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Cryptocurrency and Blockchain Video News Update 20th Sept 2019

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crypto and blockchain news 20 sept 2019

Ethereum Privacy Startup – Aztec – Launching New System
Ethereum (ETH) privacy startup Aztec recently announced the launch of its zero-knowledge succinct non-Interactive argument of knowledge (SNARKs) generation via a cryptographic ceremony called Ignition. The startup also announced the closing of its latest round of investment with participation from A.Capital, Coinbase and Libertus Capital.
The multi-party computation ceremony is meant “to generate a set of encrypted points which will be used to derive all future Aztec notes.” The process will build an open-source “reference string” that the company believes will be used by both Aztec and future cryptosystems.
Will Aztec continue to get funding and how will it do in the future?

Bitcoin Laundering Earling Very Little On Silk Road
The second annual research report by cloud security provider Armor shows that criminals are selling cash for bitcoin on dark web marketplaces at a seriously reduced rate. Armor researchers looked into 12 different hacker marketplaces over five months and determined that cash was being sold for bitcoin at pennies on the dollar. The report states that dark web markets are doing well even with the continued crackdown on their existence. More concerning for crypto users was the discovery that criminals were using bitcoin to aid in laundering stolen funds. What is the future of crypto transactions on the dark web?

Will Trump Ban The Venezuelan Petro?
Senate Bill 1025 will likely be passed on Monday which would make Venezuela’s Petro cryptocurrency illegal to use in the United States. Although it may seem to be harmless at first glance, it ultimately could prove to be the first blueprint on how to ban a cryptocurrency — and that is a scary thought. If the bill does pass, and the people in the halls of power in Washington see it as a “success” – what is the likelihood that the government may ban other cryptocurrencies in the future?

Libra Meets With Officials From The European Central Bank
Officials from the European Central Bank (ECB) and 25 global central banks will meet with Libra to assess the financial stability risks of the project. The Committee on Payments and Market Infrastructure, a Financial Stability Board international standard setter and a member of the Financial Stability Board, consists of 28 member banks, including the Bank of England, Deutsche Bundesbank and the Federal Reserve Bank of New York. According to the report, the event will be the first major encounter between Libra’s founders and global policymakers since Facebook revealed its plans for the stable-coin project on June 18. If the governments of the world continue to push pack on Libra, what will the future look like for the asset?

Will The XRP Fork Go Ahead?
The threat of an XRP fork continues.
Twitter user @Crypto_Bitlord, who has over 100,000 followers and claims to own XRP, is rallying ripple investors disappointed with the token’s performance to split from the original ledger due to Ripple’s alleged XRP dumping. The plan follows a moderately popular Change.org petition submitted by the same Twitter persona titled “Stop Ripple Dumping,” which has amassed more than 3,500 signatures over the last four weeks. Ripple is one of the fastest digital assets in the marketplace, and more or less a household name. Should this fork come to fruition, what will happen to the asset?

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Has Facebook’s Libra Made People Reconsider USD As Global Reserve Currency?

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Has Facebook’s Libra Made People Reconsider USD As Global Reserve Currency
Has Facebook’s Libra Made People Reconsider USD As Global Reserve Currency?

Major global economists credit Facebook’s Libra with pushing the world to start reconsidering the United States dollar as anchor currency.

At a Jan. 23 panel at the annual World Economic Forum (WEF) in Davos, officials and financial experts discussed one of the most important mechanisms in the global financing system — the U.S. dollar, which has become the world’s reserve currency.

Called “Challenging the Dominance of the Dollar,” the panel focused on factors that make the U.S. dollar the world’s dominant payment system and reserve currency, as well as the fact that countries over the globe are trying to reduce their dependency on the dollar. The panel featured a number of officials including Brazil’s Economy Minister Paulo Guedes and Gita Gopinath, chief economist at the International Monetary Fund (IMF). Hosted by Adam Tooze, director of the European Institute at Columbia University, the panel also included Portugal’s Finance Minister Mario Centeno and Zhu Ning, a professor of finance at Tsinghua University. 

Image result for us dollar

Gopinath, who is also a director at IMF’s research department, opened the panel with comments that named Facebook’s cryptocurrency initiative Libra as a major factor that made everyone in global finance reconsider the status of the dollar as anchor currency. Brazil’s Economy Minister supported the statement, adding that new technologies like blockchain are paving the way for future currency that will be digital:

“So then there is the new technology, the digital, the blockchain. […] The Libra episode is just evoking a future digital currency.”

Gopinath continued the U.S. dollar still remains attractive, pointing out that one of the most important features that make the U.S. dollar attractive is trust and stability:

“Why is it that the dollar has such dominance? It does because it is the currency that provides the best stability and safety. […] It makes complete sense to hold your value in dollars because if things go bad, it gains value.”

The fact that WEF economists now agree that Facebook’s Libra has pushed global authorities to start reconsidering their approach to the world’s reserve currency, is definitely reinforcing the status of emerging fintech technologies as well as blockchain. Meanwhile, some officials have already warned that projects like Libra can have a huge impact on the U.S. dollar. In August 2019, Mark Carney, the governor of the Bank of England, suggested that Libra-like digital currency could replace the U.S. dollar as the world’s reserve currency. 

