Robert Schwertner e. U. ㅣRobby Schwertner 🦋 ㅣ Blockchain nonfluencer ㅣ Crypto blogger ㅣ #ReturnOnSociety ㅣ Beratung zu Forschungszulage 🇩🇪 und Forschungsprämie 🇦🇹
I dream of applications beyond Bitcoin and cryptocurrencies. Blockchain use cases with added value to society, a #ReturnOnSociety
Blockchain use cases I am currently working on:
Security Token Offering for real estate, energy blockchain - proof of origin of green energy / PV panels, relief aid & blockchain, consultancy project on blockchain and Mobility As A Service (Maas), Age Verification Systems on Blockchain, Smart Cities related blockchain use cases, Islamic Banking & Blockchain (Malaysia).
► Questions? Ideas? Dreams? Visions?
mail to: robert(@)schwertner.com
Reuters reports that PayPal Holdings announced on Wednesday it will allow customers to hold Bitcoin and other virtual coins in its online wallet and shop using cryptocurrencies at the 26 million merchants on its network.
The new service makes PayPal one of the largest U.S. companies to provide consumers access to cryptocurrencies, which could help bitcoin and rival cryptocurrencies gain wider adoption as viable payment methods.
The San Jose, California-based company hopes the service will encourage global use of virtual coins and prepare its network for new digital currencies that central banks and companies may develop, President and Chief Executive Dan Schulman said in an interview.
“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” he said.
U.S. account holders will be able to buy, sell and hold cryptocurrencies in their PayPal wallets over the coming weeks, the company said. PayPal plans to expand the service to its peer-to-peer payment app Venmo and some other countries in the first half of 2021.
The ability to make payments with cryptocurrencies will be available from early next year, the company said.
Other mainstream fintech companies, such as mobile payments provider Square Inc and stock trading app firm Robinhood Markets Inc, allow users to buy and sell cryptocurrencies, but PayPal’s launch is noteworthy given its size.
The company has 346 million active accounts around the world and processed $222 billion in payments in the second quarter.
PayPal’s shares were up 4% at 1418 GMT, set for their best day in a month.
Bitcoin hit its highest since July 2019 on the news. It was last up 4.8% at $12,494, taking gains for the original and biggest cryptocurrency above 75% for the year. Cryptocurrency market players said the size of PayPal meant the move would be a plus for bitcoin prices. “The price impact will be positive overall,” Joseph Edwards of Enigma Securities, a cryptocurrency brokerage in London, said. “There’s no comparison with regards to the potential exposure between the upside of PayPal offering this, and the upside of any similar previous offering.”
Bitcoin and other virtual coins have struggled to become established as widely used forms of payment despite being around for more than a decade. Cryptocurrencies’ volatility is attractive for speculators, but poses risks for merchants and shoppers. Transactions are also slower and more costly than other mainstream payment systems.
PayPal believes its new system will address these issues as payments will be settled using traditional currencies, such as the U.S. dollar. This means PayPal will be managing the risk of price fluctuations and merchants will receive payments in virtual coins.
“We are going about it in a fundamentally different way to make sure we provide the maximum amount of safety to our merchants,” Schulman said.
PayPal’s service comes as some central banks have announced plans to develop digital versions of their currencies, following a Facebook-led <FB.O> cryptocurrency project Libra in 2019, which was met by strong regulatory pushback..
PayPal was among the founding members of this project but dropped out after a few months.
PayPal has secured the first conditional cryptocurrency licence from the New York State Department of Financial Services. The company will initially allow purchases of bitcoin and other cryptocurrencies called ethereum <ETH=BTSP>, bitcoin cash <BCH=BTSP> and litecoin <LTC=BTSP>, it said.
PayPal is teaming up with cryptocurrency firm Paxos Trust Company to offer the service.
Source: Yahoo Finance, reporting by Anna Irrera and Tom Wilson in London. Editing by Richard Chang and Jane Merriman
Find the original article here (in German), transcript in English:
In a crisis, people are in need of financial stability. Some take refuge in the purchase of gold and real estate. At the beginning of the pandemic, many also stocked up on cryptocurrencies, causing a short-term rise in the price of Bitcoin and other digital currencies. Would you agree with people saying that Bitcoin is the new gold?
It has certainly proved its value in the crisis. The price of Bitcoin did not skyrocket as much as gold, but it has remained stable and that is a positive sign. That was not always the case. Provided, of course, that the price remains stable, it is a good store of value. Like gold. It is the digital gold! Statistics are showing that 31 percent of the working population in South Korea has invested in cryptocurrencies. In Austria, it is only two to three percent.
But in view of the exchange rate fluctuations, you would not fill your safe with it.
To invest in Bitcoin is at present still like going to the casino. You can try it out with smaller amounts. It is not there to save money for grandchildren or to believe that you can make a big fortune. It should be amounts that you are also willing to lose. It is still a risky investment. But it is the future, the technology is still in its infancy. However, blockchain technology can do much more than just serve as a portfolio.
It is held very high by people who want to democratize society more. Why?
First, blockchain enables direct contact between economic partners. You no longer need a bank, but can transfer amounts to other people securely, fast and almost without any deductions. Payment transactions are returned to a direct interaction between the participants, and I think that’s a wonderful aspect. Passing money on through the bank is economic inefficiency. The economy thrives on the elimination of inefficiencies.
Cryptocurrencies are not there to save money or make a big fortune with it. One should be able to easily cope with the sums one uses in case of loss.
But there have been some teething troubles in the past, such as the possibility to launder money or smuggle it past the tax authorities via cryptocurrencies.
For that, people would have had to stick to cash. With it one can drive delightfully to Liechtenstein and open an account. With cryptocurrencies there could even be systems in which the tax would be withheld automatically. In this sense, cryptocurrencies would be an advantage, not a disadvantage.
A new directive is currently being negotiated in the EU Parliament to make cryptocurrencies less vulnerable to crime. How can one imagine this, if anonymity prevails here?
