Category: Markethive

Bitcoin prices jump as Japan makes the cryptocurrency legal

Bitcoin prices jump as Japan makes the cryptocurrency legal

  

  Japan IT Finance MTGOX-BITCOIN

Bitcoin prices have surged following Japan’s decision to allow the cryptocurrency as a legal method of payment, marking a major step in its adoption. The price of a bitcoin rose above $1,140 (£909) according to Coindesk’s price index. Just over a week ago one bitcoin was trading below $1,000. Japan's new law will mean bitcoin exchanges have to comply with anti-money-laundering and know-your-customer regulations. The cryptocurrency was drawn to Japanese regulators' attention by the spectacular collapse of the Tokyo-based Mt Gox exchange in February 2014.

The push to institutionalise bitcoin had been dealt a blow by the failure of a new exchange-traded fund (ETF) tracking the currency to gain regulatory approval from the US Securities and Exchange Commission (SEC).

Japan recognises Bitcoin as a valid

The SEC had been concerned by the lack of regulatory oversight in the bitcoin spot exchange market, which would allow market manipulation and fraud. Yet the move by Japan recognises bitcoin as a valid part of the financial infrastructure, setting an example which other governments will watch closely.

Pavel Matveev, co-founder at bitcoin platform Wirex, said: “Japan has fired a starting pistol in terms of cryptocurrency adoption. “Japan’s recognition of consumers’ appetite for cryptocurrency payments is an important development and provides other governments with food for thought if they wish to compete in an increasingly globalised and digital world."

Bitcoin’s adoption has slowly moved from the more arcane, even anarchic, corners of the libertarian internet towards being increasingly accepted in the mainstream. However, the cryptocurrency still faces barriers to institutional take-up, with massive volatility in prices and scepticism from regulators stemming from bitcoin’s central role behind online black market payments.

There are also concerns within the developer community around bitcoin’s architecture. It is based on distributed ledger technology which means every user has an identical record of payments, stored in the blockchain.

However, the rapid expansion in bitcoin activity has led to debates about increasing the size of the blocks. Some in the bitcoin community fear a “hard fork” in which two competing versions of the cryptocurrency exist, fragmenting a market with little central control.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Buy Bitcoin at Paybis With Credit Cards, Its Easy

buy bitcoin at paybis with credit cards its easy

 Buy Bitcoin at Paybis  With Credit Cards, Its Easy

 

EDINBURGH, Scotland, April 5, 2017 /PRNewswire/ — Users on the leading digital and cryptocurrency exchange platform Paybis can now buy Bitcoin instantly with their credit card. The new feature makes Paybis one among the few platforms that offer such an option.

 

Paybis accepts credit cards issued by major providers like Visa, MasterCard, etc. on its secure platform. Those making use of the "Bitcoin with Credit Card" option on the platform are assured to receive the cryptocurrency as soon as the card company approves their transaction. Buying Bitcoin with Credit Card is a convenient process where users can simply create an account on PayBis.com and sign in with either Facebook or Google for speed and convenience. Once verified, users will be able to choose the amount for which they wish to buy the cryptocurrency and execute payment.

 

Paybis implements a quick, simple and easy to follow identity verification stage that takes as less as 30 minutes in processing time. The platform has a simple tiered system for those wanting to purchase Bitcoin with other payment methods, where they can increase the spending limits by successfully completing different levels of verification. New users can enjoy an impressive weekly credit card purchase allowance of $5,000 or a monthly allowance of $ 20,000 USD.
 

Other payment methods supported by Paybis in addition to the Bitcoin with Credit Card option includes the likes of PayPal, Western Union, MoneyGram, OKPay, WebMoney, Skrill, Perfect Money, EPay, Yandex Money, Payeer, and Payza. The platform also offers the popular gift card to Bitcoin option that supports a range of gift cards from Amazon, Target, Walmart and other mainstream US vendors.

 

The feature-packed Paybis cryptocurrency platform, with its attention to detail and an easy-to-use interface, provides a 24/7 live customer support for its users. The website's design shares similarities with major online trading platforms to give its customers a familiar feel. Paybis takes its users' security and privacy seriously and ensures adequate protections by implementing state-of-the-art security for transactions happening over the platform. It also has a fast, fully automated payments and transfer process to provide instant delivery of Bitcoin to the customers.

