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Chat Giant LINE Launches BITBOX Crypto Exchange, Signs BitGo Partnership

Global messaging giant LINE, which is headquartered in Tokyo, Japan has announced the launch of the BITBOX cryptocurrency exchange. BITBOX is based in Singapore and offers 15 languages and 30 different cryptocurrencies.

Due to lack of regulatory approval BITBOX is unavailable to users in the United States and Japan. The site is blocked off to citizens of these countries but BITBOX is open for business in all other countries.

The primary goal of BITBOX is to merge the social experience of LINE with a cryptocurrency exchange, so perhaps the main draw of BITBOX will be an active community with easy-to-use chat software. There are plenty of crypto exchanges that have at least rudimentary chat software, but by using LINE’s messaging technology BITBOX can take crypto exchange chat rooms to more sophisticated levels.

LINE is a popular messaging app with 600 million users as of 2015. This will make it easy for LINE to get customers for BITBOX since it can advertise it to a large user base. Further, LINE is offering free trading for the first month after launch, and USD 10 of cryptocurrency for the first 2 million users.

BITBOX has partnered with BitGo, a cryptocurrency custodian, to provide security for the exchange. LINE’s BITBOX announcement says, “The BitGo wallet is the only institutional-grade, multi-signature, multi-coin hot wallet. Multi-signature, three-key management removes any single point of failure, and advanced security configurations ensure that assets are secure as they move in and out of the wallet. The BitGo wallet pairs seamlessly with BitGo’s cold storage custody making asset transfer simple and secure.”

Apparently, LINE and BitGo are aiming to attract institutional investors. BitGo CEO Mike Belshe says, “LINE and BitGo are both leaders in our industry and this partnership with BITBOX is an important step in bringing institutional investors the security, compliance, and custodial solutions they need. LINE has an established history of success in the global market. Together BITBOX and BitGo are committed to providing the most secure and reliable user experience in the digital token ecosystem.”

 

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Coinbase to Acquire Licensed Broker-Dealers to Offer Securities

The United States Securities and Exchange Commission (SEC) has given Coinbase approval to buy three companies, including Keystone Capital Corp, Digital Wealth LLC, and Venovate Marketplace Inc. Keystone Capital and Venovate Marketplace are officially registered as broker-dealers with the SEC and FINRA. Once the acquisition is complete and these companies merge with Coinbase, it will have the ability to offer securities trading. This makes Coinbase the first crypto exchange that will be able to offer crypto securities trading to US citizens.

This move is crucial, since the SEC recently declared that almost all cryptocurrencies besides Bitcoin and Ethereum would be regulated as securities. Essentially, any cryptocurrency which has a central organization that is making profits, combined with an expectation of future profits from investors who buy the coin, will be considered securities. Practically all crypto which launched via initial coin offerings (ICOs) fit this definition, and many major crypto with market caps in excess of USD 1 billion were launched with an ICO.

Recently, Coinbase announced that it would be adding five new cryptocurrencies including 0x, Zcash, Stellar, Cardano, and Basic Attention Token, and this move to become an SEC-regulated broker-dealer is essential to facilitate the listing since some of these cryptocurrencies can be considered securities. In general, becoming a broker-dealer will allow Coinbase to add a full spectrum of ERC-20 tokens in the future.

Although nothing has been announced regarding this yet, becoming a broker-dealer will allow Coinbase to actively participate in ICOs. Perhaps Coinbase will offer services to make ICOs legitimate, a move that would fit SEC’s requirement for regulatory oversight in ICOs. The ICO market is huge, having raised USD 12 billion in 2018 so far.

Circle, Coinbase’s competitor, is also seeking registration as a broker-dealer with the SEC. This is essential for Circle, since it recently acquired Poloniex and was forced to delist most of the coins since those coins could be considered securities. In general, any cryptocurrency exchange in the US will miss out on a significant amount of trading activity without being able to offer securities, and firms like Coinbase that can offer securities will have an advantage.

