Dan Schulman commented he is investing in bitcoins. He also says that his company is developing a blockchain solution for its platform.

In a recent interview with local media, Dan Schulman, CEO of PayPal, revealed certain details about the exit of Libra, the crypto project of Facebook, as well as his opinion on cryptocurrencies, also commenting that he has an investment in Bitcoin, and advanced projects that Paypal has prepared for the near future using blockchain technology.

During this year, one of the most surprising news was that the world’s most powerful social network, Facebook, would be preparing a crypto project that would lead to the launch of a cryptocurrency called Libra. In the announcement about Libra, the social network mentioned that some 28 world-class companies would be involved in its development, expansion, and support. These companies include PayPal, MasterCard, among others.

However, last month PayPal decided to leave the Libra project, being the first company to leave the project but clarifying that Paypal left its alliance to “focus on moving forward in our existing business mission and priorities”.

In this regard, during the interview, Schulman was asked about this decision. He argued that, in the beginning, Paypal was very interested in being part of a project that would boost his business and help the company with the issue of financial inclusion in terms of cryptocurrencies. “We are always exploring the next generation of technologies, such as blockchain infrastructure to do things more efficiently”, the CEO of PayPal said.

Schulman explained that, as they became more involved in the development of the Libra project, they understood that they still had many things to do before entering an initiative as powerful and ambitious as Libra. The CEO of PayPal concluded this point saying that the departure was not loud or badly, he simply wished them the best. “It was not a bitter divorce or anything like that. It’s just that they will begin to travel a path that interests us to see and monitor, and as we see later, let us find ways to work together”.

About the possibility that regulatory issues formed an important part in the outcome of his decision, the representative of PayPal decided to clarify that “regulation and compliance, for us, is essential. But we have an extremely strong relationship with all market regulators”, he sentenced.

The Exploration of Blockchain ​​Technology and the Interest in Cryptocurrencies

Dan Schulman, during the interview, also confirmed the speculation that PayPal would be in the process of organizing the company for the start of projects related to blockchain technology.

On this issue, he said that PayPal is currently studying the possibilities of creating applications that use this technology to improve identity protocols. Schulman said in parallel that the applications that they seek to develop will not compete with the concept that Libra is currently creating.

Regarding the cryptocurrency issue, the representative of PayPal mentioned that there is currently no high demand for users interested in these assets due to their high volatility. But he said there is a strong interest in this technology, although he mentioned that, in his opinion, cryptocurrencies are traded more as if they were a product than as a currency.

At the end of the interview, Schulman revealed that he currently has his personal cryptocurrency reserve, recognizing that he has bitcoins among his economic reserves.

Hence, the main representative of PayPal admitted he has cryptocurrencies as a way to save money.

By María Rodríguez

The co-founder of Ethereum dedicated an article to the analysis of the status of the ecosystem. He mentioned a total of 16 aspects, with advances and pending tasks, as well as suggesting new problems.

Five years ago, the co-founder of Ethereum, Vitalik Buterin, published his article “Problems,” in which he reviewed the main difficulties faced by cryptocurrency economy in 2014. Recently, the executive published an update of his work, in which he grouped again the 16 aspects that show advances, as well as other pending tasks within the world of cryptocurrencies.

The developer expressed his views in the article “Difficult problems in cryptocurrency: five years later,” in which he divided into three sections his reflections updated to 2019. Buterin believes that challenges are mostly focused on cryptographic problems, consensus theory problems, and economic sciences. Also, he suggests 10 new problems that relate to the past, present, and future of the cryptocurrency ecosystem.

According to Buterin, the number 1 problem of cryptocurrencies is scalability, as it relates to large blockchains and the confidence of their participants. In this regard, he noted that “if there are only a few entities capable of running full nodes, then those entities can conspire and agree to give each other a large number of additional bitcoins, and there would be no way for other users to see for themselves that a block is invalid without processing an entire block themselves.”

