Category Archives: exchanges

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Coinbase Trading Volume Drops Sharply Versus Offshore Crypto Exchanges

Coinbase, the largest Bitcoin and cryptocurrency exchange headquartered in the United States, has seen a steeply declining trading volume during 2018, amid what many consider to be a bear market.

Coinbase’s trading volume has declined 83% during 2018, compared to 73% for Bitstamp, another major USD exchange. However, overseas exchanges like OKEx and Binance that have more relaxed regulations have actually seen steady or rising volume during 2018.

Essentially, Coinbase’s trading volume has been declining more rapidly than all the other major exchanges in the world, indicating a shift of customers from Coinbase to overseas markets. This might partly be due to Coinbase only having six cryptocurrencies listed on its main exchange. For example, Kraken has 23 cryptocurrencies listed and its trading volume hasn’t dropped as fast as Coinbase. More crypto trading pairs seems to translate to higher trading volume on an exchange, since it taps into a wider user base.

Regulations are probably the biggest problem for Coinbase. It was recently forced to send customer info and trading histories to government authorities, spooking some traders. OKEx and Binance are regulated in different jurisdictions, with a less invasive and more comfortable environment for crypto traders. OKEx has seen its volume increase during 2018, with nearly USD 6 billion of trading volume in July 2018 versus less than USD 5 billion in January. Binance’s trading volume has dropped from USD 15 billion to just over USD 10 billion during the same time, not as severe as the drop from USD 20 billion to USD 3 billion per month for Coinbase.

Coinbase has gone from being one of the biggest crypto exchanges in the world by volume to having nearly the same volume as Kraken and Bitstamp, with many crypto exchanges outranking Coinbase. It has acquired Paradex in an effort to diversify and increase the number of currencies offered but has a long way to go to reach the 610 currencies that OKEx offers. Due to regulations, Coinbase might not ever be able to offer the same order of magnitude of options as exchanges like OKEx and Binance.

There has been a lot of news recently about the Bakkt cryptocurrency exchange, backed by the Intercontinental Exchange (ICE) which owns the New York Stock Exchange (NYSE). With Coinbase trading volume declining so sharply, Bakkt appears to be in a prime position to become the leading crypto exchange in the United States when it launches later in 2018.

 

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Survey Attests Crypto Exchanges Want Regulations After All

A recent survey from payment company Mistertango indicates that 88% of cryptocurrency exchanges want regulatory standards for the industry, with 55% in favor of know-your-customer (KYC) policies and anti-money laundering checks on users.

Protection from market volatility

So far, 2018 has seen poor gains compared with the latter half of 2017, while the fear of a market crash and major cryptocurrency devaluation is pushing exchanges servicing the industry in favor of regulations. Some 30% of the survey’s respondents cited a significant crash as the biggest threat facing the market.

While 88% of the exchanges did want regulatory overcite over their own activities, 40% said that actually reducing bank-enforced barriers over cryptocurrency funded accounts would help improve the overall acceptance of the industry; it would certainly make it easier for more people to enter the market.

However, 17% of the exchanges see strict regulations as the biggest threat to the industry, pointing to the need for the approach taken implementing the regulations to be well-informed and not overbearing. It is given the generally reported sentiment that the industry discourages regulations.

Understanding the results

Business Manager at Mistertango, Gabrielius Bilkštys, said in a statement that the survey shows the industry is ”crying out for regulation“, describing uncertainty as the biggest fear, requiring a solution to provide stability. The lack of any regulatory consensus globally only adds to this dilemma, making it nearly impossible for cryptocurrencies to progress such as fiat, Bilkštys said.

CEO of exchange CEX.IO, Oleksandr Lutskevych, also weighed in on the results, saying that the industry has taken the opportunity to finally have its say on regulations. Lutskevych noted the widely reported claims that they do not want such regulations has been proven to be far from the truth and that they, in fact, recognize regulations have the capability to lead to the market maturing and moving away from an accusatory image of involvement with illicit activities.

In total, 24 exchanges took part in the survey, based in Europe, Asia, South America and Oceana, which operate with an aggregate trading volume surpassing USD 100 million.

The results were published by Mistertango on Finextra.

 

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Vitalik Buterin Has Harsh Words For Centralized Crypto Exchanges

Ethereum Co-Founder Vitalik Buterin had harsh words for centralized cryptocurrency exchanges at the TechCrunch Sessions: Blockchain 2018 conference in Zug, Switzerland. He said, “I definitely hope centralized exchanges go burn in hell as much as possible”. He thinks decentralized cryptocurrency exchanges are the way of the future.