It will take some time before Coinbase starts offering crypto securities. It has to integrate its technology into the companies it is acquiring, and make sure all employees obtain proper licensing to participate in securities trading.

 

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BlackRock CEO Denies Previous Reports of Crypto Foray

On 16 July 2018, a news story that BlackRock was creating a team to explore cryptocurrency investment was thought to have sparked a 5% Bitcoin rally. This news story was based on insider tips to Financial News London. Now the CEO of BlackRock, Larry Fink, has denied these reports.

Larry Fink said, “I don’t believe any client has sought out crypto exposure. I’ve not heard from one client who says I need to be in this.”

BlackRock did not rule out moving into the cryptocurrency space once regulations mature. Fink told Bloomberg, “When it becomes more legitimatized, when it has a true open nature of it that you can identify who the players are on both sides, that’s when we’ll probably look at it.”

Simultaneously, Fink indicated that he was very excited about blockchain technology itself. Blockchain technology can be used to improve the infrastructure of an organization like BlackRock by providing an immutable cryptographically secure database, and it can also be used as the backbone for instant and cryptographically secure transactions. Blockchain technology is being used by many organizations around the world to increase efficiency and trustworthiness, and doesn’t require implementing or using cryptocurrency itself.

Despite the revelation that BlackRock will not be investing in crypto anytime soon, Bicoin held its gains and currently sits at USD 6,700.

 

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7 Banks to Form Trade Finance Blockchain Platform in Hong Kong

Seven banks including Hong Kong’s banking regulator are to launch a trade finance platform this September using blockchain.

The platform is reported to be one of the largest government-led cross-bank cooperation globally. It will include UK banking giant HSBC and Standard Chartered PLC. HSBC is the seventh largest bank globally by assets and the largest in Europe; Standard Chartered is a London-based bank with businesses across Asia.

Other banks involved are said to be one of Australia’s big four, ANZ, and four Asian banks, BOC Hong Kong Holdings, Hang Seng Bank, Bank of East Asia Ltd and Singapore’s DBS Holdings Ltd.

The financial sector has been increasingly under the microscope both by private companies and government bodies, who are beginning to regard blockchain technology as a way of modernizing record keeping and speeding up payments, in what is often described as an overly paper-driven industry, particularly given the technologies available in 2018.

The cross-bank project has been proposed to alleviate exactly some of these institutional operating issues, as Howard Lee deputy chief executive of the Hong Kong Monetary Authority (HKMA) explained. The main focus will be the digitalization of documentation and automating processes. Lee added that the group will want to “link up with other trade platforms in other jurisdictions to further facilitate cross-border trades”.

It appears that banks, at one time shunning blockchain due to in part to its connection with Bitcoin and Ethereum, are coming around to seeing the advantages of integrating the technology into upgrading financial systems.

The multi-bank platform will not be the first official blockchain encounter for HSBC. Along with Dutch giant ING, the two banks are reported to have made the world’s first trade finance transaction using blockchain earlier in May.

In China, The Shanghai Stock Exchange (SSE) published a research paper on Tuesday, which analyzed the use of DLT in various stages of a security transaction. The SSE is one of the two stock exchanges operating independently in the People’s Republic of China and is the world’s third-largest stock market by market capitalization.

 

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China Sees 500% Spike in Blockchain-Named Companies

Blockchain (qukualian in Chinese) is fast becoming a byword in Chinese business circles according to the South China Morning Post, as the word now appears in company names with a six-fold frequency compared to last year.

Figures reportedly show that most of this flurry of activity inciting companies to squeeze the word qukualian into company names actually happened since the beginning of the year. This alone seems to indicate the level at which blockchain is taking hold as a technology in China’s fintech space.

There are currently over 4,000 of such companies in China, according to recently published figures by data aggregator Qixin.com. This year, companies using qukualian in their title name has risen from 555 last year to an astounding 3,078.

