Posted on

Does Bitcoin’s Enhancing Anonymity Mean Doomsday for Privacy Coins? – CoinCentral

In the early stages of Bitcoin development, most cryptocurrency enthusiasts tended to think that the original digital currency offered them complete anonymity and they could make purchases with this type of “new money” without revealing their identities. The level of Bitcoin’s privacy was often compared to that of Swiss bank clients. However, that was far from the case.

Is Bitcoin anonymous? Bitcoin transactions are recorded in the ledger and broadcast publicly to everyone with access to the blockchain. This means, your money transfers are vulnerable to being traced, and, for hackers or governmental structures, the way to your wallet address can be as evident as a trail of wet footprints leading to a bathroom. Remember Ross Ulbricht, the notorious creator of the Silk Road black market?

Authorities tracked his transactions and were able to identify and catch him while he was sitting with his computer at one of the libraries in San Francisco. So, your financial activity is actually an open book, and Bitcoin should be thought of as more of a pseudonymous asset than anonymous. 

This is why the crypto market saw the phenomenon of privacy-focused protocols gain momentum alongside various coin-mixing tools and services without public records linking transactions to wallets. In simple terms, privacy coins were designed to cover tracks after operating with cryptocurrencies, which made their usage very popular among crypto geeks bent on anonymity.

But recent news regarding Bitcoin’s potential upgrades aimed at improving its privacy seems to threaten the future of this class of digital assets, and may even move some to eliminate Monero, Dash, and ZCash out of their portfolios. To measure the possibility of such a scenario coming true, we need to look at where privacy coins stand now. 

Overall excitement for cryptocurrency during the pandemic

Statistical data from ICO Analytics shows that prominent privacy coins, with DASH (see Dash vs. Bitcoin) leading the way, had outperformed Bitcoin as of January 31, as privacy became a bigger concern in the industry, most likely in response to the People’s Bank of China statement regarding their centralized digital yuan initiative. This was the first time in 18 months that privacy coins had outperformed Bitcoin in price gain, owing mostly to their lack of viable value propositions and the high regulatory scrutiny leveled at them.    

Source: ICO Analytics

The bullish sentiment kept gathering strength after Fed Chairman Jerome Powell’s testimony, in which he noted that privateness is essential for transactions with digital currencies and global crypto adoption: “A ledger where you know everybody’s payments is not something that would be particularly attractive in the context of the US.” The importance of the Fed chief’s stance was highlighted by one of the most famous crypto influencers, Anthony Pompliano, which in turn created hype in the community and led to a spike in privacy coin transactions.

Source: CoinMarketCap

With the COVID-19 crisis, privacy has also become a new battlefield for combating the disease. Monero, ZCash and Dash all witnessed increased trading, while the latter managed to reach new highs and outperformed Bitcoin by over 60% compared to the beginning of the year. Moreover, Dash was among the assets that recovered quickly after the “Black Thursday” market collapse in March. Interestingly, the demand for this coin was caused in large part by Venezuelians, some of whom use it for daily shopping.

Notwithstanding such impressive gains, by the beginning of the second quarter of 2020 there was only one privacy coin outpacing Bitcoin. The coin in question is Monero (see Monero vs. Bitcoin guide), which has improved its performance by around 5%. Some experts think this sudden uptick was a result of several positive developments that were done to improve transaction execution and the way Monero works with privacy networks Tor and I2P. In addition, the cryptocurrency received a great deal of attention from well-known faces in the crypto industry like Coinbase’s CEO Brian Armstrong, who expressed his hope to see privacy coins among the main trends of 2020, and controversial antivirus software developer John McAfee, who named Monero as his cryptocurrency of choice in terms of privacy. Many traders sharing this view seemed to immediately flock to long-standing exchanges that also operate in accordance with anonymity ideals, making the XMR/USDT trading pair on HitBTC the most liquid in the market.

Source: Coin360

With such a significant liquidity margin, it wouldn’t be a mistake to say that the exchange has one of the most conducive environments for trading privacy coins at fair prices, alongside its over 500 other assets.

Bitcoin Illegality concerns and “not-so-private” discourse

Not everyone is bullish on privacy. Detractors of privacy coins emphasize their involvement in illegal transactions conducted on dark markets and insist this outweighs all the arguments made by privacy advocates. Most marketplaces existing on the dark web accept untraceable privacy, thereby skirting anti-money laundering and counter-terrorism financing requirements. Japanese and South Korean regulators are among those fighting hard against anonymous coins, even enforcing local exchanges to delist them.

For example, the Korbit exchange removed five privacy coins in May 2018, citing the South Korean government’s ban on anonymous cryptocurrency transactions. Later on, Tokyo-based CoinCheck stopped its support for several privacy coins, including Monero, Dash and ZCash, when half a million of dollars was stolen from the exchange, despite the fact that none of the cryptocurrencies was used for committing the crime.

Actually, the May report from the Rand Corporation revealed that the majority of illicit transactions (59%) on the darknet use Bitcoin, while the presence of privacy coins widely believed to be the “currencies for criminals” is far less prominent.

Source: RAND DWO

And what is even more interesting is the recent announcement from Chainalysis detailing its support for Dash and ZCash. This means that now almost all of the transactions conducted with these two assets, which fancy themselves as anonymous and untraceable, can be easily tracked. It looks like this sudden move by the U.S.-based crypto analysis company will ease the task for law enforcement agencies and make privacy-focus coins practically useless.

Chainalysis stated that anonymous coins offer a fraction of increased privacy, but nothing close to total anonymity. The company found that only around 1% of transactions executed on the ZCash network can boast maximum privacy, even with enhanced encryption taken into account. As for Dash, that rate falls below 0.7%, which, from a technical point of view, places the privacy aspects of the coin on the same level as those of Bitcoin.

It’s noteworthy that almost two months earlier researchers from Carnegie Mellon University generated similar results through their test-trial of ZCash and Monero traceability. The figures are disappointing: 99.9% of ZEC transactions and 30% of XMR transactions can be easily tracked.

With all that in mind, Bitcoin’s increasing privacy poses an existential threat to anonymous cryptocurrencies that may eventually see less growth and community support, as the first-ever cryptocurrency still has many more resources and much more interest than any of the altcoins.

The prospects of the “Bitcoin vs privacy coins” rivalry

Of course, technologies benefiting Bitcoin’s privacy and efficiencies like the Taproot protocol and Schnorr signatures, enabling cooperative closes to look like regular transactions and remain completely hidden to people from the outside, might take away some of the edges from anonymous cryptocurrencies. Bitcoin Core developer Ryan Havar suggests that the wider BTC user base will be capable of making it more private than its privacy-focused competitors: “Simply put, there’s a lot more Bitcoin users, and use cases. So if you can ‘hide’ in the crowd of Bitcoin users, it’s a much bigger crowd than say ZCash.” 

The situation for privacy coins is marred by the crackdown against them that is gaining momentum in different parts of the world. In March 2020, the head of the French National Assembly ‘s financial committee, Eric Woerth, claimed, “it would also have been appropriate to propose the prohibition of the dissemination and trade of crypto-assets to guarantee complete anonymity by preventing, by their design, any identification procedure.”

However, this doesn’t mean that Monero, ZCash, Dash, and other similar coins will eventually fade into obscurity, as the crypto market is not a zero-sum game where only one asset can maintain popularity. This type of crypto is still in demand with the most valuable privacy coin in terms of market cap, XMR, rising in price by approximately 86% since the beginning of the year. The BTC privacy updates still lie ahead and, while the jury is still out, privacy assets can take advantage of Bitcoin’s current lack of anonymity and fungibility and accelerate their attempts to gain more territory.

The Bitcoin for privacy debate will continue to rage on, so be sure to keep track of updates within the network and any future anonymity tests.

This article is Originally posted on CoinCentral.com
Author: Adam Stieb

Posted on

YoBit Exchange Review: Is YoBit Legit, Safe, and Worth Your Time?


A steady presence in the cryptocurrency space since 2014, YoBit is one of a small set of exchanges that don’t require you to enter personal information to trade. 

YoBit has a very user-friendly interface; virtually anyone can set up an account and start trading in under five minutes all while keeping their anonymity. 

Anonymity, it seems, is a core tenet of the YoBit organization, as there are no formal owners or operators listed. This anonymity, however, seems more of an ideological preference of the exchange’s founders, rather than a more dubious alternative. It seems the exchange is based in Russia. With an average trade volume hovering around $60m, 800 coins available for trading, and 3353 trading pairs, YoBit is considered a moderately active platform. 

YoBit offers a very wide variety of altcoins, and it allows altcoin creators to list their coins seemingly with very little obstacles or verification. 

But how does the rest of YoBit stack up? Let’s find out. In this YoBit exchange review, we dig into everything you want to know, including:

  • Key Information
  • How It Works
  • Trading Fees
  • Available Cryptocurrencies
  • Transfer Limits
  • Company Trust
  • Fund Security
  • Customer Support
  • Final Thoughts

How YoBit Works

YoBit seems to be better suited to an intermediate to advanced cryptocurrency trader. While beginner investors and traders could still use YoBit, they may be intimidated by the number of options on the trading screen.

If you’re well-versed in cryptocurrency trading, though, you’ll likely enjoy YoBit’s interface. The platform places all trading functionality on a single screen, so you don’t have to switch between tabs or open multiple windows to research and perform trades.

YoBit Exchange Interface

YoBit Exchange Interface

YoBit contains all of the functionality you would expect from an advanced trading platform. For analysis purposes, you have candlestick charts over multiple timeframes as well as an order book depth chart. 

Additionally, you can view the current orders, daily volume, 24-hour highs and lows, and the trade history for each available market. 

Placing buy and sell orders on YoBit is straightforward. 

YoBit Exchange Interface

Launching a trade on YoBit

From your dashboard, simply input the amount of the cryptocurrency you’d like to buy/sell (or the total amount you’d like to receive for it) and the price. From there, YoBit automatically updates the other relevant fields.

YoBit Exchange Interface

Trading on YoBit

InvestBox and YoPony

A feature unique to YoBit is InvestBox. InvestBox is advertised by YoBit as a tool for developers to promote their coins as well as a means of passive income for investors. According to the YoBit team, you can earn anywhere between a 0.1% and 7.0% daily return on your investment through InvestBox. 

It’s not entirely clear how InvestBox works. We advise our users to be wary of any feature or service offering a guaranteed percentage payout with advertised zero risks. 

A representative from YoBit claims InvestBox is essentially a tool that provides visibility to low cap coins for short-term investments. 

YoPony, another unique feature of YoBit, is a “cryptocurrency racing game” where users guess which horse will win the race. Each horse represents a coin, and the winning coin receives a 5BTC pump. 

YoPony, along with dice games, are essentially based on a randomized probability. The legality of the feature is between YoBit and their local jurisdiction, but we advise our users to be wary in participating. 

The representative from YoBit claims that YoPony is a means to keep users incentivized and engaged to use the platform. An example: 

YoBit Trading Fees

YoBit’s trading fees are straightforward – just 0.2 percent per trade. It doesn’t matter whether you’re the trade maker or taker. Your monthly trading volume has no effect on the fee either.

Available Cryptocurrencies on YoBit

YoBit has quite a few cryptocurrency markets at your disposal. Most of the supported cryptocurrency are available as trading pairs with BTC, ETH, DOGE, USD, RUR, or USDT. In these markets, you can trade:

  • Bitcoin
  • Doge
  • Dash
  • Ethereum
  • ZCash
  • Waves
  • Litecoin
  • Ethereum Classic
  • EOS
  • Tron
  • And many more.

Listing a coin on YoBit is a relatively straightforward process, so the platform also contains numerous low-cap cryptocurrencies that you wouldn’t be able to find on other exchanges. 

YoBit Transfer Limits

There do not appear to be any transfer limits on the YoBit exchange. You should note, though, that certain deposit and withdrawal methods come with varying levels of fees.

Deposit fees range between 0.00% and 1.00% while withdrawal fees can reach up to 7.00%.

