” The prospective digital currency will be used by both central banks and financial institutions in the countries.
TokenSoft, a security token offering (STO) startup, has acquired a 20% stake in regulated broker-dealer Marpine Securities LLC in order to launch its own regulated broker-dealer. After acquiring the 20% stake, TokenSoft will launch its new regulated broker-dealer entity, called TokenSoft Global Markets, that will be registered through the Financial Industry Regulatory Authority (FINRA). The new regulated broker-dealer entity will allow TokenSoft to advise token issuers through every step of the Initial Coin Offering (ICO) process. Additionally, TokenSoft will now be able to legally operate in services related to insurance and management.
Tom Lee, co-founder of Fundstrat Global Advisors and a notable cryptocurrency pundit, believes that the current fair value of Bitcoin (BTC) is between USD$13,800 and USD$14,800, according to a note published on Thursday. Lee arrived at this valuation by taking into account the number of active wallet addresses, usage per account, and other supply and demand metrics. Additionally, Lee forecasted that the fair value of BTC will reach USD$150,000/coin once BTC wallets account for 7% of Visa’s 4.5bn account holders.
UAE Exchange, an exchange based in the United Arab Emirates (UAE), is partnering with Ripple to launch a blockchain-based cross-border remittances platform by 1Q2019, as per a Reuters report on Thursday. The report details further that Finablr, a payments and foreign exchange company that owns UAE Exchange, observes a high level of remittance inflows from expatriate workers in the Middle East region. “We expect to go live with Rippel by Q1, 2019 with two other Asian banks,” said Finablr CEO Promoth Manghat, adding, “This is for remittances to start with, from across the globe into Asia.”
De Nederlandsche Bank, the Netherlands’ central bank, will soon require domestic cryptocurrency providers to obtain a license from the regulator to operate, as per a report by Dutch news outlet DeTelegraaf. The Netherlands' central bank is taking these measures in the hope that it will, “prevent such cryptocurrencies from being used to launder money obtained through crime or to fund terrorism.” In order to receive a license, cryptocurrency firms must maintain Know-Your-Customer procedures and report any suspicious activity to the Dutch central bank.
Eddie Hughes, a conservative member of the United Kingdom’s Parliament, suggested that Bitcoin (BTC) should be accepted as legal tender for tax and utility payments, according to news outlet Express.co.uk. The article discusses that Hughes, who is a self-described, “crypto enthusiast with amateur knowledge,” recently met with the Royal National Lifeboat Institution, which accepts cryptocurrency donations. This news comes after the US state of Ohio announced that it would begin accepting BTC as legal tender for tax payments.
Following a case in Canadian courts that resulted in a ruling ordering mistakenly sent crypto funds to be returned to their owner, a blog post from the University of Oxford Faculty of Law is noting that there could be repercussions with the case potentially setting a precedent for lost or stolen cryptocurrency claims. The Canadian court case’s ruling will require defendant Brian Wall to return USD$370,482 worth of Ethereum (ETH) tokens to the plaintiff, Copytrack. The blog post from the University of Oxford Faculty of Law reads, ‘This precedent may have major repercussions for the enforcement of claims regarding lost or stolen cryptocurrencies,” adding that the ruling allows the plaintiff to recover tokens, “in whatsoever hands those Ether Tokens may currently be held.”
Japan’s government is considering plans to ease cryptocurrency taxes in an effort to revitalize the domestic cryptocurrency and blockchain industry. This week, Japanese Congressman Takeshi Fujimaki proposed four significant changes to taxation requirements pertaining to digital assets, which include: a reduction on the cryptocurrency gains tax from 55% to 20%; elimination of taxes on crypto-to-crypto payments; elimination of taxes on miniscule cryptocurrency payments; and an adjustment that would allow cryptocurrency investors to carry forward losses across quarters and years, effectively until cryptocurrencies are ‘cashed’ out.
Jay Clayton, Chairman for the United States Securities and Exchange Commission (US SEC), said during a speech that Initial Coin Offerings (ICOs), “can be effective,” for fundraising, but that, “securities laws must be followed.” Clayton went on in his speech to comment on the US SEC’s work regarding distributed ledger technology (DLT), digital assets, and ICOs, saying that it is an, “area where the Commission and staff have spent a significant amount of time,” and, “that this trend will continue in 2019.”
Jay Clayton, the Chairman of the US Securities and Exchange Commission (SEC), expressed his optimism for distributed ledger technology’s potential impact on traditional financial markets in a testimony before the US Senate Committee on Banking, Housing, and Urban Affairs yesterday. According to a transcript published on the SEC’s website, Clayton said, “I am optimistic that developments in distributed ledger technology can help facilitate capital formation, providing promising investment opportunities for both institutional and Main Street Investors.” Additionally, Clayton highlighted that the SEC is, “Focusing a significant amount of attention and resources on digital assets and initial coin offerings (ICOs).”
Maxim Akimov, the Deputy Prime Minister of Russia, announced that no significant changes will be made to the draft of a bill concerning cryptocurrency regulation in the country, as per news outlet Finmarket. The bill was already approved by Russia’s parliament, the State Duma, in May 2018, although the bill has generated substantial discussion since. Since approval of the bill, all cryptocurrency and token-related terminology have been removed and replaced with the term “digital rights”. At the beginning of December, Pavel Krasheninnikov, Chairman of Russia’s State Duma, said that the bill needed to be, “significantly,” changed.