SCMP suggests that Chinese companies that have filed blockchain related patents applications now represent more than half the world’s total, showing China’s advancement in this technological space. Some 41% of startups at the last count, that is the first quarter of 2018, were blockchain-related companies.

It is clear by these statistics, and by recent official statements regarding embracing new technologies, that China is set to become the world leader in utilizing blockchain technology. The race is being led from the front with the Chinese president Xi Jinping suggesting that the future has arrived with such technologies. He recently stated:

“Since the 21st century began, global scientific and technological innovation has entered an unprecedented period of intensive activity. A new round of scientific and technological revolutions and industrial changes is reconstructing the global innovation map and reshaping the global economic structure.”

Calling the arrival of blockchain a “revolution”, however, has encouraged one detractor. Head of the international department of the China Banking and Insurance Regulators, Fan Wenzhong, has suggested that it was a disservice to the technology to promote it with such adulation and using such language only risks mythologizing the space.

 

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38% of South Africans Polled Regret Missing Early Bitcoin Uptake

A recent poll in South Africa on awareness and attitudes towards cryptocurrency has shown that 38% of respondents wished that they had invested in digital currency before, writes Cointelegraph.

The poll was conducted by Pan-African financial services company Old Mutual Limited. The annual Savings and Investment Monitor survey for South Africa revealed that in general, South Africans were currently largely positive about cryptocurrencies.

Along with 38% of people responding positively to the statement “I wish I had invested in [crypto] before”, another statement, “You can make a lot of money with them”, received a huge 71% agreement from the public.

The statement “They are bad news, like a pyramid scheme” seemed to resonate with 43% of respondents, while 53% had no idea how digital currencies actually worked.

Overall, and clearly important for the development of cryptocurrency in the region, according to the poll, more South Africans were unaware of the industry than those who were, with a 60/40 split.

As Bitcoin News reported recently, South Africa is developing its cryptocurrency space. The South African Reserve Bank has recently taken steps to introduce a new non-state self-regulatory body (SRO) aimed at overseeing further developments in the industry. Further to that, the SARB has announced that it wants to build a proof-of-concept wholesale payment system for interbank settlement using a South African rand token on DLT.

Europeans, according to recent statistics, are reported to be far more familiar with cryptocurrencies and take up in some countries such as Switzerland and the UK is significant. A recent ING survey suggested that 66% of Europeans were familiar with crypto and 33%, when prompted, saw it as the future of online spending. The awareness rate was found to be lower in the US with only 57% of respondents having heard of cryptocurrencies.

 

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Blockchain Company R3 Mulls IPO

R3 has announced considerations of launching an initial public offering (IPO). Advisors are being consulted regarding the viability of an IPO, as several potential buyers have already approached the company. The final decision lies on the shoulders of R3’s founder and CEO David Rutter, with input given from R3’s investors.

R3 is a blockchain collaboration of sorts, with over 200 members participating. Companies involved in this ecosystem range from tech giants like Intel and Microsoft to established financial institutions like US Bancorp and Wells Fargo, illustrating a unique mixture of what the Fintech sector has to offer.

The company also has an offering being used by some select partners, known as the Corda platform. An open source version is available and is also R3’s main source of revenue, as it also offers a commercial version.

While no definite plans of an IPO have been made, if the blockchain company follows through, it could have serious implications for the course of the company after going public.

As investors have a say in how the company operates through voting and other mechanisms, what things R3 focus on in the future could be completely different from those it would pursue if it were to remain a private corporation.

Not only could this force R3 to make something profitable rather than innovative, members of the platform may even begin to leave. Goldman Sach Group and Banco Santander left the group a couple years ago, and others may follow suit if potential new management doesn’t align with current member interests.

On the other hand, going public may do favors not only for the company but for cryptocurrency. By going public, many institutional investors may have to finally take cryptocurrency seriously. While the sentiment is beginning to change, it’s hard to ignore an IPO with the endorsement of over 200 proven companies, ranging from blue-chip stocks to household names.