Bitcoin is no longer anonymous. It is a combination of transparency and anonymity. This state is called “pseudonym”. In other words, it can be traced very well when which money flows were moved where. There is also a special forensic department at the Ministry of the Internal Affairs that can successfully track how companies send their Bitcoins back and forth. That is an important development. Control is a good thing. Cryptocurrencies that remain completely anonymous probably have no future.
You mentioned trust. When it comes to money, trust is linked to the state. How can blockchain technology replace that?
Blockchain is actually called the trust technology. People trust the algorithm. No one can steal the encrypted codes.
But there are repeated reports of hacked cryptocurrency exchanges.
But that doesn’t happen because the blockchain would be insecure. But because, as with money, many a storage location be insecure. If somewhere a theft is done, no one blames the monetary system actually. To Bitcoin: There were certainly criminals who pulled money out of people’s pockets with the promise of making them rich. But here, too, the system is not the culprit. The Bitcoin code is public and has been verified thousands of times. It is very robust. So far Bitcoin is not has been hacked. In this sense Blockchain interweaves transactions with each other, as in a solid fabric. In this sense, one trusts the programming.
What if the programmer makes a mistake?
This happens with blockchains again and again, and also with new cryptocurrencies. We live in an age comparable to the conversion from horse-drawn carts to automobiles. Of course, there will be the odd mistake in development. But generally, the advantages of the automobile will clearly outweigh the disadvantages.
Are cryptocurrencies the death of banks?
I don’t think so. The systems will converge, i.e. the banks will converge to blockchain. We will see a new world of money. The currencies will converge and offer bitcoin-based currencies. The EU is still in discussion. But China has been working on a digital renminbi for three years. It is already being tested as an app among 500,000 workers in some regions. And it works. The central bank also has access to this currency again.
You mentioned other possible applications above.
Current developments are moving towards services being integrated into products via blockchain. In the case of industrial companies, this is about payment transactions, accounting and other important things. In everyday life, the forms of application are even more colorful. The Austrian blockchain company “Riddle & Code” has programmed a “Car Wallet” for Daimler Chrysler, an electronic purse for cars. With it, cars will be able to pay parking fees or refueling independently in the future. A payment system integrated into the car is an important component for autonomous driving. After all, who is supposed to pay for services when cars are moving around the streets without drivers?
There remains the disadvantage that only a few people understand the technology and the products are sometimes extremely user-unfriendly. At least this is the conclusion drawn from relevant studies.
In fact, a lot of work still needs to be done on user-friendly solutions. But that in turn is an opportunity for start-ups and many new jobs. It is a long process and it has only just begun.
Alukönigstahl CEO Stefan Grüll Stefan Grüll and Hannes Stiebitzhofer are developing a new business model of a blockchain-based steel trading database dubbed “STEEL but SMART,” which targets traditional use cases. Within the framework of the project, Grüll reportedly founded a separate company called S1Seven GmbH that undertakes all blockchain-related activities.
The system is set to provide stakeholders with clear data on steel products’ origin, account and #industry standards, as well as information about product properties, processing, and deployment. As a result, the company intends to create a single source of complete documentation of the production history. Cool, it could be a breakthrough for many other cases!
and we introduced a section of R&D hubs and #clusters. In the article, you find links to the projects and a short explanation.
There is a surprisingly large number of energy blockchain projects in Austria with a clear sustainability goal, followed by industry and mobility. This collection of projects is the first overview, more to come 😇.
Most projects are located in the capital #Vienna, some in automotive city #Graz, steel town #Linz and of #Mozart‘s birthplace Salzburg.
Forbes reported that Walmart Canada and DLT Labs released the world’s largest full production blockchain solution for any industrial application.
The blockchain-based freight #invoice and #payment reconciliation solution is rolling out across Walmart Canada’s 60 transportation carriers to increase trust, efficiencies and savings between Walmart and its carriers. All carriers in the nation-wide network will be on-boarded by February 1st.
Three goals: 1. Resolve carrier payment issues. 2. Drive efficiency in the ways of working today. 3. Increase visibility and trust in the freight payment process.
Loudon Owen, CEO of DLT Labs: “The new system uses distributed ledger technology to track deliveries, verify transactions, and streamline the payment and reconciliation process among Walmart Canada and its carriers that deliver goods to over 400 retail stores across Canada annually.”
#smartmouth What is DLT? DLT derives from “Distributed Ledger Technology”, a supercategory for blockchain-technology. Blockchain: data stored in chain of blocks.
Chinese blockchain spending in investment and financing deals has dropped over 40% in 2019, according to a new study by Chinese government sources.
Over the course of 2019, #China totally had 245 investment and financing deals, which is nearly 60% less than in the preceding year. Chinese blockchain investment spending has seen the biggest numbers in 2018
According to a joint study by China‘s #Xinhua and financial data platform Rhino Data, the total amount spent in blockchain investment deals has accounted for 24.4 billion Chinese #yuan (€3.2 billion). Officially released by Xinhua Finance on Jan. 15, the study says that that figure dropped 40.8% in 2019 compared to 2018.
However, both the value and number of deals have significantly increased since 2017, the report notes. As such, the year of 2018 remains the peak in terms of blockchain investment spending for China so far, with over 600 deals taking place across the year, while 2017 accounted for just 168 deals, according to the data.
1/ early-stage investments makes 43.3% in 2019
2/ strategic investment increased significantly
3/ Beijing, Shenzhen and Hangzhou – Alibaba Group headquarters – attracting the biggest blockchain
After months and months of speculation, Facebook has finally revealed the details of its would-be cryptocurrency challenger. However, what looks very revolutionary, is rather to be seen critical !
Facebook intends to launch a cryptocurrency in 2020, that´s what they say, Marc Zuckerberg´s video, pathetic how Unbanked are used as an excuse.
Visa and Mastercard left the Libra foundation, read more
PayPal and eBay left the Libra foundation in October 2019, read more
Vodafone left the Libra foundation in January 2020, read more
One is for sure: Libra will have a huge impact on the US-Dollar, maybe on the EURO and especially on currencies of countries with weaker currencies.