Pan Gongsheng, a deputy governor of the People’s Bank of China, highlighted that Security Token Offerings (STOs) in China are illegal while speaking at a summit in Beijing. As per a report by news outlet the South China Morning Post, Gongsheng told the summit that, “illegal financing activities through STOs and ICOs were still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.” In citing reasoning for the continued ban on STOs, Gongsheng explained that, “Virtual money has become an accomplice to all kinds of illegal and criminal activities.”
Pantera Capital, a blockchain and cryptocurrency-focused investment firm and hedge fund, is warning investors that as much as a quarter of their ICO project could potentially be violating US securities laws, according to a Bloomberg report. In a newsletter to clients, Pantera Capital warned, “While we believe the vast majority of the projects in our portfolio should not be affected, approximately 25% of our fund’s capital is invested in other projects with liquid tokens that sold to US investors without using Regulation D or Regulation S”
Russia has no intention of implementing Venezuela’s state-backed digital currency, the Petro, into commercial operations, according to a report by news outlet RIA Novosti. While speaking to reporters this week, Russian Deputy Finance Minister Sergey Storchak said, “Representatives from our tax service and central bank... got acquainted with the cryptocurrency Venezuela is introducing,” adding, “But no more than that. As for payments, they’re not happening yet.”
South Korea’s representative body, the National Assembly, held its first official meeting with seven of the country’s largest cryptocurrency exchanges on Monday. The purpose of the meeting was to debate cryptocurrency regulation between stakeholders of South Korea’s cryptocurrency industry. Cryptocurrency exchanges Bithumb, CobitCoin, Coinone, Upbit, Gopax, Coinplug, and Hanbitco were among the attendees of the debate, which reportedly focused on Anti-Money Laundering (AML) customer protections and Know Your Customer (KYC) procedures.
The United Kingdom’s Financial Action Task Force (FATF), an intergovernmental financial security body, is calling on the country’s government to increase monitoring of cryptocurrency markets. According to an official report last week, the UK must overhaul its Anti-Money Laundering (AML) and combat terrorist financing (CFT) efforts in order to prevent illicit activities with cryptocurrencies. “Virtual currency exchange providers are not yet covered by AML/CFT requirements,” the report details, adding, “this is an emerging risk and there is not yet evidence to suggest that broad scale ML/TF is occurring in the UK through this relatively small sector.”
The United States Commodity Futures Trading Commission (CFTC) is interested in learning more about the Ethereum (ETH) network, its technology, and the markets build around it. On Tuesday, the CFTC published a Request for Input (RFI) that requests the public’s feedback on different questions concerning Ethereum. The RFI explains that its goal is to inform the CFTC about Ethereum and similar emerging technology, saying, “The input from this request will advance the CFTC’s mission of ensuring the integrity of the derivatives market as well as monitoring and reducing the systematic risk by enhancing legal certainty in the markets. The RFI seeks to understand the similarities and distinctions between certain virtual currencies, including here ether and bitcoin, as well as ether-specific opportunities, challenges, and risks.”
The United States Securities and Exchange Commission (US SEC) is ordering that cryptocurrency asset manager CoinAlpha Advisors LLC pay a USD$50,000 fine, alleging that the firm conducted an unregistered securities sale. After forming in October 2017, CoinAlpha raised more than USD$600,000 from investors to invest in digital assets. In an official release, the US SEC said that CoinAlpha did not file a Notice of Exempt Offering of Securities, meaning that the firm breached securities laws by soliciting securities investors. Additionally, the firm allegedly did not adhere to proper know-your-customer procedures to verify that investors were accredited.
Venezuela is reportedly beginning to convert its citizens’ monthly pension payments into Petros, Venezuela’s controversial state and oil-backed cryptocurrency, according to a report by local economics blog the Caracas Chronicles. The conversion of Venezuelan pensioners’ payments into Petros came after the country already sent pensioners their monthly payment in the form of a check for Venezuelan Bolivars -- normally, upon receiving their check, pensioners would deposit their funds into a bank account where they could then withdraw fiat from local branches. The Venezuelan government, however, converted pensioners’ fiat payments into the Petro upon their deposit into a bank. In the first few weeks of the Petro’s existence, its value has risen from 9,000 to more than 15,000.
Warren Davidson, an Ohio Congressman and notable advocate of blockchain and digital assets, is floating blockchain technology as a solution to fund US President Donald Trump’s prospective US-Mexico border wall. While interviewing with NPR, Congressman Davidson suggested, “the American people, or whomever should choose to donate,” could pay for the border wall, adding, “you could do it with sort of like a crowdfunding site or you could do a blockchain and you could have WallCoins.”
“The long-term value of Bitcoin (BTC) is more likely to be USD$100 than USD$100,000,” says Kenneth Rogoff, a former Chief Economist for the International Monetary Fund (IMF) and the current Harvard University Professor of Economics and Public Policy. While writing an article for major UK news outlet The Guardian, Rogoff highlighted that, because BTC’s use is limited to transactions, it makes the digital asset more vulnerable to a bubble-like collapse. Rogoff also cited that BTC’s energy-intensive verification processes is, “vastly less efficient,” than systems that leverage, “a trusted central authority like a central bank.”