 

Paybis believes in maintaining a transparent operating process with no hidden charges for the benefit of its clients. The fee structure and exchange rates for all payment methods can be directly accessed on Paybis website. All these features make Paybis one of the trusted platform among the community members with impressive feedback ratings to prove it. Paybis has completed over 50,000 transactions so far for more than 20,000 happy customers. It is going to further improve in the coming days with the introduction of few new features and products.
 

About Paybis
 

Started in 2014, Paybis is a fast-growing cryptocurrency and digital currency exchange platform. It is run by a group of experienced professionals from various industries with the aim of solving one of the actual e-commerce problems faced by the cryptocurrency and digital currency segment. Paybis is one of the few cryptocurrency platforms with a valid federal Money Service Business (MSB) license in the United States.

David Ogden
Entrepreneur

 

Alan Zibluk Markethive Founding Member

How the Blockchain is Being Used Beyond Bitcoin and Finance

How the Blockchain is Being Used Beyond Bitcoin and Finance

  

The clouds of misconception and skepticism around bitcoin were

so dark in the initial years that it hid the genius behind it.  In trying to understand bitcoin, it brought into the spotlight the technology that underpins it –
the blockchain.

During the World Economic Forum at Davos, Christine Lagarde, Managing Director, International Monetary Fund spoke about virtual currencies and released a paper titled “Virtual Currencies and Beyond: Initial Considerations.” The paper examines virtual currencies as well as blockchain. It reads, “VC schemes and distributed ledger technologies can strengthen financial efficiency by facilitating peer-to-peer exchange while reducing transaction times and costs, especially across borders…Beyond payments systems, distributed ledger technologies have implications for a wide range of markets and financial market infrastructures as a fast, accurate and secure record keeping system, including for stock exchanges, central securities depositories, securities settlement systems or trade repositories.” While blockchain has applications beyond bitcoin, the two are intertwined. In fact, bitcoin can be called a beautiful, first application of this amazing technology.

Improving the Ledger

Throughout history, records of transactions have always been an essential part of tracking information, be it in commerce or government activities. Such recordings created ledgers, which house these records. Blockchain supports digital distributed ledgers that record and store data.  The data is ‘distributed’ across a whole network, which can be open to everyone (“unpermissioned”) or restricted in terms of participants (“permissioned”).

Blockchain’s distributed ledger has great potential of cost-saving especially for international remittances for the banking system. According to the IMF report on virtual currencies, “The costs of sending international remittances, however, are notoriously high: as of 2015, the global average cost of sending small remittances (for example US $200) is 7.7%, though this has declined from just below 10% in 2008. In contrast, the cost with Bitcoin is estimated to be about 1% (Goldman Sachs, 2014).” Banks are looking to act fast as blockchain-based remittance systems have already made a debut; in the Philippines and Kenya, such platforms offer transfers via bitcoin and back into fiat currency.

Besides cost advantages, the other area where banks are looking to benefit from blockchain is efficiency in operations. The use of this technology will help them get rid of ‘headache work’ like manual processes, middlemen, huge data entry and verifications; blockchain making all possible at a faster speed and greater accuracy. The blockchain technology is being looked at as a great invention, which has many potential uses in many other industries such as music, healthcare, diamond, real estate and more. Even governments are showing interest in the breakthrough technology.

Blockchain Moves Beyond Finance

A recent report by the UK Government Chief Scientific Adviser says, “distributed ledger technology provides the framework for the government to reduce fraud, corruption, error and the cost of paper-intensive processes. It has the potential to redefine the relationship between government and the citizen in terms of data sharing, transparency, and trust. It has similar possibilities for the private sector.” The diamond industry, which is highly prone to fraud, has already embraced the blockchain technology. Everledger is a permanent ledger for diamond certification and related transaction history. It provides verification for insurance companies, claimants and law enforcement. According to Everledger, “£200 million is spent by insurers each year for tackling fraud.”

Likewise, the real estate industry can benefit greatly from the blockchain technology. According to Ragnar Lifthrasir, “Putting property titles on the Bitcoin blockchain will bring the real estate industry out of its existing 18th-century technology. Title insurance is a $20 billion industry. It’s estimated that the total annual cost of fighting and resolving title fraud is $1 billion.”

