South Korean Company Claims to Have Found a Solution to Blockchain’s Speed Issue

Andres Chavez
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South Korean Company Claims to Have Found a Solution to Blockchain’s Speed Issue

For years, it has been said around the industry that the blockchain’s commercial viability has been damaged by its relative lack of speed. However, a South Korean startup is claiming to have solved the mentioned speed issue with a clever initiative.

Lee Sang-yoon, the Chief Executive Officer of Bloom Technology, is quoted by United Press International as saying that the company’s Locus Chain technology has created a unique ledger structure that facilitates quicker transactions, a development that has been greeted with open arms around the field.

The Blockchain Structure

A regular blockchain linearly connects blocks. These blocks are created by collecting lots of transactions. That is why the process to form the blocks can take a little time. Also, they will slow down at some point because the blocks can be connected in only one place.

To solve the issue at hand, Locus Chain will process transactions by account unit, which will result in transactions being processed in a significantly faster way. We are talking about less than a second.

It would be like establishing the difference when a person is processing a determinate task or request with one bank teller than doing it with several of them.

It Is “Strange” to Wait 10 Minutes to Pay with Crypto

Lee observed that “it would be strange if we need to wait 3 minutes to pay with a credit card. But it takes more than 10 minutes for cryptocurrencies and even longer than an hour for bitcoin.”

Lee is famous around the industry for its role in the development of the famous video game title Kingdom Under Fire.

Lee also stated that the decentralized network does not suffer the same “slowing down” issue explained above, not even if the number of total users was to augment. The issue is famous for affecting users of Bitcoin and Ethereum.

A Public, Successful Test

The company performed a test to show off the speed of the system. It was performed publicly, and the enterprise said at the time that a maximum of 635 nodes took part in the testing process for a total of three days. The average processing time of a transaction hovered between 0.13 and 0.23 seconds.

The system already has some high-profile fans around the industry. For example, Moon Young-bae, currently the Vice Chairman of the Korea Blockchain Association, had nothing but praise for the technical achievements of the project.

“Locus Chain is still under development to become a complete version. But I believe that the technology is already commercially viable. I think it is a real deal,” he said to the United Press International.

The company behind the idea, Bloom Technology, has its headquarters in the Pangyo population, located in the province of Gyeonggi, in South Korea. The firm is believed to be looking to secure a patent for its ledger deployment and its verification know-how.

By Andres Chavez

Deutsche Bank Says Crypto Could Replace Fiat Currencies by 2030

Maria Rodríguez
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Deutsche Bank Says Crypto Could Replace Fiat Currencies by 2030

Inflation is one of the difficulties that could lead citizens to prefer using cryptocurrencies to save their money and, even, as a form of payment

Every month, new crypto ATMs are installed in the world, more companies accept cryptoactives as a form of payment and more people are interested in having these digital assets to save money.

In only ten years more, by 2030, the demand for alternative currencies will rise, according to recent research from The Deutsche Bank. The financial institution also considers that digital currencies eventually will replace cash and, in this way, it will also replace traditional money.

Cryptocurrencies like Bitcoin, which was the first cryptocurrency of the world, have reached important places and now are part of the current economy.

The British Virgin Islands has announced that it is developing a digital currency called BVI-LIFE. This project is possible thanks to the collaboration of the LifeLabs startup. The main purpose is to help grow the local FinTech sector and, as a way to transmit more confidence to users, the cryptoactive will be anchored to the US dollar.

Even countries like France and China could launch national cryptocurrencies. In fact, Venezuela has its national crypto, “Petro”.

For that reason, Deutsche Bank hopes that, once cryptocurrencies overcome the most difficult obstacles such as the adoption and expansion, they could obtain more space in the market and consolidate their value.

Fiat System is Currently Fragile

As happens in Venezuela, a South American country that faces strong inflation despite being a nation rich in oil, citizens could resort to the use of cryptocurrencies as a way to avoid the devaluation of their money.

About the possible future for cryptoactives and other fields, Jim Reid, Deutsche Bank strategist presented a report with 24 alternative ideas for the next 10 years. In that report, cryptoactives are very present.

