A case of crypto traders locking in holiday gains? Whatever the reason, the price of bitcoin spent much of Saturday in decline, as the world's largest cryptocurrency saw a nine percent drop over the 24-hour span. Sunday's session has so far seen that drop intensify, with the price down nearly 12 percent as of 4:00 UTC. Just hours away from a launch on a major futures exchange, bitcoin is now down nearly 25 percent from an all-time high of $17,117 set earlier this week, with the price hitting a low of $13,152 today, data from the CoinDesk Bitcoin Price Index reveals. That said, bitcoin wasn't the only cryptocurrency affected. According to data from CoinMarketCap, all but one of the top 50 assets by market capitalization have seen 24-hour declines. At time of publication, the total value of all publicly traded cryptocurrencies was down 8 percent from its recent highs, falling from a high near $400 billion to $367 billion. Still, that's not to say there hasn't been periods of upward movements. A look at the market's most recent session (18:00 to 24:00 UTC) indicates litecoin, bitcoin and IOTA all gained more than 5 percent in the 6-hour span (despite being down on the day).
Data further suggests declines may have been limited to a poor afternoon session on Saturday (12:00 to 18:00 UTC), as data from CoinMarketCap shows that the five best performing cryptocurrencies during the period all saw declines.
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France's finance minister unveiled Friday a decree that would make it the first nation in Europe to allow the trading of some non-listed securities using the blockchain technology that underpins cryptocurrencies. The decree, presented by Finance Minister Bruno Le Maire to the government, should enter into force by July at the latest and will apply to non-listed financial securities that EU law doesn't require to be traded via an intermediary, a market worth potentially more than 3 trillion euros. In particular this includes shares in mutual and hedge funds, negotiable debt securities, and unlisted stocks and bonds. Blockchain technology debuted in 2009 as a public, encrypted ledger for the digital currency bitcoin. It has drawn interest from the established financial sector in recent years because of its potential for securely tracking transactions, allowing anyoneto get an accurate accounting of money, property or other assets. Blockchains record transactions as "blocks" that are updated in real time on a digitised ledger that can be read from anywhere and does not have a central recordkeeper. It is considered to be secure as all changes should be made simultaneously among all users. "The use of this technology will permit fintechs and other financial actors to offer new solutions for exchanging securities, solutions that are faster, cheaper, more transparent and more secure," Le Maire told journalists.
Fintechs are startups trying to shake up the financial sector via the introduction of new technology. Le Maire said the decree "is a way of telling firms 'come do live tests here, in a secure legal framework'." Becoming the first in Europe to authorise blockchain trading will increase the attractiveness of Paris for fintechs and encourage innovation, he added. Sources: AFP Australia is set to be the first securities exchange to switch to blockchain technology. Other exchanges are also experimenting with similar transitions. Blockchain Bound In the latest high-profile switch to blockchain technology, the Australian stock market will become the world’s first blockchain-based stock exchange. The Australian Securities Exchange (ASX) announced that it will begin using the tech to clear and settle trades. This move has been in the works since January 2016, when the ASX began working with US-based blockchain startup Digital Asset Holdings to develop a blockchain-based system. The exchange will outline its transition to the new technology in March. The exchange is currently running on a system known as the Clearing House Electronic Subregister System (CHESS), which has been in use for decades. The new system could allow for the savings to the tune of tens of millions of dollars, according to Michael McCarthy, chief market strategist for CMC Markets in Sydney, speaking with the BBC. The implementation of the tech will help to make clearing and settling transactions less expensive, easier, and faster by removing the third-party middleman that banks currently have to go through. Benefits of BlockchainIn a press release, Digital Asset’s CEO Blythe Masters said, “After so much hype surrounding distributed ledger technology, today’s announcement delivers the first meaningful proof that the technology can live up to its potential.” The technology is a decentralized method of digitally recording data — in this case, transactions — and verifying them as having occurred. Instead of the ledger being held on a single computer or server, it is distributed over a network of computers, each having to verify the accuracy of a transaction. In theory, this makes the ledgers that use the tech virtually unhackable. However, after some high-profile hacks, the development has yet to live up to its promise.
Other major securities exchanges around the world, including the Nasdaq, the London Stock Exchange, and the Japan Exchange Group have also been looking into implementing blockchain technology. Even so, finance is not the only area in which implementation of blockchain could be transformative. Businesses and governments could benefit from its potential cost-saving effects as well as increased security and transparency. Sources: BBC News
Bitcoin is a poor currency and a crazy investment -- but the technology behind it is a real breakthrough.
