Notable Growth of the Blockchain Market in Spain and Latin America in the Next Three Years

Alexander Salazar
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Notable Growth of the Blockchain Market in Spain and Latin America in the Next Three Years

Investment in Spanish blockchain-based projects will exceed USD 100 million. Latin America will reach USD 77.1 million of investment in 2020.

The blockchain technology market in Spain and Latin America will experience notable growth over the next three years. A report by the Spanish firm Ametic determines that this technology will have sustained growth in Spain, where an investment of more than USD 100 million in 2020 is projected.

The technology consortium recently published a report entitled “State of the art of Blockchain in Spanish companies”. In the document, they detail that the growth of the blockchain market in Spain will focus on the financial sector in terms of investment volume, while the industrial sector will experience further development.

The industrial sector will accumulate higher growth in the next three years, with 56% of the compound annual growth rate (CAGR). This highlights the need to digitize new production processes, giving new value to data, and preparing different information exchange platforms with an additional layer of integrity and security.

The report gathers the results of a survey in which 400 companies from different industrial sectors in Spain participated, which was carried out during the months of September and December of last year. This consultation indicates that only one Spanish company out of 10 is currently working with blockchain projects.

Regarding the level of maturity reached, the document mentions that 68.2% of the country’s blockchain projects are still in an embryonic phase, while 31.8% have entered a production phase. However, it views 2020 as a stage in which digitization will be consolidated, considering that 50% of companies’ spending on technology will be related to data.

Although the development of blockchain projects is guaranteed for the next three years, the analysis found some barriers that are hindering further adoption. A total of 41% of companies still do not use the underlying technology of cryptocurrencies and say that they do not understand how its implementation can help them transform their businesses.

The report notes that it will be necessary to build a plan to help companies understand the virtues of blockchain technology, as well as to define the processes that contribute to their digital transformation.

Latin America Follows the Footsteps

The Ametic team also details that the volume of investment in blockchain projects will have grown 62% more in Spain than in the Latin American market. For this reason, they consider that the achievements of Spanish companies will be benchmarks for the LATAM market, due to their presence and close relationship in the development of new digital business lines.

Latin America will reach USD 77.1 million of investment in blockchain projects in 2020 and will maintain sustained growth of 45% until 2023. Brazil and Mexico will concentrate on 57.2% of the total investment directed to the development of blockchain-based projects that will be promoted in the area in 2020.

The financial sector will be the one making the largest investment on the continent, to adapt the new transactional processes to current regulations and expand their areas of action to new digital markets. On the other hand, the distribution and services sector will experience the greatest evolution in Latin America in the coming years, with a growth of 49% until 2023, as the document reflects.

By Alexander Salazar

Confidence in Bitcoin Has Increased Since 2017, According to Study

Alexander Salazar
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Confidence in Bitcoin Has Increased Since 2017, According to Study

Millennials are the users that show the most confidence in Bitcoin. Half of the people over 65 years old believe that Bitcoin is a financial bubble.

The Tokenist team conducted a survey to ascertain the current level of confidence in Bitcoin.

In the consultation, the users had to answer whether they would rather buy USD 1,000 worth of Bitcoin or USD 1,000 worth of government bonds, stocks, real estate, or gold; whether they agreed with the statement that Bitcoin is a financial bubble; and to what extent they agree or disagree with the assertion that Bitcoin is a positive financial technological innovation.

The survey results showed that there is a significant increase in confidence in Bitcoin. More than 45% of the people surveyed prefer Bitcoin to traditional assets like stocks or gold. Sixty-eight percent of the respondents are familiar with Bitcoin. As for the millennials surveyed, 78% are aware of the cryptocurrency and 14% have had Bitcoin at some point.

Increased Confidence

Sixty percent of the respondents feel that Bitcoin is a positive financial technological innovation. People’s sentiment on Bitcoin as a financial technological innovation has had a 27 percent increase in the last 3 years.

On the other hand, 47% of the respondents prefer Bitcoin to big banks, representing a 29 percent increase from 2017. Forty-three percent of the respondents, and fifty-nine percent of the millennials, said that in the next decade most people will use Bitcoin. Additionally, 44% of the millennials said that they will probably buy BTC in the coming years.

