Latin American Social Network Taringa! Announces Reward System through a Stablecoin

Andres Chavez
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Latin American Social Network Taringa! Announces Reward System through a Stablecoin

As it turns out, Facebook is not the only social media network that has recently launched a crypto project for its user community. Taringa! is one of the most widely known social apps in Latin America, and just like Facebook, it will now enter the digital assets industry in an attempt to keep up with modern times.

And, also like Facebook, Taringa’s cryptocurrency will be of the stablecoin variety. The networking company has established a partnership with MakerDAO and widely known e-wallet firm AirTM to develop a stablecoin-powered points ecosystem that will satisfy a market that can approach 30 million users.

Announced at the Blockchain Summit Latam

The piece of news was reported this week by Taringa! via an official press release. The development was announced during the Blockchain Summit Latam in Mexico City; the capital town of Mexico.

The pilot initiative is called “Taringa! Pioneers,” and is basically a reward system that will use a stablecoin to incentive the community. The idea is to encourage people to create content in the platform. This content will be able to be monetized, being turned into DAI, a stablecoin that functions in MakerDAO’s Ethereum blockchain.

The social media app stresses the vast potential that the program has to provide users with a safe way to store value, and at the same time, earning independence from governments when it comes to funds management.

Pegged to the US Dollar

Nadia Álvarez of MakerDAO stated that DAI is a token that reunites all the features of a cryptocurrency, but its value is pegged to the US dollar. The system that backs it up, according to Álvarez, looks for it to always be equivalent to the dollar.

“Latin American people, no matter which country they are from, can use their local currency to obtain a cryptocurrency that is worth $1. In nations such as Argentina and Venezuela, with high inflation rates, DAI will help people protect themselves from that situation, finding a comfort zone thanks to a stable coin,” were here words at the Summit.

Ignacio Roizman, Taringa’s representative at the Summit, stated that the social network aims to take a giant step towards blockchain use and application, not to mention decentralization. He lauded the crypto community’s strong sense of belonging in the market.

Rubén Galindo, AirTM’s representative, observed that the company works hard to be able to satisfy millions of people around the world, being an option to receive, buy, send, and sell funds through the e-wallet, with no middlemen and low emission costs.

Not Its First Rodeo

This is not the first time that Taringa! experiments with crypto-related projects. It all started in 2015, when the company established a strategic alliance with Xapo, a wallet provider, to develop a revenue distribution system based on Bitcoin.

Taringa! is known around the Latin American community, especially in Argentina, as the equivalent to Facebook. Unlike the Mark Zuckerberg-owned network, it has chosen a non-proprietary stablecoin.

By Andres Chavez

Three Years after Bitcoin’s Second Halving

Willmen Blanco
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Three Years after Bitcoin’s Second Halving

On July 9th, 2016, the reward for the mined block went from 25 BTC to 12.5 BTC. The next halving is expected for May 23rd, 2020, approximately.

July 9th marks the third anniversary of Bitcoin’s second halving, which led to the reduction of the rewards obtained by the miners of the network to 12.5 BTC for each mined block.

Halvings occur every 210,000 mined blocks (approximately every four years), had said Satoshi Nakamoto. Only two reward reductions have occurred during Bitcoin’s history: first in 2012 and then in 2016. A third event is expected on May 23rd, 2020, on block 630,000.

Regarding the 2016 halving, cryptocurrency holders focused their expectations mainly on the incidences of the reduction in the price of the crypto asset. As a result, bitcoiners expressed their concern and expected a price increase prior to the event and prepared for a subsequent fall.

It is worth remembering that when the second reduction of the reward occurred, the ecosystem did not have its current level of maturity. The relationship of the cryptocurrency market with traditional entities and regulated companies was lower. However, bitcoiners had the previous experience of a first halving, which occurred on November 28th, 2012. At the end of that year the price reached more than 13 dollars.

According to Buy Bitcoin Worldwide records, the price started to rise in July 2012, when it exceeded US $10 per unit. The bullish trend increased after the reward for mining was reduced from 50 BTC to 25 BTC. After this halving, Bitcoin initiated one of its most important escalations, where it managed to break the US $100 barrier.

When evaluating Bitcoin’s historical price charts in the months before and after July 2016, it is observed that the impact of halving on Bitcoin’s value was not as immediate as expected. Even so, the changes in the movement of prices were noticeable about one month before and one month after the date estimated for the reduction.