It is also important to see the power of Facebook: it has 2,4 billion active users, that´s 40% more that China has inhabitants which has 1,4 billion! No wonder that Chinese president Xi Jinping is pushing for their own digital Yuan.
LibraMyth No 1: A blockchain allows Libra to function
Libra is enabled by what is called in Zuckerberg´s White paper as the “Libra Blockchain” which is described as a “Decentralised Programmable Database”. However, Libra blockchain is a lot but NOT a blockchain. Some of the very important characteristics are missing. Normal blockchains add blocks to the chain. Libra neither uses blocks nor uses a chain! According to their technical paper it will be a “single data structure that records the history of transactions and states over time”.
Facebook wants to define the expression blockchain, because they use technologies associated with blockchains such as Merkle Trees, hashes, and a consensus mechanisms and therefore it should be called blockchain. However, I am very against the fact that Facebook should get to decide what a blockchain is and what not. And furthermore: What Facebook tries to achieve definitely does not need a blockchain at all.
LibraMyth No 2: Libra is decentralised
In the Libra Whitepaper provided, it is stated that Libra is a decentralised system. However, unlike Cryptocurrencies such as Bitcoin, Libra won´t use the Proof of Work consensus mechanism that incentivises miners to keep the network going. Instead Facebook and the other 27 founding partners of the Libra association will run their own nodes that validate Libra transactions. The partners include Uber, PayPal and MasterCard. Each one has paid $10 million for the privilege. Facebook says that Libra will move to a more permissonless system in the future. But we don´ t provide any details on how and when that will happen.
LibraMyth No 3: Libra can reduce payment fees
Fees for transferring moneyare high due to several reasons like political ones or technical which are associated with the complicated process of moving money from one jurisdiction to another. Although it is true that fees for cross-border payments are way toohigh, we already have many companies which try to work on that issue like TransferWise or Revolut. However, as long as the majority of people use US-Dollar or Euro or other FIAT currencies they will have to exchange their money into Libra which will come at a cost, which means: There are transactions costs twice: in and out of Libra.
LibraMyth No 4: Libra protects users from data-based conflicts of interest
LibraMyth No 5: Facebook wants to help the Unbanked people
Seriously??? Facebook wants you to think that Libra is about helping the unbanked and the reason for introducing the Libra cryptocurrency introduction shall increase financial inclusion and to bring in the in the 1.7 billion adults around the world who remain outside the banking system. But it´s not clear how the unbanked will be able to buy Libra when these people have no bank account particularly if Libra wants to keep regulators happy by doing proper checks on its users to avoid money laundering. Libra is also unlikely to help people in countries with rapidly depreciating currencies as those countries tend to put in capital controls to prevent a run on their banks. Facebook has never shown interest in the unbanked before, and I am not sure why it´s suddenly so interested.
LibraMyth: No 6 Libra legitimises Bitcoin
Libra calls itself a “low volatility cryptocurrency”, but just as the Libra blockchain isn´t a real blockchain, Libra isn´t a real cryptocurrency either! That´s because it´s issued by a centralised entity, doesn´t run on a real blockchain and rather than being subject to the whims of the cryptomarkets it is pegged to a basked of fiat currencies. So it´s much more akin to something like the Gemini dollar, a stable coin issued by the Winklevoss twins exchange. And it is probably not a coincidence that the twins´ longtime rival Mark Zuckerberg chose another star sign for the name of the coin.
LibraMyth No 7: Libra will comply with all regulations
Libra says its Founding Members are “committed to working with authorities to shape a regulatory environment that encourages technological innovation while maintaining the highest standards of consumer protection”.
Libra says its Founding Members are committed to working with authorities to shape a regulatory environment
Really? Openly stating the intent “to shape a regulatory environment” rather than comply with the existing regulatory environment is a veiled assertion that Facebook is more powerful than the state, and that regulators should have to buckle to its will. While Facebook probably does have some sway over national bodies, to assume it can also sway international regulatory bodies like the BIS — which happen to have a bee in their bonnet about the use and abuse of customer floats by non-banks — is truly ambitious.
Overall the use of words blockchain and cryptocurrency is more about PR value than substance!
And ever thought about the fact that if we have a currency issued by companies: What if these companies are going bankrupt? Are they already TOO BIG TO FAIL? Another interesting aspect is who is NOT part of the consortium: Amazon, Google, Apple. And there is not a single bank! Will talk about that soon!
Blockchain media platform Cointelegraph released statements of 40 renown experts on their conclusions on cryptocurrency and blockchain developments and learnings of 2019 and an outlook on future trends in 2020.
A big setback for the industry this year has unfortunately been the scams that continue to take place in crypto, a recent notable example being the PlusToken (see BBC article)scandal. In terms of the biggest milestones, it is important to note the continued development of the Lightning Network within the ecosystem.
The crash and rebound of the Bitcoin price, the start of the Libra project by Facebook and the announcement of the digital Chinese currency were some of my highlights in 2019.
Personally, I was of course very pleased that we were able to launch one of the most successful crypto funds in the world at Crypto Finance Group with our Crypto Quant Fund in 2019 (this has already won various performance awards).
For 2019, this was a year of big transition for EY. The era of proof of concept is largely over and instead people became focused on going to production for their enterprise solutions. The downside here, though, is that they ran straight into the roadblock of partner adoption. Private blockchains are expensive and they don’t scale up very well, when it comes to partner on-boarding. A study conducted by Forrester on behalf of EY in November 2019 confirmed this. The good news is that by the end of 2019, I think we had largely solved the cost challenges for doing business securely on public blockchains (see here) and we look ahead to 2020 to see the migration of enterprise users to the public Ethereum mainnet. The crypto market also felt like it was treading water in 2019, with big anticipated changes like Lightning not appearing to have much impact. That being said, what may look like treading water on the surface conceals an enormous transformation on the engineering side. For all the obsession around tech firms doing things quickly, the reality is big changes can take a year or more to flow from concept to product to client adoption. At EY, our engineers were very busy in 2019 and this will only continue in 2020.
That crypto found its way onto the “top 10” topics of many politicians and central bankers.
