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Cryptocurrencies – The Future of Money?

India scraps its 500 and 1000 fiat currency notes to combat corruption. England bans the 500 Euro note in concerns of terrorism funding and drug trafficking. Sweden, one of the first countries to experiment fiat currency might be one of the first ones to remove it altogether. These headlines raise a significant question, where does the future of money lie once fiat currencies are out of the picture?   Putting a ban on large fiat currencies, although well intended, reduce the economic freedom of the mass population. Interest rate provided by banks reduce drastically,  in fact in some cases going into negative. Inflation rates have also seen an upsurge thereby fluctuating the value of liquid assets. 

As an alternative, the first thing that comes to the mind of many is the digital currency industry. Reports such as Barclays introducing cryptocurrency desks make it evident that there is wider adoption of digital currencies. The question is, to what extent in the long run will cryptocurrencies replace money. 

A large number of financial firms and investors have sought trading in cryptocurrency. A Reuters survey found out that one in every five firms are looking to trade in altcoin in the next year. 70% of them said that they would do so in the next three to six months. There has been a large flow of money from venture capital firms to startups in relation to blockchain technology and cryptocurrency. In the three months after January this year, the amount invested in blockchain businesses is far more than the USD 55 million average for the three year period. 

Cryptocurrencies hold the potential to change the face of finance

One of the biggest positives is to see firms’ open mindedness on regulations of cryptocurrencies. In fact, as long as they’re reasonable, regulations might even persuade investors who have currently been on the sidelines due to their skeptic nature. Moreover, a bullish sentiment was expressed in the group of 20 nations’ (G20) meeting when finance ministers made a joint request to FSB to consider multilateral response around cryptocurrencies. 

Perks of a complete transition to cryptocurrencies

There are many advantages to an all cryptocurrency future, such as the fact that cryptocurrencies cannot be easily manipulated, therefore giving a stability assurance to an individual. Fiat currencies involve intermediary cut during a typical everyday transaction, something that cryptocurrencies will eliminate. However in an all crypto scenario, the infrastructure will have to be well-developed. Cryptocurrencies are also a better medium of distributing universal basic income. This makes it interesting to see whether financial institutions would pivot to this status quo in time or just stick to the traditional fiat mode of currency. 

Cryptocurrency usage in an essence reduces the requisite to trust other actors in a system, thanks to the fact that it is a peer to peer encrypted mode of transaction that is decentralized and secure. 

Concerns pertaining to the transition to cryptocurrencies

Needless to say, a complete crypto takeover also poses many challenges. Firstly, the fact that in certain countries the infrastructure to facilitate a digital currency system is a major obstacle. Secondly, the transition process from cash to cryptocurrency creates a void in compatibility for certain people, leading to an inevitable loss of assets since the traditional currency would lose its value without any recourse. 

The government has a hold over its citizens via its ability to print fiat notes. This is primarily due to the fact that it has a centralized control over money that circulates around. With the introduction of cryptocurrencies, the government loses this influence, giving the citizens more freedom in what they buy and what they save. In addition, this also removes the government’s option to print more currencies in case of a financial turmoil, which would then become dependent on the cryptocurrency mined. 

However, there are also some ways in which it will be in the interest of the government for an all crypto world. Identification and attesting of citizens will be an easier venture to accomplish. Analysis of financial stability of an individual will also be an easier job to do. In the third world countries, identification of refugees and migrants will be an easier job which will help them get micro loans or will allow them to make purchases in case they are forced to leave the country. 

How would an all crypto world look like?

In the event that crypto completely takes over fiat currency, the distribution of wealth will be facilitated as opposed to its concentration. Cryptocurrency would help in better distribution of wealth due to its decentralized network. The increase in the number of users in an integrated technology network proportionally increases the capital investment in such a network leading to a serendipitous chain of events. Therefore introduction of cryptocurrency in developing countries will be beneficial for the upliftment of the entire system. 

