Analysts Doubt Whether Ether Can Be Considered as Real Money

Willmen Blanco
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Analysts Doubt Whether Ether Can Be Considered as Real Money

Many analysts and experts within the world of cryptocurrencies still do not know the answer to this question. What they certainly know is that Ethereum has a lot of potential.

A few months ago, a debate was triggered over whether or not Ether can be considered as money. To that, its creator Vitalik Buterin remarked that “Ether absolutely can be money if the community wants it to be.”

This statement was made at a meeting held in October 2019, when Buterin was asked whether he believed that Ether could be a global store of valuable assets, but more functional and without the need of permits.

Discussion about Ether

It should be noted that the discussion about whether or not Ether can be a “valuable asset” did not end with Buterin’s comment. Other experts such as Joseph Lubin, Founder of ConsenSys, claimed that this cryptocurrency has the potential to be a better form of money than Bitcoin.

However, Lubin also recognized that Bitcoin still holds the position as a reserve of value, at least for quite a while. He considers that Ethereum still needs to evolve.

People’s Comments on Ethereum’s potential

Buterin’s opinions received a mixed response from the community, especially on Reddit. Some of them even commented on things like the possibility to use ETH as a drug, if desired, of course.

Additionally, this issue of the classification of Ether as money was also discussed by Bob Summerwill, the Executive Director of the ETC Cooperative.

Summerwill believes that one of the characteristics of hard money, which is present in Bitcoin but not entirely in Ether, is certainty. He stated that it has to be tamper proof, a system that cannot be changed after it is implemented.

Emphasis must be made on system changes as, although Bitcoin is not known for being immune to market manipulations, it is known for the advantages of blockchain technology.

To this, Summerwill added that how things become hard money is, at least, through certainty. There is a huge taboo against changing anything in the monetary policy, which was always the case with Bitcoin.

Summerwill also noted that Bitcoin had a fixed supply, a block reward rule, and a block size. Then he added that there cannot be any more certainty than that.

What Can Be Considered Money

According to Summerwill, anything can be money, even a bus ticket, depending on people’s desires. However, for a bus ticket to be real money there must be a fixed monetary policy.

On the other hand, it should be remembered that this was the path that Ethereum Classic chose in its first year when introducing a monetary policy in ETC.

However, the executive director said that this is not the case with Ethereum, considering all the changes that have been made regarding mining rewards.

Besides, he said that there has been uncertainty with Ethereum’s monetary policy since the platform announced that it would move from Proof of Work (PoW) to Proof of Stake (PoS).

Considering all this, many claim that Ethereum is not a good option to be considered as money. Users seem to have the last word in this respect, according to some experts.

By Willmen Blanco

After Reaching an Agreement, SEC Fines Longfin

Willmen Blanco
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0
After Reaching an Agreement, SEC Fines Longfin

The US SEC has reached an agreement with the CEO of the financial technology company Longfin in a case of fraud.

Every day there is news about the Securities and Exchange Commission (SEC) of the United States. For example, on Saturday, January 4th, 2020, people were talking about the conflict between this agency and Telegram Group over the illegal issuance of assets made by the instant messaging company. It was learned of the agreement reached by the SEC with Longfin on charges of fraud against the latter.

SEC Activity in Crypto World

It is known that regulatory agencies around the world are increasingly playing a more active role in the crypto world. They are trying to apply the financial regulations in force in the various countries to particular cases involving the use of cryptocurrencies or blockchain technology in the field of finance.

It can be observed that this trend has grown mainly due to two reasons. The first of them is the increase in the number of private projects related to large crypto assets. Of course, it refers not only to the virtual currency of Facebook, Libra, announced last year but also to competing currencies, as would be the case of Telegram’s Gram.

The second reason for this growth in regulatory activity is a sharp increase in the amount of cybercrime involving crypto assets that have been committed, with either fraudulent investment schemes or robberies against platforms like Binance.

Therefore, the activity of institutions such as the SEC would include trying to investigate and reduce the number of these crimes in the crypto world, even without having an adequate legal framework to face the new situations experienced with this new kind of technology.