Company Trust: Is YoBit Legitimate?

YoBit’s origins are somewhat shrouded in mystery. The exchange was started in Russia in 2014 and is currently registered in Panama as YoBiCrypto Corp. However, not much else is known about the founding team. 

While the company’s duration since 2014 lends some credibility, a Google search yields a wide array of positive and negative reviews– which is natural for most any product or service. 

YoBit, however, seems to be hit particularly hard by negative reviews, many of which appear to be fraudulent bot comments. For example, one of the negative reviewers on TrustPilot has left the same exact negative review for 13 different cryptocurrency exchanges and services. 

A representative comments, “The Russian cryptocurrency exchange market is very bloody. Competitors create fake accounts to blanket their competition with negative reviews, they create scam accounts to trick users of other exchanges, and so on.”

The representative implores users to not follow headlines such as “yobit scam” and “Yobit steals money” as they are most likely posted by competitors using bots. 

Rumors have circulated alleging that Pavel Krymov, a previously arrested financial fraudster, is the man behind YoBit. However, it has emerged that the rumors are unfounded. The team has stated that, “Rumors about the relationship between the Yobit exchange and Krymov are spread by our competitors for money, so do not be fooled by this misinformation.”

In an interview with a Russian media site, Mr. Krymov’s lawyer claimed: “Krymov has nothing to do with Yobit, these are baseless statements.”

One can still find remnants of the Krymov scandal, such as an account named Pavel Krymov is listed as the Founder and CEO on a page that claims to be the official YoBit page, which is also fraudulent. 

This is a good point to remind our readers to not fall for scams online, whether that be fraudulent social media accounts or pages asking for your cryptocurrency. 

Members of the cryptocurrency community seem to have mixed opinions. On TrustPilot, the exchange has a 4 out 5 star rating. However, those ratings are primarily split between 5-star reviews (62%) and 1-star reviews (24%). However, as we’ve seen with numerous fake TrustPilot reviews, it’s difficult to pinpoint a genuine sentiment. 

Fund Security: Are Your Funds Safe on YoBit?

Regarding the security of your funds, YoBit offers little information. It’s unclear what percentage of funds the company holds in hot vs. cold storage. And the team keeps security mechanism information for internal eyes only.

YoBit hasn’t experienced a significant hack from which it couldn’t recover from. The exchange did experience a 51% attack in January 2019, but the exchange tweeted out that the funds would be covered by its insurance fund.

However, numerous users have reported difficulty accessing their cryptocurrency and withdrawing their funds from the exchange. However, virtually every exchange, even top-tier platforms such as Binance and Coinbase, has had difficulties with withdrawals. 

YoBit offers two-factor authentication (2FA) to bring an additional layer of security to your individual account.

We implore our readers: if you do decide to use an exchange, only deposit what you can afford to lose.

YoBit Customer Support

YoBit’s customer support team typically responds to inquiries within the hour but may take up to 24 hours to answer your question.

For further help, the YoBit platform also includes a 24/7 chatbox from which you can talk with other YoBit users and members of the YoBit team.

YoBit runs two Telegram communities (one in English, one in Russian) which contains over 60,000 members each. 

A representative from YoBit advises users to use Telegram support, claiming admins are usually online 24/7 and capable of solving all problems. The ticket option should serve as an additional option for those who don’t use Telegram. 

Insurance fund: In the Support page, there is an option to request compensation from an insurance fund.

YoBit's Insurance fund

YoBit’s insurance fund interface

Not many details are known about the insurance fund. But from our research, the Exchange did deal with the repercussions of a 51% attack on the Ethereum Classic network. 

Some users lost funds, but YoBit’s insurance covered the losses. 

Final Thoughts: International Anonymity, Developing Public Presence

If you’re looking to trade cryptocurrency without supplying any KYC information, YoBit may be the exchange for you. It transacts around $60 million in daily volume and supports a wide variety of trading pairs.

YoBit is a relatively simple and intuitive platform, but it does take some getting used to trading if you are not already handy with trading fundamentals. 

The exchange also seems to be very popular in international circles (language options include in English, Russian, and Chinese and is available all over the world. It also has a live chat within the trading interface, with languages available in English, German, Arabic, Chinese and Russian. It currently has the most trading pairs of any exchange, and accepts both USD and Russian Ruble.

However, the platform’s anonymity seems to be working against it on the public relations front, which seems to be a challenge for any organization without a central publicly available party. However, since it has been around since 2014 and does boast several authentic positive reviews, we’re inclined to give them the benefit of the doubt. 

YoBit advocates can point to its presence and reputation on forums like BitcoinTalk and all user-reviews online should be taken with a grain of salt: whether positive or fake. A positive perspective will applaud YoBit’s support for anonymity, which is a core tenet of the self-sovereignty ethos of many cryptocurrency traders. 

A few other risks worth mentioning is that the company hasn’t outlined any of their security practices, but it has seemed responsible and active in protecting its users from hacks (as evidenced with the prior ETC 51% attack). 

YoBit also lists altcoins for minor listing payments. While the platform itself may be legitimate, many of the unchecked altcoins can be exceptionally risky. 

YoBit has been operating for over five years, which does grant it some legitimate tenure in a relatively nascent industry. 

Regardless, as with all exchanges, we advise users to tread very carefully: only trade what you can afford to lose and don’t risk large sums of cryptocurrency on the platform– words of warning particularly pertinent for smaller exchanges with large numbers of altcoins like YoBit. 

Disclaimer: The content on CoinCentral is investment advice nor is it a replacement for advice from a certified financial planner. The creation of the above article is a sponsored post that meets our editorial guidelines for objective review. 

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Posted on

Ethereum 2.0: Is the Interest Real or Hype About Nothing?

No sooner had the crypto world started to settle down after the third Bitcoin halving event, when another wave of hype started to build around Ethereum 2.0, which was initially projected to be released this July. Ethereum 2.0 is the next level of the Ethereum platform which will be achieved by introducing sharding, proof-of-stake and a new virtual machine. Despite some doubts regarding the prospective date, in a February AMA ETH 2.0 researcher Justin Drake expressed his 95% confidence that phase 0 of the project will be finally launched in summer 2020. As it stands now, no one knows if Ethereum will hit the target date, as, according to testnet coordinator Afri Schoedon, the full spec hasn’t been implemented in any client so far. 

Ethereum’s shift from its current proof-of-work (PoW) consensus to a proof-of-stake (PoS) algorithm has been the talk of the town over the past few weeks. It’s obvious that many average users and big investors enamored by the team’s strong commitment to better security, further decentralization, and lower reliance on miners are highly anticipating the rollout of ETH 2.0. But with all the buzz going around, it’s getting harder to sort out the wheat from the chaff and understand whether the positive public sentiment towards the future of Ethereum is fact-driven or hollow. So, let’s figure it out.

Ethereum regaining lost ground

In early 2018, when Ether holders saw it hit its record price of around $1400, the number of ETH addresses was slightly over 10 million. Today, according to data from Glassnode, there are currently 40 million active ETH addresses, with more than 15 million joining the party after Ethereum 2.0 was announced in late May 2019, which represents a good 60% growth. The overall usage of the world’s second most popular cryptocurrency has also experienced a significant increase since the beginning of 2020 and, as of mid-May, the amount of ETH daily transactions has almost doubled from 450,000 to roughly 900,000.


Source: Etherscan.io

The same upward trend can also be seen within the Ethereum network powered by the Gas token, which enables transfers of payments or smart contract information. The total consumption of Gas has recently surpassed 61 million units, hitting its all-time high and moving up by around 60% compared to what it registered in January. This is a great sign for Ethereum 2.0 developers, as the more people utilizing Gas to make the whole network operate, the more smooth the update from PoW to PoS will be.

With that said, the release of ETH 2.0 is expected to create a real demand for the in-house cryptocurrencies, Ether and Gas. While the latter will serve as a fuel for decentralized computers, the higher speed of ETH transactions and much lower fees will become more appealing for both producers and consumers, as well as for both retail and institutional investors.

The influx of larger players feeling bullish about Ether has been dramatic, since it was revealed that currently over $276.5 million are under the management of the Grayscale Ethereum Trust, whereas that figure was only $11.7 million at the same period in 2019.

Authentic hype or marketing?

But are big investors really prepping for Ethereum 2.0? Some media outlets have also tied the surge in ETH volumes to growing institutional interest. At first sight, it seems to be a logical conclusion, however, figures are stubborn things.

Ethereum 2.0 Charts

Source: Coin360

As you can see ETH daily volume hit its maximum of over $10 billion after the March crypto market breakdown on April 30. This was a remarkable performance considering its previous level of $2.92 billion in early January and the subsequent global financial turbulence. Nevertheless, if we take this value and divide it by the number of transactions that were registered on the eve of Labour Day – approximately 840,000 – we discover that the average volume of one transaction is only around $12,000. Moving further, this figure decreases to below $10,000, where it remains today. Doesn’t actually look like intense institutional involvement, does it?   

There is another explanation and it’s probably much more authentic. With Ethereum 2.0, users will have the chance to become staking agents and earn rewards over time by transferring 32 ETH to a contract. At the time of writing, 32 ETH is worth $7,776, which is almost equal to the current average Ether transaction. With that in mind, this rising demand seems indicative of average users and retail investors feeling curious about how this is going to work out and flocking to ETH markets available on the most liquid exchanges with proven security, such as HitBTC and Huobi, in order to come out winning after the much-awaited release.

The aforementioned boom in user activity inevitably led to an ETH price surge. It’s noteworthy that since Ether was worth $1400, its price has declined by 85%. At present, ETH is trading at around $243, having recovered from the repercussions of “Black Thursday” when the price fell to just $111. Nonetheless, it is still not even close to its all-time high.

But this explanation for the uptick in Ethereum activity has been largely ignored in favor of the institutional investor’s narrative.

Why? Whether it is being consciously manufactured or not, the narrative that has institutional investors flocking to DeFi, and specifically Ethereum, is more beneficial to the Ethereum ecosystem. Big names getting involved with Ethereum is more likely to lead to another bull run than average users making investments in a project they believe in. 

Artificially inflated excitement?

In the crypto space, there are few better at making waves that cross over into traditional finance than the Winklevoss twins, long-known in the community for their crypto investing experience and for holding the biggest Bitcoin fortune in the world.

In a recent interview for The Defiant, Tyler and Cameron admitted to making concerted efforts to accumulate a huge stake of Ether, which is now rumored to be “in the same galaxy” as their BTC holdings: “We’re big fans of Ether. We have a material amount.”

It comes as no surprise that the brothers have been investing in ETH, but until this May they never really spoke about the quantity of their investment. Notwithstanding the fact that the real figure remains undisclosed, Cameron has hinted at its size, saying that a few years ago they received a large amount of Ether in profit, meaning that they have been investing heavily for a while now. 

So it is more likely than not that the Winklevoss twins number among the ETH whales as well, and their public bullishness has played no small part in the public’s enthusiasm for Ethereum 2.0. But why did they decide to break their silence on the issue now? Coincidence or not, the interview was published on May 21, when the price of Ether dropped below $200 for the third time in two weeks, and, following its publication, the price did an about-face and began climbing again. The Winklevoss’ enthusiasm was disseminated by a number of leading crypto media outlets where retail traders, eager to make profits, found their next big market event. The effect on institutional investors was remarkable, too, and Ether derivatives are becoming more popular than ever before.

Killing two birds with one stone indeed. This is how it works and above all, nobody can blame Tyler and Cameron Winklevoss for their sincere belief in the Ethereum network’s significance for the development of decentralized finance.

“Sell the news” opportunity

The hype around the Ethereum 2.0 launch can also be seen as a consequence of the “buy the rumor, sell the news” maxim when traders act in anticipation of any big announcement that can potentially cause a shift in the market. “If we get the rally on Ethereum I am expecting,” tweeted popular crypto trader Ethereum Jack, who used to go by the “Bitcoin Jack” moniker, “then July seems like the perfect sell the news moment with the ETH 2.0 launch.” ETH whales, if they employ this trading strategy, will be able to take advantage of the situation, while the community is speculating on the release date and the media are adding fuel to the fire.