Carney said that replacing the dollar with a digital currency would be a better option than allowing its reserve status to be replaced by another national currency such as China’s renminbi. Libra initially proposed to back its crypto project by several national currencies including the U.S. dollar, euro, Japanese yen, British pound and Singapore dollar, allegedly excluding the Chinese yuan from the group of reserve assets.

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Litecoin Is Not ‘Digital Silver’ According To Report

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Litecoin Is Not ‘Digital Silver’ According To Report
Litecoin Is Not ‘Digital Silver’ According To Report

The start of 2020 has seen considerable gains in the cryptocurrency market as a whole. Recently, Bitcoin (BTC) price reached a 2-month record high crossing above the $9,000 mark as well as other cryptocurrencies such as Litecoin (LTC) reaching $62.80 which is the highest price seen since mid-November 2018.

Cryptocurrencies’ volatile behavior is one of the main concerns raised by researchers and it complicates the argument that Bitcoin should be classified as a traditional investment asset and that it is a reliable store of value. Amid those discussions, Bitcoin has been closely compared to gold, while Litecoin has been associated with being “the silver to Bitcoin’s gold.” 

New data suggests that the actual correlation between Bitcoin and gold is not significant, as well as gold’s explanatory power of Bitcoin returns. Nevertheless, Bitcoin is still frequently compared to gold, particularly as a potential safe-haven asset. Since October 2019, silver prices have approached new record-highs. But does the latest data support the argument that Litecoin is the silver of cryptocurrencies? Could Bitcoin instead of Litecoin be closer to silver than to gold?

Our data — from May 2013 until December 2019 — shows that Bitcoin and Litecoin returns are very positively correlated (0.67) with 1 implying a strong positive correlation and 0 meaning that the assets are not correlated. A reading of -1 shows that the assets are completely inversely correlated. Meanwhile, the correlation between silver and Litecoin returns is close to zero (0.026), which is similar to Bitcoin’s correlation with silver (0.0025). We further analyzed the correlation between the lagged silver returns and the two assets. In other words, the correlation between yesterday’s silver returns and today’s Litecoin and Bitcoin returns were compared. However, the results are even more discouraging, since both show negative correlations with the lagged silver returns. Bitcoin’s correlation was -0.03 while Litecoin’s was -0.05.

Image result for litecoin

Analyzing the rolling correlations provides a wider view and each data point in the diagram above refers to the correlation of silver and Bitcoin returns (BTC/silver), and between silver and Litecoin returns (LTC/silver) over the last 30 days. One can see that the correlation between Bitcoin and silver, and Litecoin and silver, is very similar across time during both negative and positive periods.

Hence, both Bitcoin and Litecoin have a small correlation and similar relationship with silver. Thus, the Litecoin as “digital silver” narrative is challenged by these very low correlation values. Moreover, it’s no surprise that Bitcoin has surpassed both Litecoin and silver as the best investment option over the past ten years.

The data, however, suggests that silver returns may work as a predictor for future Litecoin returns. From the model employed, if silver’s return rose by 1% yesterday, we can expect that Litecoin returns may decrease by -0.232% today. This statistically significant result can lead investors to assume that silver returns may work as a predictor for future Litecoin returns in a negative way. Similar outcomes were not found in the case of Bitcoin, however. The ability to predict prices has been the holy grail of financial markets, hence the importance of this relationship between returns. Even though both crypto assets show a very low correlation with silver, the results for the lagged returns shed some light on the relationship between silver and future Litecoin returns. 

Looking forward, investors may want to look at silver returns to draw strategies when buying/selling Litecoin based on this past silver return’s analysis. However, any strategy has to consider the fast-changing crypto market environment and careful analysis over different time periods, which can cause different conclusions. Nevertheless, these findings can help us to conclude that Litecoin as the digital equivalent of silver is far-fetched due to the low correlations. However, we do highlight the value of investigating the digital silver narrative by establishing a new connection between returns, which is crucial for investors.

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Ethereum Scalable Harberger Tax Contracts Deployed to Raise Funds for Endangered Animals

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Ethereum Scalable Harberger Tax Contracts Deployed to Raise Funds for Endangered Animals

A platform called Wildcards has successfully deployed scalable Harberger tax contracts on the Ethereum blockchain for the first time in an effort to save endangered animals.

Specifically, users of the Wildcards platform can buy non-fungible animals tokens, but immediately must put the token up for sale so that someone else buys it and funds continue to be raised. In order to prevent a user from setting a ridiculous selling price, the user must pay a percentage of the selling price, which is called a Harberger tax.

Although users must sell their tokens, the platform records their stats, so they can show off how much they have donated to charity if they desire.

The Wildcards platform is not limited to raising funds for endangered animals either. Any charity can raise money with Wildcards. For example, koala non-fungible tokens might be traded in order to raise funds for the Australian wildfires.

Overall, this is an excellent example of how blockchain technology can be used to raise funds for charitable causes.

 

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