“The forces that have held the current fiat system together now look fragile and they could unravel in the 2020s. If so, that will start to lead to a backlash against fiat money and demand for alternative currencies, such as gold or crypto could soar”, the expert wrote.

Reid explained that the current fiat system has encountered challenges in recent years. He thinks that anonymity could drive more individuals to use new alternatives like digital currencies.

Eventually, inflation could become more and more embedded, according to Reid, and doubts regarding state-sponsored money may increase.

“When labor costs rise at the margin rather than fall, there will likely be a more difficult environment for policy makers. And where politicians are worried about elections, it is likely that inflation will be the casualty”.

Challenges to Overcome

But, according to Reid, cryptocurrencies need to overcome three major challenges to gain more acceptance. These include legitimacy and stability in their value. This will boost, even more, the crypto market since people and governments could feel more confident in cryptoactives.

The dependence on electricity is another aspect that cryptocurrencies should overcome. If these assets find another mechanism to arise, excessive consumption of electric power can be avoided.

“As that occurs, the line between cryptocurrencies, financial institutions, and public and private sectors may become blurred”, Reid concluded.

By María Rodríguez

The Reasons Why More than 1.6 Million Bitcoins Are Lost Forever

Maria Rodríguez
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The Reasons Why More than 1.6 Million Bitcoins Are Lost Forever

Different firms specialized in the crypto world analyzed statistical information to determine an approximate amount of lost bitcoins.

As happens in “the real world” with gold bars lost at sea, bitcoins can disappear from the Internet.

Mined digital assets could not be available or get lost for different reasons and, this way, the effort and time invested in mining are lost too.

Currently, more than 1.6 million bitcoins have been lost forever. This happens due to duplicate transactions, unclaimed rewards or thefts. This is according to a recent Coin Metrics report.

The analysis of this firm showed the world’s largest cryptocurrency might be more scarce than most people think. The report offers a conservative estimate but it shows that Bitcoin is getting scarcer with each day.

This study also explains that Bitcoin could be even more limited than users think it is. Something like this means that the amount of bitcoins is smaller than what users believe.

Bitcoin’s first block, which is known as the genesis block, contains a transaction with a 50 BTC output which was not included in Bitcoin’s ledger, whilst the only two instances of duplicate transactions on the network resulted in 100 BTC being removed from the blockchain.

Nearly 182 bitcoins were probably lost by block. Just over 3 BTC were embedded into the blockchain as messages, making them useless forever.

The digital forensics firm Chainalysis calculates that 3.79 or 2.78 million bitcoins are already gone. This represents 17% to 23% of existing bitcoins. The company used statistical sampling to determine the amount lost.

An important amount of coins was sent to fake addresses to burn them. In fact, three of these addresses currently hold over 2.200 BTC. Despite these assets are not lost forever, they are unlikely to be recovered.

There is another type of bitcoin that can get lost forever. According to Coin Metrics, these are “zombie coins”, which are those digital coins that have been inactive for a long time.

In this sense, since July 2020 about 1.5 million BTC have not been used and, for that reason, they would be part of the “zombie coins” group.

The study indicates another group of digital coins that often get lost. These ones are known as “stolen coins”. But these coins won’t return to their owners. As the structure of bitcoins records makes it easy to trace these stolen coins, the thief won’t introduce them back into circulation to avoid risks of being identified.

Also, almost 200,000 BTC were lost in two big thefts alone. In this way, 80,000 BTC were stolen from MtGox in March 2011, while about 120,000 went missing from Bitfinex in August 1016.

Although there are only 182 probably lost bitcoins, the report assumes that at least 1.6 million users are probably lost forever to save materials.

The “Mined Coins” group reflects bitcoin mined in 2017, while transactional refers to those that spent them during the last year. The category of “Strategic Investors” (for those who have held their BTC for 1-2 years) represents a small share of the losses.

Probably, more bitcoins will be lost in the future, but the rate would be lower considering that BTC now is so valuable and users will be vigilant to where their bitcoins are so the number of bitcoins lost will reduce.