The healthcare industry has shown interest in the blockchain technology and companies such as Facto, Tierion, DNA.Bits, BitHealth, and Gem are working on such projects. A tweet in October 2015, revealed a project for Philip Healthcare Group in collaboration with Tierion. The health care sector holds a lot of confidential information, like records of medical history, diseases, payments, and treatment. The blockchain not only provides a solution to the concern over the security and privacy of such sensitive data, it would help eliminate the huge costs incurred by hospitals and healthcare service providers in managing the patient and other such information.

Not far behind is the music industry, which has its own tailor-made blockchain. PeerTracks, a music streaming, and retail company is the first outfit to use the brand-new MUSE platform, in partnership with Danish exchange CCEDK and OpenLedger. OpenLedger, through its Danish registrar CCEDK, is now offering a fiat gateway — enabling anyone to buy MUSE for USD via the OPENMUSE/OPEN.USD market. On platforms using the MUSE network, such as PeerTracks, all the payments made by consumers, and income generated by artists, are in crypto-USD, so there is no confusion about how much a track costs — and no issues with crypto’s trademark volatility.

The technology is also being put to use for creation of decentralised credit rating and KYC. “Algorythmix has been named the most transformative use of blockchain in Citi Mobile Challenge APAC 2015, for “Cetas — The decentralised KYC and Credit rating framework. Cetas is a decentralised platform which enables sharing of the KYC data using blockchain.” There are many other projects working around the blockchain technology like Microsoft Corporation’s (MSFT) Azure Blockchain as a Service program, and the Open Ledger Project spearheaded by IBM overseen by the not-for-profit Linux Foundation. The project involves other big names like Wells Fargo & Company (WFC), London Stock Exchange Group Plc., Accenture Plc. (ACN), Cisco Systems, Inc. (CSCO), Digital Asset, Intel Corporation (INTC) and many more.

The Final Word

This is just an overview of the multiple projects being worked around this innovative technology. The blockchain technology, still in its early years, has thrown down the gauntlet in front of the current systems, challenging them to overhaul.

Chuck Reynolds
Contributor

 

 

Alan Zibluk Markethive Founding Member

Blockchain Mormons, ICOs, Aliens, Football: London Scene Round Up

Blockchain Mormons, ICOs, Aliens, Football: London Scene Round Up

  

Mormons seeing the light in Blockchain

Our London Correspondent Nick Ayton, the Sage of Shoreditch, reports on new promising ICOs, Mormons seeing the light in Blockchain, Satoshi run over in Picadilly, Blockchain entrepreneur abducted by aliens and CityChain 2017 which was a huge hit! In short, another exciting week in fintech capital whereby some Blockchain is apparently seen as a religion.

Proof of Donation

The Mormon church realized Proof of Donation consensus could be a blessing in disguise. Forget the West End play called “Book of Mormon” and let me introduce you to the Ledger of Mormon. Obsessed with record keeping, the church that is, it wouldn’t be long until it was adopted by one of the mainstream faiths. “The Ledger of Mormon is the perfect place to record all donations that come from our communities” mentions Donald Osmund.

“The Mormon community is funded by its community members and from other donations, with each recorded on the Blockchain as a separate transaction where all members of the Mormon church can see what others are contributing.”

“We decided to adapt the Proof of Work consensus alogorithm as on Sundays the server room got hot which made the lights dim as the donations were processed in real time. So we came up with Proof of Donation that is less labor and resource intensive.”

ICO RoundUp

Among the upcoming ICOs, I am looking forward to is Metal. Announcing the ICO its founder Marshall Hayner told me about their Proof of Payments Processed consensus that allows everyone to get rewarded for every dollar spent. Other ICOs are Aeternity delivering Lightning-based Smart Contracts that is already active, and of course Cosmos and TaaS ICOs gaining pace with the big one Storj attempting to solve the decentralized storage challenges of Blockchain that is expected anytime soon.

Satoshi in Hospital

Satoshi gets run over by a chocolate lorry delivering Easter eggs.

CT: I got a call from Vittalark Buttering who seemed very panicked on Tuesday.
Vittalark Buttering:
He is not that badly hurt you know.

CT: Who? Like I didn’t know.
VB:
Satoshi’s been run over by a chocolate duck shaped van on Picadilly.

CT: Is he Ok?
VB:
I think so, he is at the Royal Chelsea Hospital and I am on my way to see him. Apparently, he was impaled on chocolate bunnies and might not be able to eat chocolate ever again.

