Friday, 17 August 2018

Exchange operator CME is going deeper into cryptocurrencies

Terry Duffy CME
CME Group chairman and CEO Terry Duffy.
REUTERS/Fred Prouser

LONDON — Exchange operator CME Group is launching a daily price benchmark for ethereum, a sign of its growing commitment to cryptocurrencies.

CME said in a statement on Monday that it is launching an Ether Reference Rate and Ether Real-Time Index in partnership with cryptocurrency trading platform Crypto Facilities.

The Ether-Dollar Reference Rate will provide a daily benchmark price in US dollars at 4 p.m. London time. The Ether-Dollar Real-Time Index will provide a real-time ether price in US dollars. Crypto Facilities will calculate both measures using data from trading platforms Kraken and Bitstamp.

Tim McCourt, MD and Global Head of Equity Products and Alternative Investments at CME Group, said in a statement: “The Ether Reference Rate and Real-Time Index are designed to meet the evolving needs of this marketplace.

“Providing price transparency and a credible price reference source is a key development for users of Ethereum.”

Ether, which is the internal cryptocurrency of the ethereum network, is the world’s second-biggest cryptocurrency, behind only bitcoin. The digital asset has a market value of $70 billion as of Monday.

The launch of the two new benchmarks signals CME Group’s growing commitment to the nascent space. CME Group, which operates derivative and futures exchanges in Chicago and London, launched bitcoin future contracts in December last year, almost 12 months after launching a bitcoin reference rate. These contracts were one of the first mechanisms giving mainstream financial institutions access to cryptocurrency investments.

A CME spokesperson said: “We are focused on establishing the index and reference rate for the foreseeable future, and do not currently have plans to launch a futures product.”

The launch of the two ethereum benchmarks could be a sign that CME Group is considering launching new futures products around other cryptocurrencies such as ether.

Dr. Timo Schlaefer, CEO of Crypto Facilities, said in a statement: “We are excited to be contributing to the strong community that has developed around the Ethereum network by providing a reliable reference rate and real-time Ether-Dollar price.”



"Money launderers and other criminals" choose virtual currency, Zimbabwe warns

Harare — Zimbabwe’s central bank on Monday warned against trading in cryptocurrencies, saying virtual currencies such as bitcoin were not regulated in the country.

Bitcoin has sparked interest in Zimbabwe as the Zimbabwe dollar was abandoned in 2009 due to hyperinflation, and the banking system relies on scarce US dollar banknotes.

The lack of US banknotes has left Zimbabweans queueing for hours outside banks and often unable to withdraw their cash.

Zimbabwe also has a “bond note” currency whose value is supposed to be pegged to the US currency, but which trade at a significantly lower rate in reality.

“Virtual currencies such as bitcoin and litecoin do not have legal tender status,” John Mangudya, Zimbabwe’s central bank governor, said in a statement.

Mangudya said the central bank had “directed all banking institutions not to provide banking services to facilitate any person or entity in dealing with, or settling, virtual currencies.”

“The nature of cryptocurrency transactions make them the currency of choice for money launderers and other criminals,” he added.

President Emmerson Mnangagwa has been battling to revive the ailing economy after long-time ruler Robert Mugabe was ousted in November.




Thursday, 16 August 2018

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Tuesday, 14 August 2018

German bank replaces SWIFT with Bitcoin for international loan transfers

Bitbond, a German online bank, is utilizing Bitcoin to allow international transfer of loans.

The service allows small scale businesses that sell their products online to borrow up to € 50,000.

If the statistics on the Bitbond website are to be believed, the bank has already lent more than $10 million to 2,500 businesses.

Bitbond was launched in 2013, and was licensed as a financial institute in Germany in 2016. The company has so far allowed lending and borrowing of loans in Bitcoin.

The company is now using Bitcoin to facilitate international transfer of fiat loans as well, Reuters reports.

The loaned amount will be transferred to the borrower using the Bitcoin’s blockchain, only to be converted back to their country’s currency as soon as the transaction is processed.

Using Bitcoin to transfer the loans will purportedly make the transfer of loan quicker and cheaper in comparison to the existing transfer means.

Currently, most of the world’s banking institutions rely on the SWIFT network to facilitate international transactions, but that comes with several shortcomings.

Users end up paying several fees for each transaction they make through the network. These include transaction fees levied by the correspondent and recipient banks, and currency exchange rates charged by the banks.

It is also worth noting that SWIFT doesn’t actually enable the transfer of money, but only allows secure communication about payment orders between the banks.