Agreement of SEC with Longfin

One of the interventions by the SEC against cybercrime would have been the fraud committed by the financial technology company, Longfin. It should be explained that it would have deceived American investors about its launch on the Nasdaq stock exchange, ending with returns of USD 3.5 million and a fine of USD 3.2 million.

According to the indictment issued through the Southern District Court of New York, Longfin would have misled potential investors by showing supposed earnings never obtained in reality and transactions with commodities that were mostly false.

However, the SEC would have reached an agreement with the CEO of Longfin, Venkata Meenavalli, for a total of USD 400,000, to be paid by the executive to avoid a prison sentence for the fraud committed. The amount would correspond to USD 159,000, equivalent to his salary within Longfin, and USD 232,000 plus interest, as a civil fine.

To conclude, it can be said that the case of Longfin would, therefore, be within the world of financial technology. This is a good example of how the State can act positively to protect the rights of citizens, even when it comes to new technologies such as those used by Longfin. This is a very relevant topic for those interested in learning more about the use of cryptocurrencies and blockchain technology.

By Willmen Blanco

Qatar Prohibits the Use of Cryptocurrencies and Its Derivatives

Maria Rodríguez
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0
Qatar Prohibits the Use of Cryptocurrencies and Its Derivatives

Some Bitcoin nodes are still operational in the country, this is due to the complexities for their identification and their difficult total disconnection

Officially, the government of Qatar has banned cryptocurrencies in the country, as well as their variants. The announcement was made by one of the most important financial authorities in the country, the Regulatory Authority of the Financial Center of Qatar (QFC), which clarified, besides, that “all digital asset services” must be closed and prevent their operation within the territory. Despite these announcements, there is some Bitcoin (BTC) nodes that continue working.

The sudden and firm decision of the ban is due to the effects produced by the recent attack made by the US government to Iran, where Iranian General Qasem Soleimani was killed. The measure seeks to prevent the instability of markets such as that of cryptocurrencies significantly “affecting” certain economic and necessary aspects for the country and region.

The position of the government of Qatar on cryptocurrencies has always been complicated and strong. In this way, it is not a big surprise that the authorities took such an extreme measure, even as part of the tensions that the Middle East now faces a possible war.

Qatar had already imposed a ban on banks operating in the country; businesses are not allowed conducting commercial transactions with crypto assets. However, this time, the recent measure covers a wide range, covering even peer transactions using cash or other commercial assets.

It was known that the central objective of the measure is to avoid using digital money to conduct transactions and stop any assets that may be transferable. Hence, they said that the intention is to “block anything of value that acts as a substitute for the currency, which can be traded or digitally transferable, and that can be used for purposes such as payment or investment”.

The scope of this prohibition will prevent users of the country from using a wallet, or transferring any cryptocurrency or digital asset to any person, being in the territory or anywhere in the world.

According to data collected by geopolitics studies in countries of conflict, it was determined that the use of cryptocurrencies increases once there are economic or military difficulties in the countries and the region. This was verified in Syria when conflicts caused cryptocurrency transactions to increase in Turkey or in Venezuela; a South American country that is in a deep political and social crisis for some years.

Although the ban is definitive until now, some Bitcoin nodes are still operating in the country. A website operating in Qatar published in a report that there are two sites responsible for making transactions with cryptocurrencies that are hidden and that are difficult to track and block.

This measure would prevent a lack of control over the cryptocurrency market in the country, as well as dangerous fluctuations for the region’s economy. According to some reports, the price of the BTC in Qatar reached the exorbitant price of 24 thousand dollars, after the death of General Soleimani.

By María Rodríguez

Bitcoin SegWit Achieves 66 % in Adoption Level

Maria Rodríguez
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0
Bitcoin SegWit Achieves 66 % in Adoption Level

According to figures issued at the beginning of 2020, SegWit manages to achieve 66 % in adoption levels in all transactions made with Bitcoin.

Recent data show that transactions made with Bitcoin (BTC) using the technology called Segregated Witness (SegWit) managed to reach a unique point in its history, reaching an adoption level of 66 %.

An especial study which records information about the adoption levels and also about the use of transaction platforms, determined that since January 4th, more than half of all the transactions and operations made using BTC are conducted through SegWit. Besides, other portals which track the operations, such as SegWit.Space, also concluded that the platform remains above 60 % of all transactions made with Bitcoin.