But in reality, the event itself is not as important as we imagine, because, at least initially, Ethereum 2.0 will mostly serve as a testnet for the updated PoS consensus system. So, it’s not completely clear whether institutions are investing in the future of the crypto-financial network or are just trying to grab as big a piece of the hype pie as they possibly can. We can only wait and watch how things unfold.

This article is Originally posted on CoinCentral.com
Author: Adam Stieb

Posted on

Cryptocurrency in Eastern Europe: Innovations, Companies, and Progress


Cryptocurrency in Eastern Europe is history in motion.

You may be surprised by how active Eastern European countries are in the cryptocurrency space. According to Statista research, Poland, Latvia, Georgia, Estonia, and Lithuania, all ranked among the top 15 countries by the total value of alternative finance market transactions in Europe in 2018. In the same year, per capita funding for alternative online finance transactions was highest in the UK, but followed by Latvia and Estonia. 

This is not the only evidence that Eastern Europe is exploring financial paradigms outside of traditional channels like central banking. One might be surprised to learn that Georgia is the world’s second-largest mining country after China, Moldova has legalized cryptocurrency mining, and Belarus is predicted to become the European Hong Kong? 

This article is brought to you by Solomon Brown, Head of PR at Freewallet, to give you an idea of which countries favor Bitcoin and other cryptocurrencies, and which ones strictly forbid them. Get the full picture of the suddenly-hot crypto ecosystem of Eastern Europe.

Cryptocurrency Regulation in Eastern Europe

Most countries in Eastern Europe are split on cryptocurrency: either pro or con. Here’s a chart displaying where crypto and mining are legal (+), not legal (-) or unregulated (0). 

Country  Cryptocurrency Mining
The Republic of Belarus + +
Georgia 0 +
Czech Republic 0 0
Russia – –
Bulgaria 0 0
Hungary 0 0
Slovakia 0 0
Poland + + 
Moldova – 0
Ukraine – 0

+ The Republic of Belarus and Cryptocurrency

 Let’s start with the fact that Belarus has its own Silicon Valley that operates on the principle of extraterritoriality. Hi-Tech Park (HTP) is a Belarusian tax and legal zone, facilitating IT evolution, and home to 450 companies working in software development. 

In 2017, the cryptocurrency activities of the residents of the HTP received full comprehensive legislative support from the government. The administration of the HTP, together with the National Bank, the Department of Financial Monitoring of the State Control Committee, international experts, and other bodies, compiled and signed all the necessary documents. 

For instance, Decree No. 8 “on the development of the digital economy” legalized crypto exchanges and cryptocurrency exchange operators, mining, smart contracts, blockchain, tokens, etc. 

From the moment the Decree was adopted, any transactions with tokens (mining, storing crypto, purchase, exchange) became exempt from income tax and VAT until January 1, 2023. The rules regulating the operations of companies involved in the cryptosphere have been accepted by the HTP, and the full legal regulation of cryptocurrencies in Belarus has been established. It is worth noting that only entities that are registered as residents of the Hi-Tech Park are allowed to carry out activities related to cryptocurrencies.

– Georgia’s Powerful Mining Pools

In 2019 UN statistical publications, Georgia is assigned to Western Asia, not to Eastern Europe. But, geographically it belongs to Eastern Europe and is a member of the Council of Europe. We’ve decided to include it not because of favorable crypto legislation, but due to its triumphs in mining. 

A document from the Ministry of Finance notes that each unit of a crypto-asset has a market value, it can be issued, it can have an owner, its property rights can be transferred to another and divided into parts and it can be bought and sold. At the same time, the note states that, in accordance with the legislation of Georgia, a crypto asset is not a legal means of payment or electronic money.

Nevertheless, the country is experiencing a hydro-powered Bitcoin boom. According to BBC, the fact that cryptocurrency mining is “sucking its power grid dry,” doesn’t matter because of Georgia’s vast reserves of renewable hydroelectric power. Probably this reason and lack of regulations have encouraged home miners and attracted foreign businesses. According to NPR, most of the Georgian mining facilities belong to the American company Bitfury.

And although the legislation of Georgia does not regulate activities related to virtual currency, and cryptocurrency in the country does not constitute a legal means of payment, transactions of virtual money between individuals are nevertheless made. However, the government of Georgia has taken the first step towards regulating the crypto business. The multiple mining pools that will use the services of intermediary companies registered in Georgia will be subject to a value-added tax of 18%.

+ Czech Republic Pioneers Bitcoin Regulations

The Czech Republic was one of the first European countries open to operations with Bitcoin, even before the cryptocurrency market boom of 2017. In April 2015, the Czech National Bank issued a document that clarified the attitude of the state towards cryptocurrencies called, “Safety of online payments and virtual currency from the Czech National Bank point of view.” According to this document, operations with cryptocurrencies were not limited by the law of the country, only the norms of EU law applied to them.

Later on, in 2017, the Czech Republic decided to comply with the EU’s requirements for anti-money laundering and introduced the amendments to the Act on Selected Measures against Legitimization of Proceeds of Crime and Financing of Terrorism. According to the new law, all exchanges, including banks, have to verify client ID for crypto to fiat transactions amounting to €1000 and more.

– Russia and Cryptocurrency

On March 16, 2020, local news outlet Vesti.ru announced that cryptocurrency production and circulation would be banned in Russia. The issuance and circulation of cryptocurrency in Russia carries an unjustified risk, according to the bill on “Digital Financial Assets”. 

The bill levied a ban on the issuance and circulation of cryptocurrency in Russia, and established penalties for violations of the ban. Nevertheless, the authorities don’t intend to ban ownership of digital currencies. 

+ Bulgaria’s Prized Stash of Nearly $2B Bitcoin

A Bitcoin retailer spotted on the streets of Bulgaria (via Reddit)

The Bulgarian government sees cryptocurrencies as a financial asset (and owns 213,519  BTC confiscated from criminals, which is more than Bulgaria’s GDP). This state has neither recognized the legitimacy of Bitcoin nor declared it to be illegal. The main condition for the use of cryptocurrency in Bulgaria is the payment of a tax in the amount of 10% of the exchange or sale. 

– Hungary and Cryptocurrency Taxes

Cryptocurrencies are not considered a legal means of payment in the country. According to the local news outlet Portfolio (restricted access), the government has created a special group of Hungary’s central bank, the Finance Ministry, and the tax authority that is studying the industry to develop a legal framework. All cryptocurrency transactions are filed under “other income” and taxed under Hungarian capital gains tax code, which contains 15% capital gains tax and 19.5% health contribution which is called as (EHO).

+ Slovakia Monitors Cryptocurrency Transactions

Slovakia is on the list of countries that have officially recognized Bitcoin and other cryptocurrencies. However, in 2018, the authorities tightened their stance on digital business. Following the initiative of a national regulator — the Slovak National Bank — all banks began to close the accounts of firms associated with cryptocurrencies. A similar hostile reaction from the existing financial system to digital currencies was observed in the Czech Republic and Bulgaria.

In spite of the restrictive measures, non-fiat currencies are not regulated in Slovak law in any way, and their exchange, mining, and other operations are not outside the legal framework. Like the rest of the European Union, Slovakia recognizes that cryptocurrency transactions should be monitored and taxed.

+ Poland Forward Thinking Finance

The Republic of Poland ranks 36th in the world in terms of population. It stands to reason that such a large European country is forward-thinking when it comes to finance. The attitude of local financial regulators towards investing in cryptocurrencies is quite positive. The country’s Central Statistical Office (GUS) has recognized the trading and mining of virtual currencies as an official economic activity. In a statement from 2016, the ministry stated that despite virtual currencies not being subject to any separate regulations under Polish legislation, they are fully legal and subject to income tax. 

Along with that, the government supports blockchain startups. For example, in January 2019, the financial and budgetary supervision service of Poland (KNF) granted state licenses to blockchain startups Coinquista and Bitclude.

+ Ukraine’s Approach to Digital Money

The Verkhovna Rada has registered a bill proposing to legalize cryptocurrency. Plans for this were announced back in 2017, but then authorities did not dare to take such a step. And now “digital money” can be recognized as legal assets. The document titled “On Amending the Tax Code and other laws of Ukraine regarding the taxation of operations with crypto assets” was developed by representatives of the blockchain community, inter-faction elected representatives, the Office of Effective Regulation of BRDO and the Ministry of Digital Transformation.

Along with that, recent introductions to the legislative structure haven’t been that positive. The law “On Amending Certain Legislative Acts of Ukraine on Ensuring the Effectiveness of the Institutional Mechanism for the Prevention of Corruption” No. 140-IX, which entered into force on October 18, 2019, made amendments to the law “On Prevention of Corruption” and establishes the need to declare cryptocurrency as an intangible asset.

– Moldova’s Legal Mining

Cryptocurrency transactions are not legalized in the country, however, according to local media reports, digital money is popular in Moldova. In the center of Chisinau, there are several points that accept digital money as a means of payment. 

In May 2018, the Association of Digital and Distributed Technologies of the country introduced its own cryptocurrency exchange that accepts fiat like Moldovan Leu, the Russian ruble, the US dollar, and the Euro, as well as all top ten cryptocurrencies. Even though the National Bank of Moldova hasn’t officially permitted making transactions with crypto, it sent a letter to Drachmae Market, the first local crypto exchange in Moldova, which indirectly allows it to do banking. 

Moreover, in 2018, this small country hosted its first conference on blockchain and cryptocurrencies called the World Blockchain and Cryptocurrency Summit Chisinau – WBCSummit. Reporting on the conference, Crуptovest noted that “the central bank recognized the potential of blockchain for the financial system and revealed that it was assessing the implementation of technology via local banks.” Cryptocurrency legislation might be on the horizon in Moldova, as mining is already legal here.

Cryptocurrency Mining in Eastern Europe

The Transdniestrian Moldavian Republic (DMR) adopted a law on the development of information blockchain technologies, which technically makes cryptocurrency mining legal. According to the president of DMR, the law will contribute to the development of the information technology industry and attract investment from entities operating in the field of blockchain technologies. DMR may become a paradise for miners. 

The law provides for the creation of a targeted free-trade zone, where foreign companies and individuals can become legal entities without additional bureaucratic procedures. Thus, the country is becoming a relatively attractive region for investment. Local authorities have guaranteed the duty-free import and export of mining equipment for residents and special electricity tariffs for miners. The president promised that the energy supply to mining farms will be provided by the Dubossary hydroelectric station and three thermal power plants.

Who would have thought that such a small country like Georgia could become a world leader in the field of cryptocurrency mining? A study by the Cambridge Alternative Finance Center (CCAF), which was published in 2018, indicated that Georgia ranks second in the world in terms of mining volume after China. At least 60 MW of electricity was officially spent on the mining of virtual currency in the country.

The first, and perhaps most important, thing that attracts mining lovers to Georgia is cheap electricity. And there is plenty of it since, after the collapse of the USSR, small Georgia inherited 20 hydroelectric power stations from the defunct Soviet state. The country was meant to become a kind of energy hub in the Caucasus. Obviously, such a large amount of electricity for a country with a population of 3.7 million people is a lot. As a result, the cost of electricity in Georgia is among the lowest in the world. 

So, as of May 2019, the price of 1 kW in Tbilisi was approximately 6 cents. But, there are still mountainous areas where electricity is cheaper or even free of charge (due to state subsidies), and free industrial zones (where the cost of electricity is 18% lower due to the absence of VAT). 

Belarus is another strong Eastern-European player in the field of mining. As you already know, a crypto-friendly economic policy and the creation of its own Silicon Valley is a part of the country’s strategy of becoming a global IT center. Though mining has lost ground after Bitcoin halving, Belarus is ready to invest its fairly cheap energy to gain profit from BTC mining. 