A new report by PeckShield, a blockchain security company that monitors various cryptocurrency ecosystems, details that decentralized applications (DApps) on the EOS (EOS) blockchain have lost as much as USD$1mm in hacks since July 2018. The report details further that DApps on the EOS network have sustained 27 breaches since July, which are responsible for the up to 400,000 EOS that have been compromised from hacks. Guo Yonggang, a blockchain security expert cited in a report on the matter by crypto media firm Blockchain Truth, believes that the hacks can be attributed to security problems with the DApps themselves, rather than with the EOS network.
A new study published by the Cambridge Centre for Alternative Finance on Wednesday finds that the number of unique ID-verified cryptocurrency users nearly doubled in in the first 3 quarters of 2018. The study details that total ID-verified users increased to 35mm in the first three quarters of 2018 from 18mm at the end of 2017, representing an increase of 94%. As per an analysis of the study by Bloomberg, the growth of crypto’s userbase despite the market decline, “could signal that an eventual recovery could be coming.”
Amid the continued cryptocurrency sell-off, only two cryptocurrency mining machines remain profitable, according to real-time data from ASICMinerValue.com. ASICMInerValue.com, which calculates the profitability of Application-Specific Integrated Circuit (ASIC) miners, indicates that only indicates that only the Ebank Ebit E11++ and ASICminer 8 Nano 44Th mining models are profitable for mining cryptocurrencies based on the SHA-256 hash function -- notable cryptocurrencies like Bitcoin (BTC) and Bitcoin Cash (BCH) use this has function.
Bitmain, a large Chinese cryptocurrency mining firm, announced that it is closing its development center in Israel, citing current cryptocurrency market conditions. In closing Bitmaintech Israel, the crypto mining giant was forced to fire all 23 employees. Among the employees let go is Gadi Glikberg, head of Bitmain’s Israeli branch and Vice President of International Sales, who said on the recent market turmoil, “The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.”
Busan, a major South Korean city, will be the beneficiary of the South Korean government’s plan to spend 4bn Korean won (USD$3.5mm) to establish a blockchain-enabled virtual power plant (VPP). As per a report by South Korean news outlet Yonhap News Agency, the project will be angled as a national competition in 2019, hosted by South Korea’s largest electric utility, Korea Electric Power Corporation (KEPCO). The VPP will integrate the idle capacities of multiple energy resources through a cloud-based distributed ledger in order to optimize power generation and decrease costs.
Church’s Chicken, a large international fast food franchise, is partnering with Dash Venezuela to accept cryptocurrencies in its Venezuelan locations. According to an official press release, 13 Church’s Chicken establishments will begin accepting Dash (DASH) as payment following, “extensive and rigorous days of training,” staff to understand cryptocurrencies. With the addition of Church’s Chicken, more than 2,200 establishments in Venezuela accept DASH as payment.
Crypto.com, a Hong Kong-based cryptocurrency payments platform, announced the appointment of former PayPal executive Tyson Hackwood to serve as the firm’s Vice President and Head of Global Merchant Acquisition in an official press release today. Crypto.com aims to increase cryptocurrency adoption by both merchants and consumers through their point-of-sale (PoS) transaction terminals. Crypto.com CEO Kris Marszalek believes that Hackwood will be integral in furthering this goal, saying, “As we develop the Crypto.com Chain to fulfill the current industry need to pay and be paid in crypto, Tyson will play an important role in expanding the number and quality of merchants that are part of our network.”
Hyperledger, a notable blockchain consortium, is continuing its robust expansion after announcing the addition of 16 new members at the Hyperledger Global Forum in Basel, Switzerland. Among the notables to join the consortium are, Alibaba Cloud, Citigroup’s Citi Ventures arm, and Deutsche Telekom. The latest addition of 16 members brings the total membership of Hyperledger to more than 260 different companies. In a public statement, Hyperledger Executive Director Brian Behlendorf said that, “The growing Hyperledger community reflects the increasing importance of open source efforts to build enterprise blockchain technologies across industries and markets. The latest members showcase the widening interest in and impact of DLT and Hyperledger."
Jeremy Henrickson, the former Chief Product Officer at Coinbase, has departed the US-based cryptocurrency exchange after serving since July 2016. “Jeremy’s contributions to Coinbase over the past two years were invaluable,” said a Coinbase spokesperson, adding that, “he helped to build our scrappy startup team into a high-functioning product and engineering organization -- overseeing a 5x+ growth of the team.” Henrickson’s departure comes after long-term Coinbase executives Adam White and Hunter Merghart left the US-based cryptocurrency exchange in recent months.
LinkedIn’s, “2018 U.S. Emerging Jobs,” report released on Thursday ranks the role of blockchain developer as the fastest growing job in the United States. The report by LinkedIn indicates that blockchain developer jobs have increased 33-fold in the past 12 months alone. San Francisco, New York City, and Atlanta are among the cities with the highest demand for blockchain developer jobs.
Orbs, a unique hybrid blockchain platform, raised more than USD$15mm in cryptocurrencies to fund its development of a public blockchain, according to a company blog post. South Korean application provider Kakao lead the fundraising efforts with a representative telling CoinDesk that the company, “always seeks to invest and support innovative startups, and Orbs is a good example.” In total, Orbs raised 139,000 Ether (ETH) and 892 Bitcoin (BTC), amounting to roughly USD$15.4mm. Orbs aims to build a public blockchain with this funding that is, “universal,” and, “scalable,” for decentralized applications (DApps) with the, “liquidity of a base layer.”
