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Ethereum Founder and Coinbase CEO See Positive Growth in Crypto

Joe Lubin, co-founder of Ethereum, has commented that the fall in recent cryptocurrency prices is no constraint to future positive market growth.

The comments were made in an interview with Bloomberg yesterday when the ConsenSys CEO indicated that the big picture was the relevant factor for investors, and not to focus on “pimples on a chart” as he put it, referring the peaks and troughs of Bitcoin prices.

He spoke of the “bubble” factor, suggesting that each of the six major events has always bought a surge of activity. He argues:

“…we build more fundamental infrastructure, we see a correction, and the potential gets even more impressive… I absolutely expect that there is a strong correlation between the rise in price and the growth of fundamental infrastructure in the ecosystem and the growth of development in the ecosystem. We are probably two orders of magnitude bigger as a developer community than we were eight or ten months ago.”

The current market trend should be expected, Lubin suggests. He argues that much of the current volatility has to be put down to investor speculation rather than flaws in the underlying technology, suggesting that cryptocurrencies were very much still on the right positive trajectory. Regarding his own case as a CEO, he said:

“So we can look at the price and make growth plans and projections, and we’re still on track, basically. So this is not unexpected.”

Lubin added that each value surge over the past years indicated that the current situation is just like the last “six big bubbles, each more epic than the previous one, and each bubble is astonishing when they’re happening”.

In other news, Coinbase CEO Brian Armstrong has revealed that the company signed up 50,000 new customers a day last year and on Tuesday reflected Lubin’s view that the general trend is positive, suggesting:

“This technology is going through a series of bubbles and corrections, and each time it does that, it’s at a new plateau… People’s expectations are all over the map, but real-world adoption has been going up.”

At time of press, Bitcoin is currently trading at USD 6,429, up 6.47% on 24-hr trading. Ethereum is trading at USD 285, up by 6.93% on 24-hr trade.

 

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Ethereum Declining Rapidly Relative to Bitcoin

After enjoying a year of popularity for its smart contract functionality, Ethereum has seen a rapid general decline relative to Bitcoin, with a dominance percentage hovering at 14% and dropping, while Bitcoin’s is at 54% and rising.

It has been the second most popular cryptocurrency since 2017. For a brief time in June 2017 it looked like Ethereum might overtake Bitcoin as the #1 cryptocurrency when its dominance percentage rallied to 32% while Bitcoin’s dominance percentage crashed to 38%.

Ethereum is the most popular cryptocurrency that has smart contract technology, which can be used to build decentralized apps (Dapps), which are like normal apps except they are integrated with the Ethereum blockchain, giving them cryptographic security and immutability. A plethora of Dapps and cryptocurrencies have been created with Ethereum since it initially rose to global popularity in 2017, but now Ethereum appears to be losing popularity. Currently, its native currency Ether’s price is down to USD 260 as of 14 August 2018 after dropping 20% in a single day, far worse than the 6% drop encountered by Bitcoin during the same day. This is the lowest Ethereum’s price has been since it rose to become one of the top cryptocurrencies.

To put this in perspective, Ethereum hit an all-time high near USD 1,400 in January 2018, and only a month ago Ethereum was near USD 500. Essentially, Ethereum has lost nearly 50% of its value in a month, indicating that it is losing popularity and leaving Bitcoin firmly in the #1 rank for cryptocurrencies.

The exact reason for Ethereum’s decline is unknown. Perhaps developers are choosing to create their own platforms and blockchains rather than use Ethereum’s blockchain, which lowers demand for Ethereum. Major cryptocurrencies like EOS and Tron have left Ethereum to go to their own native blockchains recently. This is particularly easy since Ethereum is open source, so anyone could copy Ethereum’s code and start their own cryptocurrency. Additionally, there are cryptocurrencies like Cardano and EOS which claim to be like Ethereum but better. Regardless of if they’re better, clearly Ethereum has competition now whereas before, it had practically none.