Since the end of 2019 SegWit, an actualization of Bitcoin would have reached high levels of adoption. Since last September, 40 % of transactions would have been achieved so in October its use increased to 50 % of all transactions with BTC. When the 50% barrier was overcome, some analysts and experts pointed out that the adoption of this protocol for transactions with BTC would have achieved its establishment as a leader in transactions with this cryptocurrency.

It is currently the most used for transactions with BTC, so 2 out of every 3 transactions are made through this protocol. Some expert opinions indicate that shortly all transactions made with this digital asset will be made using SegWit.

Although these data point to the platform as the closest to achieving final adoption, there are still other portals which determine that it has not yet reached such high levels. For example, portals such as transacationfee.info and Woobull, the statistics initiative of Willy Woo, determine that SegWit only has 59% usage levels. Some data are comparable with others, but statistics may be determined by different variables that may or may not be summed up to current data.

Although these mentioned data do not coincide entirely with those of many others that place SegWit above 65% of the use in transactions with BTC, the vast majority certify that the protocol has a high tendency towards adoption over others. This manages to give positive results to the transaction protocol that since its launch in 2017 has improved its performance and loyalty with users.

Houses of Change Want to Implement SegWit in Their Services

When this protocol was launched in 2017, it might seem a luxury to implement it in the services offered by cryptocurrency exchange houses, but the high use of this tool today could now be a great necessity if users want to survive the accelerated changes of the cryptocurrency market.

SegWit is a protocol that was developed to improve the efficiency and speed of transactions with BTC. In this way, the high volume of transactions can be reduced.

Despite the obvious advantage of using this protocol for the network, its adoption proved to be slow and laborious. Some users accused the intermediaries and the exchange office of imposing a pressure that could be avoided by implementing this solution.

An example of this is found in the numerous complaints about companies such as Binance, which although it is currently one of the largest exchange houses in the crypto world, does not yet implement SegWit, which in many cases supposes a great weight to the network causing many criticisms from users to the exchange platform.

In response to these complaints, Changpeng Zhao, who is CEO of Binance, talked to the public in May 2019. He assured that developers and technical teams are in the task of solving these problems. Then, in October of last year, the Bitcoin support Udi Wertheimer said it would officially announce when Binance manages to implement SegWit in its processes.

Despite this need manifested by users, there is not an official pronouncement by the company. In this regard, this year promises that the adoption of this protocol will reach a higher level of use, even above the current level and many more platforms use it in their changes and services.

By María Rodríguez

After Reaching an Agreement, SEC Fines Longfin

Willmen Blanco
-
0
After Reaching an Agreement, SEC Fines Longfin

The US SEC has reached an agreement with the CEO of the financial technology company Longfin in a case of fraud.

Every day there is news about the Securities and Exchange Commission (SEC) of the United States. For example, on Saturday, January 4th, 2020, people were talking about the conflict between this agency and Telegram Group over the illegal issuance of assets made by the instant messaging company. It was learned of the agreement reached by the SEC with Longfin on charges of fraud against the latter.

SEC Activity in Crypto World

It is known that regulatory agencies around the world are increasingly playing a more active role in the crypto world. They are trying to apply the financial regulations in force in the various countries to particular cases involving the use of cryptocurrencies or blockchain technology in the field of finance.

It can be observed that this trend has grown mainly due to two reasons. The first of them is the increase in the number of private projects related to large crypto assets. Of course, it refers not only to the virtual currency of Facebook, Libra, announced last year but also to competing currencies, as would be the case of Telegram’s Gram.

The second reason for this growth in regulatory activity is a sharp increase in the amount of cybercrime involving crypto assets that have been committed, with either fraudulent investment schemes or robberies against platforms like Binance.

Therefore, the activity of institutions such as the SEC would include trying to investigate and reduce the number of these crimes in the crypto world, even without having an adequate legal framework to face the new situations experienced with this new kind of technology.

