Almost 70% of Small Businesses in Mexico Are Unaware of Cryptocurrencies

Alexander Salazar
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Almost 70% of Small Businesses in Mexico Are Unaware of Cryptocurrencies

Clothes and accessories shops are the ones that know Bitcoin the least, with 25.8%. The restaurant sector is the one with the greatest potential to accept cryptocurrencies, with 64.7%.

It has been reported that most small and medium-sized businesses in Mexico are unaware of Bitcoin (BTC) and cryptocurrencies in general. A study conducted by the British firm UENI determined that 67% of the enterprises are not aware of this branch of finance. For the research, 1287 traders were surveyed during the second half of November and the first days of December 2019.

A fact highlighted by the analysis was that, of the 33% that claimed to know Bitcoin, 50.4% indicated that they would not use it as a form of payment in their establishments, the restaurant sector being the one with the greatest potential to accept it with a 64.7%. In the report, it was stated that, although an important part of the SMB sector does not know anything about cryptocurrencies, it is considered as a mechanism to globalize business.

A study entitled “Is Mexico prepared for cryptocurrencies?” highlights that cryptocurrencies allow investment opportunities that are very attractive to small and medium-sized businesses. It explains that, by working with a virtual currency, small businesses can have access to a global network of businesses operating with cryptocurrencies and thus be more accessible to digital users worldwide.

Something that also attracts people’s attention is that half of the supermarkets and companies selling food products say that they know what Bitcoin is, but 75% of the companies in this industry would not accept the cryptocurrency in their stores.

In a previous study by Psyma Latina, Wisum, Bitso and Fiinlab, which was published in August 2018, it was determined that 47.4% of Mexicans did not buy cryptocurrencies for fear of becoming victims of fraud and another 39.6 % did not do it because they lacked knowledge about the setting of prices of digital currencies.

Cryptocurrencies in Mexico

Beyond the results shown in the study conducted in 2019 among SMBs, Mexico is booming regarding cryptocurrencies. The country is among the first places in Latin America concerning Internet users that own assets of this type. In February 2019, it was reported that the oil-producing nation ranks third with almost 6% of Internet users with some type of investment in Bitcoin, after Brazil and Colombia.

Besides, a survey conducted in February 2018 already indicated that 46% of smartphone users wanted to buy cryptocurrencies, thus showing the potential for Bitcoin trading. Even last year, Bitcoin’s ticker “BTC” was the most searched word by Mexicans on Google.

Just as the interest in Bitcoin has grown in Mexico, so has the interest of local authorities to regulate cryptocurrencies and the companies that make life around them. Even the central bank, Banxico, stated in June 2019 that there should be a “healthy distance” from cryptocurrencies in Mexico.

During the last year, the local crypto industry was also related to all the repercussions that the new FinTech law had on the regulation of Bitcoin and how this legislation could affect exchange houses.

By Alexander Salazar

Japanese Analyst Makes Surprising Discovery about Altcoins

Alexander Salazar
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Japanese Analyst Makes Surprising Discovery about Altcoins

A report casts doubt on the legitimacy of the trading data on the biggest rivals of Bitcoin.

Japanese analyst and researcher Koji Higashi criticized cryptocurrency exchange houses for falsifying 99% of the trading volumes of the altcoins Ethereum (ETH), Litecoin (LTC) and EOS (EOS). Besides, he noted that the levels of false trading volumes presented by these exchange houses are significantly higher than those attributed to the Bitcoin market.

According to data presented in Higashi’s research published after an impressive price rally in the altcoin market, ETH increased by 20%, after falling to USD 116.25 at the end of December, whilst EOS and LTC grew by 26% and 25%, respectively.

However, Higashi believes that exchange house operators could be using false data on altcoin trading volumes before opening their bullish positions since trading volume remains one of the main indicators in this market.

“The trading volumes of the altcoins reported contribute to generating high expectations,” explains Higashi.

Bitcoin’s Dominance Greater than Reported

Higashi also specified that the reference volumes of the main altcoins included in his analysis were used concerning the fiat currencies presented on the CoinGecko portal, which specializes in analyzing the legitimacy of cryptocurrency exchanges, separating authentic data from false ones.

This strategy allowed Higashi to conclude that 95% of the total trading volume of Bitcoin reported is false. A comparison between the original cryptocurrency and the main 30 altcoins (not including stablecoins and exchange tokens) revealed even more problems regarding altcoin data.