The very consequence of a crypto world will make investors look towards the acquisition of digitized assets such as user data on the internet or credit system for online payment.  

A report from the second quarter of The Federal Reserve Central Bank of St. Louis stated that,

In the near future, a close cash substitute will be developed that will rapidly drive out cash as a means of payment. A contender is Bitcoin or some other cryptocurrency. While cryptocurrencies still have many drawbacks… these issues could rapidly disappear with the emergence of large-scale off-chain payment networks (e.g., Bitcoin’s lightning networks) and other scaling solutions.

Conclusion 

BitcoinNews.com has already shed light on how 65% of the world’s central banks are dipping into blockchain, the underlying technology of cryptocurrencies. Moreover, several countries such as Venezuela, The Marshall Islands, Senegal and Tunisia have either already released government-backed cryptocurrencies or have it in the pipeline. This has proven to decrease dependency on fiat currencies while preventing counterfeits.  

Regardless of an individual’s perspective of a complete crypto transition, the future is unknown. On one hand many speculate that a crypto takeover is inevitable, while on the other, many believe that a crypto dominated economy is a dream too far fetched. Although there have been tendencies in the economical world which suggest our transition toward a crypto led economy, the traditional skeptical mindset of the people will serve to be a big obstacle to tackle. But one thing is for sure, an all crypto society has the potential to change the way people save and sell. 

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World’s Central Banks Are Dipping into Blockchain – What’s Ahead for Fintech?

banks

The term blockchain, or more conveniently known as distributed ledger technology (DLT) to traditional finance is increasingly becoming a popular household name in the banking sector. There may well be more than 200 investment, commercial, and Central Banks as well as other financial institutions including big names such as Bank of America, Bank of China, Bank of England, Bank of Canada, Deutsche Börse, Reserve Bank of India, HSBC (Hong Kong Shanghai Bank), JP Morgan Chase, Morgan Stanley, among others who are currently integrating or planning to incorporate a part of the technology with their business operations.

Heralded as one of the most transformative technologies for financial services, the blockchain could be the key to unlocking a new economic era. Here’s how Harvard Business Review puts it:

“The blockchain will do to the financial system what the internet did to media.”

Redefining the Narrative for Blockchain

The Bank of England may have been the first Central Bank to venture into the DLT space and in partnership with the Bank of Canada and Monetary Authority of Singapore (MAS) published a paper on Cross-border interbank payments and settlements.

With sixty-five percent of the world’s Central Banks reportedly exploring blockchain technology and DLT, what does this mean for the future of finance? Firstly, the true scope of blockchain exploration by these traditional financial institutions can only be truly appreciated when considering the combined weight of their valuation alongside the core value proposition of the technology. This supposedly gives the blockchain industry a stupendous valuation that dwarfs current estimates. Blockchain and finance are often considered to be two peas in a pod – giving this an alternate meaning, perhaps, in the future, anything related to finance will have a string of blockchain technology attached.

This possibly explains the stiff competition among tech giants like IBM, Microsoft, Amazon, Facebook and others vying for a future stake in the blockchain industry – and not settling for small portions. R3 Corda apparently has a stake as a major player across most of these financial-enterprise deals, having well over 250 institutional partners across the world, the blockchain hype may indeed be off the charts.

But the story wasn’t always this glittery, as legacy financial institutions always slighted cryptocurrencies – the premier products of blockchain during its limelight; mostly due to Bitcoin – a decentralized entity, and largely considered to be a repulsive aberration of financial principles. However, over the years, most traditional financial institutions have warmed up to the idea of a distributed ledger technology and have found useful applications in operational efficiency. For them, it’s more about the blockchain and less of Bitcoin – still a wonder though how they justify that unholy separation.