As shown in CoinMarketCap statistics, Bitcoin’s value began rising approximately in May 2016, when it was pricing at US $449, approximately. The price reached a peak of over US $700 in June, but then it started falling, ranging between US $600 and US $700, thus being around US $650 on July 9th.

After the halving in 2016, Bitcoin remained fluctuating between US $600 and US $700, with a drop that reached US $560 in August. In the following months it began rising gradually until it reached over US $900 in December.

Beginning of a New Stage

The contexts in which these two reductions occurred were different. In 2012, Bitcoin was not very attractive and the only interesting market was developed in the Silk Road illegal goods purchase portal, hosted on Deep Web. However, in 2016 the cryptocurrency gained some importance in the financial markets, but not at the current levels.

For these reasons, the second Bitcoin halving was received with greater expectation, uncertainty and curiosity, by both bitcoiners and novices. The event marked a new stage in the ecosystem, which has led the cryptocurrency’s growth and advance in the market to significant levels.

The Bitcoin charts show that the halving that took place in 2016 preceded the bullish rally of 2017. After that, the cryptocurrency reached its historical maximum in December 2017, almost reaching the US $20,000.

BY Willmen Blanco

China Considers Launching its Own Cryptocurrency after Facebook’s Plans

Maria Rodríguez
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China Considers Launching its Own Cryptocurrency after Facebook’s Plans

The Central Bank thinks that cryptocurrencies could seize and completely change the financial market

People’s Bank of China (PBoC) thinks that Facebook’s cryptocurrency, Libra, could generate changes of vital importance for the world of finance and economy by allowing international payments when this asset begins to operate.

The digital currency of Facebook would allow unbanked users to operate and receive payments without problems. For this reason, Wang Xin, Director of the People’s Bank of China Research Bureau, talked about it during an event at Peking University.

Xin offered more details about the financial institution’s position regarding the creation of its own cryptocurrency, and also presented some considerations related to the initiative that Facebook plans to promote.

“We started early with this initiative, but it takes a lot of work to consolidate our leadership in the matter. Xin says Libra could impact monetary policy, and China is preparing.”

For these reasons, Xin said that the Chinese bank is evaluating this situation very carefully, and that Facebook’s announcement about launching its own cryptocurrency in 2020 could serve as an impulse for the Asian entity to develop its own digital currency more quickly, which already has several years under consideration.

The South China Morning Post reported Wang’s comments, who said the PBoC is paying “high attention”to new advances since the release of Libra’s white paper last month.

Debating and Changing Previous Opinions

Some weeks ago, many legal representatives from different countries such as The United States, Russia, France and The United Kingdom expressed their financial and legal concerns in relation to Facebook’s initiative, which seeks to make financial mechanisms more flexible for unbanked users.

The reasons against Libra are that, according to what some the representatives of those countries commented Facebook has an extensive amount of personal information about its users; thus, they think Facebook has to clarify everything related to the operation of the cryptocurrency first.

About this point, Wang said he disagree with Libra’s close correlation to the U.S. dollar. If the digital currency will be linked to different cryptocurrencies, Wang said he is worried considering that other sovereign currencies in the world would suffer financial consequences of a U.S. dollar-focused currency, mainly, U.S. control over a leading digital currency.

Additionally, it is also informed that Libra would be associated with companies such as Visa, Mastercard, PayPal, Stripe, eBay and Uber.

A Hard Competition

In order to compete with the power that new cryptocurrencies could have, Wang says that other countries would have to develop their own central bank digital currencies. Another option would be to look to intergovernmental organizations, such as the International Monetary Fund (IMF), to set up an international digital currency.

Right now, China does not allow new listings or trading with digital currencies, including Bitcoin (BTC). Currently, authorities of the region consider tokens as “risky” assets so they are watching their behavior first.

This is not the first time that the People’s Bank of China investigates about cryptocurrencies. The central bank began studying digital assets in 2014 in an effort to keep up with Bitcoin, according to the SCMP. Also, it established a research institution in 2017 to further facilitate research.

The PBOC has the approval of the State Council and continues to work on creating its own currency, but there are not public announcements of the progress until now.