An influential new recruit has joined the chorus of bitcoin skeptics. The chief investment officer of UBS, the world’s biggest wealth manager, says it’s too risky to be added to the firm’s portfolios -- and his assessment is relatively mild. Others have called it “the very definition of a bubble” and even “a fraud.” Those stronger terms are justified, especially after the latest spell of wild price volatility. But the idea underlying bitcoin -- blockchain, or distributed-ledger technology -- could be transformative.
The problem with bitcoin and other so-called digital currencies is that they’re a misuse of this technology. As either a new form of money or an investment, bitcoin has fatal disadvantages.
Tokens that are privately created -- "mined,” if you insist -- can succeed in a limited way as a means of exchange and be used to execute certain kinds of transactions. (Cigarettes in prison are a kind of currency.) But as a reliable store of value, bitcoin is much less useful, because its volatility is so extreme. The value of ordinary currencies is underwritten by governments and stabilized by central banks acting as trusted monopoly producers. Bitcoin and its rivals leave those vital roles vacant. Moreover, bitcoin has no fundamental value as an asset -- no stream of future income, no ultimate assurance of liquidity or security, and (unlike gold, say) no alternative use. Its scarcity (hence some floor on its value) is purportedly guaranteed by the underlying technology, but most of its buyers simply take that on trust. Should they come to doubt that guarantee, its price will collapse.
In the meantime, bitcoin’s utility as a means of exchange depends on official tolerance -- a point rightly emphasized by UBS’s Mark Haefele. That tolerance cannot be taken for granted, especially as bitcoin’s appeal rests so much on the anonymity of its users. At the moment, its comparative advantage is its usefulness for illicit purposes.
All this said, the distributed-ledger technology that underlies bitcoin is potentially very powerful. By reducing the need for central intermediaries, it holds out the promise of processing transactions of various kinds more efficiently than today. Many banks and exchanges are exploring these applications.
Blockchain technology might also be used one day to produce new kinds of central-bank money. Central-bank digital currency could start to replace the electronic payment systems that financial institutions use with each other. A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash.
All these ideas are worth study now. And they’ll still be worth pursuing after the bitcoin bubble bursts. Source: Bloomberg
Blockchain technology in the local transportation or taxi industry is only the continuation of an evolution that has gone on for centuries. Mankind has long sought more efficient technologies both in transport service providing and industrial administration.
From ancient forms of transportation that involved trekking, the use of animals and carts, to the complexity of present-day machines, the transportation industry has developed into an organized ecosystem with basic administrative departments.
Taxis are everywhere
The local taxi systems that exist in almost every major town and city across the globe have proven to be quite essential to modern life. Given the importance of commuting in daily life, it’s unsurprising that taxis are in high demand and the industry is exceedingly competitive. It is estimated that the global taxi market fluctuates between 50 and 100 bln dollars. Traditional taxi management systems have revolved around centralized organizations. For instance, in the city of Lagos, Nigeria, local unions and associations demand that every taxi operator must be registered and pay periodic dues and levies for running the association. This is supposed to be a way of ensuring proper licensing of taxi drivers, but the centralized nature of its management leaves room for misappropriation and poor management. The benefits of decentralizationThe introduction of partially decentralized taxi systems like Uber and Lyft introduced some necessary competition into the taxi industries. This has provided commuters with more options, leading to reduced fares and better quality service. However, despite the extent of decentralization that is introduced by these systems, they are still governed by a single database and run by a single company. Blockchain takes it a step furtherAs Blockchain implementations are speedily sweeping across every industry, signs of the technology overtaking the taxi industry are clear already. For an industry that has been continually evolving over time and across ages, moving into a new phase will not be a surprising development at all.
According to Tomas Peleckas, Founder of A2B Taxi:
Licensed taxi drivers are essential to the industry for purposes such as security and appraisals. The situation in the market is an inspiration towards the creation of a platform designed to connect customers with professional and accredited drivers directly. Providing a mobile application for customers to find a licensed driver, as well as drivers to manage their business more efficiently will go a long way in creating a sanitized taxi industry. It is an essential tool for both the security of commuters and motivation towards quality services. Implementing the concept of tokenization, or using Blockchain-based apps to manage local transportation systems is a development that has been long coming. It’s likely that many taxi services based on Blockchain and tokenization will spring up. This is largely due to the various benefits that Blockchain offers, especially in the area of personal control and decentralization. For example, imagine traveling to a new city where the local currency is totally different from where you are coming from, and you need taxi services to take you from the airport to a hotel. Using a Blockchain-powered service automatically eliminates the need for any form of currency conversion as the value of the token remains the same and is available all over the world. A technology for the common manIn many circles, Blockchain is described as the technology for the common man. This is a description that is proving its correctness in by giving regular people more control over their resources. It also services to open up the marketplace in various industries while enabling a level playing field for all involved. Blockchain implementation will automatically enable a transparent industry; opaque unions and associations will no longer override the will of taxi drivers and commuters. Instead, anyone who holds a Blockchain token will retain full control of all the benefits associated with such tokens, be it in exchange for other tokens or fiat, or for the payment of taxi fares.
