Venezuela Sets the Standard for P2P Exchange of Bitcoin in Latin America

Alexander Salazar
-
0
Venezuela Sets the Standard for P2P Exchange of Bitcoin in Latin America

An analysis of scrutinized operations in LocalBitcoins during the 2019 blackout in Venezuela. The power outage had side effects on the exchange of Bitcoin in several countries in the region.

A study on the behavior of the exchange platform LocalBitcoins, during the general blackout in Venezuela between March 7th and 11th, 2019, determined that the oil-producing country is setting the standard for exchanges between Latin Americans in this P2P crypto exchange.

The analysis scrutinized the operations with bolivars (VES) conducted in Venezuela before, during and after the power outage. After that, it compared the data obtained with the number of transactions made with the national fiat currencies of Colombia, Peru, Mexico, Chile, Argentina, and the USA. The results show that the fall in operations with bolivars had a side effect among operators in those countries.

Seven charts show that operations in LocalBitcoins, with the aforementioned national currencies, fell at the same time as Venezuela was experiencing a lack of electricity, Internet service and connectivity to banks. On the first day of the blackout, LocalBitcoins registered about 800 operations per hour, which then dropped to about 200 transactions every 60 minutes.

Colombian, Mexican, Chilean, Argentine, Peruvian and US national fiat currencies exhibited similar behavior regarding their transactions. The report supports the data obtained through testimonies by three Venezuelans living in Chile and Argentina, who use LocalBitcoins to exchange pesos (CLP and ARS) for bitcoins (BTC) to then convert them into bolivars (VES) to send remittances to Venezuela.

The researchers state in the report that the power outages that occur in Venezuela also lead the number of Bitcoin exchanges in Latin America to drop. This is because money transmitters outside Venezuela cannot communicate with their counterparts in the country to complete the cross-border transfer of value.

Bitcoin as Intermediate Currency

The report indicates that people in the region use Bitcoin as an intermediate currency between fiat currencies. In other words, they do not use it as a means to store value, but as a way to obtain fiat currencies such as the US dollar (USD) or the Colombian peso (COP).

The analysis stated that both individuals and companies in Venezuela want to sell their bolivars for bitcoins to acquire other fiat currencies. Their objective is to safeguard value or to pay for a range of goods and services, both digital and physical worldwide.

In April of last year, the strong influence of Venezuela on LocalBitcoins was evident due to the significant decrease in exchange volumes on this platform. During the blackout, the drop was 26% in Venezuela, 23% in Brazil, 19% in Peru, 11% in Mexico, 9% in Chile, 9% in the Dominican Republic, 6% in Colombia and 3% in Argentina, respectively.

Even though the situation analyzed occurred last year, trade-in LocalBitcoins continues to fall in Latin America. This might be related to new options for the exchange of Bitcoin or other cryptocurrencies, the implementation of a more rigorous Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) policy measures on the platform and the decrease of trade worldwide.

By Alexander Salazar

Ecuador Creates a Platform that Develops Digital Checks Based on Blockchain Technology

Maria Rodríguez
-
0
Ecuador Creates a Platform that Develops Digital Checks Based on Blockchain Technology

The idea is to develop high-security checks, using a unique code to prevent fraud and avoid the issuance of counterfeit checks.

Transparency, low cost, security, and the possibility of tracking real-time transactions are some of the advantages that blockchain technology offers to any sector that applies it. That is the case of the banking world, where blockchain will help prevent counterfeit checks through a new platform.

David Ramírez, a system engineer and member of the Libretec cooperative in Ecuador, considers that blockchain technology can also revolutionize the banking area. He ensures that Quito is experiencing a cultural change, in favor of technological appropriation and collaborative development.

According to the engineer, decentralized technologies are solid and positioned alternative in the public and private sector, which produces and disseminates technologies and services in the region. Blockchain is one of these new technologies.

For this reason, Ramírez put a lot of his professional development and effort into focusing the benefits that blockchain technology could bring to achieve a “transaction revolution”, designing a platform to develop digital checks based on blockchain technology.

Previous Blockchain Projects

Ramírez has a lot of experience developing projects related to blockchain technology for Ecuador. Among those projects that the partner of Libretec has developed, one of the most important and outstanding ones is the mobile wallet. This project led him to achieve a second place on the Digital Bank Quito 2018 competition, an annual and public event to discuss new technologies.