During the event, Huang Yiping, a Professor at Peking University, said: “It is still unclear if Libra will succeed, but the concept will not go away, and this has sent a warning to China that its leadership in digital finance is not a sure thing.

By María Rodríguez

BTC to Help Family Abroad

Willmen Blanco
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BTC to Help Family Abroad

Antonio uses Bitcoin as a method of sending remittances to Venezuela. In Brazil, there is still no specific regulation for cryptocurrencies.

Two years ago Antonio migrated to Brazil due to the economic crisis in Venezuela. He had to travel alone, and so he left his parents and other loved ones behind.

The International Monetary Fund estimated inflation at 1,000,000% in late 2018, when the Venezuelan diaspora exploded. Something similar had occurred in Germany after World War I and in Zimbabwe in 2000.

In recent months about 5,000 Venezuelans have emigrated daily seeking economic stability, security and quality of life. In June, the UN Refugee Agency (UNHCR) and the International Organization for Migration (IOM) determined that around 4 million Venezuelans have emigrated.

According to the World Bank, the population was estimated at 28 million inhabitants in 2018. Almost 15% of Venezuelans have left the territory, becoming one of the largest groups of displaced people worldwide. UNHCR and IOM determined that the number increased by one million in just seven months.

When Antonio’s documentation was in order, he had different jobs until he began working as a baker, his area of expertise, which has allowed him to help his family. However, changes in government policies have led to a foreign exchange control that greatly hinders the sending of remittances to Venezuela.

LocalBitcoins

Antonio stopped sending remittances through the Venezuelan government and banks, and opted for electronic payment methods such as PayPal. However, high commissions made him dismiss it because he lost part of the money that he wanted to send. After investigating and talking with other Venezuelans in Brazil and other countries, he learned that Bitcoin is widely used by migrants to help their families.

Exchanges in LocalBitcoins with Latin American currencies have reached their historic highs recently. Venezuela ranks second regarding world trade in bitcoins in this platform, only surpassed by the United States. One reason for these high figures is the sending of remittances through the platform.

Before using this method, Antonio learned how to operate Bitcoin and taught it to his parents. It was easy, since the cryptocurrency’s popularity has generated abundant information on this subject and the term Bitcoin is very frequently searched with Google.

Using the Platform

After complying with the KYC (know your client) and AML (anti-money laundering) process, aimed to reduce scams, money laundering and terrorist financing, he became a verified user who could perform operations in exchange for bitcoins in the LocalBitcoins platform.

Antonio changes his salary in reais twice a month and sends it through LocalBitcoins to his parents’ portfolio, and then they exchange the bitcoins for bolivars. Both parties know the risks of using a hot wallet like this platform, since it can be attacked more easily.

To reduce the risk, his parents change the remittances into fiat money and have them available through the bank. However, the country’s hyperinflation compromises their purchasing power and they must use the remittances within the same week that they receive them, as prices rise weekly.

With the bitcoins that they receive they can buy food and medicines. They can even pay medical service providers such as eye doctors and dentists.

Despite the crisis and inadequate public services, which do not allow his parents to have a carefree life, Antonio feels relieved because he can help his family with Bitcoin.

By Willmen Blanco

Over US $2,000 in BTC Donated to One of the Toughest BTC Critics

Willmen Blanco
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Over US $2,000 in BTC Donated to One of the Toughest BTC Critics

The Bitcoin wallet address that Schiff posted on Twitter has already received 86 transactions over 0.18 BTC. Some members of the community have been disappointed because this man is a Bitcoin “hater”.

Renowned bitcoiners encouraged the community of Bitcoin users in general to send satoshis to Peter Schiff, one of the fiercest critics of the cryptocurrency created by Satoshi Nakamoto, after it was publicly known that he has bitcoins (BTC). Despite his attacks on the cryptocurrency, he has already received more than US $2,000 in donations.

It should be noted that Schiff has assured that Bitcoin is a pyramid scheme, which needs the entrance of other users in order to keep its value. He believes that when there are no more buyers, the price of Bitcoin will collapse, as he recently posted in his Twitter account. The question is why he received so many donations from the community.

The main reason for this series of donations was the Co-Founder of Morgan Creek Digital Assets, Anthony Pompiliano. This investor posted a tweet about Schiff’s cryptocurrency holdings last Friday, July 5th, 2019. He reported that the Bitcoin hater, Peter Schiff, had admitted that he owns some BTC. He recommended not paying attention to what people say but to what they do with their money.