Vitalik Buterin is particularly critical about how centralized cryptocurrency exchanges have gained the power to decide which cryptocurrencies will become popular. He says “We can really take away this stupid king-making power that these centralized exchanges have where they have this ability to just decide which tokens become big by deciding to list them and then charging these crazy $10 million to $15 million listing fees. The more we can get away from that world and into something which actually satisfies the blockchain values of openness and transparency the better.”

Aside from Vitalik Buterin’s criticisms, in general, there has been animosity towards centralized cryptocurrency exchanges from the crypto community due to numerous exchange hacking incidents, and even more incidents of exchanges acting like a centralized bank and freezing user funds. For example, over 100 pages of complaints have been filed with the United States Securities and Exchange Commission describing how Coinbase has frozen user accounts and funds and their customer service doesn’t offer any help. This highlights how centralized cryptocurrency exchanges control money, defeating one of the main purposes of cryptocurrency which is to give power over money back to the people.

Additionally, centralized cryptocurrency exchanges usually require identification information from users, removing the anonymity that cryptocurrency was built to provide.

Vitalik Buterin recognizes that the fiat side of cryptocurrency trading is what has caused centralization, saying “In practice, particularly on the fiat to crypto side, it is very difficult to decentralize because you ultimately are interfacing with the fiat world, and the fiat world is one that only has basically centralized gateway. There are valuable services being provided there that are very hard to decentralize”.

Vitalik Buterin is strongly in favor of decentralized cryptocurrency exchanges. Binance and Huobi, which are among the biggest cryptocurrency exchanges in the world, are planning on switching to decentralized blockchain-based platforms, so they won’t have to deal with government regulations anymore.

A truly decentralized cryptocurrency exchange will be able to offer cryptocurrency trading anywhere in the world without collecting identification information from users, and due to its decentralized blockchain-based nature governments can’t really do anything to stop it. Binance and Huobi were forced out of their native country of China following the September 2017 cryptocurrency trading ban, which is probably why these exchanges are leading the way towards decentralization, to ensure their survival no matter the regulatory environment.

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Jonathan Stacke – Bitcoin in India

Jonathan Stacke – Bitcoin in India:

Jonathan Stacke writes on Bitcoin in India for his latest article on The Genesis Block (@TheGenesisBlock). Excerpts:

“With talk of inflation and capital controls familiar to the bitcoin community, one might think Indian citizens would be jumping at the opportunity to adopt the digital currency, yet the hurdles to wide-scale bitcoin proliferation in India may be significant for the foreseeable future. While demand for gold has grown in India, the multiple applications it offers culturally and industrially in addition to acting as an alternative store of wealth may mean that such demand does not translate to bitcoin.”

“[A correlation exists] between bitcoin adoption and internet penetration in a given country. India, with just 12.6% of its citizens having internet access, has the sixth lowest internet penetration of the 100 largest countries. Despite that fact, the size of the total Indian population – more than 1.2 billion – makes India the third largest internet-using population in the world, with 150 million users, behind only China and the US.”

“It is possible to buy and sell bitcoin through a number of websites including buysellbitco.in and there does appear to be a healthy LocalBitcoins market.”

“Not to be overlooked is India’s mobile phone penetration of 71%, or approximately 900 million total users. […] only 44 million Indians are smartphone subscribers.”

“M-PESA, the mobile payment system that has changed the lives of millions in Kenya recently rolled out in India. […] If mobile payment systems like these gain traction in India as they have in Africa, acceptance of digital currency would prove to be a less significant hurdle.”

“India had the highest remittance volume in the world in 2011 with $58 billion, or 3.1% of GDP, according to the World Bank.”

“Forward-thinking companies like Buttercoin have recently stepped in to apply the potential of bitcoin to these markets […]”

“The Reserve Bank of India has stated that it does not immediately intend to regulate bitcoin, but their historic actions indicate that may change soon enough […]”

 – http://thegenesisblock.com/bitcoin-in-india-drivers-and-barriers-to-adoption
 – (Further discussion of this article)

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Wired – Bitcoin's Street Sellers

Wired – Bitcoin’s Street Sellers:

Wired writer Robert McMillan (@bobmcmillan) makes some face-to-face, in-person trades and describes the experience.  Excerpts:

“Welcome to the quickest, most private way to buy the internet’s most successful digital currency: in-person and face-to-face.”

“Buttonwood meetups started in New York a few months ago and fanned out to San Francisco and Los Angeles. Buttonwood is an allusion to the May 17, 1792 agreement, struck under a buttonwood tree at 68 Wall Street, that set down the rules for what became the New York Stock Exchange.”

“After some haggling, Light types Copley’s Bitcoin address into his mobile phone and transfers just over half a Bitcoin ($50) to Copley’s digital wallet [for payment of silver bullion]”.

He used to buy and sell on a (temporarily shuttered) marketplace called Bitinstant. But a few months ago, ‘it started to ask for too much of my information,’ the student says. Given the nature of his business, he wants to buy Bitcoins without being tracked.