Of blockchain turbulence in China, which ended on a positive note in late October — but which created waves moving out across the rest of the world.
Of increasing legal constraints which have transformed offerings (ICOs) into an option only for those with very well-funded legal and regulatory compliance teams. Still perhaps cheaper than initial public offerings (IPOs) — but the gap is closing.
That business leaders began to recognize hype as being “hype”; to understand that the benefits from blockchain, while very real, have limits, some of which are linked to the “tolerance of change” within their own organizations; and to see that the implementation of blockchain technology, for example, for traceability, can be complex.
That blockchain developers also began to realize the importance of barriers to implementation created by the complexity of supply chains and organizational culture.
There is a growing amount of governments across the globe examining blockchain and cryptocurrencies, including stablecoins, as well as self-regulated and global regulatory standards, which indicate more widespread public adoption. I think in 2020 we will see different experiments tried by many different governments around the globe for adoption, some will work, some may not, but overall, they will have a tremendously positive effect for crypto adoption.
2019 was a year of mining. The hashpower steadily increased throughout the year to reach an all-time high of 100 exahashes, a record for Bitcoin. The hashpower increased even though the price fluctuated wildly and was bearish in general. This shows me that crypto, and more specifically Bitcoin, is here to stay. The confidence the mining ecosystem showed regardless of the price is an extremely good sign for the Bitcoin cryptocurrency industry for future years. It points to the fact that these people mining believe in Bitcoin and its potential. Another huge impression of 2019 for me was the advent of multiple upgrades to the mining protocol, namely Stratum v1. Keep in mind that Stratum v1 has not been updated for basically the whole entire time pool mining becomes a thing. The great brains behind Braiins (pun intended) developed and launched Stratum v2. An important step for further decentralization of the mining process. Additionally, other mining pools like the one I currently work at, Poolin, are also developing a new mining protocol also furthering decentralization. Poolin calls it Bitcoin Universal Mining Protocol, or BUMP, for short. Information on our open-source protocol will be released in 2020.
2019 was the year that kept crypto and blockchain in the headlines of the mainstream media. It was no more a question of what or why — it became a question of when cryptocurrencies would gain prominence, and potentially lead the way.
And just earlier this week, the Bank of International Settlements (BIS), which serves as the central bank for central banks, initiated dialogue to formulate a crypto asset policy for banks worldwide. The BIS wants to design “a prudential treatment for banks’ crypto-asset exposures,” as they phrased it.
Collectively, these are a sign of the extraordinary times that we live in.
Well, we all witnessed the soft and pleasant increase in temperature after the “Crypto Winter,” but the Crypto Spring of the last 6–8 months was more of a sideways movement, which I still think is healthier overall for the ecosystem than if we’d gone straight into another steep price hike. Working as a bridge-builder between the blockchain/crypto world and incumbents and large corporates, what 2019 really stood for is final acceptance that “Crypto is Here to Stay.” For most of us, this sounds like an old narrative, but in the Board Rooms around the world, it’s not. Libra, in its own right, has helped here too, because seeing a large tech firm at the doorsteps launching such an ambitious blockchain project hammers that message straight home.
I joined the Stellar Development Foundation (SDF) in mid-2019, right around the time when we started seeing broader public interest in the blockchain space as a result of new players in the market, like Facebook and JPMorgan. The entrance of these companies helped push blockchain into the mainstream conversation and build more credibility for the technology. It was an exciting moment to jump into the space and join discussions about the potential for the technology we’re building.
In addition to the institutional interest in cryptocurrencies, the rising popularity of stablecoins continued to grow in 2019 — and we’ve witnessed that firsthand as new partners built on the Stellar Network. Whether that was Franklin Templeton using Stellar for a new fund or IBM signing on several banks to issue stablecoins on WorldWire this year, we saw this broader trend playing out in the Stellar ecosystem.
Boring. Exciting. Boring again. That is how I would describe 2019. Things got exciting in the summer when Facebook announced Libra. 2019 was the year of the stablecoin. Although many people do not understand that stablecoins are essentially digitized versions of fiat currencies, it is positive that more people are embracing a digital monetary existence. Stablecoins may prove to be the gateway catalyst into a true cryptocurrency like Bitcoin.
This has been an amazing year filled with opportunities and a lot has been accomplished in the industry. Bitcoin was an absolute rollercoaster, Facebook announced Libra, China has endorsed blockchain while condemning cryptocurrencies.
Bitcoin technology has evolved with a lot of progress being done on Schnorr signatures, while Ethereum has surprised by the growth of DeFi protocols, such as Compound, Synthetix and Uniswap. The value locked in DeFi DApps has exploded from $190 million at the beginning of 2019 to $628 million today. Insane growth that highlights the importance of this industry.
2019 was a formative year for crypto, year of the next leg of the Gartner curve, the beginning of a steady growth. No breakthroughs have been achieved, rather we are laying the foundations for future advancements. I was impressed by a steady growth of enterprise blockchain, finally we can see a breakthrough in the level of understanding of blockchain concepts in business scenarios.
It’s been a great year! Many projects with smart people and good ideas have delivered products and further developments.
At Bitwala, we were of course very focused on our customers: About 12 months ago… with the free bank account and debit card for Bitcoin investors, we are virtually at zero launched. From Berlin, we now serve customers in all 31 countries of the European Economic Area. The customers are happy and so are we.
And so are our investors, by the way: In the summer, we made our largest investment to date ($13 million for a German blockchain start-up). The amount of the funding round and the well-known investors underline that even in a bear market a strong team, an innovative product and the actual implementation convince investors.
2019 was a remarkable year for blockchain and cryptocurrency development. We saw the birth of new trading products: Regulators on both sides of the Atlantic started paying close attention to the benefits of digital assets, and China entered the blockchain race in full force spending billions in its efforts to become the epicenter of development.
For me, undoubtedly the biggest milestone of 2019 was Libra. A seismic shift occurred across the globe following the announcement. Libra successfully goaded central banks around the world to start having a serious conversation about the digitization of currencies.
