Croatia Will Promote Tourism by Allowing the Exchange of Cryptocurrencies

Maria Rodríguez
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Croatia Will Promote Tourism by Allowing the Exchange of Cryptocurrencies

Only 3 of the 1,016 offices in the Croatian territory are able to provide the cryptocurrency exchange service, as part of their pilot plan to boost tourism and commercial projects

According to a statement issued by the Croatian Post, it was announced that the country plans to launch a cryptocurrency exchange system throughout the territory. The objective is to promote a new period of developments of new technology in tourism in that region.

As it is well known, in some parts of the world the mail services offer foreigners who do tourism some banking services. This is in order to facilitate some procedures and bring benefits to users. In this case, the Croatian Post seeks to attract the attention of tourists that dabble in new financial technologies.

As part of a pilot plan, and thinking how will be the entire exchange system, the Post Office of Croatiaenabled three of its post offices in the small coastal city of Zadar. The idea is to benefit tourists who want to exchange cryptocurrencies for fiat money. It is important to highlight that Zadar is one of the cities with the greatest tourist attraction in Croatia.

Referring to this pilot plan, representatives of the Post Office of Croatia commented that they are making a pilot test that will not only evaluate the operation of the exchange system, but will also take into account the participation of people and the amount of money that would be handled. They mentioned that if the pilot plan is a success, they would evaluate the inauguration of several exchange houses throughout the territory and, mainly, in areas of high demand for tourists and merchants.

The official announcement explains the importance that the country gives to the project and that this idea could be an effective alternative to improve tourism attractiveness and its forms of financing, due to the fact that some companies are investing in cryptocurrencies and are interested in territories where they can exploit them.

“Over the past two years, cryptocurrencies have developed a greater network of users, and Croatia will surely contribute to its popularity with its network of 1,016 post offices. Digitization is one of the development strategies of the Croatian Postand a driver of numerous business projects. Once entering the cryptocurrency market, the Croatian Post confirms its position as one of the leaders in digital transformation”.

This pilot plan that has been conducted in Croatia will allow all users to exchange fiat currency for any of these cryptocurrencies. Bitcoin, Ether, Stellar, XRP and EOS. Users can also make the change in reverse, from fiat money to cryptocurrencies, accepting from dollars to Croatian money.

It should also be noted that this technological improvement project for the tourism sector in Croatia is possible due to the collaboration with theElectrocoin company (a cryptocurrency brokerage company based in Zagreb), which supported the pilot system, as well as some stockbrokers and some payment companies, which have been operating in the country for about five years and now support projects of this nature.

By María Rodríguez

Cryptocurrency Miners Prefer Bitcoin to BCH and BSV Forks

Willmen Blanco
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Cryptocurrency Miners Prefer Bitcoin to BCH and BSV Forks

Bitcoin is about 25 times more powerful than Bitcoin Cash and Bitcoin SV, according to its hash rate. BTC miners could rewrite 10 days of the BSV blockchain in just 3 hours.

Bitcoin (BTC) remains the favorite for miners with specialized hardware for the SHA-256 algorithm, which it shares with Bitcoin Cash (BCH) and Bitcoin SV (BSV).

Coin Metrics shows in a recent report state that Bitcoin exceeds its most renowned forks BCH and BSV, regarding hash rate, in revenue generated by mining and in network security.

The Most Powerful

The most obvious and easy to verify in any block explorer is the hash rate. Bitcoin broke records, reaching a processing power of 78.9 exa hashes per second, on July 29th 2019. On the other hand, the highest points regarding the processing power of Bitcoin Cash and Bitcoin SV were 2.7 EH/s and 1.4 EH/s, respectively. Currently, the Bitcoin network is about 25 times more powerful than those of BCH and BSV.

The statistics shown by Coin Metrics coincide with the figures shown by the Coin Dance portal, regarding the power of mining in these networks. According to them, of the 100% of the hash rate shared by the networks of the three cryptocurrencies analyzed, 96.8% corresponds to Bitcoin, while Bitcoin Cash has 2% and Bitcoin SV 1.2%.

The only time that the Bitcoin and Bitcoin Cash hash rates have been similar was shortly after the fork that gave rise to BCH, between August and November 2017. On that occasion, there was a strong hash war where the miners took advantage of the adjustments of difficulty and the price variations in the crypto asset market to change from one chain to another.

The One Generating the Most Income

The cryptocurrency whose mining activity generates the most income is not necessarily the most profitable for miners, but this feature can undoubtedly attract their attention. To determine the income generated by the mining of a cryptocurrency, the mining commissions and rewards of each block are considered, all measured in US dollars according to the value of each crypto asset in the market.