Schiff admitted that he owns between US $80 and US $100 in bitcoins. He also added that he owns ETH and BCH, clarifying that it is a gift that he received. After exchanging some tweets with Pompiliano, the “Bitcoin hater” posted a Bitcoin wallet address that he owns. Pompiliano assured that he would send Schiff the amount of satoshis equivalent to US $100.

The Bitcoin analyst, Nic Carter, used the publication of Schiff’s Bitcoin wallet address to encourage the “conversion of a nocoiner”, and he retweeted the address so that others would send some satoshis to Schiff.

It has been reported that the address has had a significant number of transactions in favor since then. When consulting the information about the Bitcoin blockchain, it can be observed that Schiff has received 86 different shipments, thus placing his positive balance in 0.18021476 BTC. This suggests that the bitcoiners of the world have sent an amount equivalent to just a little more than US $2,000, according to current market prices.

Neeraj Agrawal, the Director of Communications at Coin Center, among other members of the community, have been disappointed with this campaign, as well as with the significant amount of donations received. They find difficult to understand the idea of sending satoshis to someone who openly attacks Bitcoin. Besides, they do not believe that the mere fact of owning some cryptocurrencies, without any interest, would convert Schiff into a bitcoiner.

It is important to note that, in the event that Schiff decides not to move those satoshis and loses access to his wallet address, the lack of mobility of those funds will favor the rise in the value of circulating bitcoins. In other words, it would add value to the satoshis owned by the rest of the world’s bitcoiners.

By Willmen Blanco

LTC Halving Will Lead to Miners’ Exit from the Network

Willmen Blanco
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LTC Halving Will Lead to Miners’ Exit from the Network

Halving could increase the aggregate efficiency and profit margins of some miners. Litecoin is registering an increase in the difficulty of mining and in the crypto asset’s prices.

The data provider Coin Metrics says that the reduction by half of the block reward, or Litecoin halving (LTC), will prove the probable effects of these reductions that are expected in miners’ behavior, such as in the crypto asset market cycles.

An analysis published on Coin Metrics corporate blog warns about the possible exit of inefficient miners once Litecoin halving occurs, approximately on August 5th. The researchers add that, when cutting the reward per mined block by half, profitability is immediately affected. This occurs as a consequence of the fall in income.

Since miners operate as large-scale companies and face recurring operating costs (mainly the cost of electricity) that they pay with fiat currencies, they must regularly sell some of their block rewards. Given that mining represents a perfectly competitive industry where profits are constantly seeking a stable state of zero economic surplus, most of the mining block rewards must be sold for fiat money.

Coin Metrics

Once the reduction occurs, operators will have to continue spending the same amount of electricity to extract fewer cryptocurrencies. This decreases their profit margins and makes it difficult to maintain the balance between income and production costs. This would be detrimental to some miners, who will not be able to sustain the balance, so they will probably leave the network.

The researchers explain that the sales pressure from miners is significant. They mention that in 2018 Litecoin mining revenues totaled almost 5.3 million LTC, equivalent to US $561 million. Consequently, it is estimated that annual inflation, which currently is 8%, will fall by half (4.4%). They say that this represents a significant drop in the sales pressure led by miners.

Possible Effects on Mining Power

The report also considers that Litecoin halving will increase the aggregate efficiency and profit margins of the miners remaining in the network. Even though those miners will start selling less, they will also tend to retain more profits. This occurs as a result of the departure of some operators.

It should be recalled that, after the first reduction of LTC rewards occurred in 2015, there was a flat or negative difficulty growth. This event led to a mining capitulation in mid-2016. However, researchers believe that this situation is unlikely to be repeated on this occasion, given the current development of mining technology.

It is worth noting that LTC has been recording a steady increase in mining difficulty, which has reached record figures in recent months. The upward trend is also observed in its price. Both facts are related to the usual pattern followed by cryptocurrencies before their halving. The market cycle that is usually observed implies a price increase before the event and a decrease in its value after the reduction of rewards.

However, Coin Metrics says it is still too early to draw definite conclusions. Therefore, many predictable effects should not be taken for granted. In that sense, it is necessary to wait a few days to analyze in detail the impact of the reduction of rewards in the cryptocurrency’s performance.

By Willmen Blanco

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