In 2019, during a meeting with representatives of the IT sector in Hi-Tech Park, Alexander Lukashenko said that he was going to employ a new Belarusian nuclear power plant, to mine Bitcoins. The president explained he wanted to use the surpluses of electric power to ensure the operation of mining farms. “I even especially left a place there! Let’s build farms and mine this Bitcoin (…) If there is Bitcoin, you can always sell it” – Lukashenko commented.

Cryptocurrencies in Eastern Europe: Where to Buy and How to Spend

To buy cryptocurrencies, a lot of countries in the so-called “second world” use one of the largest crypto exchanges, Exmo. This trading platform supports 183 trading pairs with many leading cryptocurrencies and local fiat currencies like the euro, Russian ruble, Ukrainian hryvnia, Polish zloty. The website is available in Russian, Ukrainian, Romanian, and other languages. Users can buy crypto with a credit card, SEPA transfer, Yandex Money, Qiwi, and Payeer.

Non-EU former Soviet countries, like Russia and Ukraine, use Bestchange.ru. The service provides structured information about automatic and manual exchangers of crypto and electronic currencies, and also supports the ruble and hryvnia.

Eastern European countries are home to many of Freewallet’s regular customers with Czech Republic, Hungary, Slovakia, Romania, Poland, Russia, Ukraine, Bulgaria, Belarus, and Moldova making up about 10% of our user base. From our family of simple and secure wallets, these countries most often go for Freewallet: Crypto Wallet, which supports BTC, ETH and 100+ other cryptocurrencies, and our Bitcoin Wallet. Freewallet apps are highly rated for their built-in exchange and fee-free transactions within the ecosystem.

In Georgia, the first ATM that allows you to exchange fiat money for cryptocurrency appeared in March 2018 at the New York Burger diner. A few months later, a second one was installed in Tbilisi. As of November 2019, there are 14 cryptomats operating in the country.

Poland is one of the largest countries in Europe that welcomes the development of blockchain technology. In 2018, the first Bitcoin ATMs with BTC, LTC, and ETH appeared in Gdansk and Bialystok. 

The largest Polish food delivery service Pyszne.pl began to accept cryptocurrencies in 2017. This innovation took place after the purchase of the service by Dutch investors. Currently, Pyszne.pl serves more than 8 thousand catering establishments. The average number of customers is 955 thousand and 7% of users pay in crypto.

The Czech Republic might be small, nevertheless, it ranks sixth in the world in the number of crypto ATM machines. Globally, there are almost five thousand ATMs, and in the Czech Republic, there are about 70. Most of them are set in Prague. Bitcoin ATMs can be found not only in large shopping centers and electronics stores but also in kiosks at metro stations, along with printed materials, cigarettes, and tickets.

The number of Czech companies and organizations that accept Bitcoins as payment is increasing, and not all of them are related to the IT field. On the list, you can find the largest electronics store Alza.cz, a coffee shop in Paralelni Polis (in addition to BTC, they also accept Litecoin, Dash and Monero) and the Paper Hub coworking agency related to the same project. 

A real estate agency Home Hunters has been in the public eye since it closed on a 35-Bitcoin-deal, which at that time exceeded 5 million korunas. Also, there are places like Krypto, a local gas station, FairPlayAuto, a second-hand car marketplace, and a number of hotels and restaurants.

There is a large list of exciting blockchain and crypto projects out of Eastern Europe. We will start with the fintech startup with Russian roots Zerion. The company deals with investing and managing decentralized assets. It was founded in 2016 by graduates of the Higher School of Economics and has 15 thousand users. At the end of 2019, the startup raised $2 million during the seeding round with the American venture fund Placeholder, with Blockchain Ventures among the investors. Recently Zerion acquired the crypto platform MyDeFi that facilitates viewing crypto portfolios.

No wonder Belarus is on the list of the top 10 European countries for launching a blockchain startup. One of the local projects you might have heard of is Rocket DAO, a decentralized crowdfunding platform with independent expert evaluations of startups. These venture capitalist market analysts work with Hi-Tech Park, Angels Band, Volat Capital, Belagroprombank, friendly accelerators and foreign funds to allow startup founders to quickly and safely attract financing. The company provides startup audits, mentoring programs, and unique assessments. Their Startup Training Camp graduates get a free Startup Pack that usually costs over $7,000.

Czech Republic takes 27th place in the Global Innovation Index. The country is the cradle of innovative projects like Apiary whose parent organization is Oracle Corporation. Founded in 2014, it specializes in providing frameworks and tools for creating application programming interfaces (APIs), including the Blockchain APIs that allow you to send and receive Bitcoin, as well as convenient ways to design modern cloud applications. The startup attracted $6.8 million in investments in a Series A in San Francisco in 2015.

Have you ever thought of farm-to-table food traceability? TE-Food, a Hungarian food supply chain solution, offers this service on a blockchain. With food industry experts and Animal Welfare and Husbandry advisors in their management and FAO (The Food and Agriculture Organization) and Deloitte among their partners, the company takes care of the logistics and makes livestock and fresh food supply information transparent.

Sofia, Bulgaria hosts the headquarters of Open Source University that is trying to change the world of education through distributed technologies. The project connects educational institutions, students and businesses directly by eliminating the middlemen. It helps organizations get insights on candidates’ personalities. Learners can enroll in, and track the completion of tailored educational and professional development experiences. The company behind Rechained Ltd. decided to solve the problem of trust beyond institutional and national borders in the authenticity of formal diplomas and certificates after writing a book called Blockchain in Education.

The Prospects of Cryptocurrency in Eastern Europe

Cryptocurrency in Eastern Europe is set to become a facet of everyday life. As people that have experienced financial instability and changing political regimes (often swings from Communism to Democracy), the residents of Eastern Europe are mentally more prepared for cryptocurrencies than Westerners. 

The West is characterized by a higher standard of living and better banking services, as well as a higher average age of the population. Eastern Europe, on the other hand, is full of active young entrepreneurs who are engaged in small business and therefore are especially interested in lightning-fast financial transactions of better quality and without intermediaries. 

Many governments want to tap into the benefits of blockchain. Georgia and Belarus, for instance, are taking full advantage of the economic perks of mining. Hopefully, that new laws and amendments will not impede the development of the crypto industry in Eastern Europe, but rather will lead to this region becoming a world blockchain hub. 

This article is Originally posted on CoinCentral.com
Author: Solomon Brown

Posted on

Why the United States Needs Blockchain for Relief Packages


It seems like only yesterday people were tepidly excited about receiving a $1,200 check from the U.S. government to lessen the hardships of stay-at-home orders and pandemic-induced loss of jobs. However, rent is due today. Grocery bills for June have yet to rack up. That $1,200, regardless of how one tried to stretch it, is either running dangerously low if it hasn’t completely evaporated already.

Talks of another (few) rounds of stimulus checks have already been circling political circles, but who’s to say that future economic stimulus packages are going to find their way to the hands of those most in need? 

Over 60 million Americans haven’t seen a dime of CARES money, and nearly 40 million Americans are unemployed. Some economic models forecast American unemployment to be around 15 percent in 2021, and this figure only counts individuals that have actively filed for unemployment.

Brad Robertson, the Founder and CEO of Polyient Labs, a blockchain incubator and Polyient Games, a blockchain gaming ecosystem, argues that blockchain needs to be used to guarantee the delivery of future stimulus cash.

We got the chance to connect with Brad to discuss blockchain for relief packages.

What needs to happen at an institutional level to implement blockchain-based solutions?

There was a massive amount of hype surrounding blockchain in its infancy. The hype-honeymoon is over. Blockchain-solutions must prove themselves. To gain traction at the institutional level, blockchain solutions have to be adaptable, scalable, and interoperable.  

Corporate executives don’t have the time to discuss “which chain is right for our business and our customers.” They are only interested in efficiency and cost-savings.

So, in order to win over institutions, cross-chain functionality will be a requirement.

We’re already seeing this in blockchain gaming: Those games and gaming ecosystems that are gaining momentum are the ones that offer cross-chain functionality. That will be true for institutional implementation as well.

What are the potential downsides of using blockchain to distribute relief money?

The biggest potential downside of using blockchain to distribute COVID-related relief money is the likelihood that the Treasury Department will screw it up.

I’m not being flippant. Traditionally, government agencies have a poor track record when it comes to adopting new technology. We all remember the early days of ObamaCare. More recently, look at the IRS. It set up a website to help people track their CARES relief checks and the site has crashed at least twice.

This doesn’t mean the Treasury Department shouldn’t deploy blockchain to speed up relief payments – it absolutely should. Millions of Americans are waiting for checks that were supposed to be delivered in March. Just know, there will be bumps in the road – just as there are with every new government initiative.  

Why now is the time to deploy blockchain to ensure relief money is delivered more quickly?

The time to deploy blockchain to improve the distribution of relief money was in February– if not before. Before CARES was signed into law.

Some 60 million Americans still haven’t seen a dime of CARES money. Nearly 40 million Americans are unemployed. Lawmakers were proactive in increasing unemployment payments for millions of Americans, but they did nothing to ensure state employment agencies could process the wave of new applications. Most of those agencies still rely on centralized 1980s technology. 

Why is the US so far behind in the adoption of this technology? What is the hesitation, especially when it could ensure people get their relief money more quickly?

The U.S. is behind Canada, China, Switzerland, Malta, etc. because our laws and regulations marginalize blockchain and cryptocurrencies, making it difficult for the technology to gain real traction in the U.S.

Our current regulations reflect a lingering mindset among some lawmakers and policymakers who associate blockchain technology and cryptocurrencies with crime.

It’s not entirely their fault; there’s a lot of misinformation out there, but the research doesn’t support that viewpoint. Criminals are 800 times more likely to use traditional fiat currencies over digital ones when breaking the law.

The good news is that an outdated mindset is slowly crumbling. In 2019, Reps. Warren Davidson (R- OH) and Darren Soto (D-FL) introduced the Token Taxonomy Act and the Digital Taxonomy Acts.

Last February, Sen. Sherrod Brown (D-OH) proposed using digital dollars to distribute COVID relief, and more recently, a bipartisan group of a dozen members of Congress sent a letter to Treasury Secretary Mnuchin asking him to consider blockchain to distribute relief money.

In each case, lawmakers are trying to drag Capitol Hill into the 21st century. My companies, Polyient Labs and Polyient Games, are both headquartered in Arizona and we see Rep David Schweikert (R-AZ) doing it here: helping create a business landscape that welcomes blockchain.

Schweikert, Brown, Davidson, and Soto all have a responsibility to bring jobs back to their districts. They recognize blockchain is a job creator.  

Will the COVID crisis force the US to get up-to-speed when it comes to blockchain and digital currency?

Yes. We’re already seeing signs: Sen. Brown’s call for a digital dollar, the Congressional letter to Mnuchin asking that his department use blockchain for COVID payments.

Lawmakers know traditional payment methods don’t cut it any longer. I mean, the IRS has resorted to sending physical relief checks to citizens – and millions of those checks are lost. The COVID crisis is forcing lawmakers to admit the old methods are broken.

Similarly, industries now have to admit global supply chains are broken. We saw it firsthand in the last few months: critical shortages of medical supplies, food, toilet paper. You name it.

I guarantee you: conversations are taking place in C-suites across the country right now. Executives are saying “we need a decentralized, reliable and transparent method of tracking, tracing and auditing inventory.” That sounds like a recipe for blockchain.  

Thanks, Brad!

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Posted on

Michelle Phan: YouTube Star, Beauty Mogul, Bitcoin Bull


There are very few people in the world that can talk about makeup, entrepreneurship, and cryptocurrency like Michelle Phan. 

Michelle has grown a loyal base of supporters, numbering over 8.9 million subscribers on YouTube today, with her makeup tutorial videos that have collectively racked up over a billion views. 