CT: Well that is a relief. Maybe he could design Proof of Cocoa.
But before I got an answer the line went dead and Vitallark was gone. We hope Satoshi makes a full recovery and he con continue to eat chocolate.

CityChain 17 lands at IBM Southbank

Following a successful Blockchain for Business People event to hot ticket, this week was CityChain 17 with some familiar names speaking. The event didn’t disappoint as it was produced by ‘mbn solutions’ based in Glasgow who are at the center of the Scottish Blockchain movement which has seen Nicola Sturgeon and the Scottish Parliament support.

Hosted by Paul Forrest (Chair) and organized by Michael Young there was a healthy dose of Hyperledger ever present but it was Gideon Greenspan CEO CoinSciences and brains behind MultiChain that for me stole the show, although Dave Birch at Consult Hyperion was the audience’s favourite delivering an amusing talk announcing “Blockchain is a religion, not a technology” soundbite. With talks from Simon Taylor, Director of Blockchain at 11:FS, Peter Bidewell at Applied Blockchain and John McLean of IBM CityChain have shown it was a well-rounded event, definitely one for your Blockchain Calendar.

Abducted Again

West Ham Football Club Fan and Blockchain entrepreneur abducted by aliens, again… CT Catches up with Billy Whizz after another alien sighting when Billy’s pork pie goes missing.

CT: So Billy what happened this time?
Billy Whizz:
As usual I had just purchased a pork pie on my way out of the ground where once again we let a 2 goal lead slip.

CT: Talk us through what happened…
BW:
It was different to last time. I had just taken a bit of my pie when I was covered in a blue light.

CT: The police?
BW:
Not it was over my head, and then I was in a misty room and it was really hot.

CT: You sure it wasn’t in the back of a Police Van?
BW:
Are you going to take this seriously or not?  When I looked down my pie had gone, and I saw some shadows at the back moving around and it sounded like they were eating my pie. Then I was back on the ground, in Upton Park Road, which is strange because West Ham doesn’t play there anymore.

CT: Did they tamper with you?
BW:
Of course not I understand Blockchain you know…

Well, Billy, there is a pattern emerging, you shouldn’t buy food after the game as it seems the aliens are hungry at this time and are tracking you.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Bitcoin Steams Ahead

Bitcoin Steams ahead

Bitcoin Steams Ahead

Cryptocurrency enthusiasts will have noticed that bitcoin’s price has been going up steadily over the past few days. It is always difficult to pinpoint the exact reason for this behavior. Japan’s new cryptocurrency regulation went into effect, and there is a big bitcoin marketing campaign on the /r/place subreddit. Both factors may contribute to future bitcoin price gains moving forward.

BITCOIN PRICE PREPARES FOR ANOTHER MAJOR RALLY

It is impossible to deny the recent bitcoin price gains. Over the past few days, the value per BTC has surpassed US$1,100 once again, after a few weeks of downward price momentum. Enthusiasts always believed this negative price trend was only temporary, though, as there is no reason for the bitcoin price to lose value over time.

That being said, the ongoing scalability debate hasn’t done the bitcoin price any good. Bitcoin Core and Unlimited supporters continue to “duke it out” on the internet, which generates some negative attention for the popular cryptocurrency altogether. However, it would appear even those debates are no longer sufficient to keep the bitcoin price down for an extended period of time.

It is also worth mentioning there is some positive attention on bitcoin right now. Japan recently introduced their new virtual currency regulation, which effectively removes the sales tax on bitcoin purchases. This makes bitcoin more approachable and affordable to everyday consumers in the country. Regulatory developments like these can pave a bright future for bitcoin moving forward.

Moreover, there is a dedicated bitcoin marketing campaign taking place on the /r/place subreddit. Reddit remains a key place to discuss bitcoin and other cryptocurrencies. Advertising on other subreddits will introduce more mainstream internet users to cryptocurrency as a whole, which can only be a positive thing in the long run. The bitcoin logo is getting some good exposure on this subreddit, that much is certain.

David Ogden
Entrepreneur

 

Author JP Buntinx

Alan Zibluk Markethive Founding Member

White House: Fintech ‘Changing Relations’ to Finance

White House:
Fintech ‘Changing Relations’ to Finance

  

US government interest in fintech continues to trend as the White House hosts a dedicated event — and says fintech is leading reforms for consumers and institutions alike.