Perhaps more importantly, Ethereum’s decline relative to Bitcoin could be due to investors recognizing that Bitcoin is the gold standard of the cryptocurrency world. Bitcoin is the first cryptocurrency, the most secure due to its tremendous hashing power, the most reputable, the longest running and the most widely used. Bitcoin is the obvious best choice for cryptocurrency investment. Ethereum is a fairly good investment for speculative purposes, since if Dapps proliferate on Ethereum then Ether’s price will go up as Ether is needed to pay for executing smart contracts and running these Dapps. However, Dapp activity on Ethereum might be slowing down now due to all the other platforms available, which would cause a decrease in Ethereum’s price like we’re seeing.

Ethereum will still be comfortably in second place in the crypto world for the foreseeable future as its market cap is above USD 26 billion, while Ripple in third place is only at USD 10 billion. To put this in perspective, Bitcoin is sitting at USD 103 billion, and the gap between Ethereum and Bitcoin has only been widening.

 

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World Bank and Commonwealth Bank Team up with Blockchain

The World Bank and The Commonwealth Bank of Australia have combined to create an Ethereum-based Australian dollar blockchain bond.

The bond project has a target of between USD 50 million and USD 100 million for sustainability projects. The World Bank issues between USD 5060 billion a year for project funding around the world.

With 189 member countries, staff from more than 170 countries, and offices in over 130 locations, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries.

The World bank has three priorities in working with countries to end poverty and boost prosperity for the poorest people. It helps to create sustainable economic growth, the surest path out of poverty. It also invests in people, through access to health care, education, water and sanitation, and energy, building resilience to shocks and threats that can roll back decades of progress.

The Commonwealth Bank of Australia (CBA) is one of the country’s big four banks and has been chosen to be responsible for the new blockchain bond after consulting with investors. Microsoft had carried out an independent review of the CBA’s blockchain platform which will run on the MS Azure cloud platform.

The World Bank sees blockchain as the ability to streamline its necessary processes simplifying the raising of funds and operational conditions. The banking giant issued its first global bond as far back as 1989 and the first electronic bond in 2000.

As for selecting both the CBA and Ethereum for the project, World Bank treasurer Arunma Oteh said that it had worked with the Australian bank for a year before it could launch the project. Ethereum was top of its list as it had “the largest and most active development community globally”.

The CBA has recently been very active in using blockchain for a number of its recent projects including a shipping project reported by Bitcoin News recently. The bank shipped 17 tons of almonds from Sunraysia to Hamburg, Germany using a newly-developed blockchain platform. The trial demonstrated the usefulness of blockchain technology in international supply chains by tracking the almonds every step of the way from packing in Australia to delivery in Germany.

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Has Yale Found the Two Most Significant Bitcoin Price Indicators?

Connecticut-based Yale University has produced another insightful Bitcoin theory, this time claiming to have found the most significant predictors for the value of Bitcoin.

The momentum effect

The momentum effect describes the usual course of the price that tends to move in the same general direction that it has been. For example, if Bitcoin has seen a significant increase of around 20% in one week, the theory suggests that historical market evidence indicates that upward trend to continue at least one more week.

In short, if you are looking to call the next movements in the market, check to see what the latest trend has been and this can be the best indicator for a cryptocurrency’s next movements.

Investor attention

Investor attention refers to the measure of hype or fear, uncertainty and despair (FUD) surrounding cryptocurrency. Significant price increases are preluded by a spike in the number of search engine increases and media attention, with Google in particular cited as a strong predictor for the forthcoming price changes. According to the research, a jump in the number of times Bitcoin is Googled can consistently predict a price increase several weeks beforehand.

Ripple and Ethereum show similar trends in line with Google searches, although with different timelines.

An increase of negative cryptocurrency searches that incorporate terms such as hacks or crime can also be an indicator for prices, this time showing that the price will soon drop.