At the time of its launch, SWIFT had revolutionized international transactions with its Bank Identified Codes (BICs), now popularly called ‘SWIFT codes’, which made transactions a lot securer and faster.

With blockchain technology, there’s a promise to make this process further efficient.

In fact, the Ripple Transaction Protocol associated with the world’s third largest cryptocurrency Ripple, was developed as a blockchain-based alternative to SWIFT — however researchers have cast doubts on the long-term efficacy of its protocol.

Transactions with cryptocurrencies can be made in a manner of seconds without huge transaction fees involved. There’s only one intermediary that needs to be paid, which are the miners confirming the transaction.

Bitbond’s development of a marketplace that relies on Bitcoin to transfer loans in fiat is interesting, but even Bitcoin currently suffers from high transaction fees and longer time span for processing the transactions.

The successful implementation of Lightening Network can change this, or other cryptocurrencies can be explored as a means for facilitating the transactions.

Published May 14, 2018 — 09:18 UTC



Bitcoin Cash poised to join top 3 cryptocurrencies

Cryptocurrency investors have been suffering a tumultuous ride lately as the markets have dropped significantly. BTC was poised to top $10,000 before sliding to around its current $8,670. Bitcoin Cash (BCH) is also down to around $1,480, losing around 14% of its value in the past 24 hours. However, the markets are starting to climb back up and some are predicting that BCH could soon be among the top three cryptocurrencies.

Despite a decrease in value, Bitcoin Cash has remained relatively stable. BCH currently has a market cap of $25 billion and a circulating supply of more than 17 million. Its decline was only the second least decline among the top 15 cryptocurrencies, all of which saw a 20% or greater drop except BTC and Ethereum (ETH).

Cash Consortium (C2), a technical group seeking to bolster open standard development to bolster BCH growth, described the cryptocurrency as “the soundest money the world has ever known. It has scarcity, fungibility, divisibility, durability, and transferability.” The C2 uses open standards that allow developers to identify bugs and glitches inside the blockchain’s software.

“Bitcoin Cash and Blockchain technology enable financial sovereignty in a way which is unique in history. One of C2’s primary goals is to make these benefits available to all people, whatever their age, gender, nationality or financial status,” according to the C2 website.

The second network upgrade, happening on May 15, is expected to have a major impact on the cryptocurrency’s value. The upgrade is designed to drive down even more the already low transaction fees, as well as speed up the network. Through this event, the block size will be increased to 32MB and certain functionality through OP_Codes that was previously rejected will be introduced.  The OP_Codes should supply the greatest amount of strength to BCH’s value, as they will allow smart contract and tokenization capability on the blockchain.

Smart contract capability has been a highlight of Ethereum; through it, thousands of blockchain projects, additional cryptocurrencies and initial coin offerings were initiated. The implementation of smart contracts will put BCH on the same level as ETH. Jimmy Nguyen, CEO of the nChain Group, said, “The restoring of certain OP_Codes in the Bitcoin scripting language will bring advanced technical functionality to the Bitcoin Cash network. In computing, operating codes are the section of automated language which dictates what operation must be performed. The restored OP_Codes will enable tokenization and smart contracts to be executed on the BCH blockchain. More advanced functions will be possible with future upgrades to the Bitcoin Cash network.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.



First Bitcoin Smart Contracts Sidechain Now Secured By 1 in 10 Miners

The first bitcoin smart contracts sidechain just reached an early milestone.

To be revealed Monday at CoinDesk’s Consensus 2018 conference, RSK, the startup that built the long-anticipated technology, touted as a way to bring ethereum-style smart contracts to the world’s largest cryptocurrency, is issuing new details on the number of bitcoin users dedicating computing power to backing the experimental idea.

First launched this past January, the sidechain pegged to bitcoin was admittedly limited in that it’s not pegged to bitcoin in a “trustless” way advocates have promised for so long. Rather, anyone who wants to move their bitcoin to the sidechain needs the approval of a ‘federation’ group of third parties.

Still, the miner support, RSK Labs co-founder Gabriel Kurman contends, is rather impactful as it shows support for a concept heralded as a way to expand bitcoin’s functionality.

He told CoinDesk:

“It’s a major announcement for bitcoin as a whole. This 10 percent is coming from 80 percent of the total mining pool power.”

And, although there’s a small fraction of the entire network currently securing the sidechain, about 80 percent of miners have already committed support in the future.

“The hash power percentage is set to increase significantly over the next months,” Kurman added.