In 2011, Michelle co-founded IPSY, a subscription-based company that delivers monthly boxes of beauty samples to an estimated 1.5 million subscribers per month. The company has raised a total of $103.2 million from high-profile investors such as Sherpa Capital and TPG Growth, valuing the company at $800 million. 

credit: Luis Trujillo

Along the way, Michelle regularly revisited her relationship with money and wealth as something more intimate than just numbers. She talks about money at a conceptual level, and educates herself on monetary policy and economic theory. She’s also appeared on Bitcoin podcasts, co-hosted an interview with former Presidential candidate Andrew Yang, and interviewed with CoinCentral (hey, that’s us!)

Recently, Michelle joined Pathfinder (Founders Fund’s early-stage investment vehicle), Ashton Kutcher, and Guy Oseary in a nearly over-subscribed $3 million Seed II round for Lolli, a service that allows users to receive rewards in Bitcoin while shopping at one of Lolli’s participating retailers.

A philosophical attraction to decentralization and self-sovereignty connects the dots between her entrepreneurial endeavors, something that may have developed during Michelle’s formative humble experiences as the daughter of Vietnamese immigrants in the United States. 

Before the success and accolades such as a Streamy ICON award and making the Forbes 2015 30 Under 30 list in Art and Style category and Inc’s 30 Under 30 Coolest Entrepreneurs of 2015, before being an “influencer” was a lucrative career, Michelle could be described as the “bashful teenage daughter of impoverished Vietnamese refugees, and sometimes bullied at her high school in Tampa.“

Like many first-generation children of immigrants in the States, Michelle emulated a persistent work ethic in the pursuit of a better life without the benefits of growing up with a family with established professional and social connections. 

She found solace in the day-to-day grind and hustle. From selling candy bars to blogging, Michelle quickly learned the value of a dollar. When she uploaded her first video to YouTube in 2007 at 19 years old, she encountered the powers of the digital economy, even if it was just 25 cents per week from her videos. 

In 2011, one of Michelle’s friends brought his gaming rig over explained his excitement about using it to do a variety of things: gaming, rending images, and mining Bitcoin. 

“This when I first heard about Bitcoin, and I was curious,” reminisces Michelle. “After that, I looked it up online. I saw lots of naysayers, people calling it fools gold. My first impression was that it was a trend.”

Like many Bitcoin advocates that once had a negative first impression, Michellelook backs at her first encounter with Bitcoin with a laugh. 

Michelle kept the Bitcoin idea in her back pocket and focused on building her beauty empire. Fast-forward to late 2015, about the time IPSY its $100 million Series B and Michelle started racking up prestigious awards.

“It was until late 2015 that I was getting serious about building my assets,” says Michelle. “I was interested in building generational wealth. I came from an immigrant family, and I wanted to provide for the next lineage of my family. That’s when I got interested in gold. I watched some videos about how those people who held gold and precious metals in the Depression in the 1930s were able to provide for their family.” 

“I also started watching a lot of conspiracy videos,” Michelle laughs. “I must have thought the world was going to end. I eventually found the “digital gold” of Bitcoin. I thought I should at least diversify, at least have 1% of my holdings in some digital asset.” 

Once the satoshis hit her wallet, however, Michelle was converted into a voracious student of digital assets and a Bitcoin advocate. 

“It’s about having skin in the game,” says Michelle. “When you actually have satoshis, you want to see it grow. You want to understand it better. I decided I wanted to educate myself and learn about the Bitcoin community. I would frequently go on Bitcoin Reddit. I was able to learn a lot.” 

Michelle was brought to revisit her relationship with money in a relatively short time frame– she essentially went from working at her mother’s nail salon to the cover of Forbes in under 10 years. Her goals of financial wealth and taking care of her mother were met, but something was missing. 

In early 2016, Michelle dropped everything and went on a nine-month globetrotting hiatus. Taking a step back away from producing regular YouTube content and running several projects gave Michelle more time to herself, and she spent more time learning about the word and eventually Bitcoin. 

Michelle’s Foray into Cryptocurrency: 

Through her self-education, Michelle has a favorite: Saifedean Ammous’s book The Bitcoin Standard. It was indirectly through Ammous that Michelle connected with her newest investment: Lolli. 

“I messaged Saifedean on Twitter to thank him for writing the book,” Michelle recalls. “Since I followed him, he’s been DMing me new seminars. One day, he recommended I check out Lolli and talk to the Founder Alex Adelman. I knew it was the right company for me to invest in.” 

Michelle looks back at the countless opportunities to invest in and promote a project in the cryptocurrency space but just couldn’t find a fit.

“I had met with a lot of people, CEOs of different exchanges,” says Michelle. It didn’t make sense for me to promote them. Yes, they make it easier to buy cryptocurrency, but at the end of the day, it’s another wallet you don’t really have full ownership over– kind of like a bank. When you have Bitcoin, you should be your own bank, I believe that’s kind of the point. I believe in the decentralization of power.” 

Lolli, according to Michelle, made the most sense to her because she can see herself using it, as well as ultimately a base of customers similar to her prior successful entrepreneurial endeavors. 

“I love shopping, and I love getting rewards (like Honey),” says Michelle. “I know a lot of women do as well. I also feel that many of them aren’t comfortable taking that financial risk to buy Bitcoin. It’s foreign to them. Earning rewards is something they’re familiar with. They’re rewarded with satoshis on the side. If you don’t want to stack sats yet, you can still do so at a smaller level.” 

2020 Investment Theory: Educate Yourself, Be the Customer

As an investor and cryptocurrency advocate, Michelle sees the vague and hazy post-pandemic road ahead with an optimistic lens. 

“The pandemic couldn’t have provided a better set up for cryptocurrency,” comments Michelle. “The Fed is printing trillions of dollars, which could lead to rapid inflation. A gallon of milk could cost $12, and people are going to ask what happened to their money. That’s going to drive a lot of interest to Bitcoin.”

Michelle views the fact that hundreds of millions of people around the world at home as an extremely productive and empowering learning opportunity.

“Every person in this world is giving their time for money in one way for another,” says Michelle. “It’s ridiculous most people don’t know about money. People have a lot of time on their hands, and now is a great chance to be exploring this crazy world. Monetary policy is changing all the time, but the Bitcoin protocol is very simple. It follows Austrian economics. The more people learn more about money, the more they can invest their time and energy into something of value.

In order to spot the best opportunities ahead, Michelle advises entrepreneurs to put themselves in the shoes of their consumers.

“The official number of people claiming unemployment is around 30 million and rising,” says Michelle. “That’s only counting people that have applied, not the ones that aren’t able to because the sites are crashing or just haven’t had the chance to. So, there will likely be a lot of people without disposable income.”

“If they cut back on disposable spending items, they may spend more on essentials. Also, people will want to stay at home. I think there’s going to be some sort of trauma with going back out. [Entrepreneurship] is going to be about capitalizing on those transitions. Be the customer yourself and work your way up.” 

Looking Ahead: Final Thoughts with Michelle 

Michelle keeps herself entertained with passion and self-education. 

“I find it very interesting that there are lots of billionaires and immense amounts of wealth moving to Bitcoin,” notes Michelle. “I mean, just this week Paul Tudor Jones said he has almost 2% of his assets in Bitcoin to hedge against risk, and he’s pretty conservative with his investments. If you have big financial titans and thought leaders jumping into Bitcoin, that could be huge. Imagine the impact Buffet saying he’s going to start buying Bitcoin will have on markets. I’m interested to see who starts converting.” 

Michelle and her own make-up brand, EM Cosmetics.

Michelle Phan embodies a bit of the traditional American dream with a dash of modern digital zest. The success story of someone powering up their laptop (or smartphone) and launching a million-dollar company is no longer viewed as a surreal outlier event. Today, it’s commonplace. 

Hundreds of thousands of content creators spanning YouTube, Twitter, Instagram, Facebook, Twitch, and now Tik Tok are earning billions of dollars per year from viewers that would have likely watched a tube TV just a few decades ago. 

Billion-dollar completely remote (decentralized) companies are coming out of the woodwork, attracting top talent that would have likely walked into a JP Morgan or Goldman Sachs a few decades ago. 

Michelle may have evolved well past any of her financial concerns as a teenager, but she’s maintained a strong relationship with money at a philosophical level.

“When you see what’s happening in the world, even at a government level, you see people that are positioned to take their power back,” says Michelle. “Bitcoin is sovereign money made for free people, which sounds a lot like the American ethos to me.” 

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Posted on

What is the Bitcoin Halvening and Why It Matters – CoinCentral


The Bitcoin Halvening (or halving) is a significant moment in Bitcoin’s history. Bitcoin’s Halvening is a pre-programmed event that protects Bitcoin from inflation and helps ensure a degree of scarcity for the digital asset. 

Before we get into the thick of the Bitcoin Halvening discussion, let’s take two minutes to go over some quick halvening questions. Then, we can get into the juicy stuff.

What is the Bitcoin Halving? 

The Bitcoin Halving is an event pre-determined by Bitcoin’s programming where mining rewards are cut in half. Basically, the amount of BTC miners can earn as a reward for validating the next Bitcoin block is cut in half. 

In the 2020 halvening, the mining subsidy is going to be split from 12.5 BTC to 6.25 BTC. 

Why is the Bitcoin Halving Important? 

Bitcoin’s many Halving events seek to give the asset an element of “scarcity” to protect its long-term value. Bitcoin would become nearly as scarce as gold. 

This Bitcoin Halving event will cause the asset’s inflation rate to drop to 1.8%, making it lower than the inflation rate of the U.S. Dollar. This is particularly notable in 2020, as the United States has been printing trillions of dollars in economic stimulus packages to tackle the economical chaos caused by the COVID pandemic. 

“The Halving is an important event for Bitcoin, but it’s just one element in the perfect storm that BTC is enjoying at the moment,” comments Alex Mashinsky, CEO of Celsius Network. “Governments around the world are implementing unprecedented fiscal stimulus, which risks causing high inflation across fiat currencies, which reinforces Bitcoin’s value proposition as a deflationary asset. As a result, many first time retail investors are flocking to BTC as a way to protect their wealth.”

Every future Halving will make Bitcoin more scarce. Since we primarily see BTC’s value as a relation to USD, we have two diametrically opposed forces that point to a higher Bitcoin price.

Halving events tend to come with a flood of industry price speculation, which mostly assumes the Halving event will cause a surge in Bitcoin’s price. 

How Many Bitcoin Halvings are there? 

Halvings occur every 210,000 blocks until the block mining subsidy reaches 1 satoshi, the smallest unit of bitcoin (0.00000001 BTC). Once the final Halving event occurs, the next block subsidy drops to zero, and miners will no longer be awarded block mining subsidies but can still collect transaction fees. 

The last Bitcoin halving is expected to be in 2140. Be sure to read our article about it then– don’t forget! 

There are about 18,355,462 BTC in circulation right now. 

Notice the slight curves due to prior bitcoin halvenings

Notice the slight curves due to prior bitcoin halvenings

When is the Bext Bitcoin Halving? 

Bitcoin’s next Halving event is expected to occur in May 2020, with various sources targeting a May 12th to May 16th date range.

Bitcoin Halving Dates History

There have been two Bitcoin Halvings– one in 2012 and one in 2016. 

2012 Halving

The first Halving occurred on November 28th, 2012. The halving block was mined by SlushPool by a miner using a Radeon HD 5800 miner.

The BTC block reward dropped from 50 BTC per block to 25 BTC per block. 

Bitcoin’s Price on 2012 Halving Day: $12.35

Bitcoin’s Price Price 150 Days Later: $127.00

Price gain: 928.34%

2016 Halving

The second Halving happened on July 9th, 2016.

The BTC block reward dropped from 12.5 BTC per block to 12.5 BTC per block. 