The mobile wallet project is a transaction processing system. It could be defined as an Internet payments platform based on blockchain technology. The objective of this platform was to revolutionize the person-to-person payments, which is a scheme that other countries have also worked on. Its main task is to transfer digital money between one mobile to another one or between mobile devices to points of sale.

Blockchain and Traditional Checkbooks

Blockcheck is the current project that Ramírez is developing. This is a platform to develop high-security checks since these checks are based on blockchain technology. The particularity and main characteristic of these checks are that they have a unique code to prevent fraud in these payment methods. The main idea is to avoid counterfeit checks.

But there are other projects that, although they are not developed in the same way, have a similar objective to that of Ramírez’s idea. The Argentine firm Pagos Futuros S.A. worked on the design and development of a platform that replaces the use of online paper checks.

These electronic checks created by the Argentine company are not very different from traditional checks since they also serve to make purchases or save money. The only thing that changes is its level of security since it has a code that cannot be modified. Emirates NBD, a Dubai government-owned bank, also designed a platform for issuing checks using blockchain technology.

In this way, blockchain technology would allow the elimination of some human errors in the traditional banking sector. It could also help with the validation, protection, encryption, distribution, and tracking of data related to financial transactions, allowing, in this way, the prevention of other types of fraud.

By María Rodríguez

Coronavirus Quarantine Boosted Cryptocurrency Trading in Asia and Would Do the Same in The US

Maria Rodríguez
-
0
Coronavirus Quarantine Boosted Cryptocurrency Trading in Asia and Would Do the Same in The US

The ecosystem would be “impervious” to the supply chain problems currently seen in the stocks at the national level.

After the coronavirus outbreak affected the main stocks of the world and generated a decrease in the price of Bitcoin from USD 10,139 last February to USD 5,000 on March 13th, the crypto market could be on the road to recover its prices.

This is what Catherine Coley, CEO of Binance, considers. During an interview with the specialized media Bloomberg, she revealed that the coronavirus quarantine drove a surge in the trade volume of cryptocurrencies in Asia. This is something that would happen in the US market.

Coley explained that, currently, both traditional and cryptocurrency markets are playing a long-term cycle. She claims that the markets are experiencing the “CRIC cycle”, in which the “crisis” produces a “response” from the market, followed by “improvements”. After that, the market returns to “complacency” before the cycle repeats. This would be the current situation of the crypto-market.

“So in the regular traditional asset classes, as with Bitcoin, you are seeing that complacency in the market turns into a crisis, creating panic. That is going to generate sell-off across the board”, she said.

Bitcoin Is a Concussion Resistant Asset

According to Coley, since the technology that we can market “24 hours a day, 7 days a week” supports cryptocurrency markets, the ecosystem would be impervious to the “supply chain problems we are seeing in the stocks at the national level”. This is possible because this technology can be commercialized independently of the environment where the operation is executed.

The CEO of one of the world’s largest crypto exchange commented that there was also a resurgence of trading volumes in Asia. This recovery occurred during the mandatory quarantine the government ordered to prevent more coronavirus cases.

“So I think we will see the same thing happen in the US when we get stronger guidelines on what quarantine means for the country”, Coley explained.

Besides, Coley added: “I think they see Bitcoin as something we can continue to engage with, regardless of the safety and concerns of the US and globally”.

Current BTC prices are “accessible” for institutions

The current price of Bitcoin and other cryptocurrencies could attract institutional investment and, with this, generate more purchases of these digital assets whose price would recover in the coming months.

As Coley, David Grider, Fundstrat’s Chief Digital Strategist, and Simon Peters, eToro’s Platinum Account Manager, consider that the coronavirus crisis could strengthen bitcoin price. Peters thinks that the increasing amount of traditional money injected into the system will boost the purchase of cryptocurrencies.

Also, Coley argues that the cryptocurrency ecosystem has matured significantly over the last year. This is another positive aspect that could strengthen crypto-market. The businesswoman gave more details related to this point.

“We have seen a maturation since last year in this space, with institutions being able to identify who are the players in the crypto space, and now prices are affordable for those institutions to come in”, she said.

Coley predicts that Bitcoin’s lack of dependence on the physical world will continue to boost the trading, despite the economic challenges faced during the coronavirus threat. Binance is one example of growth. This company continues to increase the number of crypto assets available on its platform. It recently started accepting USD Coin (USDC) deposits and now seems to be going for more.

