Returns Fall if Cryptocurrency Use PoS Consensus

Alexander Salazar
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Returns Fall if Cryptocurrency Use PoS Consensus

Cryptocurrencies ATOM and SNX have registered losses of over 50% concerning the price that they had early in the year. Dash and LSK are the crypto assets using PoS that have increased the most in recent months.

A study by Wilson Withiam, a research analyst from Messari, indicates that cryptocurrencies that implement a proof of stake (PoS) as part of their consensus protocol, and hold less than 40% of their assets in reserve, have decreased in price so far in 2020.

To determine the possible influence of the participation test on the price of cryptocurrencies, Messari analyzed the correlation between the percentage of liquid supply and the price fluctuation of 21 projects that use this consensus protocol. In this regard, the study determined that the price of most of the crypto assets analyzed has fallen below 20% so far this year.

Taking into account the mechanism of PoS networks, the ecosystem understands that by reducing the supply of coins that were in circulation, the demand grew and thus the price of the remaining cryptocurrencies increased. However, the Messari study found little probability in this relationship, since cryptocurrencies with the largest volume of assets reserved for user participation, such as Cosmos (ATOM) with more than 90% and Synthetix (SNX) with more than 80 %, have dropped in price during 2020.

On the other hand, Withiam concluded that price dynamics may be more closely related to specific announcements linked to each project. In this, it agrees with Dash (DASH), which reached milestones in terms of adoption last year, something that coincided with an increase in the price of the cryptocurrency above 40% of its value at that time. It should be noted that more than 60% of the cryptocurrencies in the Dash network are in circulation, which represents much less than what ATOM and SNX own.

Although the study refers to figures from April 1st, the cryptocurrency market has a valuation equal to that of January 1st, 2020, that is, around USD 192,000 million. Therefore, it is possible to observe that 14 of the 21 cryptocurrencies using the PoS consensus included in the study have a negative performance, below the market taken as a whole.

Cryptocurrencies that use proof of participation have recently received investors’ attention since several service providers have added this consensus protocol to their platforms. Furthermore, existing projects are trying to incorporate this feature. In this regard, Vitalik Buterin announced last year that the Ethereum network will use another consensus mechanism, whilst the second cryptocurrency by market capitalization plans to migrate to this algorithm due to its inherent advantages.

The proof-of-stake consensus algorithm, first introduced in 2011, is a different alternative to the PoW model for validating transactions and achieving distributed consensus. This protocol has grown in popularity recently since some consider it to be a more profitable and efficient way to secure transactions through a distributed network. Through the PoS mechanism, participants (nodes) send a special transaction that blocks their funds for a certain period and allows them to enter the process of creating and validating blocks. Depending on the type of algorithm, the network randomly defines the participant who can propose the next block to be added to the chain.

By Alexander Salazar

Operations with AirBit Club Cryptocurrencies Not Allowed in Italy

Alexander Salazar
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Operations with AirBit Club Cryptocurrencies Not Allowed in Italy

CONSOB denounced that AirBit Club is “improperly” offering financial products and services. The Italian financial regulator has blocked access to the AirBit Club website throughout Italy.

The National Commission for the Italian Society and Stock Market, better known as CONSOB, has banned AirBit Club activities throughout Italy. In recent days, the regulatory agency issued a fraud warning against the initiative, adding to several other complaints that point to the AirBit Club as an international ponzi scheme.

CONSOB published the warning on March 30th, according to records on its website. The document indicates that AirBit Club has “improperly” offered financial services and products in Italy since the firm is not legally registered to operate in the territory. For this reason, the team behind CONSOB recommends that citizens not continue investing on behalf of AirBit Club and completely banned its activities.

It should be noted that AirBit Club is an initiative related to the world of cryptocurrencies, which has offered since 2016 the opportunity to buy Bitcoin and other cryptocurrencies. The firm supposedly works by purchasing assets when the price is low and reselling them when the market is undergoing a bullish trend, thus generating large profits from its users’ investments.

To participate in this platform, users must pay membership of USD 250. They also have to invest their savings in bitcoins so that they can generate the striking performance that the platform offers. However, the cryptocurrency community has already denounced AirBit Club as a pyramid scheme on several occasions. The company promises returns too high for a safe investment and does not indicate the potential risks to which its users are exposed.