White House Acknowledging Fintech

  

The remarks were made by Adrienne Harris, Special Assistant to the President for Economic Policy following the FinTech Summit event Friday, which she led. “Technology is changing the way consumers relate to their finances, and the way institutions function in our financial system,” Harris’ blog post summarizes.

The event played host to a range of financial industry figures — “stakeholders from across the financial technology (fintech) ecosystem, including traditional financial services institutions, fintech start-ups, investors, thought leaders, and policy makers” — and discussed everything “from big data to blockchain,” she writes.

Government representatives were also present, including Secretary of Commerce Penny Pritzker, who moderated a panel on how to ensure fintech startups and big business have the resources and support to innovate for the benefit of the US economy. Also discussed Friday were allusions to the problem of financial data handling in the US and its potential risk to consumer integrity, following a report the government published in May.

“[F]inancial data can help prevent fraud, assist consumers with managing their financial lives, and prompt access to credit for underserved populations,” Harris reports. “But these opportunities also come with risks for consumers, including risks to privacy and civil rights.” A recent Bitcoin.com piece on the problems of legacy finance for US consumers demonstrates the growing awareness of the need for change from businesses, and policy makers would appear to be making similar — if more understated — acknowledgments.

Also acknowledged were the empowering of developing-world communities to increase “resilience” through fintech, specifically mobile-based payment networks such as those active in Kenya and India.

Too Little Too Late?

More broadly, however, Harris’ comments point to a hypothetical reality which for cryptocurrency users is already the here and now. She writes:

Imagine a world in which your phone can help you make financial decisions […] Imagine a time when, as a small business owner, you can accept payments online from all over the world in minutes. Or when you can send money to relatives back home instantly and automatically.

For those with an awareness of the Bitcoin industry’s many financial service providers — from remittance to merchant solutions and beyond — calls to “imagine” such a world may well sound behind the times. While the White House may consider fintech to be “increasingly changing” consumer and business habits, the increasingly common perception is that cryptocurrency-based alternatives have already done so for an increasing section of the world’s population.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Reasons Why Bitcoin is Outperforming Everything

Reasons Why Bitcoin is
Outperforming Everything

   Bitcoin Rocket Outperforming

Bitcoin Rocket Outperforming

Favorable trade winds from the East are propelling Bitcoin’s price to new highs as the halving looms. There are numerous factors at play, however, that could create the perfect storm to test the all-time high. Let’s take a look at four major reasons why Bitcoin is outperforming other currencies and asset classes in what could be its breakout year.

It’s More Predictable

Bitcoin was officially the top performing currency of 2015. At press time, BTC price is up over 50% against the US dollar since Jan. 1, 2016. Meanwhile, traditional investors are scratching their heads. A hawkish Fed one day, then dovish the next. Current economic data is mixed at best and headed toward another global recession at worst as all eyes are on “stock whisperer” Janet Yellen.

“Market players are pricing in just a 2% chance for a rate hike this week and 23% for July, according to CME Group’s FedWatch tool,” reports Investing.com. “September odds were at about 37%.” By contrast, one important feature of Bitcoin is its certainty. Not only is its total supply of 21 million bitcoins known and set in stone, but its block reward —the rate at which bitcoins are created — will be cut in half about 26 days from now. Presumably, pricing in odds of a Fed rate hike in a “casino gulag” economy is shaking investor confidence. Let’s also keep in mind that every fiat currency is not only uncapped but has failed throughout history.

‘Hot’ Money in China

It’s no secret economic trouble is brewing in China. Recent numbers show that a slowdown in private investment in May is overshadowing other, more upbeat economic data. This has resulted in a recent 3.2% drop in Shanghai shares. What’s worse is that European businesses are expressing “growing pessimism” about doing business In China, reports the IBTimes.

   Specifically, a recent EU chamber report found that 57% of respondents felt foreign companies were “treated unfavorably compared to their domestic counterparts,” and 56 percent said that doing business getting more difficult. At the same time, China has a lot of so-called “hot” money “that has to go somewhere,” explains Huobi CMO, Du Jin.

Moreover, the halving scenario is already being felt as we move closer to July, according to the Beijing-based exchange. “Bitcoin supply is limited, the soon to come production halve is generating reactions in the market, which is reflected in the price variation,” explains Huobi CEO, Leon Li. “[…] China’s stock market crashed in late April, the performance of futures and bonds were also not good, which pushed investors to seek for other investment products, such as bitcoin.”