The Potential for Banks

For Central Banks, the DTL has several use case parameters set to address numerous pain points. As detailed in a whitepaper published by World Economic Forum, there are about 10 use cases. However, major areas of interest seem to revolve around cross-border payments, securities settlement, fraud detection/security and trade finance. Banks tend to focus more on border payments – how to ease the transfer of cross-border payments, as DLT is known for speedy transactions that could cut down the time spent in processing transactions in incumbent systems.

The Bank of Canada is currently running several partnerships to exploit the most out of DLT. Its current flagship projects – to include project Jasper – looks to transform wholesale payment systems and possibly integrate their findings with “other assets such as foreign exchange and securities.” Other initiatives would include exploring the opportunities in “securities settlement system using central bank money, cross-border/cross-currency settlement system as well as Digital Fiat Currency projects.”

According to the Bank of Canada:

“One estimate suggests DLT could enable banks to save as much as USD 20 billion a year in global back-office costs if applied to cross-border payments, securities trading and regulatory compliance.”

For this reason, the development of Central Bank Digital Currencies (CBDC) became a subject of focus for most banks. A report by Bank for International Settlements (BIS) revealed 40 central banks around the world are supposedly researching CBDC. The central bank’s design of a digital currency typically involved the use permissioned blockchain
network, granting only participants with access to participate in consensus.

Last year, talks about CBDC perhaps made more news than other financial innovations these banks could have thought of. Though, the subject of CBDC still remains sketchy at best as a study between IBM Blockchain World Wire and the Official Monetary and Financial Institutions Forum (OMFIF) revealed mixed results on the subject of CBDC among 21 banks. However, there were growing sentiments towards using DLT and smart contracts.

Moreover, considering the size of the digital currency market, it still remains to be known how an actual retail cryptocurrency issued by the bank will impact economies. For now, the versions of bank-issued digital currencies such as JP Morgan Coin are intended for inter-bank settlements with only institutions in mind.

Between banks are rising opportunities to share resources to develop CBDC protocols that would enable inter-bank transactions. In May, the central banks of Thailand and Hong Kong signed an agreement to research CBDC in the hopes that their experience sharing will foster the development of quality financial services through the platform.

CBDCs could change the narrative for digital currencies as a whole. Should it be widely adopted, on one hand lies the possibility of the acknowledgement of cryptocurrencies and thereby create massive adoption and at that make the already volatile cryptocurrency market spike further in valuation. On the other hand, a CBDC coupled with strict digital currency regulations could oust non-regulated cryptocurrencies and create a huge problem for Bitcoin and a host of other altcoins; perhaps it won’t be extremely destructive considering the decentralized nature of Bitcoin.

Still Hesitant

Despite the potential DLT could serve the banking industry, possibly saving banks billions of dollars, developments and adoption seem rather slow considering the amount of investments sunken in the research and development of DLT-related products. Having come this far with several initiatives and collaborations, could banks begin to resent their initial thrust into DLT – after all they were only super enthused because such a system like Bitcoin going on a decade seemed efficient thus far. McKinsey describes the current stalemate as blockchain’s Occam problem;

“By late 2017, many people working at financial companies felt blockchain technology was either too immature, not ready for enterprise level application, or was unnecessary. Many POCs added little benefit, for example beyond cloud solutions, and in some cases led to more questions than answers. There were also doubts about commercial viability, with little sign of material cost savings or incremental revenues.”

As for retail banks, the hesitation may roost on Bitcoin’s extreme volatility, as with other wild roller-coaster-rides in the digital currency markets, largely due to the unregulated nature of these emerging assets. Besides, for some banks like the Bank of Korea, CBDC may appear to be a moonshot project at best, and do not consider it a matter of urgency; the Bank would rather gather more information on the benefits and costs of CBDC implementation first. With Italy, it clearly stated that it had no inclination to embark on a CBDC despite vouching for its qualities. A few others are well concerned about the overall impact of the CBDC on their fiat system.

Another huge deterrent stems from the uptick in competitive solutions being offered by legacy institutions, thereby making DLT traction a bit slow. One of such includes SWIFT’s global payments innovation initiative (GPI), which is reportedly tackling initial pain points with an attempt at providing higher transaction speeds and increased transparency between transaction parties.