But it was by no means an easy ride, the prolonged bear market shook the industry. For Utrust, however, this was a blessing in disguise. We put our heads down and focused on building and improving our technology. We have not only survived but have thrived ever since.
At the beginning of this year, I predicted 3 major themes in cryptocurrency for 2019: Cryptocurrency would be embraced as “regtech” by financial institutions and regulators, it would play a vital role in sanctions enforcement, and Anti-Money Laundering practices (AML) would strengthen in Asia.
As it turns out, 2019 was an important year for cryptocurrency in terms of regulations, but more in terms of clarity provided by the Financial Action Task Force (FATF) and FinCEN, than automating banks’ compliance programs and regulatory oversight. Notably, for the first time, FinCEN explicitly states blockchain analysis is an important part of an effective AML solution and a significant factor in cryptocurrency businesses’ ability to comply with the Bank Secrecy Act (BSA). FinCEN makes it clear that Know Your Customer (KYC) processes are also important, and cryptocurrency businesses should expect tough regulatory scrutiny on that as well next year.
We also saw further regulatory clarity from the SEC. For example, the Blockstack Reg A approval was the first approval of its kind and demonstrates a path to SEC-approved IPO-type fundraising with a crypto token. While other firms have previously taken advantage of Regulation A , this is the first time that investors will receive a token rather than shares in the company.
Now that we have the regulatory clarity, I think 2020 will be an important year for embracing cryptocurrency as regtech.
Cryptocurrency did indeed continue to become important to sanctions enforcement, most notably related to fentanyl trafficking. I expect this trend to continue.
While our business expanded in Asia and Anti-Money Laundering practices there are strengthening, we still see the laundering of large amounts of illicit funds through some OTC brokers operating out of China. Funds stolen through the PlusToken scam is a good example of this.
One notable milestone that I didn’t predict was major law enforcement announcements that credit blockchain analysis as a critical tool in identifying suspects and making arrests. The Department of Justice’s announcement of the takedown of Welcome to Video, the largest ever child pornography site by amount of material stored, along with the arrest of its owner and operator and more than 337 site users across 38 countries along with the identification and rescue of 23 minors, was a major event for the industry. Law enforcement discussed how they were able to harness blockchain analysis to make arrests and rescues that otherwise would not have been possible. This was an important example of how blockchains can actually provide greater transparency into financial transactions, not less.
2019 also saw the entrance of major players into the cryptocurrency ecosystem, particularly Facebook and Fidelity. With Libra, Facebook has the opportunity to make cryptocurrency available to their massive user base, leading to its more pervasive use. Of course, this has the potential to create financial inclusion for both good and bad actors, and the risk of money laundering will need to be mitigated. Transaction monitoring will be needed to meet the expectations of regulators around the world. And Fidelity’s launch into custody and trading services for digital assets is also a boon for the industry and will pave the way for further adoption from financial institutions.
Finally, CME Bitcoin futures was an exciting development and I expect it to continue to pick up.
2019 was a turbulent year, to say the least. I think all of us in the crypto community were hoping to reach new heights as far as mass adoption, but we just didn’t get there yet. We are still a relatively small group of crypto nerds, but I’m hoping 2020 is the year that changes that. Without a doubt, Facebook’sLibra had the biggest impact on awareness for cryptocurrencies. Our friends in China announced they were getting into digital currencies and that woke up a few U.S. Senators to start having important conversations about our own digital currencies. By the time the U.S. government gets there, it will be too late.
For 2019, we had a great year at Blockstream. We launched Blockstream Mining and are now one of the largest players in North America now with 300 MW of capacity. We also announced a new product, Liquid Securities, which is a platform that sits on top of the Liquid Network (Bitcoin sidechain) to allow companies to issue tokenized securities. We’re also seeing a lot of traction with the Liquid Network itself as Tether ($4 billion market cap stablecoin) launched support of it, and BTSE (cryptocurrency exchange) announced they will be raising $50 million through an exchange token issued on Liquid.
2019 was a year of consolidation and of developments in regulation, but also of commercial and technical progress. Bitcoin stabilized from the end-2017 hype, and regulators and banks all over the world started taking the topic of crypto assets seriously. Big news included, of course, Libra, ChinaCoin and the development of regulatory frameworks in the EU, Liechtenstein, Germany and other jurisdictions. On the commercial side, the launch of the first futures, ETP and developments of ETP products for Bitcoin and Ethereum, and on both the commercial and technical side, the development and growth of the DeFi services and the development of Ethereum 2.0.
Blockchain means “crypto assets” on the one hand and “DLT” on the other — i.e., applications from the pure corporate context. In the area of “crypto assets,” one can see how Bitcoin and Ethereum, in particular, have developed very positively on the basis of various metrics — but not in terms of price. In “DLT,” one can see that one after the other, companies are now getting enthusiastic about blockchain technology. Industrial companies, banks, etc. — with some delay even the middle class.
The situation of the crypto industry in 2019: “The Party Is Over”. The magical attraction of cryptocurrencies is finally lost in 2019. In previous years, blockchain start-ups issued their own cryptocurrencies and collected fabulous sums from many stupid people, some of whom call themselves investors. Driven by greed and hope for quick wealth, blockchain companies threw money down their throats. However, they forgot the most important economic rule: Every good business needs a coherent business model. That was missing from 99% of the blockchain companies. By 2019, disillusionment was spreading and investors were getting smarter. The process was painful but definitely beneficial. What we are seeing now are great new projects of high quality.
Probably the most important hit in 2019 was Mark Zuckerberg’s cryptocurrency project Libra, and it did so several times: The foundation was established by Facebook and other partners in Switzerland. Mastercard, Visa, Paypal boarded as partners. Central banks replied immediately by criticising Libra as a “danger to the financial system”. Politicians denounced Facebook as a data killer. In October, the bomb exploded: Visa, Mastercard and Paypal got cold feet, they leave the project.