Market sentiment

The Yale economists behind the research acknowledge in the paper that the price of cryptocurrencies cannot be predicted by the same methods of the stock market or precious metals, noting that what drives cryptocurrency prices is unique to the market itself. They outline that this is because cryptocurrency is unaffected by macroeconomic or familiar stock market factors.

Instead, the two key predictive tools of investor attention and the momentum effect are ways of gauging market sentiment. Considering that the market remains in its relative infancy, it seems logical sentiment is still such a significant force.

The research was published in a National Bureau of Economic Research working paper by Yale economists Yukun Liu and Aleh Tsyvinski.

 

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From Coal to Crypto in Australia’s South-West as New Era of Mining Arrives

The buoyant Australian cryptocurrency market is in the news again with the construction of a new crypto mining facility in Australia’s south-west corner.

The target for this new facility is the Western Australian coal mining town of Collie just 200 kilometers south of the state capital Perth. Collie once referred to as a “dirty mining town” is mainly known as a coal-producing center but also offers industrial, agricultural and aquaculture tourism industries.

The center is a project devised by DC Two and its subsidiary crypto firm D Coin who have announced it as “the first behind the grid data center in Australia powered primarily from renewable energy sources”. The center will be powered by a solar farm built by Hadouken Pty.

DC Two’s aim is to host cryptocurrency mining and high redundancy zones for traditional IT workloads. A company statement said:

“By providing customized low-cost hosting options specifically engineered for cryptocurrency and Bitcoin mining at globally competitive rates, DC Two and D Coin have been able to attract the interest of both the local and international crypto mining community.”

The aim is to keep international cryptocurrency miners within the country rather than being lured overseas. This is the second of its kind that has been proposed in Australia this year after mining hardware distributor Royalti Blockchain Group (RBG) signed a contract to build a crypto mining complex in a decommissioned power station in Hunter Valley, New South Wales worth USD 142 million.

The South-West complex in Collie due to come online next year will draw an expected power supply of up to 4MW. The installations are expected to service 256 IT racks, with each rack delivering up to 30KW.

“In complete crypto mining configuration, using the initial 4MW power availability, the data center could mine about 650 Bitcoins per annum worth around USD 6 million based on current mining and exchange rates,” DC Two explained.

 

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Germany’s Biggest Ethereum Meetup Goes 100% Dapps

Germany’s biggest Ethereum meetup in Berlin has announced that is to cover the whole event using decentralized applications (Dapps).

The event ETHBerlin will use Dapps for all services including ticketing, live streaming, hotel booking and raffles.  The event will be held at Factory Berlin, which will be held in two venues from 7 September. One is in the central district of Berlin, Mitte. The other brand new Factory venue is in the middle of the city’s startup scene, Gorlitzer Park.

Currently, there are 1,565 Dapps built on the Ethereum blockchain alone, unsurprising given Ethereum’s historical place in the development of blockchain solutions. Carl Bennet of Status.im suggests that 2019 will become a new dawn for Dapps, suggesting:

“We will see more developers and designers focusing on creating simpler and more familiar user onboarding experiences for mainstream use we’ve come to expect from the applications we use and an overall lower barrier to entry into the crypto ecosystem.”

The suggestion is that Dapps will be the key to widespread crypto adoption, beyond the payments system created by Bitcoin, offering users the ability to interact with cryptocurrencies, while navigating user-friendly mobile and desktop applications, thus bringing digital currencies to the “forefront of social consciousness”.

For this event, ETHBerlin has elected to use an Ethereum-based video streaming app along with a decentralized hotel and apartment booking platform accepting Ether. Raffles, ticketing and event management will also be covered by Ethereum based Dapps. The ETHBerlin team suggests that it is “raising the bar” with Dapps, stating:

“ETHBerlin stands strong, we think that Dapps are the future, so we’ll do whatever it takes to push adoption, and inspire you to build more of them. There is room for all… As a responsible, global community, in constant evolution, as is our ecosystem, we need to understand that it is not enough to absorb these teachings and foundations and just replicate.”