One of the world’s top bank Citibank has dumped its Citicoin project which it had been developing for about 4 years. It announced earlier this year that it is now considering SWIFT on the premise that SWIFT already has a ready market with about 10,000 financial institutions already onboarded.

It’s Inevitable

It’s not all gloom for the banking industry, as the competition with emerging digital assets gets stiffer – and it will probably get worse for banks. Recently, Facebook’s cryptocurrency became an important subject as its founding infrastructure could threaten the future of legacy financial services.

The International Monetary Fund (IMF) has predicted that central bank digital currencies (CBDC), or state-backed crypto, would soon be a reality, with central banks already issuing them in the near future. This means the end to the struggles for an inclusion into the DLT market may not be too far off.

On the off chance that digital asset regulations kick off almost simultaneously around the globe, the developments of DLT-related banking products may surge, however, the industry has to fine tune its scaling strategies as the world gravitates from fiat currencies to emerging systems of value exchange.

There’s still so much more to be done by banks before incumbent systems can fully trust DLT. Therefore, more research and contingency methods would have to be in place before a complete shift occurs. However, the psychological shift is first, banks need to come to terms with the changing system as peer-to-peer systems are taking over, soon there would be lesser demand for banking services – which for the most parts lack the allure to keep customers.

Other emerging doubts could be stemmed through standardization of DLT objectives and strategies. Above all else, banks venturing into the blockchain space must do so for the long-haul, as the nascent technology still has room for growth, and perhaps evolve into a more suitable system for the banking industry.

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Swiss Federal Council Begins National Blockchain Framework Changes

Swiss Federal Council Begin National Blockchain Framework Changes

The Swiss Federal Council has initiated a consultation period on the adaptation of federal law for blockchain developments.

According to the state-issued press release, the consultation will be an opportunity to improve the framework for blockchain and other decentralized technologies in Switzerland. Specifically, it will look to increase legal certainty, restrict risks associated with misuse of the technologies and remove obstacles for blockchain-backed applications, most predominantly looking at use-cases in the financial sector.

The council first published a blockchain report in December last year addressing the current circumstances, then making it clear they would be prepared to make changes to the existing framework to provide a ”leading, innovative and sustainable location for fintech and DLT companies.”

There will be a revision of the current anti-money laundering policies, with an amendment to theAnti-Money Laundering Ordinance scheduled.

Several policy adjustments have already been proposed also, including the separation of cryptocurrency assets in the event of bankruptcy, as well as establishing a digital registration of rights in the Swiss Code of Obligations.

The Federal Council’s consultation period is scheduled to last until late June 2019.

 

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Brexit Deal or No Deal: The Effect on UK’s Blockchain Industry

Brexit Deal or No Deal: The Effect on the UK Blockchain Industry

The United Kingdom’s impending exit from the European Union has the economy on edge. Parliament has yet to approve Prime Minister Theresa May’s exit agreement and a so-called “no deal Brexit” is a looking like a real possibility.

Just a few months away on 29 March, the UK is scheduled to leave, and nobody knows quite how the laws and regulations that the EU currently govern will be affected, what the situation will be for EU workers, or what trade relations will be in place for the rest of Europe.

With these instabilities in mind, here are some of the effects Brexit may impose on the UK’s leading blockchain industry.

Financial regulation

It is no secret that the City of London is Europe’s financial capital but many have questioned whether it can remain in this position when the UK leaves the Union. Many financial service providers are there, after all, to provide services to European clients from a location that adheres to all of the required regulation.

If the UK no longer follows EU finance regulations, it will likely fail to attract these international firms. Coinbase, for example, has already moved its European base from London to Ireland. Part of the blockchain industry’s success in the UK can be attributed to the existing infrastructure for firms and international talent that the City of London attracts. In this case, what is bad for mainstream finance also looks to be bad for blockchain.