R3 may be able to receive huge amounts of funding in the process, and cryptocurrency’s brand image could receive a positive makeover.

The blockchain company’s mission from the start is to “deliver a blockchain solution for the widest possible business community”, so any choice made will be with this in mind.

 

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Kodak-Branded Bitcoin Mining Scheme Collapses Amid Scam Rumors

A Bitcoin mining scheme working under the Kodak brand has ceased operations, while Kodak has told the BBC it never officially licensed the project.

The Kodak KashMiner was launched in January this year and featured on the official Kodak stand during the CES technology show in Las Vegas. Critics accused the scheme of advertising unachievable profits and misleading information from the start, labeling the venture a scam.

Project history

Spotlite USA is the company behind the KashMiner and is one of several companies that are legally licensed to use the Kodak brand on its own products.

The business plan offered in January detailed a scheme that would allow people to rent the machines at an upfront fee of approximately USD 3,400, with the miners allowed to keep the Bitcoins they were rewarded.

During this time, Spotlite’s chief executive Halston Mikail claimed 80 devices were already in functional operation, with future plans to install hundreds of hardware units at the official Kodak headquarters in New York that benefits from its own on-site power plant.

However, a spokesperson for Kodak informed the BBC that not only had this not occurred in the New York office, but Kodak had never officially licensed the KashMiner specifically.

Mikail confirmed that the US Securities and Exchange Commission was responsible for canceling the operation and said instead that Spotlite would use the equipment at a private mining farm in Iceland.

Problematic promises

After paying the upfront costs to rent the hardware, Spotlite advertised monthly earnings of USD 375 months for the following two years. Those familiar with the logistics of Bitcoin mining found this figure to be problematic.

Accusations against Spotlite claimed that its internal analysis did not take into account the increasing difficulty of the mining process. Economist Saifedean Ammous was among the vocal skeptics, who pointed out there was no way the KashMiner could produce exactly USD 375 each month.

 

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UK Tipped as Global Blockchain Hub Contender in Rise of “Digital Economy 2.0”

According to an in-depth analysis report, should the United Kingdom further pursue a bullish approach to blockchain and cryptocurrency industry, it has “significant potential to become a global blockchain hub by 2025”.

World-class qualities ready for the New Digital Era

The 960-page analysis report was produced in a collaborative effort between DAG Global, Deep Knowledge Analytics and the Big Innovation Centre. The paper concludes that the United Kingdom is in a rather unique position to become a significant force during the rise of the Digital Economy 2.0.

The report finds that the UK has an “unprecedented potential to become a global leader” in the blockchain field thanks to its status as a global financial hub, a leader in world-class business practice, commerce and law, and furthermore, as a nation that has strong governmental and industrial support for blockchain technology and cryptocurrencies.

With these qualities and others mentioned in the report, all that is required is a proper assembly with an efficient and synergistic approach. For example, if the UK government can provide enough resource and support to blockchain-based startups, as well as fully commit to blockchain as being the future of financial transactions, data storage and other use-cases, it could utilize its disruptive capabilities so much so that it would secure its world-leading position but also prevent “stagnation”.

That is also well underway; between from 2017 to 2018, over GBP 500 million worth of investment was poured into UK blockchain companies and this figure is expected to rise.

Fourth Industrial Revolution

One volume of the gigantic paper focuses on the “Practical applications and use cases” of blockchain technology, giving a nod to technologies touted as hallmarks of the “Fourth Industrial Revolution” such, as artificial intelligence (AI) and the Internet of Things (IoT).

Use cases and applications also include the tracking of welfare spending, the UK Energy sector, charity and healthcare, going so far as to suggest that blockchain can find itself imperative in solving the NHS crisis.

In the paper, it is considered that key next-generation IT technologies such as AI are to converge with blockchain technology. Fascinatingly, it also anticipates blockchain technology itself being disrupted by next-generation IT solutions and become a staple within any industrial or governmental application.