Samsung has reportedly filed patent applications for three different blockchain-related trademark requests that all pertain directly to smartphones, according to news outlet Galaxy Club. Specifically, the patents named “Blockchain KeyStore”, “Blockchain Key Box”, and “Blockchain Core” all pertain to cryptocurrency custody capabilities on smartphones. This news comes amid the release of HTC’s Exodus 1 and Sirin Labs’ FINNEY, both of which are being marketed as blockchain smartphones with cryptocurrency custody capabilities.
I was searching for a trading bot for Bitmex, and thought I had found one with some Telegram channels. At first glance, it looked legit. I found it on CryptoCurrencyTrading: link directed to there TG: Link I've fallen for a scam before so I was really careful not to make this mistake again. My first one was the scam with IOTA, I made a wallet with the online wallet generator and got scammed out of my coins. This is how I got scammed this time: there was only 1 person to reach on Telegram from the group - @BitmexSpecialist. I started the chat and they had a special offer that was only valid until new year: joining the VIP group and getting the bot cost $100 (instead of initial $200). So I paid that and got skeptical right after: they were still receiving $100 from different addresses days after new year (even today). I asked many times when I am to receive the bot, and they kept delaying it and making excuses like "Yeah buddy there is a delay because we had 80-90 Bots being processed". That was obviously a lie, here is the chat I had: https://imgur.com/a/nvdePeN Looking back at it now, I see the obvious things that indicate a scam: their Youtube channel defines location in India, that says enough... It feels so stupid that I fell for this obvious scam, and I want to warn other people. Luckily it was only $100, but people still pay 0.027 BTC (see link below) to them right now, given that the 'special offer' should've expired already. People are still falling for it and it needs to be said. And is there a blacklist to report their bitcoin addresses? Telegram 3 channels and the ones behind it: 1: Their VIP Group Link: /AAAAAEwGBQU6L_Jqh6-gJQ 2: Their Free Insider Info Bot: /AutoCryptoNews 3: Their Insider Club: /AAAAAFCupv0W1du9cKHGJw The ones behind it: @BitmexSpecialist and @geniuscrypty Every payment of around 0.026-0.028 BTC and 0.004-0.005 BTC is a victim of their scam: Their Bitcoin Address: https://bitref.com/1ERgM4wd876BVyX4tTsQvtGxtAa3kKPWoz Their videos on Youtube with fake bots posting: Youtube Channel: https://www.youtube.com/channel/UCJE2LGpk6cHlPdsu1mMh7Ew/featured Their Email: [[email protected]](mailto:[email protected]) EDIT: The person blocked me on telegram now, so I changed my name and went to the other group they had, So I just found out there other channel promoted by the post: Link is promoted to by the same scammer, Same bitcoin address and with the name @geniuscrypty, there taking 20$ from people to join their "Crypto Trading Signals" channel. UPDATE: Surprisingly this post did make some bells ring on their side, they unblocked me and started talking to me again. They started bribing/intimidating me saying that they'd pay me if I deleted this post. Sadly, I can't show the chats, because they disappeared and so did all their channels! So I only said: "First pay, then we talk", so guess what, they actually paid me back. But I'll let nobody silence me for money because the truth cannot be bought/sold. Still, so many people fell and are still falling for their scam, its sickening and these people need to be caught! And scammer changed his name now to @BpExpert! Be careful and report them! Thanks for reading my post and spread this awareness!
Thermodynamics & Silent Weapons for Secret Wars or Crypto Anarchy 101: Statists Failing & Anarchists Thriving
Crypto Anarchy 101: Statists Failing & Anarchists Thriving The black-market, the free-market, is what kept people alive throughout the worst of oppressions. The black market has been the art of surviving amidst all types of tyrannies and slaveries. The black market, aka System D, is something that everyone in the world will need to start getting comfortable with. CryptoAnarchy is the ultimate manifestation of complete market freedom, and it is here to stay. Libertarians are beginning to finally realize their incredible advantage within this new market environment. The unfortunate statist masses have been programmed to feel uncomfortable with the mere idea of complete market freedom. Keep in mind that as of 2009, half of the world’s workers- around 1.8 billion – were employed by System D. The black market is only expected to grow even more so with the incentive structures being built out in order to advance the technological advancements of cryptography. Humanity has never experienced a true free-market until now. For the first time in history one is beginning to take shape. The traditional business sector is beginning to realize that they are not even mentally equipped for the implications of having applied cryptography that is powered by market incentives. This is evident in their trite attempts at integrating these new technologies with traditional banking and financial systems. Their lack of creativity, and dependence on government, is a clear testament to how much they will be hurt in the coming future. Statists Double Down after Failure: Tether and Stablecoins Many within the crypto space have attempted to bridge the gap between legacy banking and cryptocurrencies. Amongst the various attempts at capitalizing with these new technologies, the idea of a stablecoin entered the space via Tether (USDT). A stable coin is a cryptocurrency that is pegged on a 1 to 1 ratio to the US dollar, or any other asset- like gold- or fiat. Tether operated as a stable coin pegged to the US dollar on a 1 to 1 ratio. The biggest attribute behind stablecoins resided in their ability to provide stability in an otherwise volatile market. For a long time many within the crypto space were curious about Tether’s means of operating with USD. Earlier this year TDV was the first entity to exclusively reported to its subscribers the origin of Tether’s “secret sauce;” fractional reserve banking. The laws of fractional reserve banking allowed the Noble Bank of Puerto Rico to provide Tether with the legal means of operating as a stable coin pegged to the US dollar. The Noble Bank recently went bankrupt due to being insolvent. Noble Bank was the