This week has been a rollercoaster ride for Bitcoin – and could signal an equally unpredictable future.
What happened this week? The eight-year-old cryptocurrency has pulled in droves of investors in recent months. But this week it hit record-breaking highs, soaring over $10,000 (£7,493) in value. At the start of 2017 a Bitcoin was worth just $1,000. And yet within 24 hours of hitting the benchmark it had climbed past $11,000 before losing nearly 20% of its value, to just barely $9,000.
This rollercoaster ride, and resulting headlines, prompted the Bank of England to warn “investors should do their homework” on Bitcoin: some say the currency is peaking and based on nothing but a speculative bubble, while others feel it could have further to rise.
“This week is no different,” says David Yermack, professor of finance and business transformation at New York University. “Bitcoin has always been very volatile. Anybody who invests should have a large amount of risk tolerance.” Remind me, what exactly is it? Ten years ago, the idea of a futuristic, invisible currency – one that’s not linked to any government and that lives on the internet – might have been dismissed as a possible line from The Matrix or Blade Runner. But that’s what it is: a digital alternative to notes or coins. It’s still not an official currency as it’s not issued by any government. It can be used as payment online and can be transferred digitally, avoiding the bureaucratic quicksand of banking hours, transaction fees, and waiting periods. The total nominal value of every bitcoin in existence – the first type of digital currency of its kind – is now over $167 billion. What comes next? Some say breaching the $10,000 mark signals a new chapter for Bitcoin. “We’re in the second inning of a nine-inning baseball game,” says Ronnie Moas, founder and director of research at Standpoint Research, who specialises in investment, stock, and cryptocurrency recommendations. “What do you think is going to happen when this goes mainstream?” He thinks it could end up being as lucrative as Amazon or Google stock, and for him it is worth risking a decent sum in Bitcoin, rather getting caught on the sidelines. “In the direction we are headed, there are going to be 200 million people trying to get their hands on a few million Bitcoin.”
Moas believes the $10,000 mark is “basically a stamp of approval,” almost like a celebrity endorsement. “When it was at $1,000, it had no credibility – now people are saying ‘this looks interesting’.”
Not everyone is so bullish. “It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down,” Nobel Prize-winning economist Joseph Stiglitz told Bloomberg. Bitcoin’s relevance to the average person on the street, however, is still a little intangible. Although there are a handful of exceptions, you can’t use Bitcoin in most shops because its legal status varies by country. In many places, the cryptocurrency’s semi-anonymous nature stokes fears of money laundering or an increased sale of illegal goods. Government intervention? While some think Bitcoin is the future of money, others think that the party will inevitably screech to an halt once governments get serious about trying to regulate it. Right now? “It’s a total mess,” says Tadge Dryja, research scientist at MIT’s Digital Currency Initiative, when describing the decentralised nature of Bitcoin – meaning, there is no central body like a government or bank that oversees its distribution or use. Dryja and his team are working on systems that will make Bitcoin safer and easier for Bitcoin holders to use in the future. But as it stands he describes the digital currency as “dangerous.” “I guess the best analogy is that of gold: governments can regulate the institutions that deal with it but not the metal itself. They can’t decide if it’s going to weigh less or be purple instead of yellow. They will have to regulate what is regulate-able.” That’s why some think eventual regulation will burst the bubble. Kenneth Rogoff is a professor of public policy and economics at Harvard University and former chief economist at the International Monetary Fund. He thinks that there could be a broad international crackdown, and that even in countries like Japan or Australia which have gone to great lengths to legalise bitcoin, it won’t be further legitimised because governments cannot allow people to make big transactions in ways that can’t be traced.
At the moment, he says governments are sitting back and letting Bitcoin foster technological innovation. But while Rogoff predicts that Bitcoin will struggle as more competitors emerge (Bitcoin may be “the MySpace of cryptocurrencies,” he says), the regulation issue is what will prove the ultimate challenge.
“It’s just nonsense to think that we’ll reach a situation where everything is done in cryptocurrency and that no one pays taxes,” Rogoff says. He says in the currency game, “the government makes the rules and they can keep changing them until you can’t win. “The fundamental thing is that governments will pull the rug out at some point,” he says. “It will take some international coordination. I don’t think [Bitcoin] will be worthless – there may be some rogue states that support it.” But for now? The past week’s volatility could signal the “beginning of a really wild ride,” for Moas. Whether it soars or crashes though, one thing’s for certain, Dryja says: “There will be plenty of jobs for lawyers going forward.” Sources: BBC |
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