According to Higashi, the net trading volume of the main digital currency averaged 10,000 BTC (equivalent to about USD 70 million), whilst the reported volume was approximately 2,600,000 BTC (equivalent to about USD 18,000 million). This suggests that 97% of the reported data may be considered false.

“If false trading volumes are eliminated, then Bitcoin’s dominance in the market increases to 70%, compared to the 50% reported,” says Higashi.

Dominance of the Chinese Republic

Higashi’s stablecoin analysis also revealed China’s surprising dominance in the trade of Bitcoin. He said that the Asian giant makes more than half of the cryptocurrency transactions against fiat using the controversial stablecoin USDT.

“False volumes are a serious problem for the crypto industry,” said the Japanese analyst.

An article by Higashi published on the website Medium concludes that the United States controls only 20% of the Bitcoin market, followed by Japan and Europe with a market share of 10% and 5%, respectively.

It should be noted that US regulators adopt a cautious approach to regulate digital currencies. The United States Securities and Exchange Commission (SEC) has so far emphasized that there are too many cases of price manipulation in the global cryptocurrency market, which has become the main reason for the refusal to approve Bitcoin exchange-traded funds (ETF).

The fact that the cryptocurrency exchange houses analyzed by Higashi reported false Bitcoin and altcoin data should serve to raise awareness among those wanting to venture into the crypto world. This Japanese analyst has provided valuable information that proves, once again, that the cryptocurrency par excellence remains the best investment option.  

By Alexander Salazar

Crypto Exchange House in Chile is in Risk of Closure

Maria Rodríguez
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Crypto Exchange House in Chile is in Risk of Closure

The exchange office will send its clients a statement, via email, explaining the situation and some steps to follow in case of having any pending operation.

Bitcoin ChileBit, the renewed Chilean cryptocurrency exchange house, surprised its users recently with a notice of temporary suspension of services.

In an announcement made through the social network Twitter, the exchange company reported that its services are temporarily frozen and that they will send more detailed information to customers via email. “Fees and withdrawals temporarily are frozen. Soon we will send a notice by mail to everyone”, says the tweet.

This notice of suspension of services arose after the Bank of Credit and Investments (BCI) closed the bank accounts of members of the board. Therefore, it is believed that the operational continuity of the stock market is at risk.

In a recent interview, conducted by a news web portal, Tiago Struck, who is CEO of ChileBit, announced that at the moment they are focused on conducting measures that help provide answers to all those clients who had already made some operations on the platform, and that by the measure, have been pending. Thus, Tiago Struck said that they will send customers an email explaining the situation and the steps they should take to finalize the operation.

Based on responding to customers, Struck said that at the moment they do not have accounts with other banking institutions; thus, they have turned to business partners to solve part of the situation.

“The exchanges in Chilean pesos (CLP) are temporarily frozen because we do not have accounts with other banks to process them. However, we have talked with some market partners who are with us since the beginning of our operations and we agreed that they will maintain sales orders open, those with CLP can buy bitcoins and process the withdrawal to settle it elsewhere”.

In this way, Struck explained that the bitcoin buying and selling platform will be enabled next week so that it can finish processing the operations that were left behind. But he clarified that this process will have some margin of slowness since the accounts of its partners will be used. They estimate that they can resolve all cases not exceeding more than three days.

About the blockade of accounts, the CEO of the exchange company explained that all operations were paralyzed without any warning. This happens since, due to a failure in the notification issued by the bank, the notice did not arrive on time. It should have been sent last December 19, 2019.

With this failure in the communication by the financial institution, the necessary corrections could not be taken, Struck explained.

“Everything took us by surprise, so we could not anticipate the situation and take preventive measures. The closure of the account came to our knowledge when we failed to access the account and when asking our executive what was happening, he sent us a letter”, said the CEO of ChileBit.

According to the statement sent by the banking institution to ChileBit, the exchange office does not comply with the rules of knowing the origin of the money for the purchase and sale of cryptocurrencies.

About this aspect, Tiago argued that they have always complied with all the necessary rules for the prevention of money laundering, as well as the procedure known as “Know your client”. They also see with concern that the bank also blocked the account of another company which is owned by one of its partners.

“We are 100 % solvent, both in BTC and in Chilean pesos. However, all this has not been enough for the bank. We are currently in a legal consultation with our lawyers to determine how we can unlock the account. We are a platform that has been operating for a whilst, but we are still small and any decision can affect us so that closing operations is one possibility”.