Digital Economy 2.0

It is considered by the paper that 2018 is the “inflection point”, the beginning of blockchain’s catalyzing transition from the present digital economy to what is known as an “Augmented Economy” – the Digital Economy 2.0.

At this point, the blockchain, AI and other aforementioned next-generation technology solutions will penetrate the majority of social activities and norms with finance, law, regulation, commerce and even governance included. The “true peak” of this transition to an “Augmented Crypto Economy”, according to the paper, could occur around 2022-2025.

Sean Kiernan, chief executive of DAG Global said, “The gap between the two worlds of traditional finance and crypto economy remains, but in the coming years we can expect this to lessen and eventually disappear.”

 

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Buying up All the Bitcoin in the World: Could It Happen?

If a government, corporation, or individual bought up almost all the Bitcoins in the world, what would happen? In theory, based on the law of supply and demand, the act of buying up almost all available Bitcoin would result in several things.

First, it would drastically decrease supply, while demand from investors, traders, and users would at least stay constant and probably increase significantly from speculation caused by the price spike that occurs when someone is single-handedly buying up all the Bitcoins. When there is less supply but the same or increased demand, then price rises.

What it would take

Such an operation would require extreme secrecy and a globally-coordinated effort. One way to do this would be to open accounts on every single cryptocurrency exchange in the world, which would require bank accounts in almost every country, as well as opening accounts on all peer-to-peer trading sites like Localbitcoins. Additionally, accounts should be made with over the counter (OTC) trading desks like Circle. Beyond this, an effort should be made to contact and make deals with all the biggest known holders of Bitcoin and anyone else with Bitcoin. This is such a large task overall that an entire company with many cryptocurrency experts would probably have to be formed to pull this off successfully.

Bitcoin purchases would also have to be made across all the exchanges in the world simultaneously for all Bitcoins that are at a reasonable price within a range of average price. The price of Bitcoin would rise drastically during the initial purchasing, followed by a continued rally as speculators across the world try to make profits from the rapidly rising market.

Buying up Bitcoin could also be done over time; probably easier but more costly and time-consuming.

As of this writing on 16 July 2018, there are BTC 17.15 million in circulation, with another BTC 3.85 million that will be mined over the coming years. It is estimated that perhaps a few million Bitcoins have been lost, which would mean supply is significantly less than the total number in circulation, but this cannot be confirmed since a lost Bitcoin looks no different than a normal Bitcoin on the blockchain. The market price is near USD 6,670 which yields a market cap of USD 114.5 billion.

Based on the market cap, theoretically, someone with around USD 100 billion could buy almost all the Bitcoins if purchased at the current exchange rate. Obviously, this isn’t how it works in reality. Bitcoin would cost progressively more as they were being purchased and it would be practically impossible to purchase all the circulating Bitcoins. Even with the best effort, millions of Bitcoins would probably still be held by other people.

Who could pull it off?

The richest man in the world, Jeff Bezos, has USD 150 billion. He could single-handedly buy up almost all of the Bitcoin available for purchase if he wanted to, but only if he could get them all at the same price they were today. It gets even easier for a corporation to achieve this: Apple has USD 375 billion of assets, more than three times the Bitcoin market cap and there are many other corporations with such wealth.

A nation’s government could easily do the same. The United States had a budget of USD 3.98 trillion in 2017, only a small fraction of that would be needed to buy up almost all the Bitcoin available. This is made even easier by the fact that the United States sells bonds that are considered the gold standard of the bond market, so the United States could issue USD 200 billion of bonds that would be bought up instantaneously for this operation, effectively not having to pay a dollar of its own money.

It cannot be accurately estimated how much profit would be generated from buying up almost all the Bitcoin in the world, since it depends on how much would be left in the hands of others. One rough way of estimating is to assume that there would still be USD 100 billion invested in Bitcoin from all other people in the world, based on the current market cap. If BTC 1 million were left, this would translate to a price of USD 100,000 per Bitcoin. If only 100,000 Bitcoins were left, then Bitcoin’s price would be USD 1 million.

 

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