Another aspect that gives rise to concern is the possibility that Gutemberg Dos Santos and Renato Rodríguez want to get the management of AirBit Club. Both figures faced a trial for the execution of the Vizinova ponzi scheme in 2017, which led them to lose USD 1.4 million. Due to this, authorities such as the National Commission of the Spanish Stock Market (CNMV) have also issued warnings about the possibilities of fraud behind AirBit Club.

The Italian regulatory agency CONSOB implemented in order to block the access to the AirBit Club website throughout the Italian territory. The companies that offer Internet services in this European country must take this measure into account. Despite these complaints and possible reprisals, AirBit Club continues to be a popular initiative in Colombia, Mexico and, Russia.

Cryptocurrency users, in both Latin America and other parts of the world, should thoroughly investigate the security and transparency of companies before placing their trust and money in them. The blockchain ecosystem has experienced several cases of pyramid schemes with numerous victims, the most famous of which have been MMM Global and OneCoin. This type of fraud has been so versatile that it has even affected famous figures like Ronaldinho whilst exposing novice users to the possibility of losing all their savings.

By Alexander Salazar

Robert Kiyosaki Recommends Investing in Bitcoin Rather Than in the US Dollar

Alexander Salazar
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Robert Kiyosaki Recommends Investing in Bitcoin Rather Than in the US Dollar

For several days, the well-known author of the book Rich Dad, Poor Dad has made financial recommendations to the world. The investor had already warned that cryptocurrencies would eventually replace the US dollar.

Robert Kiyosaki is the world-renowned businessman that wrote the best-selling book Rich Dad, Poor Dad, which was published in 1997. The financial guru stated on his Twitter account last April 4th that the best way to protect funds right now is by investing in Bitcoin, instead of saving in US dollars. Kiyosaki is sending financial recommendations to users of that social network, now that the world economy is under threat from the consequences of the coronavirus pandemic.

The businessman wrote on his Twitter account that the US dollar is dying and people are desperate about money. He advises that people who receive free money from the government should spend it wisely, rather than save it. He recommends buying assets such as gold, silver, and Bitcoin, of which silver is the best option. The precious metal costs USD 20 an ounce, thus being the best purchase for future security. The author says that anyone can afford USD 20, “especially with free fake money.”

A few days ago, the businessman posted other messages, in which he made criticisms about the traditional financial system that controls the US fiat currency. On that occasion, he stated that the US dollar became debt in 1971 when former President Richard Nixon completely abandoned the gold standard and has not since contributed to the world economy. For that reason, he believes that the US dollar has rather made the poor and the middle class poorer and the rich richer. “Debt, dollar, greed destroying lives & world economy VERY SAD. Save gold, silver & Bitcoin,” he indicated at that time.

On April 1st, the Hawaiian businessman had posted his opinion on the measures announced by the US Federal Reserve (Fed) in its attempt to support the US economy in these times of crisis. In this respect, he thinks that there is too much manipulation and adds that it is useless to save money when the FED can continue printing trillions of US dollars.

A little less than two years ago, the investor had warned that cryptocurrencies would end up replacing the US dollar. He thinks that the US fiat currency is in serious trouble because gold, silver, and cryptocurrencies are going to take it out of the game. Kiyosaki, who has repeatedly stated that Bitcoin is among the best options, said that “the US dollar is a scam.”

Kiyosaki’s position is based on his projection about the collapse of the traditional economy backed by “government money,” as he refers to the US dollar. In his opinion, the “invisible” and unlimited issuance of US dollars unsupported by gold reserves is “inflating a big bubble” in the market, which could even be higher than the dot-com and the 2008 housing crises. In a few words, it is better to invest in money with a limited issuance like the main cryptocurrency in the market, Bitcoin.

By Alexander Salazar

Tax Agency Gives Brazilians More Time to Declare Bitcoin and Other Cryptocurrencies

Alexander Salazar
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Tax Agency Gives Brazilians More Time to Declare Bitcoin and Other Cryptocurrencies

The Brazilian government states that about 32 million taxpayers must declare their income this year. The balances for the purchase of cryptocurrencies are reflected according to the value on the date of acquisition.