However, Brexit also offers the UK a chance to create its own unique financial policies which have the potential to produce a more crypto-friendly environment than that imposed by the EU. While the Union requires firms to uphold strict know-your-customer (KYC) and anti-money laundering (AML) policies for their clients, Brexit would be the chance for the UK to create a more autonomous financial sector, although there has yet to be any indication of a move in this direction.

Another case that could work in the blockchain industry’s benefit is if the UK chose to adjust its DPA 2018 legislation (its version of Europe’s 2018 General Data Protection Regulations) which has caused much friction for operations built on immutable blockchains that do not readily allow the removal of data as the privacy regulations require. Any data regarding European citizens that is stored on a blockchain would still be subject to GDPR, although Brexit would give the UK an opportunity to create more flexible regulations compared to GDPR.

EU workers

The blockchain industry faces the same challenge as every other sector in the UK regarding migrant workers from the EU. While the government has just launched a scheme that would allow current EU residents to remain living and working in the UK after Brexit, the plan has faced scrutiny over its impracticality in registering residents. This owes to the facts that the application only works on the most recent versions of Android phones, and a fear that they are not doing enough to let people know they must register themselves.

Europeans who fail to register on the Settlement Scheme could find themselves deported from July 2021.

London, the UK blockchain hub, is compiled of 14% European workforce, with 26% of workers coming from outside of the EU.

Trade deals

As it stands, Theresa May has ruled out the chance of the UK remaining in the Single Market and the European customs union after Brexit.

This will impact both businesses that use blockchain to export or import products between the UK and Europe, as well as those that provide services of any kind within the region. Services account for 70% of economic activity in the EU and the Single Market gives companies the freedom to offer these services anywhere within the Union.

The last few years have seen cryptocurrency exchanges such as Binance expand across Europe, but leaving the Single Market means they would have to operate with the UK’s own unique regulations. To keep up interest from exchanges, the UK will have to prove its worth the extra costs required to move operations locally.

Losing its voice

The UK has one of the leading blockchain industries in Europe, but Brexit could result in a loss of political power in drafting crucial legislation for the technology. For one, with no more Members of European Parliment representing the UK after Brexit, the country will no longer be allowed any official input in creating EU policy.

Pro-crypto MEPs such as Eva Kaili have proven how effective a positive voice can be in the governing body, with her efforts resulting in the crafting of the parliamentary Blockchain Resolution.

Blockchain and Brexit

It is not all doom and gloom for the industry, however. Blockchain has indeed been given a spotlight by the UK government for its potential in providing a solution to the customs crisis, being hailed as an opportunity to continue providing ”frictionless trade” with the EU.

Particularly valuable on the contentious issue of the Ireland border, blockchain has been hailed as a way for the government to track the movement of goods in a transparent, immutable, and non-invasive way. The UK’s finance minister Philip Hammond even called blockchain an ”obvious” solution to the problem.

An uptick in blockchain logistics solutions could well increase the levels of UK companies that adopt the technology, but financial services providers that utilize blockchain may find themselves having a more difficult time adjusting to the forthcoming new regulations.

May’s latest update in Parliment on Monday 21 January included a commitment to sticking to the 29 March Brexit date so there is not long left to see what the deal will look like, if there is one at all.

 

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Why Bitcoin Shouldn’t Focus on Succeeding as a Domestic Payment System

Why Bitcoin Shouldn't Focus on Succeeding as a Domestic Payment System

Bitcoin: the cryptocurrency that started them all.

Created as the first decentralized, peer-to-peer payment system independent of a third party mediator, the appeal to manage personal finances without requiring a traditional bank account is a concept that has appealed to many, to say the least. But as Bitcoin reaches its tenth anniversary and continues to mature as a financial instrument, the strengths and weaknesses of the cryptocurrency are becoming increasingly realized.