Buterin mentions that the problem is to create a blockchain design that maintains security guarantees similar to those of Bitcoin, but in which the maximum size of the most powerful node needed for the network to continue functioning is substantially sublinear in the number of transactions. In this regard, he said that in the last five years there has been great theoretical progress on this point, but further evaluation in the real world is pending.

The programmer sees four other challenges in the crypto area, including timestamping, arbitrary computer testing, obfuscation coding, and hash-based cryptography.

Consensus Issues

One of the challenges in the area of ​​consensus is the Proof of Work (PoW), which is resistant to ASIC miners. However, Buterin considers that the problem has been solved as far as possible and cited as an example the application of the Ethash algorithm in the Ethereum blockchain to try to counteract digital mining with higher-capacity processing equipment.

The developer added three other challenges in this area: that of a useful Proof of Work (PoW), the same Proof of Participation (PoP), and the so-called Proof of Storage (PoS) that involves the bandwidth of Internet connections and the storage on hard drives.

Challenges in the Economic Area

Buterin’s update also covers the area of economic sciences. The main problem, according to its criteria, is the volatility of Bitcoin prices. The challenge is to design a cryptocurrency with a stable price. On this issue, he notes that there is some progress and mentions the arrival of MakerDAO as a collateral ETH asset, not to mention other stablecoins with more time in the market, such as Tether (USDT).

In this section, the developer stressed that the difficulties are also concentrated in decentralized incentives for public goods, reputation systems, Proof of Excellence (PoE), anti-Sybil systems, decentralized contribution metrics, and decentralized success metrics.

It is important to comment that Buterin’s analysis is conducted, in certain aspects, from the perspective of the Ethereum blockchain, its main project in the ecosystem, comparing some elements with the Bitcoin network. Despite the progress that has been made, the programmer is one of those who believe that there are new problems, such as decentralized governance mechanisms, reputation systems, and unique human identities, among other challenges.

By Willmen Blanco

Royal Bank of Canada confirmed the acquisition of patents for crypto project, but it does not mean that it is developing a platform for crypto exchange.

The news about the launch of a cryptocurrency that would be issued by the Royal Bank of Canada (RBC), the largest bank in the country, was recently denied by the financial institution. It also refuted that it is not working on a digital currency exchange platform.

Since last week, some news portals echoed the news that the RBC could be developing a platform that would help to exchange cryptocurrencies. The news did not cite official documents issued by the entity and recently representatives of the bank denied that they are creating a similar project.

According to the press releases that were published at that time, the platform that would be created by the institution “would facilitate the purchase and sale of individual digital currencies, including Bitcoin (BTC) and Ether (ETH), as well as the transfer of funds by combining different types of cryptocurrencies”.

When the RBC denied the truthfulness of this news, it asked not to take into account that statement. It commented, in addition, that they are not in plans to launch a similar project.

However, in a recent web interview with a bank representative, it was known that this could be a misinterpretation of the business performed by the institution since the bank has recently acquired some patents on blockchain technology.

“Recent articles in the media have commented on certain patent applications made by the RBC in relation to blockchain technology, and speculated on the applications for these patents”, it said.

The bank also clarified that the acquisition of these patents does not determine that the bank is developing a platform for currency exchange in the short term so a cryptocurrency exchange for RBC customers is far from being fulfilled.

“As part of the innovation and discovery process, the Royal Bank of Canada, like many other organizations, files patent applications to ensure proprietary ideas and concepts are protected”, said the institution.

On other occasions, similar refusals have emerged regarding the implementation of these technologies in world banks. Recently, it was known that the Central Bank of Tunisia (BCT) would be in plans to digitize the country’s official currency through a blockchain platform. Then, the institution flatly denied these reports stating that the plans are “on the table” but have not yet advanced in their possible implementation.