By María Rodríguez

Exchange House in Brazil Must Pay More Than USD 16,000 to a Former Client

Maria Rodríguez
-
0
Exchange House in Brazil Must Pay More Than USD 16,000 to a Former Client

Genbit faced a lawsuit for non-payment. Now, the company must pay significant compensation to the affected party.

A court in Sao Paulo, Brazil, sentenced the cryptocurrency exchange house Genbit for not paying a client. In response to that action, the Brazilian court authorized a blockade of the money stored on the company’s financial accounts, local media reported.

The court decided to seize and block more than 83,000 Brazilian reals (approximately USD 16,400) on Gensa Serviços Digitas S/A accounts. This is the organization in charge of managing the exchange services company.

According to some previous reports, authorities in Brazil imposed a ban on Genbit so the exchange house could not conduct cryptocurrency operations in the country. The Brazilian Securities and Exchange Commission (CVM) considered that the company’s shares were out of the regulations. The CVM also supposed that Genbit already registered some irregularities on the market it handles.

Genbit is also known as Zero10Club. It is part of the well-known Tree Part group, which manages a considerable set of companies that raised numerous suspicions in the regulatory entities of Brazil.

The Reason of the Problem

A former investor paid about 100,000 Brazilian reals (equivalent to USD 20,000) to the company. However, he only received 19,000 reals (USD 3,700) for his investment and decided to file suit against the crypto exchange house.

Now, Genbit must pay to the plaintiff the rest of the money he invested and could face fines for customer damages. The company currently has similar lawsuits in the Brazilian courts for similar cases.

After this situation, the company has received strong criticism and many negative ratings regarding the way it works. Among the worst opinions, some users accused the company of using a “financial pyramid” scheme to defraud large numbers of people through others.

Genbit faces a large number of lawsuits after some customers branded the company as fraudulent. The delays in many payments for cryptocurrency exchanges caused many losses to the company that could receive more accusations against it.

On the other hand, representatives of Genbit have not issued any statement to their clients or to the local press to explain the situation. This is something that has generated more suspicion among the people who use these platforms to buy and sell cryptocurrencies in the market.

This is not the only company operating in Brazil that has faced serious problems with the authorities and with clients through the same “financial pyramid” method. Many “cryptocurrency-based” companies use this same scheme in the South American territory. For this reason, fewer and fewer users decide to invest.

The 18K company Ronaldinho is a similar case. It uses the same pyramid scheme but using the image of the famous soccer player Ronaldinho Gaucho. Another case names the company Atlas Quantum, which also faces some lawsuits for allegedly using a financial pyramid method.

Until the moment these fake companies have affected more than 26,000 customers in Latin America. Brazil is working on preventing these types of crimes and how to compensate affected users.

By María Rodríguez

The Largest Market Capitalization Bank in South Korea Will Launch a Crypto Custody Service

Maria Rodríguez
-
0
The Largest Market Capitalization Bank in South Korea Will Launch a Crypto Custody Service

This development includes trading, consulting, and managing digital assets like Bitcoin (BTC) and Ether (ETH).

KB Kookmin, the largest and most important South Korean bank, is planning to offer crypto custody services for Bitcoin and Ether. In late January, the bank asked the South Korean Intellectual Property Office to register the trademark. This is according to what local media recently reported.

This cryptocurrency custody platform of the bank will be called KBDAC (KB Digital Asset Custody). Although the exact launch date is still unknown, the trademark registration means that most of the development process of the crypto custody solution is complete.

In its request, the bank expresses its desire to register the KBDAC brand in more than 20 areas, all related to the cryptocurrency industry. These areas include trading, consulting, and managing digital assets like Bitcoin (BTC) and Ether (ETH). It also specifies virtual asset shipping, settlement, and fiat currency transactions.

The nature of these 20 areas that the bank asked to register suggests that the idea of ​​this financial institution is to offer crypto products and services. The service would not only consist of receiving or storing digital assets but also managing them in investment funds.

Previous Steps

Last June, KB Kookmin partnered with the startup Atomrigs Labs to work on the development of this new asset management platform. The idea of ​​both companies was to explore digital asset management and different solutions. This is what a bank official explained to local media.