As expected, Bitcoin leads this area. In recent weeks, BTC mining has generated daily revenues close to US $30 million. However, the miners of Bitcoin forks, BCH and BSV, have failed to reach US $ 1 million in daily income until now in 2019.

The Safest

The security of a cryptocurrency is usually closely linked to its hash rate. In theory, this is because a high hash rate makes it more expensive and, therefore, difficult to make censorship, block reorganization or other mining-related attacks on it.

Concerning this aspect, Bitcoin is also at the top as it has remained consistent with the hash rate figures discussed above. However, another way to prove Bitcoin’s advantage over its forks, at the security level, is to measure how long it will take its miners to rewrite 10 days of operations on the Bitcoin Cash and Bitcoin SV blockchains.

According to Coin Metrics’ results, BTC miners could rewrite 10 days of the Bitcoin SV chain in just 3 hours. In contrast, it would take seven (7) hours to make the same attack on Bitcoin Cash. However, it would be unlikely to make the attack on BCH due to properties added by its developers to the network.

To conclude, these statistics show that Bitcoin is still far superior to Bitcoin Cash and Bitcoin SV. It should be noted that these other cryptocurrencies are not as old as Bitcoin, since the fork giving rise to BCH occurred in August 2017 and the one from which BSV was born occurred in November of 2018.

By Willmen Blanco

Chinese traders in Russia prefer Tether for cross-border payments to China

Willmen Blanco
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Chinese traders in Russia prefer Tether for cross-border payments to China

Chinese importers in Russia buy up to US $30 million in Tether from informal sellers every day. They use the stablecoin USDT to send large amounts of money to their country of origin.

The business in Moscow is fast due to a constant flow of Chinese traders that arrive at the city carrying large bags of cash every day.  Oleg’s over-the-counter cryptocurrency (OTC) trading desk sells them about US $3 million in Tether (USDT) per day.

Only 20% of Oleg’s sales are in Bitcoin, the oldest cryptocurrency with the largest market capitalization. The other 80% is in the dollar-linked token or stablecoin USDT.

USDT allows cryptocurrency traders to move money between exchange houses quickly to take advantage of arbitration opportunities. However, several over-the-counter traders in Moscow report that it has at least one use, as a remittance service for Chinese importers.

Maya Shakhnazarova, Head of OTC trading at Huobi Russia, said that they accumulate a lot of cash in Moscow and need USDT to transfer it to China.

USDT has the usual advantages of cryptocurrencies, with no limit on how much money can be sent or where, and without the volatility that makes it unfeasible for most currencies to move millions across the border daily.

Tether’s Killer App

Chinese gray market importers used to trust Bitcoin before the 2018 bear market, said Roman Dobrynin, another over-the-counter distributor. As the price was increasing, traders and intermediaries who helped them buy cryptocurrencies could earn some extra money in the process.

It should be noted that, to buy or sell USDT for US $ from Tether itself, a trader must be verified through the know-your-customer (KYC) process. However, since the token runs on public blockchains (Bitcoin, Ethereum and Tron), anyone can receive or send it, and secondary trade is not restricted.

In China, traders can easily exchange USDT for fiat money, despite the fact that spot trade (currency exchange) from fiat to cryptocurrencies was banned in September 2017, forcing exchange houses to exit the country and limiting crypto-to-crypto operations.

Over-the-counter operators report that USDT’s daily volume exceeds its outstanding offer several times, indicating that people go around the token several times a day. According to CoinMarketCap, on July 29th, the 24-hour USDT volume was recorded at US $17,500 million, while the total supply was only about US $4,000 million.

Avoiding Capital Controls

The Chinese government keeps strict capital controls, limiting the amount of foreign currencies that can be bought or sold to US $50,000 a year. An additional allocation may be requested, but still the amount of coins they can buy and sell will be limited. Consequently, some Chinese have chosen to use cryptocurrencies to move money across the border.

The fact that Chinese traders, who bring cheap merchandise to Moscow’s shopping centers use cryptocurrencies to move money, was almost officially recognized by Russian authorities in 2018.

Yuri Polupanov, Head of Financial Monitoring and Currency Control at the Bank of Russia, said that several large shopping centers in Moscow represent about US $9.5 billion of unregulated cash flow per month, and most of the traders are Chinese, said.