bank of Bitfinex and Tether. As a result, Tether and Bitfinex ended their relationship with Noble Bank. It is important that you as a subscriber move your crypto out of Bitfinex. You should never keep your cryptoin exchanges. When you do this you don’t actually control the private keys of your coins. (If you are an active trader, please consider using Bisq. Bisq is an open source decentralized exchange that does not control your private keys while trading. It is the most Anarchist exchange in the market right now.) After losing its partnership with Noble Bank, Bitfinex began banking with HSBC. On October 15th, Bitfinex tweeted that their fiat deposit system was re-enabled. Overall, Bitfinex is still in the midst of reorganizing itself as an exchange with proper banking liquidity. For this reason we are of the opinion that it is best to stay away from Bitfinex until they are more solvent in their banking partnerships. Tether (USDT) on the other hand is suffering from a lack of proper banking structures. Binance paused all USDT withdrawals and KuCoin, the exchange, also paused USDT deposits and withdrawals. Tether is currently at around 2.1bn dollar market cap. Tether holders are having a difficult time cashing out of their Tether for USD. It is expected that unless Tether gets its banking situation sorted out, we will see movement out of Tether. This situation has caused the price of Tether to hit a low of $0.90 to the USD. As of writing this, Tether is trading at around $0.97 to the dollar. The situation for Tether is dire at the present moment. We expect to see many Tether holders drop their Tether for Bitcoin, or other more cryptographically secure cryptocurrencies. This will more than likely be one of the main strategies that will be implemented in order to cash out of Tether. This overall situation is once again showing us how unstable things are when dealing with fiat. We hope for the market to realize that there is more security in cryptocurrencies than there is in fiat backed stablecoins. Stablecoins will always have the instability of the fiat currencies that they are pegged to. The time will eventually come when people will realize that cryptocurrencies are a better store of value than stablecoins. In spite of all of the issues circulating Tether, statist entrepreneurs are doubling down on their desire for stablecoins. We are seeing the beginning of what we believe will be a trend in the upcoming future; that is, stable coins pegged to various countries’ fiat and assets like precious metals. The new USD stablecoins recently announced to the market are GeminiUSD, TrueUSD, and Paxos Standard. Volatility as a Sign of Life in the Market Contrary to the statist perception on volatility, one can also view volatility in crypto as proper to a market that is fully alive. Crypto, for the first time in history, freed the market from bankster manipulation. Arguably, volatility is to be expected in an unregulated free-market where everyone in the world is for the first time welcomed to participate. In comparison to the legacy financial system, crypto is fully alive while the former is handicapped by regulations, coercion, and disconnected from true free-market signals. That is, volatility signals of a free-market that breathes freely for the first time. Volatility is indicative of a market that is fully alive. The desire for individuals to attach crypto to the legacy financial system, under the pretense of “less volatility,” is indicative of individuals that will have a hard time operating outside the bounds of regulation and government coercion. As long as we have statists uncomfortable with Anarchy, we will have stablecoins pegged to fiat. Various Libertarian entrepreneurs are also beginning to dabble with the idea of a stablecoin that is pegged to precious metals. The challenge of these projects will be the same regulation that oversees fiat. Remember that the difference offered to the world by cryptocurrencies resides in crypto’s ability to operate freely within System D, without regulation. It is this new market, the true free-market, that for the first time is unstoppable. Bitfinex’s Effect on EOS Bitfinex is one of the entities that holds the greatest amount of votes for EOS Block Producers (BPs). For this and other reasons, we are currently expecting a shakeup of votes for selected top BPs. It is important that you remain attentive to the happenings within EOS and move your votes accordingly. We will soon be coming out with more details on our perceptions regarding various BPs. There are various discussions regarding BPs pending arbitration. This is a good thing. All shakeups lead us closer to more transparency and accountability. This should not directly affect the price of EOS, aside from what will result from the expected FUD of future BP shake-ups. The Resilience of CryptoAnarchy after Blockstream’s Fake Sidechain Amongst the various innovations within Bitcoin, sidechains have- for the past 5 years- existed as one of the holy grails of innovation. Blockstream, as a company, was put together to manifest sidechains. They sold us the concept of a sidechain as they were sourcing capital during their first rounds of investment; this was in October of 2014. Sidechains were supposed to be delivered by Blockstream as a way to make Bitcoin innovation competitive to that of altcoin innovation. Sidechains were supposed to be “the Altcoin killer.” After all of this time, Blockstream only delivered Liquid - which is not a sidechain- and called it a “sidechain.” That is, Liquid is not a sidechain when properly defined. Liquid is a multi-signature layer that allows for multiple exchanges to pool their money together to transfer funds amongst themselves. Liquid is not a true sidechain, it is more precisely a multi-signature wallet. Calling Liquid a “sidechain” was just a marketing scheme by Blockstream in order to impress the illusion that they had delivered what they had promised. They didn’t. Blockstream gave up in attempting to create a true sidechain and created a multi-signature wallet instead. Keep in mind that Liquid is a “private sidechain.” Note that a proper sidechain ought to be made with open-source innovation in mind. Many of us see the actions of Blockstream as a bait and switch marketing scheme. (For the rest of this article I will use the words “Drivechains” and “sidechains” interchangeably as synonyms. Drivechains are what sidechains originally were supposed to be- according to the