The Brazilian Senate had requested the Tax Agency to postpone the deadline to declare income tax, which originally closes on April 30th, due to the coronavirus pandemic. However, according to local media, government officials had not granted the extension.

However, the news portal G1 (Globo Network) reported last April 1st that the Brazilian Tax Agency decided to postpone the term to declare income tax until June 30th. This presents an excellent opportunity for those who have not yet declared their movements with Bitcoin and other cryptocurrencies, and the government officials can now study the subject in more detail.

Extended Term

According to the publication, José Tostes Neto, who is the secretary of the Tax Agency, announced on April 1st that they would postpone the deadline for the submission of declarations of income tax by natural persons by 60 days. Therefore, the final date originally scheduled for April 30th would now be for June 30th.

Regarding the alteration of the deadline, the official stated that this term will expire on April 30th and have an extension until June 30th. As a consequence, the tax declaration submission period for natural persons will have a two-month extension.

The coronavirus pandemic may also affect repayment terms as the first batch occurs on May 30th and the Tax Agency is deciding whether to maintain the deadline. The secretary of the Receita Federal provided the information during a collective interview conducted at the Palacio do Planalto, which other members of the government also attended.

Until March 30th, the Tax Agency had made an assessment that defined 8.1 million declarations that had been submitted. This corresponds to 25% of the total previously foreseen since the government states that about 32 million taxpayers in 2020 are submitting declarations of income tax for natural persons.

Consequently, the extension of the term can help cryptocurrency investors, since the Brazilian tax agency Receita Federal has not published specific guidelines to declare profits from transactions in crypto assets in the income tax returns. On the other hand, many investors are lost concerning the procedures that the government office has adopted.

However, various financial portals recommend reporting cryptocurrency transactions under the heading “Other Assets and Rights”. In the case of cryptocurrency purchases, the taxpayer must record the value that the cryptocurrencies had at the time of the acquisition, regardless of the fluctuation that it has had at the time of the declaration, according to the website ValorInveste.

The taxpayer must declare the balances in cryptocurrencies in the Goods and Rights form, in the “Other Goods and Rights” field below, which is item 99 in the form.

In the case of profits obtained from the sale of cryptocurrencies, taxpayers must declare them only if the sale operation exceeds BRL 35,000, equivalent to USD 6,650.

By Alexander Salazar

Upcoming Halving of BCH and BSV Could Affect Bitcoin Mining

Willmen Blanco
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Upcoming Halving of BCH and BSV Could Affect Bitcoin Mining

When the previous halving in Bitcoin occurred in 2016, Bitcoin Cash and BSV did not exist. Both BCH and BSV could lose a large number of miners after their next halving.

Bitcoin Cash (BCH) and Bitcoin Cash Satoshi’s Vision (BSV) will undergo their first halving between April 8th and 10th, 2020, respectively. This event directly impacts the unions of miners of these cryptocurrencies. Regarding Bitcoin (BTC) forks, these events could also affect the mining of the first cryptocurrency.

It is important to note that Bitcoin Cash and BSV are the results of hard forks of the Bitcoin code but, in the case of BSV, it comes directly from Bitcoin Cash. However, the blockchains of both forks and that of Bitcoin, the original cryptocurrency, share a large part of their history. Furthermore, BCH and BSV also retained the mining algorithm, block production time, and height of each Bitcoin halving. All this allows a certain correlation in what happens with these cryptocurrencies, especially in the area of mining.

Bitcoin Cash was born in August 2017, a little over a year after Bitcoin’s second halving. Currently, the BCH blockchain has 629,282 mined blocks and its first halving would occur on April 8th. Shortly after, between April 9th and 10th, the BSV halving would take place. The blockchain of this cryptocurrency, born in mid-November 2018, has 629,073 blocks mined until now.

The same as in Bitcoin, the halving of Bitcoin Cash and Bitcoin Cash Satoshi’s Vision will occur at the height of block 630,000 of their chain. However, it will take another month to happen in BTC as block production has flowed differently in this chain.