More than 1 in 3 millennials would hold onto Bitcoin if someone gave it to them, while 27% would sell the asset immediately. Thirty-nine percent of male millennials have no issues with Bitcoin’s intangibility, while twenty-five percent of millennials overall show the same attitude. Only 24% of the millennial respondents think that Bitcoin is a bubble, while 50% of the people over 65 years old think the same.

Bitcoin Is Increasingly Attractive

The methodology used by the team consisted of a survey of 4,852 people in 17 countries. They used questions drawn from the 3 most cited BTC confidence surveys: eToro in April 2019, BlockChain Capital in October 2017, and BankRate in July 2018.

They surveyed Google Surveys, and the sample consisted of 4,111 participants in total. The ages of the respondents were between 18 and 65 years old. More than 45% of the answers fell in the range of 25 and 35 years old, while only 17% were rated as millennial women.

A survey by Bitflyer Europe also revealed that users in Europe increasingly trust Bitcoin. Through the crypto-confidence index, a survey that has been conducted since 2019, the Bitflyer team was able to demonstrate the increase in interest in Bitcoin in most of several European countries.

On the other hand, Edelman, a US public relations and marketing consulting firm, published a survey on user confidence in cryptocurrencies. According to the results, among the 34,000 respondents, around 76% said that they knew very little about Bitcoin and blockchain. This led the Edelman team to say that it is necessary to inform the population more about Bitcoin to create more confidence.

By Alexander Salazar

Price of Cardano Rises Following Announcement of Shelley Update

Alexander Salazar
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Price of Cardano Rises Following Announcement of Shelley Update

The price of ADA rose by around 16% in less than 24 hours. According to Hoskinson, the hard fork of the network will occur on June 30th, 2020.

In recent days, IOHK CEO Charles Hoskinson announced the activation date of the new hard fork of the Cardano mainnet.

On his Twitter account, Hoskinson published the roadmap for the next fork that will occur on the network. As he explains, the Cardano team scheduled the fork for June 30th, after completing tests on the network. The update aims to make the protocol go to a Proof of Stake (PoS) algorithm, to create and validate blocks.

The Shelley blockchain has been in a testing period since April 27th, when the first block was created in the beta version of the network. The last fork that Cardano experienced occurred on February 20th, the date when the blockchain changed its consensus algorithm. On that occasion, it used Ouroboros BFT as a new Proof-of-Stake mechanism.

Hoskinson, who is also a co-founder of Ethereum, said that Shelley will be open to all users on June 9th. Besides, he noted that they will begin to “put things together from start to finish” on June 16th. Finally, he explained that, if everything works without problems, they will make the move to Shelley on June 30th.

Effects of Announcement on Price of ADA

Hoskinson’s announcement prompted multiple users of the ecosystem to go to exchanges to obtain ADA, cryptocurrency token of Cardano. The high demand for the token caused its price to increase by around 16% in less than 24 hours. Early on May 28th, the price of the cryptocurrency was in the range of USD 0.055. At the time of writing this article, its price is around USD 0.064.

According to data from Cryptobriefing, about 37,000 wallet addresses bought around 7.85 billion ADA when the price of the cryptocurrency was around USD 0.054. Also, they said that they expect the demand for the token, as well as its price, to continue to increase due to the next fork.

However, they also said that it is important to take precautions as Cardano has consistently delayed several of the updates to its network. Likewise, they stated that the event can be used as a “buy the rumor and sell the news” scheme. This is a methodology used to quickly inflate the price of an asset.

After the announcement of a Cardano update last March, the price went as high as 20%. Announcements related to the activation of the new Cardano mainnet have raised expectations among its users.

Demand for a cryptocurrency typically increases due to announcements of its forks or halvings, increasing in its price. In the case of ADA, it will be experiencing increases in price until the next Cardano hard fork on June 30th. So that they can make their best decision, investors need to know when the best moment to buy or sell.