original Blockstream Sidechain white paper. Blockstream’s bait and switch marketing scheme led to them calling “sidechain” a multisignature wallet that is not at all what they promoted on their white paper. Paul Sztorc, in an attempt to differentiate himself from the Blockstream perversion of the word “sidechains,” called his development of true sidechains “Drivechains.”) Drivechain Sidechains Paul Sztorc, the creator of decentralized prediction markets, was very much looking forward to Blockstream’s creation of sidechains. It was his hope that his decentralized prediction market would run as a Bitcoin sidechain. At about the end of 2015 Sztorc was done with BitcoinHiveMind, his decentralized predictions market (previously known as TruthCoin). After realizing that Blockstream was not going to deliver on sidechains, as promised, Sztorc felt he needed to build it himself. The creation of his Drivechains started off as a means to an end for Sztorc; he needed true Sidechains for his decentralized predictions market- so he build it himself. On September 24, 2018 Paul Sztorc announced the launch of the first Drivechain release. This release was accompanied with fervent followingof old-school Bitcoiners that immediately jumped into experimenting with Drivechains on the testnet known as “Testdrive.” The Drivechain protocol is an alternative to the sidechain project originally proposed by Blockstream. It is a simpler design that enables blockchain compatibility in which the system still utilizes the same 21 million bitcoin ruleset- the Nakamoto consensus. Drivechains are intended to allow for permissionless innovation without diluting or challenging the value of the main cryptocurrency. Contrary to other means of innovation within crypto, any innovation that comes from a Drivechain sidechain actually adds value to the Bitcoin protocol- for it does not dilute the main cryptocurrency. Satoshi vaguely discussed the importance of the ideas of sidechains and multi-blockchain connectivity on June 17, 2010. This creation, of providing varied market options, make infighting and political discourses regarding consensus upgrades now seem infantile. Drivechains will provide the market with ongoing competitive solutions for blockchain development. Investors will now be exposed to options that would otherwise have been shunned in a less free environment. The strategic advantage of Drivechain sidechains is that they will offer investors various options in the form of alternative chains. It is important to keep in mind that Drivechains are available for blockchains with the same UTXO set. That is, Drivechains are available for both BitcoinCore (BTC) and BitcoinCash (BCH). How Drivechains work Namecoin was the vision of early Bitcoin adopters of creating a DNS and identity infrastructure based on Bitcoin; that is, .bit DNS. This technology piggy backed on top of Bitcoin mining. That is, if you so chose you could merged-mined Namecoin alongside BTC or BCH. Namecoin can absorb hashrate from BTC or BCH without needing its own miners. Merge-mining with BTC or BCH is also the process of validating and safeguarding Drivechain sidechains. Unlike Namecoin, Drivechain sidechains don’t require miners to run special software. For Drivechain sidechains miners implement what is known as blind-merge-mining. In blind-merge-mining the nodes of the sidechain run the software, not the miners. This operates under the assumption that the nodes running the software also hold BTC or BCH. A payment fee is paid to miners to blind-merge-mine the sidechain, in a similar way that Namecoin merge-mining pays a fee. In this process, miners don’t have to run any software- they just passively make money for blind-merge-mining blocks with sidechains. The main difference with sidechains is that you are not mining another coin like Namecoin, but rather you are mining the same BTC or BCH in another sidechain when you do the blind-merge-mining. Miners don’t get paid with the sidechain, they receive payment from the mainchain that they already trust when they blind-merge-mine. Miners are also economically benefited by always getting paid in the superior coin that they are already intentionally mining; BTC or BCH. As BTC or BCH moves in and out from the mainchain to a sidechain, there might be claims of ownership that may cause disputes. Drivechain prevents this by emphasizing the superiority of the mainchain over sidechains. Sidechains have to report on exactly what it is doing- at all times- to the main chain. Whenever a sidechain wants to transfer money back to the mainchain it has to do it very slowly. This safeguards the network from theft. The slow movement of funds from the sidechain to the mainchain can be arbitrage by individuals who will be willing to purchase sidechain receipts for BTC or BCH coming from sidechains at a discount. People will also be able to do atomic swaps between chains in the near future. (Atomic swaps, or atomic cross chain trading, is the exchange of one cryptocurrency to another cryptocurrency, without the need of trusting a third-party). It is the intent of Drivechains to create the interaction of miners with sidechains as seamless as possible. However, it is still important to have guarantee that money ends up in the right place. This is the reason for the slow movement of funds from sidechains to the mainchain. The movement of a certain amount of transactions coming from a sidechain to the mainchain is batched up into one transaction with its own transaction ID. This transaction is frozen in place where miners and developers can examine it for at least a month (there are talks of even making this process longer between 3 to 6 months). During this time miners vote on whether to allow the payment to go through or not. Upon receiving enough upvotes, the batched up transactions are released unto the mainchain. The slowing down of movement of BTC or BCH from sidechains to mainchain decreases the threat of miners stealing BTC or BCH from a sidechain. The sidechains are always watching the mainchain, so they know to credit people immediately when the mainchain sends money to it. Sidechains also know when the miners have accepted the release of batched up locked funds that are released unto the mainchain. Once the sidechain receives notification of the miners acceptance of funds in the mainchain, the sidechain destroys the funds that were frozen awaiting miner upvotes. It is overall acknowledged that sidechains increase the value of