Fears of Halving

Bitcoin Cash and BSV halving events will occur almost simultaneously, one month before Bitcoin (BTC), which may be causing some concern in the BCH and BSV community. The reason is that, after the halving of these cryptocurrencies, the mining of BTC may be more profitable. This could lead to a massive migration of miners to Bitcoin, which would reduce the hash rate of BCH and BSV dramatically.

According to a recent newsletter by analyst firm Arcane Research, there will not be an exodus of miners if one of the following scenarios occurs. One would be a significant increase in the price of BCH and BSV in the market or the commissions that miners earn. The other would be a dramatic drop in their hash rate and mining difficulty. However, in this second possible case, the remedy could be worse than the disease. A very low hash rate would lower the costs for the performance of a 51% attack against the BCH and BSV networks.

Effects of BCH and BSV Halving on Bitcoin

Twitter and Reddit, among other social networks, are debating the possible impact of the anticipated halving of BCH and BSV on Bitcoin. While many consider that it will not affect the mother cryptocurrency, others believe that it will. These events are unlikely to change the price of BTC, but they could slightly affect Bitcoin mining.

The potential migration of miners from BCH and BSV to Bitcoin could lead to an increase in the hash rate of the latter. A sudden increase in hash rate would affect block production time and, consequently, mining difficulty setting. Given that BSV and BCH only hold 5% of mining power together, BTC mining is unlikely to change dramatically after the halving of Bitcoin Cash and Bitcoin Cash Satoshi’s View.

By Willmen Blanco

The Adoption of Blockchain ​​Technology in Video Games Could Increase During 2020

Maria Rodríguez
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The Adoption of Blockchain ​​Technology in Video Games Could Increase During 2020

The Blockchain Game Alliance highlights that some important projects involving both industries could emerge later this year.

The video game industry could present an increase in the use of technologies such as blockchain during this year. Some experts highlight that video games represent one of the most lucrative industries in the world. This year, the video game industry could experience a significant change by incorporating innovative methods such as Distributed Ledger Technology (DLT), or blockchain networks.

The Blockchain Game Alliance, a consortium dedicated to the use of this technology in video games, issued a press release to give more details about the project. In the publication, the group explains that there are important projects in this area that could be ready later this year.

Some of these projects establish that the Blockchain Game Alliance should participate in presentations, events, and exhibitions within the crypto industry. Also, the alliance should promote the creation of unique networks for video games, as well as facilitate the development of usage standards between both industries.

Besides, the alliance emphasized the importance of adopting blockchain technology. The idea is to help video game players and encourage positive initiatives for users through blockchain technology.

Using Blockchain Technology in Video Games

Some companies are working together to adopt both technologies, despite the global limitations that may arise during the COVID-19 pandemic. In this way, blockchain technology could benefit companies and video game users.

More than 90 companies are working to adopt technologies such as DLT in video games and vice versa. Among the companies that stand out are ConsenSys, Ubisoft, AMD, Sandbox, and many others.

Sébastien Borget, President of the Blockchain Game Alliance, talked about other plans that the alliance has. He assured that this set of associations would benefit both industries.

In this way, the Blockchain Game Alliance plans to incorporate all the members of both blockchain and video game industries at a central level where they can promote future projects. He stressed that the mission of this plan would be adding large and small companies in this scenario.

Borget added that it is important to take into account all those involved in both industries. In this way, it would be possible to strengthen their evolution. “I firmly believe in aligning the interests of gamers, creators, and developers of video games. We must continue to encourage truths owned by players and creators through the inclusion of the blockchain industry (…) We must be stronger as games with blockchain advance”.

The Blockchain Game Alliance began operating with just 8 members since the end of 2018. It currently has more than 90 companies from both industries. These companies have shared projects that help adapt technologies such as DLT in video games.

Anne Puck, associate manager of Ubisoft, talked about the importance of blockchain technology during an interview in 2018. Ubisoft is a company linked to the Blockchain Game Alliance.

Puck considered that blockchain technology could be very important for the video game industry. “Blockchain has the potential to transform the gaming experience by offering players new benefits and an unprecedented level of participation”.

Every year, the video game industry can generate more than 130,000 million dollars. This amount of money is what makes the video game industry one of the most lucrative ones in the world. Blockchain technology could help attract more users to this entertainment industry.

By María Rodríguez

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