This Seoul-based initiative uses multi-part computing cryptographic (MPC) technology to store cryptocurrencies. Besides, it seeks to achieve the growth of the digital asset market and find new businesses related to cryptocurrencies. However, there are not many details about this development.

About Atomrigs Labs

Atomrigs Lab is a company specialized in the development of blockchain solutions for the financial sector. This startup has worked on the development of blockchain-based digital asset protection systems.

KB Kookmin Bank and Atomrigs Lab will continue to cooperate in the development of digital asset management services. They will seek to take advantage of the Atomrigs Lab’s technology and the internal protection control infrastructure of KB Kookmin Bank.

Regulation in South Korea

Previously, South Korea worked in the regulation of crypto exchange houses to prevent money laundering. In this way, these types of companies can operate in the country without problems if they are registered.

To achieve this goal, lawmakers amended the Financial Prevention law to include new measures and help prevent money laundering. This law requires that South Korean cryptocurrency exchange houses be registered with regulators.

Plans for the Future

KB Kookmin bank is also considering to launch other cryptocurrency-based services, such as marketing, investment advisory, and asset management, according to local media. This would be the beginning of more crypto services for the users in South Korea.

Meanwhile, in Germany, more than 40 banks asked the Federal Financial Supervisory Authority for authorization to offer the Bitcoin custody services. This is possible, as in the case of South Korea, after the presentation of a new regulatory law in the country to protect all the users and avoid financial crimes, a protocol that South Korea is following.

By María Rodríguez

Audit of Ethereum 2.0 Aims to Improve Its Phase 0 Performance

Alexander Salazar
-
0
Audit of Ethereum 2.0 Aims to Improve Its Phase 0 Performance

The audit focused on reviewing the Phase 0 specifications of the new Ethereum version. It concluded that, although the network enjoys robust security, it can suffer DDoS attacks.

In recent months, the founder of ConsenSys, Joseph Lubin, stated that Ethereum 2.0 would be ready for the year 2020. Even though the fulfillment of this forecast is not yet certain, the new Ethereum version undergoes an audit and gives the first hints of its performance.

The startup Least Authority conducted a review of the Ethereum 2.0 specifications for the initial activation stage, known as “Phase 0”. They also audited technical details of the Beacon Chain and the upcoming hard fork. The research ended in a security report, where the experts noted that there are problems in the Ethereum 2.0 P2P network and its system of validators.

None of these vulnerabilities affect the network that the Ethereum community currently uses. It is a new protocol that will work with a Proof of Stake (PoS) algorithm and is being developed in parallel. In this way, users will migrate to this new blockchain to enjoy greater scalability and programming capacity.

To allow the migration and activation of the blockchain to occur successfully, the experts recommend reviewing the choice system of proponents of the Ethereum 2.0 block. These entities are in charge of proposing the blocks so that the network validators certify them. Therefore, they play an important role in the registration of transactions and can become targets of attack.

For instance, a malicious participant can connect multiple nodes to the network and overshadow the functions of the proponents. On the other hand, they can perform a distributed denial-of-service (DDoS) attack to disable their functionality. For this reason, they recommend that the choice of proponents should be as reserved as possible to avoid revealing their IP.

There Are Not Always Good Intentions

The Least Authority report notes that Ethereum 2.0 is a robust and secure network, concluding that “security has been an important consideration during the design phase.” However, in the specifications on the P2P messaging system, the analysts said that the lack of documentation does not allow them to conclude how secure it can be.

This leads them to continue monitoring the behavior of this sector and its future development when the network is already working for the public. They added that this type of platform can work very well when it is in the hands of altruistic users. However, Ethereum expects this network to be in massive use but, as its operation becomes increasingly collective, setbacks may occur.

For example, they consider that malicious or selfish users can attack it, working against the proper functioning of the network and generating “spam”. For that reason, they suggested applying a BAR system that is resistant to these attacks and limits harmful behavior on the network. They highlighted that this type of attack would delay or even stop the network processing for as long as it takes place.

Ethereum 2.0 is one of the releases that the community following this network, specialized in smart contracts, has awaited the most. Recognized developer Vitalik Buterin noted that the new network will make transactions on Ethereum more secure and increase scalability.

By Alexander Salazar

1...1,3681,3691,370...1,654Page 1,369 of 1,654