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One of the common criticisms of cryptocurrency is that it isn’t a currency, practically - that it is too volatile, and that no one takes it in exchange for goods and services. While that’s largely true for much of fly-over country in the US, there are pockets in the world where it’s changing. Prague has over 50 businesses that accept Bitcoin. Buenos Aires also has a decent number, at about 30 businesses. San Francisco has over 100. There’s also popularity in terms of transactions - Venezuela does over 8% of the world’s transactions in Bitcoin. If a local currency isn’t stable, and the risk of inflation with crypto is less than the risk of inflation with the local fiat currency, then it stands a chance, which is why we saw Bitcoin ATMs in Greece, and why we’re seeing interest in countries as diverse as Argentina and Zimbabwe.
I think there are two sides to this: One: most Americans (not analysts, just regular people) who complain that cryptocurrency isn’t a currency have never had to change money to a currency other than USD, and why would they, when the USD is as stable as it is. There aren’t a proliferation of currency exchange shops lining the streets, and so it’s not a part of public perception. But, businesses who do accept bitcoin find that it opens them up to customers from all over the world. CheapAir.com is a good example, who recently had to find another way to process BTC payments when Coinbase closed their merchant services offering. As the blog post from their founder says,
“We believe that accepting digital currency has been a win-win for both CheapAir and our customers. So we decided to double down without reservation.”
Two token sales to watch 👁️
Orca is attempting to make an AI and front end to manage crypto of all kinds, alongside your fiat accounts. They say, “ORCA is on a mission to foster mass cryptocurrency adoption. We are doing that by creating a customizable, community-backed and consumer-oriented platform of diverse crypto services. It will help users to organize and control their finances more easily than ever.” Screenshots of their interface show an AI advising a user which wallets will give the better exchange rates moving BTC to ETH, “use your Binance wallet to Huodi for the better price”. They also include copy like, “build your own bank.” Essentially, it’s personal banking with some smarts. But this is something people need - regular people don’t yet understand wallets, exchanges, and how to figure out what the best moves to make are. They demonstrate cashing out crypto to Euro in 6 seconds as a video, which is interesting. The whitepaper is worth the read.
Humancoin is essentially an ecommerce loyalty program aggregator with a focus on philanthropy. The use case pitched is solving the problems about lack of transparency and trust in the funds a charity raises and distributes to recipients. The blockchain should make trust transparent, and donors can vote on projects and rank them. There’s a utility token which gets used for loyalty rewards, and mining is tied 1:1 to “proof of charity”, the actual volume of charitable donations. What the heck is proof of charity?
Even a modest 1% of the charity industry turnover accounts for 25 times more than the number of Humancoin tokens issued at the Token Sale. Therefore, in order to provide further rewards to benefactors, the company will issue additional tokens after the Token Sale, in strict correlation to the actual amount of funds raised on the Humancoin P2P charity platform.
The smart contract will grant additional issues of tokens in limited tranches to reward benefactors in proportion to their donations. New tokens for other purposes, apart from rewarding donors, will not be issued. Benefactors will receive back 50% of the value of their donation in tokens, according to the exchange-weighted price of the token.
Benefactors will receive back 50% of the value of their donation in tokens, according to the exchange-weighted price of the token. All tokens exchanged for benefits from e-commerce partners on the platform will be taken out of circulation and burned.
For more info, read the whitepaper.
The Good, the Bad, and the Ugly 😊😠👹
EU Parliamentary Study Calls for CBDCs to Level Competition in Crypto Market
A recent study released by the European Parliament zooms in on the competition within the fintech ecosystem and suggests that decentralized cryptocurrencies could be upstaged by central bank digital currencies (CBDC).
The EU Committee on Economic Monetary Affairs (ECON) published an industry analysis titled "Competition issues in the Area of Financial Technology.” When it comes to the functionality of crypto in the EU market, the study predicts that “the arrival of permissioned cryptocurrencies promoted by banks, even by central banks, will reshape the current competition level in the inter-cryptocurrency market, broadening the number of competitors.”
At present, cryptocurrencies like Bitcoin are the “source of disruption for the entire sector” because they “operate in a decentralized way by means of P2P technologies, like blockchain, and without participation or supervision by any central bank or institution." The study claims, however, the central banks could potentially level the competition in the crypto market by complementing or substituting the currencies already in use. Closed and permissioned crypto systems with a supervisory authority could provide a perfect means of fighting tax evasion. Moreover, “direct public participation through a central-bank digital currency” could become “a remedy” for the lack of competition policy in the crypto sector.
US SEC Rejects Winklevoss Twins’ Revised ETF
Once again the Winklevoss Twins’ Bitcoin ETF hit the headlines. The U.S. Securities and Exchange Commission rejected a second attempt by Cameron and Tyler Winklevoss, founders of Gemini exchange, to list the first-ever cryptocurrency ETF on a regulated exchange. The ninety-two page report explains the verdict was motivated by concerns regarding investor risk and high possibility of fraud and crypto market manipulation.
SEC Commissioner Hester M. Peirce has published a statement of official dissent, stating, “I believe that the proposed rule change satisfies the statutory standard and that we should permit BZX to list and trade this Bitcoin-based exchange-traded product (‘ETP’).” Peirce voices her concern regarding the Commission’s approach. She goes as far as to claim the decision “undermines investor protection by precluding greater institutionalization of the Bitcoin market” and “sends a strong signal that innovation is unwelcome in our markets.”
BitFunder Operator Pleads Guilty To Federal Charges
The operator of Bitcoin stock exchange BitFunder Jon E. Montroll faces as long as 20 years in prison after pleading guilty to federal charges of having defrauded investors and lied to the U.S. Securities regulators.
Montroll is charged with securities fraud and obstruction of justice. Back in 2013, he provided false statements to the U.S. Securities and Exchange Commission when it investigated the theft of 6,000 BTC from WeExchange.
According to prosecutors, Montroll spent a portion of BTC belonging to the exchange’s users to cover his own personal expenses and “repeatedly lied during sworn testimony and misled SEC staff to avoid taking responsibility for the loss of thousands of his customers’ Bitcoins.”
Google Partners With Two Blockchain Companies
Despite a persisting cryptocurrency ad ban, Google is increasingly betting on blockchain technology. This week the search giant announced two significant partnerships with Digital Asset and BlockApps. The combo will bring distributed ledger solutions to Google’s Cloud Platform.
“We’re partnering with Google Cloud to provide developers with a full stack solution so they can unleash the potential for web-paced innovation in blockchain,” said Blythe Masters, CEO of Digital Asset, in a statement. “This will reduce the technical barriers to DLT application development by delivering our advanced distributed ledger platform and modeling language to Google Cloud.”
These new partnerships indicate Google’s move to join companies such as Microsoft, IBM, and Oracle Amazon Web Services, which introduced blockchain platform for DApps back in April 2018.
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