Those shopping centers, located inside huge warehouses on the outskirts of Moscow, host multiple retail stands, which mainly sell clothes, usually cheaply for cash. Those places attract people that cannot afford to spend much on clothes and even avoid large clothing chains.

Small cryptocurrency exchange offices still operate in those shopping centers, according to Dobrynin, although they may not provide the volumes that traders need.

By Willmen Blanco

Entities Dedicated to Cryptocurrencies in Japan Call for Tax Changes

Maria Rodríguez
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Entities Dedicated to Cryptocurrencies in Japan Call for Tax Changes

Changes in tax matters would help boost the cryptocurrency business and establish a clear framework in all legal senses

Japan has become the first country in the world in which cryptocurrencies have been regulated. But recently, some companies dedicated to the exploitation of crypto assets, in institutions linked to the crypto world have demanded to the government the modification in tax policies around digital currencies.

In the country, the cryptographic environment is regulated. This regulation was first conducted between 2014 and 2015, with the establishment of a special working group that would be responsible for the “sophistication of payment and settlement operations”, in the Financial Services Agency (FSA).

The group was responsible for conducting an investigation of cryptocurrencies. In the final report, the working group establishes an introduction of a registration system, where data from transactions made with cryptocurrencies would be stored, so that the industry is regulated by the laws against money laundering and other crimes. The group also considered that a system should have been added to protect users from cryptocurrencies.

After these modifications, the government decided to propose a bill that would help change the Payment Services law. This amendment established cryptocurrencies in Japan’s financial markets. In addition, it opened a field so that it could be understood how these currencies are used in international markets.

For this reason, the Japan Virtual Currency Exchange Association (JVCEA) drafted a request to the government of the country to make some changes in tax matters, this in order to improve its processes.

The requirements are clear. According to the letter sent by the JVCEA, the laws regarding the topic of cryptocurrencies are in accordance with the times and needs of the sector. However, in tax matters it is something else. The JVCEA requests an immediate update to the entire tax legal system.

To go into detail about the requirements for changes in tax matters, the JVCEA sent a petition document to the FSA, in order to demand that the taxes are applied both to cryptocurrencies and merchants dedicated to the crypto industry. The JVCEA explained that cryptocurrencies are considered legal and safe financial assets, emphasizing that they deserve a treatment like the one given to fiat money.

The country has some requirements to treat cryptocurrencies. It is known that among some of the requirements for tax changes are:

1. Small-scale cryptocurrency transactions should not be required to pay taxes.

2. Transactions made with cryptocurrencies must be recorded separately.

3. The issuance of ICOs should be considered as a capital transaction instead of being considered a taxable income.

4. Citizens who will be asked for taxes for the possession of cryptocurrencies should have time to manage their documentation.

These requirements made by the JVCEA will be considered as a set of measures that will help boost the crypto industry in the Asian country, in addition to improving national and foreign investment in cryptocurrency businesses. The idea is to get a clear regulation as much as possible.

By María Rodríguez

Over 300 Cryptocurrency Exchange Houses Launched in the Last 18 Months

Willmen Blanco
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Over 300 Cryptocurrency Exchange Houses Launched in the Last 18 Months

CoinGecko has incorporated 6.5 times more exchange houses to its platform since January 2018. In 2019, a total of 9 exchange houses went into liquidation, closed by authorities or were scams.

The 2019-second quarterly report by CoinGecko, the website of cryptocurrency market analysis, revealed that 302 new exchange houses have been added to its platform since January 2018.

The CoinGecko platform, focused on providing data for cryptocurrency market analysis since 2014, reported that it is currently tracking 347 exchange houses. Of this figure, only 45 were incorporated between 2014 and the end of 2017, which indicates a 6.5-fold increase in the tracking of cryptocurrency exchange houses in the last 18 months.

It is striking that the explosive growth of the number of exchange houses coincided with the bearish cryptocurrency market of 2018 and extended until the new bullish stage of 2019. In this context, the founders of CoinGecko, Bobby Ong and TM Lee, indicated that after last year’s price winter, the cryptocurrency market finally reached the summer. They said that only in the 2019 second quarter, Bitcoin increased by 165%.

According to the information, of the total number of cryptocurrency exchange houses that can be consulted in CoinGecko, 88.5% (307) are centralized and the remaining 11.5% (40) are DEX or decentralized exchange platforms.

More Exchange Houses Closed in 2019

Within the framework of the emergence of a large number of new cryptocurrency exchange houses, several closures have also been raised so far in 2019. The CoinGecko report reflects that at least nine exchange platforms closed their doors for different reasons.