However, Libra’s merit is certainly that now finally Western central banks are waking up and thinking about their own digital currency projects. And this is absolutely necessary for the survival of the western market economy because there is already a lot of activity in the East: I was impressed by the targeted use of blockchain technology by China. They are not only talking but alos implementing: The Chinese government is already testing a Digital Yuan/Renminbi with over 500,000 companies in the two industrial cities of Shenzhen and Suzhou from 2020. The aim is to simplify the sending of invoices, make immediate payments, and also improve the payment of salaries and social security. The tax system will be considerably simplified. If the USA and Europe do not quickly promote innovation and create improved framework conditions, we will lose this competition and will have to implement Chinese standards later.
2019 has been a year of progress for blockchain, cryptocurrencies and digital assets. There has been significant advancement led by both decentralized communities and centralized institutions.
First, decentralized finance is beginning to take root globally. DeFi protocols now enable savings and lending, exchange and trading, and synthetic structured products. We count over 200 stablecoin projects, most of which run on Ethereum. Over $500 million is currently locked in DeFi, powering a variety of capital markets applications.
More traditional assets from real estate to art, securities to bonds, are now transacted using tokenized financial instruments over public and private open-source blockchains. The market share for DeFi has only just begun.
Institutions, whether enterprise or even government bodies, have clearly signaled their interest. Early in the year, JPMorgan announced their JPM Coin for better interbank settlement. This was followed by Facebook’s announcement of Libra, which accelerated developments from the Chinese and U.S. governments.
ConsenSys released Codefi (Commerce and Decentralized Finance) in September this year as the first full product suite of fintech tools to help companies and organizations with their blockchain and digitalization journey. For instance, we helped Mata Capital tokenize a single real estate fund asset, backed by ownership of a building in Paris, for an investment sum of 26 million euros.
In my view, the crypto and digital asset industry 2019 developed very positively. We welcome the progressive acceptance on the retail and institutional side, as well as regulatory further development of the crypto industry. The blockchain strategy of German Federal government, the announcement of Libra and the creation of the first regulated trading center for digital assets in Germany with the Boerse Stuttgart Digital Exchange are just a few highlights that point to one positive development of this exciting future technology around blockchain and DLT. However, the aspect of security in the custody of cryptocurrencies has made unfortunately negative headlines in 2019 again and will continue to occupy the industry in the future. But I see here a professionalization of the crypto industry — with emerging insurance solutions and new security concepts.
In 2019, the crypto community bore witness to the rise of stablecoins — a necessary development for the industry that indicated a movement toward KYC and regulation of exchanges, an essential requirement for mainstream adoption among traditional investors. I was also happy to see the progress in blockchain-based securities trading, from both a tech and regulatory perspective. The stage is being set for a popular blockchain use case, and I’m excited that NEM Catapult has some special tech advantages here.
2019 was very much characterized by U.S. political involvement in digital currencies. For the first time, President Trump tweeted about Bitcoin, Secretary Mnuchin held a conference discussing digital currencies, and there were various well-attended hearings in Washington around the space. While we had seen U.S. regulators become involved in the space in previous years, this was the first year that we saw an extensive involvement from politicians and lawmakers, including a sitting U.S. president. Some of the biggest milestones we saw this year was proof-of-stake networks coming online, with a rise in staking of tokens to capture an annual yield on invested assets, progress in the Lightning Network, growth of decentralized financial services as evident by the number of loans originated/and Ether locked across these platforms, as well as the launch of Bakkt’s product offerings and others to allow for greater institutional involvement in the space. Some of the bigger setbacks of 2019 was the response of some U.S. lawmakers around Libra as they push to delay or stop the project, China’s recent harsher stance on digital currency trading, and the exit of exchanges from U.S. markets, including Poloniex and Binance.
2019 was pretty clearly a year of consolidation after the bear-market misery year of 2018. The biggest event of the year has to be the formal announcement of Facebook’s Libra, due to the shockwaves it sent across the world. If governments and banks weren’t paying attention to this technology before, they sure as hell are now. Amazingly, Libra has taken much of the antagonism away from Bitcoin.
Beyond Libra, the big story is the DeFi phenomenon: stablecoins and interest-bearing accounts that are significantly decentralized. In a world of increasingly negative interest rates, DeFi is a bright spot, bringing borrowers and lenders together, regardless of their jurisdiction, and without the involvement of any bank or government. DeFi is still early and full of risks, but it is a beautiful thing to watch.
In 2019, we again saw some very high volatility with Bitcoin prices ranging between $3K and $13K. While this made for some notable headlines and great trading opportunities, price swings like these have a chilling effect on adoption and I hope to see more stability in 2020.
A big setback for crypto in general were the many successful hacks attacks aimed at exchanges. It was disappointing to see that at least in a few cases the impact of these hacks could have been lessened or even prevented by adoption of better security models. However, what was really important was that some of these hacked parties, like Binance, managed to absorb the losses and continued to operate normally. No one will ever be completely immune to hacks, but demonstrating that being hacked won’t necessarily impact customer funds was a huge win for crypto.
All things considered, I think that 2019 was a great year that brought us an increase in adoption with more people using cryptocurrencies and more companies offering payment options through crypto, but also some great applications from the fintech industry, like the first bond settlement on blockchain.
The growth of DeFi and Blockchain Gaming have made the biggest impression on me. I think 2019 has been a very good year overall for the industry to focus on building products, communities and adoptions and find an actual market for their products. The quality of projects overall has risen, which we are very happy to see.
I think there is a lot of development happening under the hood and a lot of exciting technological progress has happened. Additionally, big actors like Facebook and the Chinese government have announced that they are very interested in the place and are building new projects. This is very exciting, as it shows that the place is getting more and more professional. Unfortunately in terms of adoption, this year wasn’t the breakthrough that people had hoped for. We still need to improve usability such that more and more people can effectively use cryptocurrencies.
The biggest development in 2019 is the growing public awareness of the vital role that privacy plays in our digital lives, and how poorly the big consumer networks preserve and protect our privacy. This public focus on privacy is a tremendous opportunity for the blockchain community to appeal to these users, provided that we can offer solutions that satisfy their needs.