Bitcoin’s Price on 2016 Halving Day: $650.63

Bitcoin’s Price 150 Days Later: $758.81  

Price gain: 16%

  • 2009 – Blocks 1-210,000 earned 50 BTC in rewards.
  • 2012 – Blocks 210,001 – 420,000 earned 25 BTC in rewards.
  • 2016 – Blocks 420,001 – 630,000 earned 12.5 BTC in rewards.
  • 2020 – Blocks 630,001 – 740,000 will earn 6.25 BTC in rewards.
  • 2024 – Blocks 740,001 onward will earn 3.125 BTC in rewards.
  • ~2140 – all 21 million bitcoins will have been mined; the reward will be 0.

It’s worth noting that just because the BTC reward is lower doesn’t make mining any less attractive. Bitcoin’s price has increased throughout the years. Earning the block reward in 2016 was worth about $16,250, whereas the new block reward post-Halving 2020 would be worth about $53,125.

Why Halve Bitcoin?

A common question many have is why not keep the bitcoin reward the same throughout its existence? The answer brings us to the concept of scarcity. 

Bitcoin Scarcity: A Delicate Balance

If Bitcoin were to keep the reward consistent at 50 BTC, that would mean only 420,000 blocks would offer the reward until the 21 million BTC cap is hit, which would have happened at some point in 2016. 

This would have been extremely detrimental to Bitcoin’s user adoption since the technology was still relatively new and only a small minority of the population would hold the vast majority of the Bitcoin. 

At first, an early decrease in accessibility might make Bitcoin seem to be more valuable, but ultimately, this would repel many early-stage users. If there are fewer people capable of using it, then the digital asset would essentially be trapped in a gilded cage of low liquidity. 

Following along the trail of events, low liquidity would increase the risk of holding the asset, chipping away at its inherent value. 

The supply and demand among the small group of Bitcoin hoarders would determine the price. 

The price of BTC would be artificially inflated and holding (hoarding BTC) becomes a game of hot potato. Any individual whale with massive holdings could tank the price at any moment, further increasing the volatility risk of the asset. 

One of the core drivers of Bitcoin’s price is user adoption, and by placing such unreasonable hurdles on new users (high volatility and high costs to enter the Bitcoin ecosystem), few newcomers would venture into relatively unfamiliar cryptocurrency territory. 

With so many comparable digital assets such as Litecoin, user adoption would not bode well for Bitcoin.  

One the other side of the scarcity extremities, we could remove the 21 million cap to understand Bitcoin’s mechanics. 

If Bitcoin were to keep the reward at 50 BTC but removed the 21 million cap, there would be a theoretical infinity of BTC available on market over a long enough time frame. This would flood the markets in the long-term creating an essentially worthless digital asset. Each new year would theoretically slightly devalue the asset. If you need any real-world evidence, just take a look at the Venezuela cryptocurrency situation and why so many Venezuelans have embraced Bitcoin.

The 21 million cap and the periodic halvening events help to ensure that Bitcoin offers users the best of both value retention and usability. 

How Will the Halving Affect Bitcoin’s Price?

If you’ve been reading CoinCentral for a while, you’ll know we don’t speculate on asset prices. We’ll leave that to the Twitter day traders that soundlessly delete their tweet predictions when wrong. Trixy hobbitses.

However, there are a few logical arguments that can be made for Bitcoin’s price moving in either direction. Bitcoin’s price did increase after the first two halvings, but it’s hard to tell whether this is merely correlation or causation. 

Will there be a price jump after bitcoin halvening 2020? Only time will tell.

Will there be a price jump after bitcoin halvening 2020? Only time will tell.

That being said, many influential and respectable figures in the space have made price predictions, many of which are predicated on Bitcoin being a scarce asset. 

Billionaire venture capitalist Tim Draper, for example, predicted a $250,000 Bitcoin by 2022. 

Ex-Goldman Sachs hedge-fund manager Raoul Pal, recently claimed Bitcoin’s price could hit $1 million before the next halving event in 2024.

But take any prediction on the Internet with a spoonful of salt. John McAfee, for example, made a lot of noise with a $1,000,000 bitcoin prediction but soon backed out once proven wrong by the test of time.  

In a pure vacuum where only basic market forces and mathematics prevailed, Bitcoin’s price would go up after a halvening because of scarcity, but the reality is far more complicated than that. In lieu of us jumping into a rabbit hole here, feel free to shoot us an email if you’d like us to go into greater detail in another article.

Final Thoughts

Regardless of its impact on price, the Bitcoin halvening is a unique piece of digital asset history. By sheer resilience, Bitcoin has proven countless doubters and antagonists wrong. Each successful milestone of its programming keeps Bitcoin on its path to being a resilient, decentralized, and global means of exchange and store of value. 

“In 2016, I didn’t participate in the halving and all things considered, it was a minor event,” comments Catherine Coley, CEO of Binance.US. “The real rally happened 18 months later. On the whole, I’m bullish on Bitcoin long-term, whether not this event changes the prices noticeably or not. With unemployment and stimulus funding flooding our USD system, I think more people are looking for an alternative exposure to a market that’s unrelated to USD.”

The halving doesn’t require much, or any action, on your part. If you hold the digital asset, it’s worth your while to develop a more intimate understanding of how it works. Learning this unlocks the flood gates to better understanding global monetary policy in an increasingly more tech-enabled, a crucial lesson given the current economic conditions. 

To get a better understanding of Bitcoin, read our Bitcoin guide or Bitcoin for dummies guide. 

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Posted on

Coronavirus and Bitcoin: Why COVID-19 is Bitcoin’s Biggest Test


Bitcoin and Coronavirus (COVID-19) is economic history in motion: Not only is Bitcoin facing its first genuinely unified and global external threat, but it’s also doing so to the background music if a potentially hyperinflating U.S. Dollar.

Coronavirus and Bitcoin can help us correlate the relationship between the impact of external factors (public fear/panic and global pandemic) and borderless digital currency. 

A bullish sentiment would focus on the possibility of Bitcoin evolving past its speculative phase into a more stable asset as global demand increases, generating an enormous profit for early holders of the currency. 

A bearish sentiment would further cement its argument that Bitcoin offers no actual utility and will always be a highly speculative asset. 

If you’ve been reading CoinCentral for a while, you know we don’t shy away from saying we don’t know what’s going to happen. We’ll even go out on a leg here to say that most sites and personalities that give you thinly veiled opinion-predictions based on “deep technical analysis” don’t either. 

However, we can take a look at what happened and surmise some narrative and review. In this article, we’re going to go over the impact of Coronavirus (COVID 19) on Bitcoin, and what that means for the U.S. Dollar. 

Coronavirus and Bitcoin Price

The two most notable changes in Bitcoin’s price so far are:

  1. A steep 44%+ drop on March 12th, 2020. What caused Bitcoin to drop? Investors most likely panicked watching the Dow Jones drop by a 10%+ in a day. 
  2. From April 1st, 2020 to April 2nd, 2020, Bitcoin’s price jumped up 17%. What caused bitcoin’s price to go up? We’ll get into that soon. 

Let’s start by disqualifying a comparison between Bitcoin’s price and the general stock market. Yes, Bitcoin has generally outperformed the stock market in 2020, but that’s not saying much. The $20 bill in the back pocket of your old jeans has technically outperformed the globally ailing Coronavirus pandemic stock market. 

Bitcoin is prone to the same panic. It dropped about $50B in market cap on March 12th, which seems like a lot if you ignore that the five biggest tech companies (Amazon, Apple, Alphabet, Facebook, and Microsoft) lost a combined $416.63 billion on the same day. Bitcoin is small, but it makes a lot of noise, a factor worth keeping in mind when monitoring drastic price oscillations. 

The thought of Bitcoin being a safe-haven asset is a fever dream built on a few logical arguments:

  1. It’s not connected to any government and it can’t be printed. 
  2. It’s global, digital, and borderless
  3. You can’t catch germs from a Bitcoin. 

However, all theories are dominated by the reality: Bitcoin has still yet to mature past its speculation phase.

Was Bitcoin’s recent price gain a response to the Department of Labor reporting a whopping 6.6 million new unemployment claims? Possibly. If so, this could be a bold indication that people are flocking to Bitcoin in search of stability (ironic for one of the most volatile asset classes, historically). With the United States printing trillions of dollars in aid (money printer go BRRRR) and dealing with the economic repercussions as an afterthought, it makes sense people would seek an alternative means of wealth storage. 


Is Bitcoin security in the time of crisis? Bitcoin plummeting by over 50% in the course of March would suggest otherwise. The global community of investors seems as fearful as ever, and fairly so as we collectively try to deal with this global coronavirus pandemic and national quarantines. 

Was the early April price spike the result of sophisticated and mainstream traders? Likely. A recent survey of traders and investors by popular exchange Kraken placed $22,866 as the bitcoin price target, which would surpass Bitcoin’s previous ATH of around $19.5k.

However, if we look past the blatant speculation that has plagued digital assets for years, we have an extremely important threat to follow: how will U.S. inflation due to its recent and future stimulus package affect Bitcoin and digital assets?

The U.S. Inflation and Bitcoin: 

The U.S. Dollar has witnessed a lot since its creation in 1792: a Civil War, two World Wars, a handful of lethal pandemics. Its seen the rise and fall of superpowers. It’s survived Depressions and thrived in booming economies. 

Despite this or because of it, the Dollar has become the de facto world currency. In 2019, nearly 61% of all known central bank foreign exchange reserves were made up of the U.S. Dollar (the second most popular is the euro with 20%.) 65% of all U.S. Dollars, about $580 billion, are used outside the United States and mostly in former communist countries in the old Soviet Union bloc and Latin America. 

Entertaining the idea of a future where the U.S. government doesn’t dominate the political scene or is forced into a tertiary “ailing empire” role, is far outside the immediate realm of belief for the vast majority of Americans. 

However, it’s more real than ever. Instead of rattling and prophesizing America’s threats like war hawk political talk show pundits, we’ll re-focus on the impact of Coronavirus (COVID 19) on Bitcoin, and what that means for the U.S. Dollar. 

Coronavirus has given hundreds of millions of Americans a small taste of what a catastrophic economy feels like: going to supermarkets and not being able to get what you want, having very limited recreational or nightlife options, and for many, being forced into becoming financially dependant on your government.

It’s hard to imagine George Washington and Alexander Hamilton planned for an America that has $23.5 trillion in national debt and is rapidly printing currency to keep its hundreds of millions of citizens alive at home. 

There are few antagonists of the current U.S. stimulus plan with better solutions. Scold all you want, but there are going to be millions of people relying on government aid to pay for life’s basic necessities like food and water. The general population is less concerned with inflation and more with surviving.

However, that doesn’t eliminate the threat of hyperinflation. One doesn’t need to look far past the Hong Kong riots and Venezuela’s dilapidated economy to understand why Bitcoin is receiving international attention as a viable alternative to native currency. 

In 2017, Chamath Palihapitiya, the Founder of Social Capital and Co-Owner of the Golden State Warriors, once predicted Bitcoin’s price would hit $100,000 in the next three to four years and $1,000,000 in the next twenty.  

“This thing has the potential to be comparable to the value of gold,” sais Palihapitiya. This is a fantastic hedge and store of value against autocratic regimes and banking infrastructure that we know is corrosive to how the world needs to work properly.”

At one point, Palihapitiya owned about 5% of all BTC in circulation, so it’s fair to say its sentiments sway bullish. However, it’s hard to look past the substantial value BTC and other digital assets offer citizens in countries like Venezuela. The once-rich country now has currency hovering around a 10,000,000% inflation rate, which has many citizens turning to BTC as a store of value. 

Coronavirus and Bitcoin: Antifragile or Bust

It’s hard for one to read Nassim Nicholas Taleb’s Antifragile: Things That Gain From Disorder in 2020 and think of Bitcoin. Coronavirus is Bitcoin’s biggest test. Will it bend? Will it break? Will it flourish? Only time will tell, but we do have some sense of direction as new information appears. 

John McAfee, a vocal Bitcoin bull and proponent of digital assets, made an early bold claim in 2017 that BTC would reach $500,000 in 2020. When pressed on the question by Forbes, he not only defended his forecast but doubled down, predicting BTC would see $1,000,000 in 2020. 