It’s Gaining Legitimacy

As the regulatory landscape becomes clearer and security improves, confidence in Bitcoin exchanges is being restored in the post-Mt. Gox world. “There is a strong trust in exchanges and platforms for purchasing Bitcoin, such as Bitstamp, which recently got EU regulatory approval,” writes Civic CEO, Vinny Lingham. As a result, interest in Bitcoin seems to also be crawling out of the trough of disillusionment. Hype is jumping from buzzword to buzzword: from Bitcoin to blockchain, from permissioned distributed ledgers, but ultimately back to Bitcoin. This is because, in time, more and more people will realize the superiority of the open blockchain, much like an open internet. 

A continued increase in price also means more attention from traditional finance. Traders will not only find it increasingly hard to ignore such a performer, but also the clear frontrunner in the blockchain technology arms race. Incidentally, today’s sole Bitcoin exchange trusted fund (GBTC) is hitting new highs, boosting Bitcoin’s legitimacy in the process.

To boot, Goldman Sachs even admitted that Bitcoin is an “ideal vehicle” for public transactions while predicting that its blockchain technology could “disrupt everything.” 

It’s a New Store of Value

   Bitcoin offers unprecedented mobility and security of funds for the user. Today’s financial system makes moving money and gold around the world slow, costly and inconvenient due to friction and capital controls. Not so with Bitcoin. Whether a few pennies’ or a million dollars’ worth, transfer fees are negligible while your funds are always with you on your device. In fact, it is reportedly becoming a new favorite method for wealthy Chinese to move capital out of the country and as a store of value similar to gold.

But unlike gold and traditional money, you can easily secure your funds without a need for a vault. To wit, your gold, cash, and even your bank accounts can be stolen, hacked or even confiscated on a whim by the authorities, even if you’ve done nothing wrong. Your bitcoin funds, on the other hand, will always be under your control if your secret passcode is protected. In fact, there are numerous ways to safely store your bits.

Outperforming Paper

So why is Bitcoin outperforming everything along with its crypto counterparts such as Ether? Because they comprise a new niche that’s fostering real innovation in finance. It could soon add 4 billion unbanked individuals to the global economy as Bitcoin empowers every individual to be their own bank.

  

In the shorter term, however, the upshot of the soaring price is increased attention that will add a new wave of users and set the stage for mainstream adoption. Meanwhile, traditional investors will find it increasingly hard to ignore what Forbes calls a “new asset class,”  which is poised to outperform every fiat currency for the second year in a row.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

China to Play a ‘Leading Role’ in Bitcoin’s Future

China to Play a ‘Leading Role’
in Bitcoin’s Future

  China

An interesting report was recently written by Digital Gold author Nathaniel Popper in the New York Times about the relationship between China and the Bitcoin network. Popper states that the cryptocurrency has become a multi-billion dollar industry and that the Chinese have a significant amount of influence in this environment.

China’s Investors, Mining Farms, and Transaction Volume Shows the Country Believes in Bitcoin

  

Popper gives his readers an inside look at what is happening in China with the Bitcoin industry and how everyone in the region seems to be getting involved with its infrastructure. From the government to investors and miners, the cryptocurrency is quite popular in China. However, from companies and mining farms located in the region, Popper states, “despite the talk of a borderless currency, a handful of Chinese companies have effectively assumed majority control of the Bitcoin network.”

The Digital Gold author is not the only observer of this relationship between Bitcoin and China with firms such as Goldman Sachs reporting in 2015 that 80 percent of bitcoin volume is exchanged in and out of Chinese Yuan. The report by the multinational finance company says the U.S. dollar follows second to the Yuan and Euros, with the Japanese Yen trailing behind them.

Goldman Sachs Group explains:

“Thus far, most merchant Bitcoin activity has been concentrated among US and European-based  merchants. Despite China’s higher trading activity, restrictions enacted by the PBoC to limit Chinese Bitcoin companies’ access to traditional Chinese payment processors have  prompted many large Chinese companies to stop accepting Bitcoin. However, in light of a somewhat stabilizing Bitcoin economy in China, a few payment processors have reemerged, such as BTC China’s JustPay.”