By María Rodríguez

Reserve Bank Experiments with Australian Ethereum-Based Digital Dollar

Willmen Blanco
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Reserve Bank Experiments with Australian Ethereum-Based Digital Dollar

The bank’s internal innovation laboratory examines the potential of a Central Bank Digital Currency: the digital Australian dollar.

Ethereum is still one of the most used blockchains for developing cryptocurrencies, which is evidenced by this information. The Reserve Bank of Australia (RBA) conducts digital currency experiments based on Ethereum and seeks opportunities for third parties to participate.

It was reported that, although there are risks associated with a “digital Australian dollar,” the RBA is exploring whether there is potential value in developing a digital currency that can be used by wholesale participants in the payment sector.

According to the publication, the RBA says that there is currently no reason to create a Central Bank Digital Currency (CBDC), but it can still take advantage of blockchain technology for its domestic use.

In a submission to the Senate Select Committee on Financial Technology and Regulatory Technology, the bank said that there may be very little demand for a CBDC among consumers since the banking system is quite stable in Australia.

However, it maintains that, in times of uncertainty, such a digital currency could facilitate bank runs. Besides, its widespread adoption could lead to a drop in bank deposits, which would reduce the number of available funds for domestic and commercial loans.

Australian Digital Dollar

Despite the previous opinion, the central bank’s internal innovation laboratory is examining the potential of an Australian CBDC, specifically in the context of wholesale liquidation.

According to the RBA, the laboratory used a private and authorized Ethereum network for the project, pretending to be a central bank that issued tokens to commercial banks, as well as tokens that are exchanged between banks and eventually exchanged with the central bank.

The RBA believes that a national digital currency “fully integrated” into a blockchain platform could allow 24/7 payments between participants without relying on an external payment system. Other benefits include facilitating the so-called “programmable money” and “atomic transactions,” which only allow a transaction to be made if all parts of exchange are executed.

It should be clarified that this experiment does not mean that the Australian central bank is crypto friendly. Up to the present, the bank has said that cryptocurrencies “do not provide the usual functions of money.” However, it considers that emerging cryptocurrencies seek to address some failures, such as price volatility.

Support to Libra

The RBA has said that Libra will be different from existing cryptocurrencies since it will be backed by a reserve of assets comprised of a basket of bank deposits and short-term government securities denominated in a variety of fiat currencies. This aims to boost confidence in the cryptocurrency and reduce price volatility, although the value of Libra will still fluctuate concerning other currencies.

The bank also clarified that it agreed with the Group of 7 (G7) in that the launch of global stablecoins should not be allowed until the risks related to consumer/investor protection, data privacy, monetary policy, and financial stability are addressed.

The Reserve Bank added that it is working closely with the relevant agencies at the national and international levels to understand recent proposals and ensure that they will be properly regulated and supervised.

By Willmen Blanco

Launch of Aragon Decentralized Court in Ethereum Is under Preparation

Willmen Blanco
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Launch of Aragon Decentralized Court in Ethereum Is under Preparation

Users can exchange their ANT tokens until next February 10th. The new project will allow interested parties to participate in solving disputes within DAOs.

The Aragon platform is preparing to enable the first decentralized court in Ethereum, after announcing its pre-activation. Users will be able to help solve conflicts in the network and ensure compliance with contracts, becoming judges of this protocol. This will require that they acquire a new type of token―known as ANJ―, which is available for exchange.

The Aragon Court protocol, first introduced in October 2019, now has two distinct phases, after its code was incorporated into the Ethereum mainnet in late December. The first part, which will last one month, will focus on allowing the exchange of Aragon tokens (ANT) for the new Aragon Court tokens (ANJ) so that this tool can be used. On the other hand, the second phase will focus on launching the platform.

The Aragon team reported that the first pre-activation phase began on January 7th. All Aragon and Ethereum users interested in participating in this platform can access the tokens until next February 10th under an equivalent of 1 ANT, equivalent to 100 ANJ. The exchange will take place on the main website of the protocol, where the details of the project are also explained.

The importance of these tokens is that only those users owning ANJ will be able to comprise an active jury of the platform. They will also have the possibility to assist lawyers and intercede in disputes discussed in court. The exchange of tokens will remain active after the platform is launched, on February 10th, under an offer other than pre-activation.