One recent academic study indicates that perhaps Bitcoin should move away from its goal of succeeding as a widely-used domestic payment system, and should instead focus on its strength as an international payment method.

Bitcoin’s competition

An Economic Analysis of the Bitcoin Payment Systemauthored by Gur Huberman, Jacob Leshno, and Ciamac Moallemi, compares the features of the Bitcoin payment system to that of the traditional alternatives offered by banks.

The study finds that Bitcoin payments are likely to incur higher charges compared to bank-operated, traditional domestic payment systems. The authors attribute this to the decentralized architecture of the network, with the mining structure behind the blockchain also allowing for delays on small transactions as they do not carry a great enough financial incentive to be processed quickly.

In short, the paper concludes that strictly in economic terms, Bitcoin fails to provide real competition to traditional domestic payment systems.

Where it does find strength, however, is its ability to process international money transfers far more efficiently and cheaper than its competitors at, say, Visa, Mastercard or SWIFT, particularly when it comes to larger sums of payment.

The ideological argument

Those who hold a libertarian ideology, or indeed anybody that is distrustful of central banks, can argue the benefits of Bitcoin as a domestic payment system despite these comparative downfalls.

The current monetary system has arguably been the cause of recessions, inflation, and growing wealth inequality; cryptocurrencies offer individuals the chance to operate within a new financial system that operates independently of these factors. Whether or not Bitcoin is the most practical or efficient option for spending money on a daily basis may well be overshadowed by a desire to exit the mainstream monetary system.

There is also the Lightning Network which, once launched in full, offers a potential scaling solution for the Bitcoin network with quicker and cheaper options for micropayments for when you buy a cup of coffee, for example.

And it is still early days for Bitcoin in the scheme of things; it is entirely possible that other scaling solutions will emerge for the network that will allow it to succeed domestically.

In the wake of a bad year for market performance, perhaps it would be most beneficial for developers to focus on Bitcoin’s strengths as outlined by the researchers until the cryptocurrency can find its feet again.

 

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Bitcoin 10 Years On: Its Place in Finance

Bitcoin 10 Years On: Its Place in Finance

Satoshi Nakamoto’s original vision for the use of Bitcoin has certainly evolved over the last decade, with mainstream adoption and the widely-believed “inevitable” entry of institutional investors giving it a place at the table with the likes of Goldman Sachs and Bank of America.

Once dismissed as some libertarian fantasy, Bitcoin has certainly come a long way in the last ten years, but will it truly ever manage to find a sustainable place in the mainstream financial sector?

The original use case

As Nakamoto imagined it in the white paper, Bitcoin would be ”a purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution”, citing the weaknesses of the trust-based model of which third-party mediators are required. Because of the double spending problem that arises from this model, Nakamoto recognized that merchants and banks would be required to ”hassle [clients] for more information than they would otherwise need”.

Bitcoin was created as a new electronic payment system that provided an alternative solution to the double spending problem by publishing all transactions on the blockchain publicly with a timestamp that means the first transaction that took place can always be checked. This is a way for customers to retain their personal data while giving people financial freedom to transact if they did not, for example, have the required identification to open a bank account or simply did not want to share that information. It also removes their requirement of dealing with central banks, of whom Nakamoto had expressed concerns over the way they managed peoples’ capital.

The idea of Bitcoin was revolutionary (a description its creators never used yet one hundreds of cryptocurrencies claimed), rebellious and, given that it meant anonymity of transactions, not something that central banks or governments looked upon favorably in the early days.

However, money talks, and after the Bitcoin bull run of 2017, the financial sector was forced to legitimize it at the very least as a potentially profitable investment option.

The move into the mainstream

CNBC, Forbes and Bloomberg have all featured positive reports on Bitcoin as an investment tool in 2018, with Henrik Andersson, chief investment officer of Apollo Capital Fund claiming, ”the coming year we will see a gradual adoption from institutions.” Andersson sees the growing number of US university endowments investing in funds as one major indicator of his claim. Goldman Sachs’ awaited cryptocurrency trading desk should also launch this year, while Nasdaq already supports cryptocurrency exchanges.