It makes sense, after all, because the sidechain is designed to be “merged-mined” – a process which allows miners to get transaction fees by contributing their hash power to the sidechain, all while using the same equipment, electricity and power they’re already using to mine bitcoin.

“RSK has massive support from the mining ecosystem because it adds a new revenue stream for them,” Kurman said.

RSK’s lightning

Not only that, but RSK has developed the sidechain to be able to handle more transactions than bitcoin can currently.

The RSK sidechain uses what the company calls “smart bitcoins,” a separate version of bitcoin with the smart contract capability, and that allows for improved scalability.

“On RSK you can process smart bitcoins at 100 transactions per second,” Kurman said, pointing to the “compression” technology RSK pioneered that decreases the total amount of data that must be stored on the blockchain.

Even with that improvement, though, Kurman is quick to note that that’s not nearly enough to bring this technology to the masses, acknowledging that the sidechain still deals with the scalability issues faced by many of today’s blockchains. But the team is working towards that.

Taking inspiration from developers working on both bitcoin and ethereum, who have been developing technologies called the lightning network and Raiden network, respectively, RSK has been building a similar technology.

Called “Lumino,” the project is what Kurman describes as a “combination” of these two networks so that it can work with RSK’s unique sidechains technology.

Kurman said he believes the finishing touches won’t take long, telling CoinDesk:

“Before the end of the year, we hope to launch the Lumino network, which will allow for 20,000 transactions per second.”

Growing the family

The last announcement from RSK today is that two companies are now joining the “RSK family,” Kurman said.

The first is the Inter-American Development Bank, an Argentinian NGO that seeks to promote financial inclusion in Buenos Aires. The NGO has been working on its launch on RSK for the past two years, although Kurman did not elaborate on how exactly the business plans to use the network.

The second company building on top of RSK is the BitGive Foundation, a long-standing bitcoin-focused charity organization that’s been used to funnel bitcoin donations to Nepalese citizens affected by a devastating earthquake in 2015, among other initiatives.

Speaking to the BitGive’s interest in using the RSK sidechain, Kurman said, “It’s a project that allows donors to have transparency using smart contracts.”

He added that these new partners display that more and more businesses are starting to see the benefits of bitcoin (and beyond), and as such, are adopting the technology.

RSK will be demoing all this functionality at their booth at CoinDesk’s Consensus 2018 conference in New York City this week.

Stickers image via RSK

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.


Monday, 13 August 2018

Bitcoin BOOST: Wall Street TITAN Goldman Sachs gives "BACKING" to cryptocurrency

Goldman Sachs is to become the first regulated financial institution to offer its clients to trade Bitcoin futures via one of its New York desks.

The company is making the foray into the crypto futures market after pressure mounted on the bank from clients singing the praises of virtual currencies.

Cryptocurrency analyst Matthew Newton said the move was not a “huge surprise” given the vast amount of attention given to virtual money in the last year and a half.

He said: “This shouldn’t come as a huge surprise to anyone who has been paying attention to cryptocurrencies over the last 18 months.

“Any forward-looking financial institution needs to understand this technology and accept its enormous potential.”

Although the bank will offer a trading desk for Bitcoin, it will only offer the service in a limited capability initially.

But Mr Newton said although the move could be a positive sign for the future of Bitcoin, because the bank is not yet buying or selling coins there is still some “scepticism” about crypto.

He went on: “Despite some initial posturing, the reality is most big banks have already invested significant amounts in research and development into blockchain technology and cryptocurrencies themselves.

“It will still take time for institutional investors to fully come around – and the fact that Goldman won’t be buying or selling actual coins suggest some scepticism remains – but there’s a growing acceptance that these assets are here to stay.”

The initiative from the bank will be led by its “digital assets” trader Justin Schmidt – Bitcoin futures will be traded with Goldman Sachs’ own funds on behalf of its clients.

Despite the renowned bank making its first foray into the crypto space, Barclays CEO Jes Staley recently said virtual markets are a “real challenge” and expressed doubts over security.

He explained: “Cryptocurrency is a real challenge for us because, on the one hand, there is the innovative side of it wanting to stay in the forefront of technology’s improvement in finance.

“On the other side of it, there is the possibility of cryptocurrencies being used for activities that the bank wants no part of.”

Bitcoin is trading at $8,688.86 at the time of writing – the move from Goldman Sachs could increase investor confidence and bump up prices.

In the last month the cryptocurrency has seen its value rise by 8.2 per cent.

This marks a whopping rise of $658.64 to its price.

But Bitcoin has seen rapid declines and price spikes because of the monstrous volatility of the crypto space, making investment a high-risk venture.