What Aragon Court Is About

The new Aragon platform plans to introduce a new decentralized justice system, an idea already outlined in 2016 by Vitalik Buterin, developer of Ethereum. The Aragon Court introduces the possibility of forming a digital court without the intervention of third parties, a vision that opens new legal possibilities.

To do this, it aims to solve conflicts between users, contracts, and DAOs (autonomous decentralized organizations) that make life in Ethereum. The developers of the protocol have clarified that the goal of the court is to ensure compliance with smart contracts and solve disputes that cannot be solved by technology. In this sense, it describes that all those “subjective disputes” that require human intervention can be presented on the platform.

The court will consist of a group of judges and lawyers registered on the platform, who can be any users of the Ethereum network. The participants must bet their ANJ tokens in a particular dispute to be recruited as memberS of the jury. They will also earn fees each time they successfully adjudicate in one of these legal conflicts.

To avoid corruption, the Aragon Court team of developers decided that the judges will be chosen by lot. Likewise, the parties involved will be able to determine how many judges will participate in the conflict. According to Luis Cuende, developer and co-founder of Aragon, this court could start operating with real cases by 2021.

By Willmen Blanco

According to Metric, Bitcoin Has Reached the Floor

Alexander Salazar
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According to Metric, Bitcoin Has Reached the Floor

Bitcoin’s price may have fallen to the bottom in December, according to a non-price metric, which has proved a reliable price indicator in the past.

Bitcoin is currently trading above USD 7,700, after having hit eight-month lows below USD 6,500 in mid-December. The bounce may be encouraging, but the main cryptocurrency is still trapped in a six-month bearish channel.

However, Bitcoin’s difficulty adjustment indicates that the bearish market, which began with highs above USD 13,800 in June 2019, may have reached a low near USD 6,500 in December.

According to data from data.bitcoinity.org, the mining difficulty fell from 13.7 trillion in November to 13 trillion in December, being the first downward adjustment in 12 months.

Historically, major price bottoms have been marked by negative monthly difficulty adjustments, according to digital currency writer and analyst Nunya Bizniz.

For instance, the massive sale after the all-time high of USD 20,000 seen in December 2017 fell near USD 3,100 in December 2018 with the consecutive monthly downward difficulty adjustments in late 2018.

Even before that, the difficulty dropped from 0.0494 trillion (49.4 Giga) in April 2015 to 0.0488 trillion (48.8 Giga) in May 2015. Bitcoin’s decline after the December 2013 high of USD 1,153 reached around USD 200 in April and May 2015.

The cryptocurrency traded sideways for a couple of months before beginning an upward climb in October 2015. That behavior could be explained by the monthly declines in difficulty caused by miner capitulation.

It should be noted that mining difficulty is adjusted every two weeks approximately, in line with the amount of the computational power (hash rate) used for mining. The latter depends on mining profitability, which is greatly influenced by price.

A monthly decrease in mining difficulty is the result of a fall in the hash rate due to small and marginal miners that close operations during sustained massive sales in the market and reduce mining profitability.

Furthermore, miners usually sell their coins at the market price to recover from mining losses, while closing operations, thus accentuating the massive sale. Only when these miners’ supply is absorbed do selling pressures weaken and the cryptocurrency finds a floor.

Meanwhile, remaining miners tend to hold their coins and sell them later to make profits when prices increase, further decreasing the supply in the short term and increasing the price of the cryptocurrency, according to Alex Benfield from Digital Assets Data.

Besides, mining difficulty decreases occur a few months before reward halvings – a process aimed at coping with inflation by reducing the rewards per mined block by half every four years.

The miners that sustained the bearish market may have predicted a rise in prices on the reward halving and thus held their coins, creating a supply shortage in the short term and boosting prices.

History Repeats Itself

Bitcoin’s drop of 17.48% in November last year was caused by miner capitulation, according to market analyst Willy Woo.

This argument may have some merit as Bitcoin fell from USD 13,800 in June to USD 7,500 in September. Such a price drop may have affected weak miners, forcing capitulation.

Besides, the latest downward difficulty adjustment occurred five months before the reward halving. Therefore, big miners could create a supply shortage in the short term, leading to increases in price.

Generally speaking, there is a strong reason to believe that Bitcoin reached the floor in December with the downward difficulty adjustment and could regain its balance in the coming months.

By Alexander Salazar

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