BTC and BCH, which eventually make mining more profitable. It would be counterproductive for miners to attack and steal funds from sidechains. That is, miners acting maliciously decreases the value of their own equipment. In spite of this fact, it is good that Drivechains make it increasingly more difficult for theft to occur. Miners, through their voting process, also get to punish bad sidechain actors. Any malicious sidechain will be cleaned out by miners. This is the opposite of the Ethereum model where anyone can code anything into the Ethereum blockchain, to the point that it could become a detriment to the Ethereum mainchain itself. That is, anyone can create a new ERC20 or ERC721 token without any vetting from the network. Coins are moved from the mainchain to the sidechain by means of sending coins to an address that represents the sending of funds from the mainchain to the sidechain. Anyone running the given sidechain software will recognize that funds were sent to the sidechain- this will automatically credit the person with the same amount of BTC or BCH on the sidechain. Also, the sidechain is programmed to recognize the reception of funds unto the mainchain address from where it will automatically credit the user the same amount of BTC or BCH unto a sidechain wallet. People on the mainchain don’t have to know anything about this particular address. As far as they know, it is just another address. Embrace the Spontaneous Order of Market Anarchy It is important that people within BTC and BCH take on a more Hayekian approach to entrepreneurship. Many within crypto are uncomfortable with the mere notion of spontaneous order. It is important that we as Ancaps lead the way in motivating people to experiment with their entrepreneurship. In the past few years, the desire of individuals to covet the development of crypto has become more apparent. These people need to be ignored. No one is the leader of Bitcoin or crypto development. The best innovators within crypto are those that create tools that empower other entrepreneurs to create more options. It is this spontaneous order that we should welcome and promote at all times. Many within BTC and BCH will not accept or feel comfortable with the radical spontaneous order enabled by Drivechains. This is good reasonto brush up on your Austrian Economics in order to properly confront minds that are fearful of human freedom. The Ancap entrepreneurs who are most comfortable with spontaneous order will be the same ones who will produce the greatest amount of value. The development of CryptoAnarchy is guided by the science of praxeology and Austrian Economics. Drivechains are testament to the augmentation of our libertarian order are necessary for CryptoAnarchy to thrive. Drivechains and Investment Strategy The philosophical and economic advantage of sidechain innovation is that it enables the development of BTC and BCH with an investor-centric intention. It is the market’s investment that now decides the best means for scaling and development. Politics and propaganda take an almost insignificant backseat to that of market forces. The technology is now readily available for investors to test drive with their BTC or BCH on any given proposed sidechain. That is, you actually get to experience the value, or lack of value of a new innovation without jeopardizing your position as an investor. All investment decisions are about strategy. Sidechains empower the investor’s strategy by allowing the investor to survey all of the possible value propositions of his/her original investment without having to incur any actual costs. In a similar way, sidechains also provide developers with quick market feedback on the aspects of development that are most favored by the market. Drivechains are a pivotal step in maturing the crypto space into becoming more conscientious in considering the investment strategy of those buying the coins. It is important for innovators to start taking the investor’s strategy into account. Drivechains force developers to consider what is best for the investor, not just what is desired by a given team of developers. Here we have not only a better proposition for investors, but also an incentive for developers to use Drivechains in future crypto experimentation. When experimenting with an altcoin, the measure of success is contingent on this new altcoin gathering a new pool of investors to literally buy into the project. With a sidechain you are already dealing with a more seasoned group of investors that will provide you with more accurate market feedback, being that their investment is now fortified by all other sidechain experimentations that they have already tested at no cost. Altcoins will soon no longer be the locus of innovation within crypto. All future innovation will be offered the option to experiment within BTC or BCH via sidechains. Keep in mind that all previous innovations, already tested in the market by successful altcoins, are now easily adopted by BTC or BCH. It is also important to note that creative experimentation on sidechains do not at all jeopardize the mainnets of BTC or BCH. On the contrary, sidechains will make BTC and BCH much more valuable. When the Drivechain craze begins we will see a BTC and BCH bull run. Don’t be surprised if sidechains are the main reason for the next all time highs. Statists Failing & Anarchists Thriving It is important that we understand that the legacy banking system is completely dead. They are barely adopting simulations of cryptocurrencies unto their banking structures to stay alive. Stablecoins are a manifestation of this bankster angst to remain current. True market innovation is found in the embrace of Market Anarchy. CryptoAnarchy is growing exponentially with tools that are beyond the reach of state megalomaniacs. Drivechains are an example of the CryptoAnarchist tools that will result in further anti-fragility of this new crypto free-market. Proper Austrian Economic incentive structures coupled with applied cryptography is our lethal weapon against nation states and central banks. Arguably, our Ancap philosophy is what guides applied cryptography in the market towards success. For this reason it is important that we keep revisiting the texts of Rothbard, Mises, Hayek, and Konkin throughout our crypto endeavors. Peace! by Rafael LaVerde Source TL;DR: How familiar are you with thermodynamics and silent weapons for secret wars? How familiar are you with the Brave New World Order?