Also, Google announced a breakthrough in the development of quantum computing, which raises the bar for cryptographic protocols that have been used for blockchains and cryptocurrencies. There is now a real challenge to the community to deliver quantum secure decentralized platforms and currencies to avoid control of these platforms by private and government entities with quantum computing capabilities.
I believe the raise and stabilization work on the Lightning Network and Wasabi wallet are the most important milestones, where the first is advancing Bitcoin’s portability and fungibility, while the latter is advancing its fungibility. Also note, I may be slightly biased on the latter 🙂
2019 was a mixed bag for digital assets. On the one hand, we have seen tremendous technological developments in terms of infrastructure for traditional institutions looking to trade digital assets. We have seen improvements in custody, execution, data and more. However, 2019 can be characterized by a sharp decline in retail interest and disappointing institutional involvement.
The biggest milestones were the launch of Bakkt and Fidelity Digital Assets. The biggest setback has been regulatory uncertainty in the United States. While China’s anti-crypto stance was a net-negative for the industry, it was not surprising.
I have been very impressed by a few developments within the space. The first is Bitwise Asset Management’s focus on attracting registered investment advisors and family offices to allocate to digital assets. I am also excited about the developments being made that enable institutional investors to trade out of cold storage.
2019 was the year that the crypto industry was told to grow up by regulators around the world. Travel Rule enforcement is simultaneously the biggest milestone and the biggest setback for crypto. It has and will continue to force a level of maturity that will enable the industry to grow into an institutionally accepted asset class that is adopted by the masses for payments. It also presents an existential threat for many exchanges and poses potential privacy issues for users. The Travel Rule compliance operations will be costly even with open-source software like Trisa.
The big surprise of 2019 was the dominance of enterprise blockchain solutions. While many 2017–2018 startups took a beating this year, there was a steady interest in blockchain technology from the enterprise sector, which has traditionally led much of the experimentation of emerging technologies due to its vast resources and reach. The biggest development, however, is the growing realization by corporations that the real value driving innovation is in public, permissionless blockchain and not in private DLTs. Whether its EY developing exclusively on Ethereum mainnet or the many post-private POCs looking for a public implementation for their use-case, I believe these milestones will make 2019, seen in retrospect, as the year where existing businesses built the foundation for mass adoption of blockchain technology.
2019 was full of significant events for the crypto industry: the launch of institutional giants Bakkt and Fidelity Digital Assets, the boom of STO, IEO and DeFi, the next, albeit not prolonged, Bitcoin rally. However, there were unpleasant moments. Numerous scams and the closure of a large number of exchanges. For example, in India, under the pressure of regulators and the refusal of banking services, Koinex, the country’s largest Bitcoin exchange, has closed. This was preceded by the liquidation of the Coindelta trading platform for the same reasons.
I was impressed by the prospects of a brand-new trend — staking. And I think that 2020 will show that the possibilities of cryptocurrency are much greater than it is considered. And digital money, which allows you to receive passive income, can become #1 in the blockchain industry very soon.
2019 was a year of infrastructure-building — from new custodial technologies and decentralized protocols to innovative payments capabilities, like Lightning Network, engineers have been working hard to develop the necessary plumbing for the emerging digital asset financial system. 2019 was also a year of mainstream validation with Facebook, JPMorgan, Fidelity, Telegram and other corporations piloting or actively building blockchain projects. Institutional involvement heralds a bright future for the entire crypto sector, and we expect to see more institutions entering the space in 2020.
We’re wrapping up one more year that Bitcoin’s been around, despite continuing predictions of its imminent demise. The post-2017 bear market still drags on, but I’m not thinking about price too much; right now, Bitcoin only needs to be valued high enough to pay for its own security while the next generation of improvements, like Lightning Network, are being developed. It’s been a rough year for altcoins though, whose value seems to be much more speculative.
If anything, the fact that Bitcoin is enduring such setbacks rather than collapsing seems to have further raised mainstream awareness that it’s here to stay and not just a bubble. There’s been increasing attention and recognition from politicians and other public figures, and mega-companies, like Facebook, are starting to make plays for this new market.
Crypto had a great year in 2019 and accomplished a key objective or rebounding from the lows after the big drawdown coming from the rapid rise at the end of 2017. The annual performance of Bitcoin in 2019 will likely be better than most other assets, which is very positive for the sector.
Key milestones included the launch of Bakkt, Fidelity’s custody platform, growing adoption/accessibility from traditional fintech companies, like Square, Robinhood and SoFi, and an infrastructure development across lending and prime brokerage type services.
I feel that 2019 reflects the “Slope of Enlightenment” phase of the Hype Cycle. With the price of Bitcoin up more than 100% since the beginning of the year, we’ve seen confidence in the market begin to return with what I believe could be our new bottom. People are becoming more savvy to altcoins and their lack of use, as we’ve seen all of the top 10 altcoins lose significant value against Bitcoin (except for BNB, which is likely to be as a result of Binance’s heavy push on their coin this year).
My attention has been focused on the Lightning Network developments this year, seeing its first major bug handled extremely diligently. Nodes have doubled over the year to almost 5,000, as well as exchanges beginning to integrate it into their offerings.
We’re also seeing what I can only describe as our first “Layer 3” developments, with the proof of concept “Whatsat,” which is developed to be a decentralized version of WhatsApp built on top of Bitcoin’s Lightning Network (Bitcoin Layer 1, Lightning Network Layer 2, Whatsat Layer 3).
I think the year of 2019 was a year of big hopes for wider adoption and some disappointments. The Libra debacle was one of the big events that, in my view, influenced the market quite a bit. While the reaction of the hardcore crypto community to Libra was mostly negative (Libra is not really a cryptocurrency), there was hope that bringing 1B people to blockchain-based currency will increase awareness and adoption. But this did not work out.
So, in my mind, the biggest milestone is that crypto made inroads into the mainstream media and awareness, and the setback is that this did not lead to wide adoption (yet).