His rationale? Scarcity. 

Since BTC is limited to just 21 million coins, it’s only a matter of time until scarcity starts playing a major role in its price fluctuations. There are currently 18,104,700 BTC in circulation, meaning that roughly 86.1% of all BTC has been mined and is in the ecosystem. 

However, according to, McAfee, this scarcity is much more drastic than the numbers let on. 

“Let’s get real, there are only 21 million bitcoins, seven million of which have been lost forever, and then, if Satoshi is dead, add a few more million,” McAfee explains.

Mathematically, Bitcoin’s price can be deduced to simple supply and demand. The scarcity argument would be emboldened by the potential flock of people starting to buy and hold Bitcoin, but it also glosses over a critical detail: we communicate Bitcoin’s price as it relates to the U.S. Dollar. If the very fundamental basis of understanding Bitcoin’s value starts rapidly inflating, McAfee may get his $1M Bitcoin wish soon enough. 

However, if Bitcoin does become the last resort for stability for Western economies, the world is likely going to be in a much more precarious position than it is today. This may be music to the crypto-anarchists in the audience, but such a large fundamental shift could be very dangerous. 

The supremacy of the Dollar has been leveraged as a foreign policy tool, a replacement for boots on the ground. The United States has leaned heavily into this advantage. The unraveling of the complicated web of militaristic and economic relationships created over decades challenges the very status quo of daily existence, which has only been proven to generally improve over the years. 

Understanding what could evolve into the de facto functional currency (or parent of it) can only serve as an advantage in the time to come. At the very least, studying Bitcoin’s response to Coronavirus will help paint a picture of the efficacy and utility of decentralized digital assets. We’ve never seen Bitcoin respond to a truly global macroeconomic event, which makes this an incredibly exciting time to be involved in the cryptocurrency world. 

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Posted on

Cryptocurrency Regulation in the Caribbean: Is It the Perfect Sandbox?


How many Caribbean countries do you know off the top of your head? Out of almost 700 Caribbean islands only about 30 are inhabited, each with their own stance on cryptocurrency.

The Caribbean Islands are first and foremost known as tourist destinations, but they have also, over time, picked up a reputation as shady offshore havens. The local regulatory stances on cryptocurrency are slow to evolve but are consistently pointing towards a more transparent future.  

Despite their reputations, efforts are underway to regulate cryptocurrencies in the Bahamas and elsewhere in the Caribbean. A hotbed for fintech, the Caribbean has been revitalized by the growing and largely unregulated Bitcoin market. 

Here is an overview of the Caribbean cryptocurrency industry from Solomon Brown, Head of PR for Freewallet, a cryptocurrency wallet developer. 

Islands, regulations, and cryptocurrency usage

Cryptocurrency regulations vary from island to island. Caribbean countries have different views of distributed ledger technologies and blockchain. Islands like the Bahamas and Antigua and Barbuda are well on their way to having established cryptocurrency regulations, Haiti’s viewpoint on the matter can be called controversial and Cuba is a bit behind the ball on passing cryptocurrency laws. 

Image via Pixabay

The Bahamas

Legislators in the Bahamas have signaled that they would like to incorporate cryptocurrency into the legal framework of the island’s economy, but with the way things stand now, there’s still a lot of work to do for that to happen. 

Graham Thompson Attorneys, a leading Bahamian law firm, concluded in a whitepaper, titled, ‘’The Bahamas’ place in a Cryptographic World’’: “It is important that the Bahamas seek to not wedge virtual currency business into a legislative framework that doesn’t quite fit but to develop a piece of legislation, either by amendment to the PSA or otherwise, that is virtual currency specific.”

 Indeed, the only official law offering regulatory treatment in the sphere is the old Central Bank of the Bahamas Act that dates back to 2010 when we had hardly heard of legal framework and standards in the digital token sphere. 

Image via Pixabay


The act defines currency as follows: “8. (1) The currency of The Bahamas shall be the notes and coins issued by the Bank under the provisions of this Act. (2) The unit of the said currency shall be the dollar, which shall be divided into one hundred cents.” It mentions that it is the “Sole right of the Bank to issue notes and coins”. Obviously, as it makes no specifications for digital tokens, it is hardly able to regulate the emerging local cryptosphere. 

Little by little things are beginning to change. On November 7, 2018, the Central Bank of the Bahamas issued a discussion paper on proposed approaches to the regulation of cryptocurrency assets. This paper describes the proposed regulatory posture on cryptocurrency assets and related instruments for supervised financial institutions (SFIs) under the remit of the Central Bank of The Bahamas. 

This includes the application of government-imposed limitations on the range of cryptocurrency payment instruments called the Exchange Control (EC) regime. The planned operations will allow Caribbean countries to better stabilize their economies by constraining in- and out-flows of currency, and subsequently keeping exchange rate volatility at bay. 

In 2019, the Securities Commission of Bahamas (SCB) took cryptocurrency a step further by releasing the draft called “Digital Assets and Registered Exchanges Bill, 2019.” 

The DARE Bill, 2019 regulates the requirements for issuing or selling digital tokens in the country, and how sellers and related firms must conduct their businesses. It also covers the sections that ensure the entrepreneurs comply with anti-money laundering (AML) and counter-financing of terrorism (CFT) laws and protect their clients’ data and assets.

Cuba

In Cuba, cryptocurrency may be the ultimate solution for US economic sanctions-caused problems. Not supported by the government, Bitcoin has been extensively used to top up phones, shop online and send funds after the roll-out of mobile internet in 2018. The founder of the Telegram channel CubaCripto estimates about 10,000 Cubans trade cryptocurrencies. Some use it as a side job, some get remittances from abroad. 

Brazil-registered Fusyona can be called the first cryptocurrency exchange operating in Cuba. It helps with remittances, charging up to a 10% fee and working via larger exchanges. As other platforms hesitate to develop activity in the country, cautious of the US penal fines, Fusyona’s founder is using Bitcoin, saying “for Cubans it is a necessity and can be a solution to their exclusion from the global financial community.” Nevertheless, the exchange is planning to get authorised by the Cuban government. 

Image via Pixabay

Funnily enough, in July 2019 the Cuban government was considering issuing its own cryptocurrency coin, but it decided to hold back on it to avoid money laundering and/or clashing with its communist principles. 

The state’s central bank has been investigating the pros and cons of cryptocurrency and will soon discuss the prospects of using cryptocurrency at a meeting with global financial leaders in Washington. But, in the meantime, there are no administration bills that specifically place cryptocurrency under regulation. 

Haiti

The legal status of cryptocurrency in Haiti is controversial. Cointobuy’s analysis tool has ranked Haiti 208 out of 249 countries in terms of cryptocurrency safety. Obviously, it isn’t secure to invest in ICOs or trade cryptocurrency in this country. Nevertheless, cryptocurrency entrepreneurs of this small island have come up with a number of brilliant ideas. It is safe to say Haiti is enjoying a real blockchain boom led by a number of exciting and meaningful startups that are trying to shape the future of agriculture, production, and other spheres.

For instance, AgriLedger is a project that will enable users to trace the food supply chain and find out how products are grown or transported. The Blockchain Cotton Project (BCP) works in a similar way: it will endorse smallholder cotton farmers that provide cotton for US clothing producers. Farm locations will be tracked by GPS and BCP will also verify whether the cotton is organic or fair-trade and guarantee the farmers a fair price for their cotton. 

Apart from this, Haiti is the homeland of groundbreaking educational projects like Cryptocurrency for Haiti and the Haiti Blockchain Alliance. They help common people get acquainted with the potential of blockchain. The Haitian Central Bank announced at the Haiti Tech Summit in June 2019 that it will be launching its own digital currency.

Dominican Republic

Little is known about the cryptocurrency industry in this region. After the Dominican Republic government banned using any kind of cryptocurrencies in transactions, all the financial institutions in the country cut down on crypto. However, citizens have kept using it at their own risk. 

Barbados

In Barbados, cryptocurrency regulations are still on the fence. The Central Bank of Barbados has expressed a positive attitude towards BTC and is starting to make changes on this front. 

On July 5th, Bitt Digital Inc. became the first blockchain-based company to complete and exit the 8-month-long regulatory sandbox guided by the Central Bank of Barbados and the Financial Services Commission. Governor of the Central Bank of Barbados, Cleviston Haynes, confirmed that the Regulatory Review Panel (RRP) considered the type of business activity trialed by Bitt to be a candidate for regulation under legislation that is currently being drafted. 

In June 2019, the Central Bank of the Republic of Haiti invited Bitt to present the likely benefits of a national blockchain-based digital currency.

Jamaica

Currently, the legal framework in Jamaica does not deal with crypto. Digital currencies are hardly defined or regulated under the Securities Act or the Bank of Jamaica Act. The Banking Services Act deals with e-money which is closer, but still distant from BTC and cryptocurrency. However, recently efforts have been made to rectify the situation and take digital currencies into account.

Jamaica is bigger than most Caribbean countries. Lately, it has economically outperformed many of its neighbors. In 2018, the Jamaica Stock Exchange (JSE) was identified by Bloomberg as the fastest growing exchange in the world. It was the second time the publication had named the JSE the best performing exchange.

In April 2019 the JSE announced that it was going to enable the live trading of security token offerings (STOs) and digital assets with the support of the Canadian FinTech company, Blockstation. The move was aimed at helping businesses raise capital through STOs and establish themselves in the financial community, while also promoting safe digital asset transactions in the market. Presumably, the JSE, the Financial Services Commission and the Bank of Jamaica (BOJ) will shortly issue the regulations and guidelines that will facilitate this new digital trading.

The Organisation of Eastern Caribbean States

This inter-governmental organization aims at promoting economic development along with other legal aspects. Protocol members and Anguilla use the Eastern Carribean Dollar issued by the Eastern Caribbean Central Bank. 

In spite of having no cryptocurrency regulations, these 11 countries have signed up to participate in a pilot program that will test the use of cryptocurrencies alongside the country’s national currency. Only time will tell if the blockchain-based digital version of XCD is OECS’s short cut to a cashless society.

Saint Kitts and Nevis

This OECS member is willing to take part in the Digital Eastern Carribean Dollar ‘test drive’. However, the Saint Kitts and Nevis government is negative about accepting Bitcoins as a payment for the Citizenship by Investment Program (CIP), which has been warmly welcomed in many Caribbean countries. 

Antigua and Barbuda

Unlike their Caribbean counterparts from Saint Kitts and Nevis, government officials from Antigua and Barbuda are drafting laws to regulate Bitcoins. According to local media outlets, Antiguans are interested in using cryptocurrency to pay for public services.

The authorities of the Caribbean jurisdiction are developing a special bill with the aim of securing the status of legal currency for Bitcoin, the circulation of which is allowed in the territory of Antigua and Barbuda.

The decision was made during a meeting of the Cabinet of Ministers with experts from the Antiguan Leisure & Gaming Association, dedicated to best practices in accepting Bitcoins as payment for goods and services. Thus, very soon, Bitcoin could turn into an official means of payment in Antigua and Barbuda.

Interestingly, while enumerating the benefits of Bitcoin, Antiguan officials who promote its legalization in their home country noted that Bitcoin makes it easy to track transactions, which is very important considering how many see the Caribbean country as a “tax harbor. ”

Saint Lucia

In recent consultations with the authorities of Saint Lucia, representatives of the mission of the International Monetary Fund (IMF) said that central banks should not ignore Bitcoin. According to IMF experts, virtual currencies can compete with existing currencies and also challenge monetary policy.

Subsequently, it was reported that the Saint Lucian government was considering Bitcoin’s prospects and was exploring options on how to “make it work.” A corresponding statement was made by the Prime Minister of Saint Lucia, Allen Chastanet.