Agreement of SEC with Longfin

One of the interventions by the SEC against cybercrime would have been the fraud committed by the financial technology company, Longfin. It should be explained that it would have deceived American investors about its launch on the Nasdaq stock exchange, ending with returns of USD 3.5 million and a fine of USD 3.2 million.

According to the indictment issued through the Southern District Court of New York, Longfin would have misled potential investors by showing supposed earnings never obtained in reality and transactions with commodities that were mostly false.

However, the SEC would have reached an agreement with the CEO of Longfin, Venkata Meenavalli, for a total of USD 400,000, to be paid by the executive to avoid a prison sentence for the fraud committed. The amount would correspond to USD 159,000, equivalent to his salary within Longfin, and USD 232,000 plus interest, as a civil fine.

To conclude, it can be said that the case of Longfin would, therefore, be within the world of financial technology. This is a good example of how the State can act positively to protect the rights of citizens, even when it comes to new technologies such as those used by Longfin. This is a very relevant topic for those interested in learning more about the use of cryptocurrencies and blockchain technology.

By Willmen Blanco

Main Functionalities of Several Lightning Network Wallets

Willmen Blanco
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0
Main Functionalities of Several Lightning Network Wallets

Analysts recommend wallets that allow users to connect to a node of their own. Using wallets that allow connection to the Tor network is considered the best way to operate.

The consulting firm Veriphi has recently published a study exploring the functionalities that can be integrated into a Lightning Network (LN) wallet. The analysis provides details for users to operate more securely in the layer-2 payment protocol, which offers the possibility to open liquidity channels off the chain.

The firm compiled a table showing 50 different functionalities integrated into LN wallets. It also makes some recommendations although it considers that this is an incipient technology that needs further development. For that reason, the study was based on exploring the functionalities.

The information can become a useful tool for users wanting to know in detail the functionalities and features available in several wallets that can be operated in the payment protocol Lightning Network. They can evaluate the different ways to interact with the network and choose their favorite system, according to individual preferences.

Most Recommended Functionalities

Among the recommendations that the study makes are the wallets that allow users to operate in the payment network, whilst connected to their Bitcoin node. The analysts note that the wallets with this integrated feature are considered more secure as they do not force the use of the service provider’s node.

The comparison table shows the platforms that offer the possibility to connect to their own node. Among them are the cases of Eclair, Blue Wallet, BLW, Nayuta, Dropbit, and Electrum.

For security and anonymity reasons, the study recommends using wallets that allow connection to the Tor network, since it is considered the best way to operate. According to Veriphi’s comparison table, the wallets that allow routing with Tor are BLW, Zap, Spark, Zeus, Nayuta, RTL, and Electrum.

Veriphi also recommends Lightning wallets that have some kind of locking mechanism that prevents a malicious actor from accessing the application if it has gained access to the device.

Some users prefer their wallets to reflect the price of their bitcoins in fiat currency. However, the analysts indicate that not all applications show this feature. Therefore, they referred to those in which it is visible, such as Eclair, Phoenix and Blue Wallet.

The report also recommends wallets with Bech32 type addresses, which are those supporting the Segregated Witness (SegWit) format on the Bitcoin network. This is considered efficient in terms of the size that they take in a block, and are thus less expensive. Eclair, Phoenix, BLW, Breez, Zap, Muun, Spark, and Zeus are some of those wallets having this functionality.

Likewise, the report recommends wallets with P2SH (pay to script Hash) such as Zeus, Nayuta, RTL and Electrum, since this functionality allows them to achieve an optimal transaction when making payments to script hashes. It is worth mentioning that Bitcoin scripts can contain more payment terms and information than a simple address. This format also offers greater anonymity as the content of the script remains hidden until it is executed.

A wallet should have a backup of the private key as it is the most crucial element of all the system’s operational security. On this point, the study advises being cautious with wallets that allow the user to omit the backup of his funds, which can be dangerous when it comes to safeguarding belongings.

A payment channel backup is among other recommended functionalities, especially for non-custodial wallets. When a user receives or sends Bitcoin through an LN channel, the channel status is constantly updated to reflect the correct balance of the respective wallets. The report notes that the status channel must be preserved by both parties if they are to successfully reclaim Bitcoin funds in a chain once they have completed transactions on the network.

By Willmen Blanco

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