These are the kinds of deals that have regulators worried.

It’s traditionally been tough to quickly buy Bitcoins with U.S. dollars, and recently it’s become tougher.  […] That [regulation has] led to a pretty healthy off-the-books market for Bitcoin traders. […] Buyers and sellers can also hook up over Internet Relay Chat at #bitcoin-otc”

“Buyer’s Best Friend will give you Bitcoins back for cash, much like you can get cash back from a credit card, but you are supposed to purchase something first.”

“Though trading an obscure crypto currency may sound very modern, the whole transaction has a decidedly old-fashioned and human flavor to it.”

 – http://www.wired.com/wiredenterprise/2013/07/buttonwood
 – http://bitcointalk.org/index.php?topic=261116.0

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Wired – Bitcoin's Street Sellers

Wired – Bitcoin’s Street Sellers:

Wired writer Robert McMillan (@bobmcmillan) makes some face-to-face, in-person trades and describes the experience.  Excerpts:

“Welcome to the quickest, most private way to buy the internet’s most successful digital currency: in-person and face-to-face.”

“Buttonwood meetups started in New York a few months ago and fanned out to San Francisco and Los Angeles. Buttonwood is an allusion to the May 17, 1792 agreement, struck under a buttonwood tree at 68 Wall Street, that set down the rules for what became the New York Stock Exchange.”

“After some haggling, Light types Copley’s Bitcoin address into his mobile phone and transfers just over half a Bitcoin ($50) to Copley’s digital wallet [for payment of silver bullion]”.

He used to buy and sell on a (temporarily shuttered) marketplace called Bitinstant. But a few months ago, ‘it started to ask for too much of my information,’ the student says. Given the nature of his business, he wants to buy Bitcoins without being tracked.

These are the kinds of deals that have regulators worried.

It’s traditionally been tough to quickly buy Bitcoins with U.S. dollars, and recently it’s become tougher.  […] That [regulation has] led to a pretty healthy off-the-books market for Bitcoin traders. […] Buyers and sellers can also hook up over Internet Relay Chat at #bitcoin-otc”

“Buyer’s Best Friend will give you Bitcoins back for cash, much like you can get cash back from a credit card, but you are supposed to purchase something first.”

“Though trading an obscure crypto currency may sound very modern, the whole transaction has a decidedly old-fashioned and human flavor to it.”

 – http://www.wired.com/wiredenterprise/2013/07/buttonwood
 – http://bitcointalk.org/index.php?topic=261116.0

All News – Daily E-mail Subscription – Twitter: @BitcoinNews

Wired – Bitcoin's Street Sellers

Wired – Bitcoin’s Street Sellers:

Wired writer Robert McMillan (@bobmcmillan) makes some face-to-face, in-person trades and describes the experience.  Excerpts:

“Welcome to the quickest, most private way to buy the internet’s most successful digital currency: in-person and face-to-face.”

“Buttonwood meetups started in New York a few months ago and fanned out to San Francisco and Los Angeles. Buttonwood is an allusion to the May 17, 1792 agreement, struck under a buttonwood tree at 68 Wall Street, that set down the rules for what became the New York Stock Exchange.”

“After some haggling, Light types Copley’s Bitcoin address into his mobile phone and transfers just over half a Bitcoin ($50) to Copley’s digital wallet [for payment of silver bullion]”.

He used to buy and sell on a (temporarily shuttered) marketplace called Bitinstant. But a few months ago, ‘it started to ask for too much of my information,’ the student says. Given the nature of his business, he wants to buy Bitcoins without being tracked.

These are the kinds of deals that have regulators worried.

It’s traditionally been tough to quickly buy Bitcoins with U.S. dollars, and recently it’s become tougher.  […] That [regulation has] led to a pretty healthy off-the-books market for Bitcoin traders. […] Buyers and sellers can also hook up over Internet Relay Chat at #bitcoin-otc”

“Buyer’s Best Friend will give you Bitcoins back for cash, much like you can get cash back from a credit card, but you are supposed to purchase something first.”

“Though trading an obscure crypto currency may sound very modern, the whole transaction has a decidedly old-fashioned and human flavor to it.”

 – http://www.wired.com/wiredenterprise/2013/07/buttonwood
 – http://bitcointalk.org/index.php?topic=261116.0

All News – Daily E-mail Subscription – Twitter: @BitcoinNews

Wired – Bitcoin's Street Sellers

Wired – Bitcoin’s Street Sellers:

Wired writer Robert McMillan (@bobmcmillan) makes some face-to-face, in-person trades and describes the experience.  Excerpts:

“Welcome to the quickest, most private way to buy the internet’s most successful digital currency: in-person and face-to-face.”