Caribbean cryptocurrency evolution

The 2018 BIS Annual Economic Report suggested that cryptocurrency is the “new petal in the money flower.” The taxonomy of money can be defined by four properties: the issuer, the form, the degree of accessibility and the payment transfer mechanism. Cryptocurrencies combine three key features:

  1. They are digital. Cryptos aims at providing security and rely on cryptography to prevent hacking and fraudulent transactions. 
  2. They are private, and by design, they have no intrinsic value, unlike commodity money. “Their value derives only from the expectation that they will continue to be accepted by others” – the report states.
  3. They allow for a digital P2P exchange.

The competitive advantage of cryptocurrency is its underlying distributed ledger technology. It enables each user to verify transactions in their copy of the ledger, ensure the accuracy of each transfer and rule out the possibility of double-spending.

Image via Pixabay

What does this mean for the Caribbean islands?  BTC has a number of potential benefits that could let the financial genie out of the bottle. 

For the small Caribbean countries that made a name for themselves as tax havens in a similar way to the Latin American Panama, cryptocurrency offers a way of evolving into the future. After a massive leak of financial files tied to the fourth-biggest offshore law firm in the world, it was hard for Panama to recover from reputational losses. Panama shifted its focus onto cryptocurrency at the official level by working out taxation protocols and supporting blockchain technology. 

The Caribbean seems to be following Panama’s example. The Bahamas are drafting regulations of cryptocurrency assets. The British Virgin Islands are issuing a national cryptocurrency coin. Antigua and Barbuda are offering citizenship for BTC. In other words, a good many Caribbean governments are willing to put themselves on the map in the cryptocurrency space. 

Image via Pixabay

In the opening stages of introducing cryptocurrency into the global economy, it is crucial for blockchain-based projects to keep security issues crystal clear. Gaining user trust is key to the mass adoption of Bitcoin. With operational security in the spotlight, it is important that locals use reputable cryptocurrency services such as top market leaders like Binance, Coinbase, and Bitfinance. As far as safe wallets are concerned, Freewallet is proud to work side by side with these big names to make cryptocurrency more available to a wider audience. It’s been a privilege for us to join our efforts in order to modernize the financial services sector. 

The Caribbean is boldly stepping into the future with cryptocurrency and we are happy to help this process along.

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Posted on

Crypto’s New Deal: This DeFi Platform is Putting Unused Tokens Back to Work


Decentralized Finance “DeFi” has experienced tremendous growth in the past few months, and it looks like it’s only going to continue ramping up. According to DeFi Pulse, there is roughly $1.13B locked into DeFi contracts, nearly double the amount at the start of 2020.

The underpinning of DeFi’s recent rise to popularity is the series of unconventional financial tools that are helping democratize the future of global peer-to-peer lending and transactions. 

We connected with the Chintai team, a Cayman-based platform that seeks to enable the leasing of unused utility tokens. If you haven’t heard about utility tokens in a while, you’re not alone. Utility tokens, or tokens that are essentially a promise to access a future product or service, were exceptionally hyped in the 2017 ICO craze, but the ensuing bear markets cooled off the utility market landscape. 

Utility tokens are meant to be used, but most of them are lying dormant. Utility token holders have seen some of their utility token values plummet upwards of 95% and have moved onto focus on other things. 

Chintai wants to let utility token holders get some actual utility out of their tokens. With over 250M in transaction volume, Chintai appears to be offering a significantly attractive value proposition, if not at least demonstrating the DeFi ethos of enabling uncaptured financial opportunity in action. 

We spoke with Ryan Betham, Chintai COO, about DeFi, Chintai’s recent growth, and the utility token landscape. 

Why is DeFi an exciting space right now? 

DeFi pioneers are producing tangible use cases that deliver on the dreams which ignited the cryptocurrency movement in the first place. It’s about giving people control of their money, and democratizing access to opportunity – all while eliminating value extractors. 

So, here we are today with a plethora of DeFi protocols. Many of which are offering decentralized lending. And it’s working, really well. We’re seeing proof that we don’t need 3rd parties to facilitate one of the most basic building blocks of a new economy – borrowing and lending. 

And it’s being done on a global scale, without borders, all executed with code. It’s like watching sprouting seeds for a vision of a new digital economy. How cool is this stuff?!

Can you hypothesize how much more the DeFi space has to grow? 

If you broaden the definition of DeFi to include any financial instrument that relies on smart contracts and distributed ledger technology to function, the sky’s the limit. The total monetary value of the global financial system is somewhere around $300 trillion– with a “T”. Not everything needs to be on blockchain.

 But there’s a good case to be made that we could see a global financial system that is mostly reliant on blockchain tech. It’s simply too efficient and secure compared to the existing infrastructure. Market principles would suggest you either adapt or die.   

Take the $109 trillion bond market as an example. That’s something we’re trying to help fix and blockchain technology is a perfect instrument to bring massive efficiency gains in bond markets. And the great thing is that the solution is disruptive while still being beneficial for big banks, small banks, businesses, and investors simultaneously. Incentives align and everyone wins. 

So once people understand the value proposition, we expect this stuff to catch on like fire. It’ll be one of those leaps in evolution that seems slow in the moment, but fast in retrospect. 

“Utility tokens are meant to be used, but most of these tokens are lying dormant, collecting virtual dust for the investors that purchased them.” How does Chintai aim to address this issue? 

We built the first high-performance, decentralized exchange for lending and borrowing token utility. Not borrowing the currency – borrowing the utility itself. We started with an EOS token leasing market. 

For people that don’t know, EOS tokens give you ownership of network CPU and NET. You can think of CPU and NET as the battery power you need to run an application or transact on the network. Without CPU and NET you can’t use the network.

So people who own the EOS token, but don’t need to use the CPU and NET, can set an interest rate and lend out their resources to someone who needs CPU and NET. 

The borrower pays that interest rate for a fixed period and receives the CPU and NET for their applications or transactions. The cool part is that the borrower doesn’t actually have possession of the tokens because you can delegate CPU and NET while maintaining custody of the token itself. 

The whole process is handled by smart contracts so counterparty risk is virtually non-existent. We saw $250 million in transaction volume within six months, had 33,000 unique accounts using the instrument, and roughly $3 million in interest generated for lenders. 

Now we’re taking that concept and applying it to any utility token and even NFTs, which represent unique or bespoke items. So you know virtual items in games? Swords, skins, characters – whatever. We want to enable leasing of those items too. We’re also launching a handful of new leasing markets in early 2020 and we’ve already seen promising outcomes. It’s hard to not get excited about this stuff. 

What milestones does the non-fungible token (NFT) ecosystem need to hit to reach a point of critical mass? 

Generally speaking, the most important milestone is having developer tools that can enable smooth UX. Let’s take gaming for example. 

It’s an ecosystem that is ripe for disruption, but doesn’t quite have the tools that game devs need to fully utilize the benefits of blockchain tech. 

Gamers are already accustomed to in-game economies. But do you really think they’re going to manage private keys and login to a blockchain account for tokenized virtual assets? Mostly no. So game developers need tools to embed virtual items into games in a way the end-user doesn’t realize they’re using a blockchain at all.

We’ve built instruments for this use case specifically. The same engine that facilitates token leasing can also facilitate transactions for NFTs in games. 

And that engine can be used in the background, using our API, to embed the process of exchanging virtual items directly into games. No friction for the end user, but all the benefits of blockchain for the gaming industry. 

Can you explain how what Chintai is offering is different from competitors? 

We’re kind of like a swiss army knife for DeFi. The reason why we can have such a diverse offering is because of our high-performance on-chain order management system (OMS). This is super FinTech geeky stuff so bear with me. 

OMS’s match orders and execute agreed terms between buyers and sellers – it’s how an order book is populated on say a crypto exchange except those order management systems are offchain so you lose the transparency that comes with an on-chain OMS. 

Our on-chain OMS is agile and highly configurable. It allows us to rapidly build markets for anything from token leasing, to decentralized bonds, NFT trading, and everything in between. 

The other cool aspect of our OMS is that we can white label businesses to take part in any Chintai market by allowing them to curate their own front-end UI, set their own fees, and use our exchange in the background to facilitate order management and execution. 

This allows people to create highly customized portals or UIs for very specific needs. And the liquidity for every market is shared, so you don’t end up with fractionalized markets.

“Decentralized exchanges that lack compliance with global regulators are at risk of being shut down due to lack of consumer protection and anti-money laundering laws.” – What alternative does Chintai offer?

The on-chain OMS I just mentioned is a big part of it. Regulators want transparency. Since our OMS is on-chain they can trace and see token movements. In our case, accounts will link back to a person’s identity using KYC. 

Our users will have their compliance laws encoded into their accounts. And tokenized securities will also have compliance controls coded in as well. So as a user you can only access tokens that are considered legally compliant within the jurisdiction you live.

“Chintai lowers the cost for those who are trying to use the tokens while also providing yield to those who lend them.” – What interest rates does Chintai offer?

Chintai enables markets that have fluctuations like any other market. We’ve seen APR as high as 40%. But usually the APR is more reasonable. Somewhere around 3-10% depending on the market. 

Chintai’s suite of products looks pretty, well, sweet. Which of these is the most popular among your users? Which product do you think is being underutilized and offers a ton of value? 

The token leasing markets are most used. Mostly because they’ve been live the longest and the DEX is awaiting licensure approval from the Monetary Authority of Singapore so it’s not yet live. The most underrated aspect by far is the Chintai Merchant Network, i.e our OMS white labeling service. 

Merchants can set their own fees, build their own custom UI, and Chintai takes care of all order management and execution. It’s extremely powerful. After all, what good would it be if we had all these cool tokens, but couldn’t make a proper market to exchange them within applications or for various use cases? 

Can you walk us through how the most popular one works?

Talk to us. We explore exactly what market you want to make and we customize it for you. Or if we already have a market you want, but think could benefit from a better UI, then we white label you to use our OMS and share liquidity that’s already been established. In either case you need to build your UI and set your own fees. But we take care of the rest.

Why EOS?

Chintai was designed to be a high performance, enterprise-grade, fully on-chain Order Management System (OMS).  This inherently required us utilizing a blockchain that can handle high transaction volume with low cost; this made Etheruem an unsuitable choice in late 2017 when the project launched.

While the Chintai tech stack does utilize eosio, we are deploying on multiple instances including Worbli (for DeFi) and WAX, Ultra (for commercial gaming) – the EOS blockchain itself features as only a small component of the markets and services.  

Additionally, Chintai will shortly be utilizing Liquidapps DAPP Network for horizontal scaling, which includes their LiquidLink service to enable dApps on Ethereum to also leverage Chintai, with the benefits of the on-chain transactional throughput and reflecting back to Ethereum at settlement to minimize gas cost.

From financial service industry discussions to date, indications in terms of preference have been towards leveraging or spinning up an industry/private instance of eosio as the basis for DeFi services, and there is a reluctance to leverage any of the existing public blockchains. 

We will continue to make decisions based on our partner feedback and customer needs in that regard, but feel we have the right tech stack to be able to service and scale while leveraging the efficiency benefits of blockchain.

What does the Chintai Roadmap look like for 2020? 

2020 is a year of accelerated takeoff. Our primary focus is readying our tech and business for the DEX. We’re establishing our business development team in Singapore to enlist a consortium of banks to issue decentralized Bonds and securities and we’re opening a branch in Germany for our technical team.


 This includes lining up a few companies that will pilot STO issuances on the regulated DEX. We are also launching a handful of token leasing markets and formalizing partnerships that will integrate our OMS for gaming, tokenized commercial real estate, and FinTech. 

To help power it all we’ve just opened a pre-seed round in early 2020. But what ambitious startup isn’t trying to raise money? So you probably knew that already. 

How can someone get involved with Chintai?

We are probably one of the more transparent and interactive teams. If you ask us what we’re doing at any moment we will tell you as much as we can. 

We’ve really enjoyed building a culture where our followers, users, and supporters can go on the ride with us. The best way to get close to the action is telegram or twitter. Both handles are chintaiEOS.

Twitter: @chintaiEOS
 Telegram: https://t.me/ChintaiEOS
 Email: [email protected]

This article is Originally posted on CoinCentral.com
Author: Alex Moskov