Dapps are clearly on the march this year, mainly because of the influx of funding through ICO token sales enabling further development and testing of new ideas and applications. Within the Ethereum community, there is a general feeling the Dapps are the future replacing intermediary-based centralized systems.

Critics suggest that there are scalability issues, with some suggesting that the Ethereum protocol will need a massive scaling boost to support larger platforms demanding huge transactions.

 

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44% of Russians Have Heard of Crypto, 13% Know It Well

A survey of Russian citizens shows that 44% have heard of cryptocurrencies, with 13% responding that they have a good understanding of them.

Some 56% of the surveyed group said that they have no clear understanding of what is meant by cryptocurrency, although 31% did say that they could guess what the concept is despite not having a clear understanding of the term.

Interestingly, of this 31%, the most common participant in this group was those of low incomes, measured by less than 10,000 Russian rubles (RUB) or USD 150 per family member. The group boasting the highest income of RUB 25,000 per member and above most consistently fell in the 26% that had no idea at all what cryptocurrencies were.

The two cryptocurrencies most predominantly invested in were surveyed as Bitcoin and Ethereum, with Bitcoin the crypto of choice five times more frequently.

About 76% of respondents who had purchased cryptocurrency said that their primary motive was to make a profit, with half of them saying that they had achieved their set financial goal.

Following profit, 26% said that they were motivated by a wish to follow current trends, 16% said they used it to purchase goods, and 15% invested because of increased media attention and advertising.

Romir conducted the survey as a branch of the Gallup International Association in Russia, with 1,500 Russian respondents taking part. The results were initially published on Tuesday.

Commenting on the survey, Romir’s president Andrey Milyokhin said that the results conclusively show that cryptocurrencies have not yet formed a meaningful financial instrument, dismissing them as a get-rich-quick scheme that the Russian population has experienced before and learned the better of.

A similar survey conducted in January by the All-Russian Center for the Study of Public Opinion found that over 56% of Russians had heard of Bitcoin in particular, while 74% of Moscow’s population did have knowledge of it.

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Yale Research: Minimum 6% Bitcoin for Investment Portfolios

Yale University has published a study recommending investment portfolios be made up of at least 6% Bitcoin.

The research paper, published by economics professor Aleh Tsyvinski and entitled ‘Risks and Returns of Cryptocurrencies’, acknowledges that not everybody may be a huge believer in Bitcoin. For those less crypto-enthusiastic, he recommends holding just 4%. Even the biggest Bitcoin skeptics would benefit from 1% in holdings merely for diversification purposes.

Bitcoin, Ripple, and Ethereum are marked in the paper as distinctly different from alternative investment opportunities such as stocks and precious metals as they have no exposure to macroeconomic factors, nor to most common stock market pressures. Tsyvinski employs the Sharpe Ratio to argue that despite high rates of volatility among the cryptocurrencies studied, they offer higher rates of returns than these traditional investment tools.

Returns from cryptocurrency investments are also described as independent of that of currencies and commodities in that they are specific to factors of the cryptocurrency market. The study reads: ”Specifically, we determine that there is a strong time-series momentum effect and that proxies for investor attention strongly forecast cryptocurrency returns.”

The paper comes to finish with an index of exposures to cryptocurrencies including 345 US-based industries and 137 in China.

What do his academic colleagues say?

Tsyvinski’s colleague at Arizona State University, Professor Dragan Boscovic, shares a similar sentiment when it comes to cryptocurrency investing. In June this year, Boscovic spoke out on the increasingly popular decision for institutional investors to enter the market.

The more this happens, the more Boscovic believes this will encourage consumers and merchants to take up cryptocurrency payment methods.

Not everybody in the space shares similar positive sentiments regarding crypto investments, however. Nobel Prize Winner Robert Shiller expressed his dismay at Bitcoin’s popularity in May, lambasting it as a failed experiment spawned from ”faddish human behavior”, noting that it resembles some of the biggest failed currency experiments seen in history.