On the other hand, the People’s Bank of China confirmed that it will use a new system that would help certify more than 11 types of hardware and software which are linked to digital payments, and clarified that they must request a license issued by the institution and pass an exam to be accepted in future inspections.

Although the institution denied rumors about the creation of the platform, the purchase of a blockchain patent only ensures that the institution could develop a crypto exchange when the global economic situation requires it.

By María Rodríguez

According to blockchain researchers at eToro, a digital brokerage platform, have stated that instead of supporting the Libra network and coin, Facebook should shift its focus to other third-party stablecoins.

The report was published by Finextra near the end of November. EtoroX Labs, which is the eToro’s blockchain research department, seems to think that while Facebook’s crypto project presents a “trailblazing opportunity” to achieve global financial services disruption, the social media network should modify its approach to maximize the opportunities to successfully complete the goal.

A Lot of Opposition

Regulatory issues, worldwide opposition and overall distrust have plagued Facebook’s project ever since it was unveiled in June. Politicians and lawmakers in the United States have referred to it as “ZuckBucks.”

However, eToroX Labs staffers are defending the notion that there could be something to stand for and fight, as the firm wants to embed a peer to peer payment ecosystem that has the potential to, allegedly, promote financial inclusion at a worldwide scale.

The researchers believe that the world’s biggest and most prominent social network could stand to benefit from delegating asset issuance to other third-party partners that are currently regulated. That way, they could skip the painful process to be accepted in specific countries, which has been a problem.

Fiat-Backed Stablecoins

EToro says that having several independent and fiat-backed stablecoins would be beneficial because it would eliminate the responsibility of currency control from Facebook, letting the influential service have the time and resources to focus on the development of the Calibra wallet to satisfy nearly 3 billion of users across the planet.

The online trading platform sure knows what it is talking about, since it issues several stablecoins backed by assets and fiat currencies such as the U.S. dollar, pound sterling, and euro, among others.

Yoni Assia, eToro’s CEO, and founder, observed that the Libra Association should work to get regulators to give harmonized regulatory standards and a proper structure to properly cover the “governance of the third parties using the Libra chain for executing payments.”

He said that “the regulatory burden and associated compliance costs would befall those who use the ledger for their own gains, be it in the issuance of collateralized stablecoins, commodities or other financial instruments, effectively removing Libra from the money trail altogether.”

Answering Critics with Work

The announcement of the Libra project has brought Facebook a lot of criticism over the last few months. A recent episode was starred by David Rutter, the CEO of R3 (an enterprise software company,) who claimed that it was “ridiculously stupid.”

Others have followed a similar line of thought, but as the world continues to pile on, the Association has answered with development. According to reports, it has logged more than 30 projects and over 50,000 transactions on the Libra ecosystem in the last 60 days of intense testing.

The original plan was for Facebook to launch the whole ecosystem sometime in the first half of 2020, although that remains to be seen.

By Andres Chavez

A sizable portion of the crypto community is currently talking about China’s intentions of launching a digital currency. After all, there is no shortage of nations with the desire of doing so as well, including the European Union and the United States.

While making a presentation at the Caixin Hengqin Forum in Zhuhai, in the People’s Republic of China, the former head of the People’s Bank of China Xiaochuan Zhou stated that the powerful Asian nation will prioritize the development of the digital payment resource for retail use before anything else.

The report was published by Caixin and confirms that one of the country’s primary goals is to use the digital yuan to facilitate retail payments. The former senior official confirmed the sentiment at the start of the week.

Two Different Goals

According to what Zhou explained, “there are two goals for international digital currencies:  the first one, which is also what China envisions is to develop digital payment and its use for a retail system in the country, while the other goal is to cross-border payment for international financial institutions.”

While there haven’t been any indications that Chinese authorities will dismiss the second possible use, it becomes clear by judging Zhou’s remarks that they will focus on retail use, at least for the time being.

The two exposed approaches require different designs and technical resources to complete, and it remains a possibility that China expands its capabilities after the successful implementation of the digital payment tool of the digital yuan in retail.