https://preview.redd.it/v8e2ct1inqd11.png?width=720&format=png&auto=webp&s=6939535727b1538eafaf819d15f365d84a5ab678 Cryptoindex is a tool for exposure to the cryptomarket and serves as a smart benchmark for all cryptocurrencies. The AI-based Cryptoindex algorithm is continuously analyzing more than 1000 coins applying over 170 factors, processing more than 1 million signals per second to provide a highly sophisticated index of the top 100 coins. You can find our previous reviews here: Cardano - review. Future plans.Ripple - review. Further PerspectivesLitecoin. June'18 overviewThe Dow Jones index. From where did it come to us?Bitcoin Cash. June 2018 overviewAre cryptocurrency indices a new crypto market trend?EOS. End of May'18 overviewEthereum. May 2018 overview Here on our Cryptoindex blog, we will be posting 100 articles about each of the top performing coins selected by our powerful AI algorithm#CIX100coinreview. Today’s review: TRON and their prospects. What is TRON? And who was created this? First, let's start with what the ‘Throne’ is. This platform was developed for the creation of digital content. Each person has their own "intellectual property," be it music, a book or any other content. The platform itself is created on the Ethereum blockchain. The TRON ecosystem was founded in September last year, by the Singapore non-profit organization Tron Foundation. The company is headed by Justin Sun. Before creating TRON (TRX), he created the social application ‘Peiwo’, which gained more than one million users. Prior to this, Justin Sun acted as an advisor and representative for Ripple in China from December 2013 until 2016. In 2015 and 2017 he was nominated in Forbes ‘30 most successful people under the age of 30’ list. Key targets of the project Everyone is interested in reading good quality content. The TRON project encourages individuals to become they’re own creators with protected rights, a "Paradise to combat piracy," where there is no Torrent. Most of the content on the Internet passes through large sites such as Yahoo, Google, Yandex, etc. Due to this, they can dictate any prices in the market, more importantly, subject it to censorship and transmit data about each user to the Special Services. How does this platform work? The throne synchronizes the work of original information and entertainment portals in the public network. The uniqueness of the platform is that it can be used to remove the "mediator" between the creator of the content and its consumer using blocking and peer-to-peer networking (P2P) technology. Each user, regardless of whether the individual is a blogger or journalist, can post content in their network. The audience must approach the author for access to the content and pay them directly.. For users, this is an excellent opportunity to receive unique content without advertising from the "intermediary." TRON[TRX] cryptocurrency For the convenience of users, all services on the platform are paid exclusively by their cryptocurrency called Tronix [TRX]. After the successful ICO in August 2017, Tron was listed on many major exchanges such as Bitfinex, Bittrex, Binance. TRON can be used and stored on the MyEtherWallet purse. The increased popularity of TRON was noticed and Coinmarketcap.com rated it within the TOP-15. The price of TRX changed from $ 0.0015 to $ 0.30 at the peak in January of this year. Further perspectives of the project The developers stated in the Roadmap project that TRON would be split into several stages, to help the project take the lead position in the world. Exodus A platform for peer-to-peer distribution and storage of content, through which it will be possible to free up data. The platform will be able to provide free publication and storage of user data. This stage does not provide for the use of a block but uses a network file protocol that supports a distributed file system. Odyssey This stage according to the Roadmap is scheduled for January 2019. With the launch of Odyssey, the platform will increase the content rights expansion, as well as complement new features, such as the introduction of locking technology and monetary incentives to host content on the platform. The system will include bonuses for a user response to content, as demonstrated at such venues as Steemit, Golos, Medium. Sample content is free, to give you a taster, full access is granted only when you pay TRX for their services. Great Voyage and Apollo These two steps will allow users to create their brand and generate their tokens. This should increase the attractiveness of the project and improve its economy. Star Trek(2023 г.) and Eternity( 2025 г.) This phase will create online gaming platforms enabling users to maximise their game process, invest in new gaming projects and offer their ideas to their developers. For game developers themselves, this is an excellent opportunity to be one step closer to your community. The developers themselves expect that the whole process will take no more than ten years to implement all the plans fully. Criticism and disadvantages of the project A significant disadvantage of TRON is that it does not conform to generally accepted copyright standards. For example, the person who first places the content on the TRON blockbuster will automatically become its author, although, in fact, it may not be it. TRON generated some controversial media over accusations of plagiarism. Vitalik Buterin (Ethereum Founder) accused Justin San of plagiarism when drafting the project documentation. First, Sun on Twitter listed seven advantages of Tron before Ethereum, and then Buterin added the eighth paragraph, which said: "The art of writing documentation (Ctrl + C and Ctrl + V is much more effective than writing by yourself)." Many users expressed their non-transparent work with the tokens of the project themselves. The first transactions that have taken place since the launch of the project are not entirely clean for users, but only add distrust to the team. Several packages of tokens that have been sold. 41% of the tokens of 100 billion, were withdrawn on October 1, 2017, and then distributed to other purses of the "B" series. Some of them may have fallen into the hands of the state or more, be used to inflate the price artificially. Conclusion Despite such harsh criticism from experts and the community, the project successfully took the TOP-15 on the Coinmarketcap. With competition such as Ripple, Stellar or Cardano, TRON is unlikely to achieve its desired effect, but the project has followed its Roadmap, and for their investors that is a good sign. Also positive on the token rate is the fact that Justin San co-operates with Jack Ma and his project Alibaba. Perhaps their close merger could lead to an even greater token growth. At the time of writing, TRON[TRX] is 0.928% of the total of CryptoIndex portfolio.You can always check the current CIX100 composition at our MVP platform:http://cryptoindex.ai/ Stay updated on our channels:Follow CRYPTOINDEX onTelegramFollow CRYPTOINDEX onMediumFollow CRYPTOINDEX onTwitterFollow CRYPTOINDEX onFacebookFollow CRYPTOINDEX onLinkedinFollow CRYPTOINDEX onReddit
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