“Buttonwood meetups started in New York a few months ago and fanned out to San Francisco and Los Angeles. Buttonwood is an allusion to the May 17, 1792 agreement, struck under a buttonwood tree at 68 Wall Street, that set down the rules for what became the New York Stock Exchange.”

“After some haggling, Light types Copley’s Bitcoin address into his mobile phone and transfers just over half a Bitcoin ($50) to Copley’s digital wallet [for payment of silver bullion]”.

He used to buy and sell on a (temporarily shuttered) marketplace called Bitinstant. But a few months ago, ‘it started to ask for too much of my information,’ the student says. Given the nature of his business, he wants to buy Bitcoins without being tracked.

These are the kinds of deals that have regulators worried.

It’s traditionally been tough to quickly buy Bitcoins with U.S. dollars, and recently it’s become tougher.  […] That [regulation has] led to a pretty healthy off-the-books market for Bitcoin traders. […] Buyers and sellers can also hook up over Internet Relay Chat at #bitcoin-otc”

“Buyer’s Best Friend will give you Bitcoins back for cash, much like you can get cash back from a credit card, but you are supposed to purchase something first.”

“Though trading an obscure crypto currency may sound very modern, the whole transaction has a decidedly old-fashioned and human flavor to it.”

 – http://www.wired.com/wiredenterprise/2013/07/buttonwood
 – http://bitcointalk.org/index.php?topic=261116.0

All News – Daily E-mail Subscription – Twitter: @BitcoinNews

The Genesis Block – 2013 Mid-Year Bitcoin Review

The Genesis Block – 2013 Mid-Year Bitcoin Review:

https://docs.google.com/viewer?url=http://thegenesisblock.com/wp-content/uploads/2013/07/TGB-Bitcoin-Mid-Year-Review-and-Outlook-4.pdf

This report from The Genesis Block (@TheGenesisBlock) covers the major events from the first half of 2013 and what to look out for in the months ahead.  Excerpts:

“The one outlier in the global bitcoin trading story so far in 2013 has been CNY, with a meteoric rise from near obscurity at 1% in January to more than 6% of global volume at the end of June. This was largely attributable to a brief documentary about bitcoin aired on state-run CCTV.”

“Volatility has presented a number of exceptional arbitrage opportunities for traders. As macro events and news from different exchanges create unique trading dynamics, the price differential across exchanges can become quite significant.”

“As a smallmarket, bitcoin is still heavily influenced by individual micro events, but traders are clearly paying attention to major macro headlines as well.”

“We are also aware of three VC-backed exchanges currently in development.”

“The initial ASICMiner IPO was in August 2012 [raised] over $100,000 for initial ASIC production. As of this writing, shares are trading at 4.25 BTC each, providing initial shareholders a 4,250% return in 8 months and netting IPO investors millions of dollars in gains.”

“The US has unquestionably been the least accommodating with regards to virtual currency regulations. Throughout the rest of the globe, government responses have ranged from deferment to outright encouragement so far this year.”

“We expect more and larger retail players to enter the space, helping the value of the market continue to grow steadily.”

 – http://thegenesisblock.com/bitcoin-mid-year-review-and-outlook
 – http://bit.ly/1aJhEQs (PDF)  (Flash-based PDF Viewer)

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Jon Matonis – "Until physical paper cash is outlawed …"

Jon Matonis – “Until physical paper cash is outlawed …”:

Bitcoin Foundation board member Jon Matonis (@JonMatonis) describes the growing trade of bitcoins in face-to-face, in-person transactions.  Excerpts:

“In-person bitcoin transactions allow you to meet interesting new people in your area – and discuss bitcoin.”

“For the casual traders seeking more privacy, I recommend in-person trading through LocalBitcoins.com.”

“LocalBitcoins has steadily added new cities and market depth. ‘We currently have 142 countries and 1700 cities,’ [founder Jeremias Kangas] recently told Bitcoin Magazine, ‘but that most definitely isn’t enough. We want to expand to at least 170,000 cities’”.

“LocalBitcoins offers an escrow facility and a rating system both of which can be extremely valuable for the first-time trader.”

The bitcoin provider sets the price markup and types of payment that will be accepted. […] Given the robustness of trade in some large urban areas, it is entirely possible to earn a living from buying and selling bitcoin using the LocalBitcoins matching platform.”

“In the general classification of commodity, bitcoin’s trade is similar to any other collectible item, such as antique diamonds, celebrity autographs, moon rocks, Buddha figurines, and baseball cards.”

“Ultimately, until physical paper cash is outlawed, bitcoin will still be bought and sold in person just like any other commodity.”

 – http://bit.ly/12RZ7x1
 – http://localbitcoins.com
 – http://bitcointalk.org/index.php?topic=240015.0 (Further discussion on the article)

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