However, not everything will be as smooth as advertised. Zhou has warned that the current environment for China to conduct proper testing of its digital currency is not the smoothest. In fact, a nation with a smaller population would be significantly easier because the cycle for the circulation of the currency is shorter. Instead, China would have to overcome the obstacle stemming from the fact that it is, by far, the most populous country in the world.

A Peek of What’s to Come

“In case there is something wrong, it will be easier to steer the boat into a different direction,” Zhou said regarding the possible repercussions of having such a large population. While he is not leading the Chinese central bank anymore, his thoughts can mean a lot and can give people a peek of how authorities will launch the digital currency DCEP (Digital Currency, Electronic Payment).

It is a common occurrence that the Chinese government and authorities send subtle signals through former executives or senior officials before a big, formal announcement, according to Mable Jiang, currently one of the partners at Nirvana Capital, which is a VC company from Beijing that specializes in fintech.

“I think this is an important signal that China would start pushing retail use of DECP hard in some economies that fit Zhou’s description about smaller population and good internet infrastructure,” were Jiang’s words.

By Andres Chavez

China’s virtual currency is expected to generate major changes within the crypto world. Some of its advantages and disadvantages are described below.

Since the future launch of Facebook’s virtual currency Libra was announced in the middle of the year, the world’s governments have been on alert. In particular, the Chinese government has decided to take the initiative in the face of the threat to its power, accelerating the program for the creation of its virtual currency.

China Virtual Currency

Undoubtedly, the development of the Chinese virtual currency was accelerated after the announcement of Libra. This would be an attempt by the government of this country to have an instrument with which to combat the most negative effects of Libra on the capacities of the State, especially regarding the control of the money market, whose monopoly it holds.

However, the effort for the creation of this virtual currency has not come out of anywhere, or because of Facebook. It is part of a national technological strategy, which has been analyzed for years by the Chinese government and has now been accelerated by Libra.

The position taken by the President of China, Xi Jinping, would be a sample of who publicly supported Blockchain technology. It has encouraged the country to take advantage of the possibilities that blockchains offer to national development, which would show that support for the development of Blockchain would be a piece in a much larger planning.

Advantages of Virtual Currency for China

Therefore, China’s main objective in developing Blockchain technology is to use it for national aggrandizement. It is aimed at serving as a dynamizer of its economy and a constituent element of a desired international supremacy.

This is possible thanks to the tangible benefits that blockchains would bring to the country and its government. Of course, it would start with the internationalization of the yuan, as its virtualization would allow the Chinese government to push its national currency beyond borders. It would run its Blockchain as a platform parallel to SWIFT (the traditional international banking system), driven by the One Belt One Road initiative.

This would also have the potential to become an inter-company payment system, since WeChat’s virtual payment platform is currently the most common method for peer-to-peer transactions. Virtualization has not been as successful when it comes to businesses, something that could help the government’s virtual currency.

Besides, the government’s Blockchain could also provide the government with greater control over the food and medicines that enter the country. It would keep a watch through the blockchain on the status of the food, as well as the authenticity of the medicines that enter and move through the country.

Risks of the Currency

Regarding the launch of China’s virtual currency, not everything is positive. This currency involves several risks that threaten both China and the entire world economy, the main one perhaps being the possibility of a new crypto bubble.

The experience left in the crypto world after the bullish rally of 2017 teaches that bubbles are very possible if the potential of a virtual currency is overestimated. This can happen once the virtual yuan is in circulation since just President Jinping’s speech led to a 40% increase in the shares of all blockchain-related businesses on the stock exchange.

Besides this, there is also the risk of excessive centralization of Blockchain technology by government entities. If they were able to combine in their virtual currencies the advantages of cryptocurrencies, together with government control, it would be a death blow for the rest of the cryptocurrencies. These would be eroded by the competition of the State to maintain control over the money market.

By Willmen Blanco