The report accounts for a first group of three exchange houses based in India, which were forced to close their doors in the first half of 2019. These platforms are Coindelta, Coinome and Koinex, which yielded to the strong regulatory pressure from the Central Bank of India.

It should be noted that, in September 2018, there arose a closure of Zebpay, one of the oldest exchange houses in that Asian country. In the same way, just ten days ago, Cryptokart also ceased operations, for a total of five platforms closed by government action in India.

Another group of four exchange houses have gone into liquidation processes in 2019. Among them are included the crypto trading platforms Liqui Exchange from Japan (in January) and Cryptopia from New Zealand (in May), which alleged liquidity problems. The former was affected by the extended bearish market and the latter by a cyber attack in which it lost around US $16 million.

The QuadrigaCX exchange house, of Canadian origin, was also subjected to a liquidation process in April 2019, following a scandal over irregular management of user funds and the loss of more than US $190 million. For its part, Gatecoin, a platform that suffered the theft of 15% of its funds after a hacking attack in 2016, also failed to recover and was forced to close its doors in March 2019.

Finally, two other platforms that closed this year, Bitsane and Coinroom, were identified in the CoinGecko report as exit scams. They just did not provide the service that they were supposed to offer but continued receiving payment from users.

By Willmen Blanco

Bitcoin Secures Transactions 7 Times Faster than other Networks

Willmen Blanco
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Bitcoin Secures Transactions 7 Times Faster than other Networks

Messari explains that block mining speed does not equal that of securing transactions. While it takes other networks hours to secure transactions, it only takes Bitcoin 10 minutes.

Among cryptocurrencies using a Proof of Work (PoW) algorithm for mining, Bitcoin is the fastest in securing transactions. A study conducted by Messari Crypto, published on July 25th, explains this.

The publication compares Bitcoin data to guarantee a transaction with Ethereum, Litecoin, Zcash or Dash figures, among others.

Most of the networks compared in the study have lower time averages for each block added to their respective chains. However, they fixed expense on security, so that a transaction can be considered secure and irreversible takes Bitcoin much longer.

The firm alleges that being placed in a block does not mean that a transaction is definitive, since it can be reversed. With the security spending methodology, Messari concludes that Bitcoin has the fastest settlement time as compared to the main tokens using PoW.

As a comparative scale, Messari used the time that it takes each blockchain to reach a value equivalent to a mined Bitcoin block, which is about 10 minutes. In Ethereum, second on the list, those 10 minutes are equivalent to 73 minutes, which represent 7 times longer than Bitcoin. The firm highlights that this occurs although mining each block does not even require 1 minute.

The third on the scale, Litecoin, requires 176 minutes to achieve that same value. In other words, what Bitcoin achieves in 10 it takes Litecoin almost 3 hours. The other blockchains included in the study exceed 6 hours.

Confirmation Equivalence

All those blockchains require less time than Bitcoin to mine each of their blocks. Of those mentioned by Messari, only Bitcoin Cash and Bitcoin SV, both resulting from Bitcoin forks, require the same 10 minutes.

However, the firm concludes that the latter offers miners much more rewards in the short term with Bitcoin than with any other cryptocurrency mined with PoW. Therefore, these transactions are secured more quickly.

When reviewing the equivalence between confirmations on the blockchains studied in the analysis, it can be observed that Ethereum is actually 7 times slower than Bitcoin. According to those results, Litecoin requires 16 times longer, while Bitcoin Cash and Zcash require 34 and 38 times longer than Bitcoin for their confirmations.

Cryptocurrency Price

The prices of each cryptocurrency influence the relationship between mining profits and the security of a particular blockchain. The miners’ rewards increase as a cryptocurrency gains market value. For example, the difference between Bitcoin Cash and Zcash in the Messari chart is only of 23 minutes in favor of the former.

While BCH remains stable, a significant increase in the ZEC price could cause Zcash to improve its time to secure transactions. However, these times are also influenced by the mempool state, the demand for confirmations, and the commissions that each participant is willing to pay.

Besides the increase in the Bitcoin price during the first months of 2019, the value in the rewards received by the miners of the network also increased. In May, with each BTC valued at around US$5,900, the rewards to miners grew 30% compared to April. According to Diar newsletter, at that time the rewards reached about US $291,000,000.

The PoW mining algorithm, used in the networks mentioned by Messari, selects the nodes in proportion to their processing or computing power, as opposed to the Proof of Stake (PoS). Ethereum plans to migrate to this mining algorithm in a future update of its network.

By Willmen Blanco

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