All of these factors indicate a real move of Bitcoin into mainstream finance, and into the highly-regulated world of identity checks and third-party mediators that it was created to avoid.

2018 closed with the banking sector in a bear market and the worst annual performance of the stock market in the last decade, with reports attributing this to the slowdown of the Chinese economy and concerns in the European market over the economic impact of the UK leaving the European Union.

While the cryptocurrency market did not perform well itself and Bitcoin indeed finished the year with its worst annual performance to date, there are still many questions over what impact the mainstream financial sector has, and will have in the future, on the performance of cryptocurrency.

As more institutional investors enter the market and an increasing number of established banks offer digital asset investment options, will more money be moved into cryptocurrency when stocks fall and traditional investment choices become less attractive? Or will Bitcoin’s move into the mainstream mean it is negatively impacted by poor performance in mainstream finance?

It is still early days to know for sure, but one study conducted by Yale University in August 2018 claims that the price of Bitcoin is not affected by macroeconomic factors or familiar stock market factors. Rather, they say, the drivers of cryptocurrency prices are unique to the market itself, with they two key predictors being market sentiment, investor attention and a ‘momentum effect’ that see patterns in price fluctuations.

Although, if predictions are correct in estimating an influx of institutional investors in 2019, how their influence will play out in Bitcoin’s market performance may change the conclusions of the Yale study.

Can Bitcoin succeed if it is primarily viewed as a tool for investment?

Bitcoin benefits from its resource scarcity as commodities such as oil and gold do, but nowhere in its white paper does it promise “high returns, no risk” as you can find in many initial coin offering white papers in circulation.

Major centralized cryptocurrency exchanges such as Coinbase that require identity authentification surely go against what Nakamoto originally envisioned for Bitcoin. With global regulators focused cracking down on the industry, can Bitcoin survive without exchanges complying with know-your-customer regulations?

2019 should be a year to set the pace for understanding where Bitcoin will find itself in the foreseeable future of finance.

 

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Cloud Mining Firm Argo London Stock Exchange’s First Crypto Listing

Earlier this week, cloud-based cryptocurrency mining firm Argo was announced as the first of its kind to be listed on the London Stock Exchange. This is a significant step in the acceptance of cryptocurrency by the mainstream financial sector.

Leading the way

With the blockchain industry in a period of massive expansion, Argo’s approval for listing paves the way for more blockchain-based firms to follow suit. This move is indeed a testament to the cryptocurrency sector shedding its reputation of exclusivity.

London’s role on the international stage as a global hub for financial technology is what attracted Argo to pursue a place on the city’s stock exchange in particular. “A London stock market listing will provide Argo with the profile, credibility, and access to global capital to drive our growth and help us establish a leadership position in the long term,” co-founder of Argo Jonathan Bixby said.

The firm is looking to raise USD 20 million, with a valuation target of USD 40 million.

Argo

London-headquartered firm Argo works on a subscription-based model, with its cryptocurrency mining operations based in Quebec, Canada, active since last year. This has become a popular location for mining farms due to optimal climate and energy cost conditions. Argo has plans to expand operations to Iceland and China, both of which benefit from cheap electricity costs and a cold climate.

The firm provides clients with the ability to mine Bitcoin Gold, Ethereum, Ethereum Classic, and Zcash remotely via its own mining rigs. Argo plans to charge customers USD 25 a month for access to the mining facilities. No separate mining pools are planned for development, nor will Argo act as an online wallet to store any of the cryptocurrencies mined. Customers are limited to one contract each.

Speaking to Business Insider, Mike Edwards, co-founder of Argo, noted: “Setting up a computer rig to mine cryptocurrency is challenging, inefficient and expensive. I knew that we had to change the game and democratize the process so that crypto-mining could become a mainstream consumer activity.”

 

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