By María Rodríguez

Cryptocurrencies in Venezuela and Real Situation of Bitcoin in Caracas

Willmen Blanco
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Cryptocurrencies in Venezuela and Real Situation of Bitcoin in Caracas

It is not uncommon to hear street conversations in Caracas that include the term Bitcoin. There is a wrong body of opinion on the Venezuelan Bitcoin market on an international scale.

It is 7 o’clock in the evening, there is a delay on the subway and the train, whose air conditioning system stopped working several months ago, has remained in the tunnel that connects Bellas Artes and Colegio de Ingenieros stations for over twenty minutes. This is a terrible situation in which there are overcrowding, humidity, and claustrophobia. The passengers gasp, cough and complain about the heat. Many of them try to get distracted by looking at the reflection on the glass while begging to reach the next station as soon as possible.

In the midst of human heat and bad mood, it can be observed after a few minutes that a coin shines. With certain bling that manages to catch attention, a keychain in the form of a Bitcoin coin hangs out of the pocket of a middle-aged man.

The situation described above occurred some weeks ago in the Caracas subway system. Round, modest and without pretentions of grandeur, Bitcoin was seen as an apparently worthless thing inside that train. However, in the midst of human poverty and tiredness, that little object could be noticed by those who know its meaning.

Bitcoin adoption in Venezuela resembles that keychain that was hanging from the pocket of that stranger. It goes unnoticed on a train full of people, but it is still there.

It is said that Venezuela has the largest Bitcoin trading market in the world, which is not true. It is also believed that the government’s interest in crypto assets has increased the use of cryptocurrencies on the street.

Bitcoin Raises Curiosity

Even though there are Venezuelans that buy Bitcoin as a method to safeguard the value and have started to accept it in their businesses, the use of the cryptocurrency in everyday life is still scarce. Nevertheless, the wake of cryptocurrencies is starting to have an impact on everyday activities. The same as the aforementioned keychain, the sign of Bitcoin goes unnoticed in Caracas´s everyday life.

A café downtown Caracas, a Christmas dinner or a university canteen can be the ideal scenery to raise the subject of Bitcoin. On certain occasions, it is possible to hear some people talking about cryptocurrency mining while walking on Caracas streets.

The common citizen does not understand Bitcoin but rather wants to learn how it works, since an increasing number of people are using it as a financial tool. For example, at a contemporary painting event, a person may express an interest in learning more about the much-mentioned “Bitcoin.”

Bitcoin has become a familiar topic in Venezuelan society due to its increasingly widespread use and the launch of Petro. On the highway that connects the southeast with the west of the city, it is possible to find multiple advertising billboards on which Bitcoin trading services are offered nationwide.

The huge advertisements are initially out of place in a country where the majority of people do not use bitcoins but dollars as a method to safeguard value. However, it is a silent reminder that the use of cryptocurrencies in Venezuela can eventually become an everyday activity that will cease to go unnoticed.

By Willmen Blanco

Blockchain Will Help HSBC Track 20 Billion Dollars in Assets

Willmen Blanco
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Blockchain Will Help HSBC Track 20 Billion Dollars in Assets

HSBC plans to move USD 20 billion in assets to the blockchain-based custody platform Digital Vault. Moving assets to this platform will allow users to track securities ​​in real-time.

According to Reuters, the banking institution HSBC seems to be intent on moving its current paper records to its new blockchain-based custody platform, Digital Vault, by March 2020, which will help it track securities ​​in real-time.

The bank will specifically digitize its private placement records, which will allow investors to quickly verify their holdings, in addition to increasing standardization and accelerating processes in the growing industry. The HSBC platform will digitize paper records of private locations using blockchain to reduce the time that it takes for investors to write checks or make inquiries regarding their holdings.

According to the news agency, the banking institution expects the global volume of private placements to have a 60 percent increase from 2017 to 7.7 billion dollars by 2022. However, HSBC could not assess the amount that will save the platform for the company or its customers.

HSBC Will Help Track Securities ​​in Real-Time

According to information provided by Reuters, the Digital Vault platform will allow investors to track in real-time all the goods that have been acquired in private markets.

Since private placements are generally conducted physically on paper, their processes are usually associated with a lack of standardization. Meanwhile, access to documents can be a little complicated. Above all, it can take a lot of time.