2019 was also a big year for privacy. Mimblewimble-based Beam and Grin made a bold entry in the beginning of the year and have now become important players in the ecosystem. The success of Mimblewimble protocol spurred interest from leading projects in the space, such as Monero/Tari, Litecoin and others. There was also a lot of privacy-related research — Halo by Zcash, Ben Fisch’ work on Trustless SNARKs, Lelantus protocol developed by Zcoin and adapted by Beam as Lelantus-MW, Aztec and Zether privacy protocols for Ethereum and more. Privacy is becoming a topic of the debate, and the need for privacy is being realized by the community.
Bitcoin is not only the oldest cryptocurrency, but still the undisputed number one among them when it comes to market capitalization. Almost 70% of the total value of all existing cryptocurrencies is in Bitcoin. Nevertheless, the world’s first blockchain is struggling with problems. Huge energy consumption, scaling problems and the question of how to proceed when the block reward goes towards zero.
Recent projects are trying to address the core problem of Bitcoin, the consensus mechanism Proof-of-Work. Among the best known alternative consensus mechanisms are Proof-of-Stake, a variation of it, delegated Proof-of-Stake, or even alternative database structures such as the Directed Acyclic Graph (DAG).
At the PoS, the component, which is represented by the energy consumed by the computing power during PoW, takes over the credit of the block producers. Analogous to hash power, the probability of being allowed to produce a block increases with the amount of coins owned. Although it is costly to secure a portion of the network because the coins cost money, this consumes much less energy.
Known projects implementing PoS are Algorand, Cardano or probably soon Ethereum 2.0, although the Proof-of-Stake itself still contains some problems for which there are different solutions. The projects mentioned support all Smart Contracts and are therefore superior to Bitcoin in terms of flexibility. Whether they really have the potential to knock Bitcoin from its throne will have to be shown in the next few years.
Delegated Proof-of-Stake (dPoS)
DPoS is very similar to PoS. The big difference is that not every stakeholder operates a node, but delegates the power represented by the number of its tokens. The nodes that receive the most votes take over the task of block dispatching or verification.
This model allows high scalability at the expense of executive decentralization. Known projects implementing this consensus mechanism are EOS, Tezos, Tron, Nano, Lisk, Ark. Delegated Proof-of-Stake solves some problems of PoS, but also shares the more serious ones. Crypto exchanges that do not really own the coins, for example, have great influence. It also remains to be seen how dangerous dPoS projects can be for Bitcoin.
With DAGs more than just the consensus mechanism changes. The whole database structure is fundamentally different from a blockchain. There are no longer connected blocks, but the transactions are directly chained to each other. The block limitation is omitted and the task of confirming is performed by many nodes simultaneously. Theoretically, a high degree of scaling is thus possible.
Theoretically, because the DAGs also suffer from serious problems which are currently being solved. Also for DAGs there are different approaches in the implementation. Among the best known DAG projects are IOTA or Fantom.
The ambitions of these projects are high. Whether it is enough to get to Bitcoin cannot yet be said. Time will show.
There are several promising technologies that solve Bitcoin’s problems, at least in theory. However, technology alone is not responsible for a large market capitalization. It can be assumed that the vast majority of investors have relatively little knowledge of this. What counts most is the reputation and network effect, in which Bitcoin is clearly ahead. It is almost impossible to say now what will replace Bitcoin. It is more likely that there will be no such thing in the near future.
An important question is, is it absolutely necessary to outperform the market capitalization of Bitcoin? Each blockchain has its advantages and disadvantages, so what is to be said against Bitcoin as digital gold remaining the most valuable cryptocurrency for the next few years? If the whole market rises, the investor may be indifferent in the end.
The rating and coverage is exceptional given China’s abiding hardline stance against decentralized cryptocurrencies, as epitomized by Beijing’s historic September 2017 blanket ban on crypto exchanges and initial coin offerings.
Xinhua emphasizes the volatility of Bitcoin as a currency that is not backed by a centralized sovereign power — as distinct from national fiat currencies.
Positive comments of president Xi Jinping
The report comes along with positive comments of China´s President Xi Jinping, who said that China will take the lead in blockchain technology, and research will be funded to establish blockchain solutions.
The CCID Chinese Crypto Index has brought a number of changes from the last ranking of cryptocurrency and blockchain projects, although the top one still remains EOS. The smart contract platform EOS has been the top-ranking project in the previously published indexes, indicating that China is still highly interested in this particular project despite recent governance concerns.
TRON lost to Ethereum
However, the second spot on the list – which was previously occupied by Justin Sun’s TRON – now belongs to Ethereum. Meanwhile, TRON itself dropped to third place.
While its ‘Creativity’ and ‘Basic-Tech’ sub-indexes remained largely the same, its ‘Applicability’ and ‘Total Index’ dropped by around 3 points. Meanwhile, Ethereum’s Total Index increased by around three points, which led to that two projects swapping places.
The situation regarding the top 3 projects is once again the same as it was in the 13th index, although with somewhat different Total Index scores.
NEO up from 9th to 6th, LISK from 7th to 5th
Other significant changes between the 14th and the 15th assessments include Lisk moving from 7th to 5th position in the newest ranking, as well as NEO’s rise from 9th to 6th position.
Qtum dropped significantly
Qtum, on the other hand, dropped from 8th to 14th place, while Bitcoin itself currently ranks slightly better, sitting at 9th position after previously being kicked out from the top 10 list, and ranked as 11th best project. Meanwhile, the last on the list is IOTA, holding the rank of 35. IOTA dropped from the 33rd position from the last ranking, replacing Decred which is still close to the bottom, sitting at 34th spot.
No new coins were added or removed from the index since the previous ranking.
The institution also started providing Global Blockchain Technology Assessment Index reports back in May 2018. The first ranking was published on May 17th, and the country released 14 additional Indexes, including the one published earlier today.
The index ranks cryptocurrency projects based on several sub-indexes, including innovation, applicability, and underlying technology performance.
The original index ranked only 28 cryptocurrency projects, although several additional ones were added along the way. The 15th ranking includes 35 projects in total,
These reports are important, as they indicate which aspects China values when it comes to crypto/blockchain projects. Bitcoinist reported that the country is currently preparing to launch its national cryptocurrency. A recent report also claims that the country will perform test launching in two of its cities, likely before the end of the year.