Alongside the reports from Goldman Sachs, and the latest post from Nathaniel Popper and the New York Times, the Chinese government is also moving closer to legitimizing the cryptocurrency as a “Civil Rights Object.” The drafted law proposal was released in China’s Congress hearings in Beijing on June 27. However, a new policy created by the People’s Bank of China (PBOC) the region’s central bank will impose new fees on payment providers such as Alipay, and Wechat-Pay. Whether or not this will affect Bitcoin processors is unconfirmed at the time being.

In his editorial, Popper describes the vast mining farms located within the region. Chinese mining facilities have covered the landscape in the country who have quite a bit of power within securing the network. Popper says, “big pool operators have become the kingmakers in the Bitcoin world: Running the pools confers the right to vote on changes to Bitcoin’s software, and the bigger the pool, the more voting power.”

At first, the author details how miners in China had originally stayed with the small block Bitcoin Core developers who have stalled the software upgrade. However, miners such as Bitmain’s CEO, Jihan Wu, are becoming more vocal when it comes to expanding the network and some of them are straying from the Core alliance in search of alternatives to the block size.

  

Bitcoin’s growing popularity in China comes as the currency’s 
fiat value has exploded over the past two months.

Many believe this is due to the country’s strict capital controls, the recent devaluation of the Yuan, Chinese stock market turbulence, and very high speculation concerning Bitcoin’s block reward halving coming July 10. China indeed has a strong relationship with the Bitcoin network and continues to be a formidable player in the cryptocurrency industry. Investors in the region have also injected $60 million USD into the Boston-based Circle financial proving there are a vast amount of proponents within the Chinese borders.

Jihan Wu tells Nathaniel Popper that China will play an important role within the Bitcoin landscape, stating:

“The Chinese government normally expects its businesses to obtain a leading role in emerging industries — China’s Bitcoin businesses have achieved that.”

With financial giants like China at the helm of quite a bit of the Bitcoin network’s infrastructure, it’s safe to say the cryptocurrency is here to stay for the long haul. One can also assume the Chinese bitcoin miners and investors within the region will have a significant vote towards the block size debate and the future of the network.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Reports of China Banning Bitcoin Are Greatly Exaggerated

Reports of China Banning Bitcoin Are Greatly Exaggerated

China

On November 3 the Bitcoin price took a dive from a high of US$745 to a low of $675 with news of China circling the internet. A so-called report from the publication Bloomberg had other media outlets assume that China was planning on curbing Bitcoin use in the near future. However, the reports have remained unconfirmed, and many believe the headline was fictitious.

Rumors of China Curbing Bitcoin Use Goes Viral

The stories that surround China and Bitcoin are quite vast. From “secret” mining operations to “free” electricity, to a large portion of Bitcoin transactions being traded for yuan the list goes on forever. The fact is news from China plays a significant role in a lot of people’s speculation. The November 3rd fiasco is no different as the news spread through the market and the community went wild.

Early in the morning the publication ZeroHedge published the article “China Prepares To Impose Curbs, “Capital Controls” On Bitcoin.” The news outlet is well known for writing stories regarding the global economy and subjects like gold and Bitcoin. At times the publication writes editorials predicting the cryptocurrency’s value will pump. Many of these articles are very popular throughout the Bitcoin community.

The November 3rd article was also quite popular, and some believe it made a difference in the market. The anonymous reporter Tyler Durden states within the article, “According to Bloomberg sources, Chinese officials are considering policies including restricting domestic bitcoin exchanges from moving the cryptocurrency to platforms outside the nation and imposing quotas on the amount of bitcoins that can be sent abroad.” However, the Bloomberg report cannot be confirmed as legitimate, and the article in question does not appear on their website.

Reports Are Unconfirmed and Remain Rumors

What’s interesting is that many people within the Bitcoin industry have claimed the reports are false. For instance, the CEO of Vaultoro explains that the recent Chinese headline may be false. The Vaultoro founder says while speaking with a friend who works for the Chinese Bitcoin company BitBank he was told the reports are misleading.

The BitBank representative says that if anyone wants to know how Chinese authorities feel about Bitcoin to read this editorial. The article written by Bitcoin.com’s Jon Southurst detailed a blockchain conference hosted by the Chinese government. Within the editorial, it explains that Chinese officials had no problem discussing Bitcoin. In fact, Ji Xiaonan, of China’s State-Owned Asset Supervision and Administration Commission said some positive words towards Bitcoin stating it was “the only mature blockchain technology today.”