 

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Goodlatte First Member of US Congress to Disclose Crypto Holdings

US Congressman Bob Goodlatte has declared his private Cryptocurrency holdings, becoming the first member of Congress to do so.

Goodlatte, who currently serves as the chair of the House Committee on the Judiciary, has reported that he currently holds a number of cryptocurrencies, namely Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH).

Clearly, holding cryptocurrencies in itself is not at all unusual but perhaps a rarer disclosure when made by influential politicians, given the current state of regulation in the US surrounding cryptocurrencies.

The disclosure was filed in on 10 May that congressman Goodlatte owns between USD 15,001 and USD 50,000 worth of BTC, while also holding positions in BCH and ETH valued at between USD 1,001 and USD 15,000 each.

The reason for the disclosure is a result of a Congressional Blockchain Caucus legal advisory that request that all employees of the United States executive branch reveal any crypto holdings within 45 days. The advisory was not simply limited to crypto but all holdings.

Crypto clearly runs through the congressman’s family as his son Bobby Goodlatte Jr has Coinbase investments. Also, Congressman Goodlatte is a member of the Congressional Blockchain Caucus itself. The founder of the group is Jared Polis who requested guidance early this year on crypto disclosure. Analysts are expecting him to be the next politician to disclose crypto assets.

Polis argued in February that, because crypto assets are regarded as commodities by some agencies, Congress should treat them as traditional assets for disclosure purposes. He argued:

“Members of Congress and covered employees are already required to report certain asset holdings over certain amounts, including reporting any commodities holding over USD 1,000, a Member or covered employee should report any virtual currency holding as they would report any other commodity, such as gold.”

Polis is notably pro-crypto, once suggesting that the US dollar be banned and replaced with Bitcoin, and is also one of the first US politicians to accept Bitcoin campaign donations.

 

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Ethereum Launching Top-Level Domain Name “.luxe”

The Ethereum Name Service (ENS) is about to be integrated into the rest of the world wide web via a partnership with Mind + Machines Group (MMX), which will make .luxe a top level domain name like .com or .org. The .luxe top-level domain name will be available for purchase starting from 30 October 2018 and stands for Lets U Xchange Easily.

The .luxe top-level domain has been approved by the Internet Corporation for Assigned Names and Numbers (ICANN) and will be resolvable across the world wide web. The .luxe domain names will have a corresponding hash on the Ethereum blockchain, like any Ethereum asset.

Users will be able to use .luxe domain names instead of hashes to transfer assets on wallets that are ENS enabled, which is most Ethereum wallets. This will make transacting with Ethereum an easier process since .luxe domain names can be easily memorized, versus a 40-character hash which is impractical to memorize. It is expected that .luxe will increase the movement of Ethereum assets, and will be widely used by wallet services, Dapss, and smart contracts.

The CEO of MMX, Toby Hall, said, “MMX is committed to working alongside ICANN and leading technology partners to ensure domain names continue to have real relevance to entrepreneurs, developers and end-users in the twenty-first century. We already know from Ethereum’s test in its non-ICANN authorized .eth zone that there is a real proven demand for word-based identifiers that are blockchain enabled, ENS having received deposits of over USD 28 million on approximately 300,000 seven-character words and above in the .eth zone. We look forward to working with ENS to allow those .eth registrants the opportunity to claim their equivalent .luxe name before the Company launches .luxe for sale to the general public in late October. We are delighted to have developed a deep working relationship with the keyholders of ENS.”

The lead developer of ENS, Nick Johnson, said, “We’re very excited to be helping advance integration between existing DNS-based name services and the Ethereum Name Service, improving usability for blockchain applications and users.”

From 9 to 25 October, users who have .eth domain names registered with ENS can claim their .luxe equivalent, and after that .luxe domain names will be on a first come first served basis.

 

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