By Alexander Salazar

Financial System Could Change Due to Central Bank Digital Currencies

Alexander Salazar
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Financial System Could Change Due to Central Bank Digital Currencies

If CBDCs emulate the anonymity of cash, it will not be possible to limit their use to residents of a particular country. The main difference between CBDCs and Bitcoin would be that decentralization would not be desirable in the former.

Bitcoin allows transferring digital value on a global scale without needing intermediaries, requesting permits, or censorship, among other features. The world’s Central Banks, some to a greater extent than others, underestimated the attempts to replicate this essential idea, imposing low limits and obstacles.

As a result of the possibility that Facebook would give its users access to currency without national restrictions, Central Banks became aware of the need to revive the debate on central bank digital currencies (CBDCs). Santiago Fernández de Lis, Head of Regulation at BBVA, considers that the practical implications of implementing CBDCs are profound, for both users and the entire financial structure.

Calibrating the costs and benefits of adopting a CBDC-based model involves projecting scenarios and potential consequences for the financial system as a whole. The delays by some Central Banks represent advantages for others, considering that the cross-border nature of these crypto-currencies could change the current scenario, in terms of international reserve currencies and foreign trade.

Digital and Physical Money

The main functions of a Central Bank are to preserve the value of the national currency and to maintain the stability of prices and the financial system as a whole. It is the institution in charge of safeguarding and managing gold and fiat currency reserves, issuing legal tender money, serving as a treasurer and financial agent of the public debt, and being auditors and lenders of private banks, among others.

A Central Bank is also a bank for other financial intermediaries and private credit institutions. The only real public money issued by a Central Bank is cash. Other means of payment represent private money, that is, money lent to commercial banks, telephone companies, and FinTech companies, among others.

The main argument for the growing interest in eliminating cash is that its anonymity and fungibility facilitate using it for criminal purposes. There is also the high cost of producing new units, especially in hyperinflation or devaluation scenarios and frequent changes in monetary cones.

Cash also limits the scope of monetary policies based on negative interest rates since it provides a zero-rate option in its storage. Lately, following the declaration of a pandemic due to COVID-19, the potential of cash as a disease propagator has become another argument.

Central Bank Digital Currencies

Central Bank Digital Currencies could maintain the anonymity of cash and eliminate the need for financial intermediaries. Likewise, they could increase the monetary supervision and surveillance of individuals, maintaining the presence of private banks. Of course, this would also involve digital cash subject to interest rates, the Central Bank’s greater monopoly of financial activity, and more scope for its monetary policies.

The main difference between the technical architecture of CBDCs and Bitcoin is that decentralization would not be desirable. Network security and transaction verification would rather be the sole responsibility of the Central Bank and, in any case, of trusted institutions of the bank.

If CBDCs are designed to emulate cash, whilst maintaining anonymity, it will not be possible to limit their use to the residents of a particular country. This would raise competition for global seignorage. Currently, the portability of physical money limits it, but these logistical difficulties would disappear by going digital.

By Alexander Salazar

Bitcoin Could Help Fight COVID-19 Pandemic in Europe While Central Banks Create Debt

Willmen Blanco
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Bitcoin Could Help Fight COVID-19 Pandemic in Europe While Central Banks Create Debt

The issuance of Bitcoin is intact, whilst governments are issuing money at their discretion. European central banks are exploring digital currencies, using the same approach as with fiat currencies.

The European Commission recently proposed a recovery fund for the region’s economies, which could reach EUR 750 billion. Of that amount, EUR 500 billion would be subsidized and another EUR 250,000 in the form of loans.

The approach of the European Commission is to go to debt markets, seeking to raise the required amount through bonds payable within 30 years from 2028.

The formula seems bleak, such as the almost unstoppable issuance of US dollars by the US Federal Reserve. These bailouts do not seem to represent future solutions when the injection of billions of euros has an inflationary influence on the pockets of savers and the general population.

Whilst governments are implementing inflationary measures, it is still unclear when they will reactivate economies. Even by relaxing the quarantine, the risks of new infections, deaths, and collapse in health systems show uncertainty regarding the return to normality.

Inflation, Deflation or Whatever Could Happen

Bitcoin maintains intact its policy of restricting issuance, with a rate that is not only controlled but also decreasing. Just over a month ago, the third halving event occurred, reducing by half the rewards to miners per block mined.