Questionable Sources Push Fear, Uncertainty, and Doubt

Another interesting aspect of the story is the controversial Bloomberg article has similarities to another published piece this past May. The headline for November 3rds article read “China Said to Mull Curbing Outflows Via Bitcoin on Yuan Drop.” This title and the paragraphs that follow it are very much the same as this article published in May by the Bloomberg news outlet. The story called “China to Mull Curbs on Domestic Backdoor Listing Valuations” has almost identical wording as the alleged Bitcoin article with certain words replaced throughout.

Furthermore historically when the price of Bitcoin rises stories of China and other countries banning Bitcoin have appeared in  great number. When Bitcoin was on a tear in 2013 reaching close to $1150 per BTC, these stories came out often. Publications like Bloomberg reported on China cracking down on Bitcoin as well as Forbes, the New York Times, and many others. Typically when these reports published, the price took a dive, but government officials banning Bitcoin never materialized.

The price of Bitcoin has managed to regain its upward push slightly below the $700 range. Reports of China curbing Bitcoin outflows seems to be just another rumor that shook up the market. Many wonder if these headlines will affect the value of BTC again in the future. Moreover, the question is how much does China’s stake in Bitcoin really matter when it comes to this industry?

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Trump’s Trade War With China Could Boost Chinese Bitcoin Demand

Trump’s Trade War With China Could Boost Chinese Bitcoin Demand

  

U.S. President Donald Trump pledged to declare China a currency manipulator on day one of his presidency. During his campaign, he also repeatedly pledged to impose a 45% tariff on Chinese goods. His promises risk creating a trade war between the U.S. and China which could weaken the yuan and accelerate Chinese capital outflows. When the yuan falls, investors often turn to bitcoin.

Trump Has Authority to Act, but Will He?

According to former U.S. Trade Representative attorney, Michael Gadbaw, under the Foreign Trade Act of 1974, Trump could use his authority to impose tariffs on China. Many people, however, doubt that Trump will actually impose a 45% tariff on the United States’ biggest trade partner. Alibaba founder and CEO Jack Ma is confident that Trump will not make good on his threats against China. He told CNNMoney that Trump will have to work with China or risk a “disaster”. A Nomura investor survey revealed that 75 percent of respondents expect Trump to impose tariffs on exports from China, South Korea, and Japan. Meanwhile, 77 percent of those polled expect him to brand China a currency manipulator.

If Trump does impose trade barriers on China, Beijing can either accept weaker exports or respond in kind, said economists at Goldman Sachs. They wrote:

“One possible measure would be to allow a somewhat faster weakening of the yuan, although from China’s perspective this or other trade measures could carry the risk of escalation.”

Weaker Yuan Accelerates Capital Outflows

However, a weaker yuan could trigger an acceleration in capital outflows, as it has done in the past. The yuan fell to a six-year low on Wednesday. An economist at DBS Group Holdings Ltd. in Hong Kong, Nathan Chow, said “The yuan may be pressured by Trump’s win,” citing Trump’s trade barrier threats against China.

According to Goldman Sachs, as much as $78 billion may have left China in September. October outflows are also expected to be large. Analysts and investors say that one reason for an acceleration of capital outflows is because the yuan is weakening faster again against the dollar. This reignites “concern among Chinese individuals and businesses anxious to preserve the value of their domestic savings and assets,” the WSJ reported.

Bitcoin Helps Diversification

In the past, whenever there was a flood of capital outflows from China, a certain amount went into bitcoin. Other safe-haven asset classes also benefited, such as gold and foreign property. The WSJ wrote:

“Chinese investors looking for a refuge from the weakening yuan are turning to bitcoin.”

Delta Asia Securities’ chief operating officer, Victor Au, told South China Morning Post that when the yuan depreciates, Chinese investors seek to diversify their assets. His company is a subsidiary of Delta Asia Group (Holdings) Limited and provides investment banking services, including securities brokerage, underwriting, and trading services.

The currency’s weakness and expectation that it will fall further have significantly increased demand for asset diversification, Au explained, adding that bitcoin is one of the assets that have seen increasing demand. “Limited investment channels for Chinese investors drive them to seek all possible investment tools to preserve their asset value,” he said.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member