However, through the application of blockchain technology, the banking and financial company has the confidence to reduce the time that is required to make inquiries about the investments of its investors.

Eighteen Months without Important News

Even though the HSBC banking system has not yet evaluated the potential results of the adoption of the platform, an autonomous blockchain expert hinted that it would be unlikely that significant savings would arise during the early stages of the project.

Windsor Holden, an independent consultant that tracks the blockchain and cryptocurrencies, said that he does not expect to see savings by increasing efficiency announced in the first year to 18 months.

Not the First Approach

Although the integration of a blockchain may seem a step that few people have taken in the financial industry, this is not the first time that the bank has experimented with blockchain tools, since it has done so for more than a year.

In the month of January, HSBC announced that it had liquidated approximately three million currency transactions through the use of its HSBC FX Everywhere blockchain platform, by making about USD 250 billion in transactions during the process. The amount included another USD 150 in payments.

The banking firm stated that the use of a DLT platform has particularly allowed it to verify that payments are settled without the need for external confirmation. In this way, it seeks to unify trading data within the company in a “single and shared version of the truth” and consolidate its vision of cash flows.

By Willmen Blanco

Bitcoin Mining Profitability Has Not Been Affected by its Price Drop

Willmen Blanco
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Bitcoin Mining Profitability Has Not Been Affected by its Price Drop

Revenue from mining has decreased by 15% with the bearish market, according to analysts. The most profitable miners are those of the latest generation that are installed in regions with low electricity costs.

Specialists note that the profitability of Bitcoin mining has not been severely affected by the recent fall in the price of this cryptocurrency. Calculations by the Token Insight and Hut8 firms reveal that mining with the latest equipment found in regions with good electricity rates still generates significant gains.

In recent weeks, Bitcoin’s price has decreased by 18%, reaching USD 6,600 per unit at the time of writing this article. The fall in the price of the cryptocurrency has also affected the profits of miners, which have been reduced by 15%, according to studies by mining blogs. However, this decline in the revenues of the industry does not seem to be such a heavy blow.

The Bitcoin hashrate reveals that there are very few mining machines that have been disconnected due to the bearish market. According to data from Blockchain.com, the hashrate has remained close to its record figure of 102 TH/s reached last October. Currently, Bitcoin records a hashrate of 89.9 TH/s, whose decline could be a product of the dry season in Sichuan, China, and not by the bearish market as such.

It should be noted that while Bitcoin’s price falls, the costs for mining activities continue to have the same high prices. The above may lead to doubt why miners have not disconnected their equipment recently if mining activities are still profitable with the current bearish market.

Mining Stays Afloat

Mining remains profitable despite the Bitcoin crash, according to firms like Hut8 and Toke Insight. The price of electricity, the performance of the miner and even the climate of a region can determine whether a miner survives the bearish market or not. Because of this, each device has a different performance depending on the economic and environmental circumstances.

For example, the Canadian mining firm Hut8 says that the average cost of mining operations is USD 4,400 for the third quarter of 2019. Investor Alistair Milne, on the other hand, indicates that from USD 7,500 to USD 8,000 can be spent to undermine one bitcoin. If we take into account that Bitcoin’s price is currently at USD 7,700, it can be said that mining is reaching the limit of its profitability.

Token Insight consultants believe that profitability currently depends on electricity rates and the type of device used for mining. A basic miner in a region whose electricity rate is USD 0.05 per kWH can generate expenses of USD 2,500 per mined BTC and the latest-generation one up to USD 6,500. Analysts note that, by adding the costs of the refrigeration and maintenance system, mining in these types of regions can become unfeasible.

On the other hand, if the miner is located in an area like Kazakhstan, electricity rates of up to USD 0.03 per kWH can be obtained. The latest generation miners can generate electricity bills of up to USD 1600, considering the costs of the refrigeration system. Similarly, they believe that basic mining equipment can record an operating cost of USD 3,000.

Operating expenses may be even lower if the miner is located in a cold-weather region. Temperatures below -2 degrees Celsius help keep mining equipment refrigerated without the need for expensive additional cooling infrastructure. In this way, many mining farms generate higher profits per mining.

By Willmen Blanco

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