Bitcoin will not have an issue greater than 21 million BTC, being controlled to the point of limiting its existence. It is precisely the fact of being scarce one of its main attributes as a haven of value. It is something like gold, with the difference that there is total certainty in its limit of circulation.

Each block in the chain creates a certain amount of Bitcoin. In the current period, that amount is 6.25 BTC per block, and the blocks are mined about every 10 minutes.

There are cycles established from the code, aimed at reducing the amount issued per block. That event occurs every 210,000 blocks, which represents about 4 years.

Central banks issue money or create debt to justify unsupported money, at their discretion. Europe already did something similar when it issued bonds to rescue the crisis economies of Portugal, Ireland, and Greece. The bailouts did not help solve the economic situation in those countries, and the cure was sometimes worse than the disease.

Digital Version of Fiat Currencies

As they create debt that makes the long-term picture worse, many European central banks join the blockchain and digital currency fever, with the overt support of the European Union.

They mainly explore the possibilities of stablecoins or anchored currencies to create their digital currencies. It is a non-physical version of their national fiat currencies, with the same premise of issuing at their discretion, state control, and rules to convenience.

They may improve transaction processes concerning the current functioning of banking. However, there would be only a nominal change, in terms of economic policies.

Investment firm Grayscale concluded in a recently published investigation that the launch of digital currencies by Central Banks could boost the use of Bitcoin. The contrast between both proposals would eventually highlight the qualities of the first cryptocurrency among potential users.

By Willmen Blanco

Specialist Says that an Average of USD 2.5 Million worth of Cryptocurrencies are Stolen Daily

Alexander Salazar
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Specialist Says that an Average of USD 2.5 Million worth of Cryptocurrencies are Stolen Daily

According to the specialist, exchanges do not report every robbery that they suffer. Sawhney considers that the best way to protect the funds in cryptocurrencies is through cold wallets.

One of the most sensitive issues in the cryptocurrency environment is that of security. This is especially true, given the large number of hacks and thefts of funds that have occurred in recent years, with a trend of growth in terms of losses. On average, those losses amount to about USD 2.5 million per day, according to Hartej Sawhney, a cybersecurity specialist from the firm Zokyo.

Sawhney considers that that figure is also remarkable, taking into account that money exchanges do not always report the robberies that they suffer. In recent days, he explained this situation during a panel discussion focused on security, as part of a virtual meeting.

Those figures are based on recent data from the firm CipherTrace, according to the specialist. The latest report available on the site of this firm indicates that, only in robberies and hacks, there were losses of over a million US dollars per day. With the addition of fraud and other criminal practices, that average exceeds USD 12 million.

For the computer security specialist, the cryptocurrency ecosystem, which includes exchanges, investment firms, and other companies in the area, does not take security seriously enough.

During the virtual meeting, Sawhney advised that it is always important to hire external teams to verify security. He said that potential threats within each organization are countless, adding that the main one lies in human error itself.

The biggest threat to cybersecurity is usually the human being. If someone in the company opens the wrong e-mail or makes a mistake, then the funds are at risk.

It Is Best to Opt for Cold Storage

There are various security risks that the cryptocurrency industry faces. Among the ones that Sawhney mentioned, the most prominent are the mismanagement of private wallet keys, theft of credentials, and various forms of malware.

In this regard, the cybersecurity expert stated that companies in this industry should be more careful with the security of their products. He especially highlighted the importance of seeking external teams to audit and test their systems, as a way to improve their security.

Likewise, he recommended using as few as possible hot wallets connected to the internet. In his opinion, cold wallets are pieces of hardware that safeguard private keys offline, which makes them more secure. However, he added that they are not infallible.

This position seems to coincide with that of Leo Wandersleb, the creator of the Wallet Scrutiny tool. He recently said that none of the wallets in the market is completely secure.

Wandersleb also showed concern that most wallet providers do not even bother to seek external audits. Both Sawhney and Wandersleb also agree on this point, which shows evidence of the little attention paid to security in the cryptocurrency environment.

By Alexander Salazar

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