Bitcoin Seeks Supports and Resistances after Collapsing 16%

Willmen Blanco
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Bitcoin Seeks Supports and Resistances after Collapsing 16%

Bitcoin reached a maximum of around US $13,871 after 17 months during the session on Wednesday, June 16th, 2019, but that price rapidly receded to US $10,700 by more than 16%. This indicates that the moves of Bitcoin and other cryptocurrencies are usually quite erratic and high volatility. Economic analysts say that it is not uncommon for Bitcoin to increase its volatility significantly after new information has entered the market.

Recent Bitcoin’s rise was mainly supported by Facebook’s announcement about the launch of Libra. It was informed that this new cryptocurrency will operate on the same Blockchain platform as Bitcoin, which will increase the confidence in this technology. Some world-renowned companies such as MasterCard, Visa, Uber and PayPal are said to expect Facebook’s Libra to become a global payment system.

With the support of these companies, it is said that Facebook’s Libra is likely to be widely accepted as a means of payment. It is considered that Bitcoin is making profits because confidence in the virtual currency sector has increased. Before the news of Facebook was released, Bitcoin had already been recovering due to new demand for cryptocurrencies that had arisen.

It has been speculated that when the largest companies issue their own cryptocurrencies, Bitcoin can be used as the reference cryptocurrency, in the same way as the dollar is used as a reference to calculate the exchange rate among other currencies. That is why the news of Facebook and the possibility that more companies will do the same has supported Bitcoin’s bullish price trend.

Bullish Momentum Ends

Normally, when an asset’s price rises or falls rapidly, it also recedes in the opposite direction, which most of the time is caused by profit taking, even if it is a short-term or long-term sale. It is also said that an asset is over-extended when it has risen or fallen too much without a correction. Under these premises, it could be said that Bitcoin’s bullish price is over-extended and possibly close to a correction.

On the weekly Bitcoin chart, a long upper shadow candlestick pattern can be observed, which indicates high volatility, according to experts. As the actual body of the candlestick is relatively small, that means that the asset is very indecisive. Experts explain that there is the possibility that Bitcoin’s price of US $10,000 will acts as a support, but it could lead it to a bearish price. Upwards, it is noted that the peak at US $13,871 could act as a resistance.

Extension of Bitcoin’s Bullish Price

Analysts have said that since Bitcoin’s price reached its historic maximum around US $20,000, this cryptocurrency has been over-extended to bullish prices and into a bubble that is about to explode. Even though, an abrupt fall of Bitcoin’s price was observed, it has been able to recover recently. However, this recovery has occurred so fast that it has led it again to over-extend to bullish prices. Since early this year, Bitcoin has risen 270%, while in comparison, the S&P (Standard & Poor’s) 500 has risen 20% in the last two years.

By Willmen Blanco

ERC-1155: Official Ethereum Standard

Willmen Blanco
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ERC-1155: Official Ethereum Standard

For a year the ERC-1155 was subjected to evaluations by the developer community. Until now, the proposal has been very useful for the development of blockchain games

ERC-1155 token is available to be used by the community of Ethereum developers to be admitted as the platform’s official standard.

The information was released in June, by the Co-Founder and CTO of the decentralized gaming platform Enjin, Witek Radomski, who stated that the design of the token is complete, after having been subject to 50 reviews and 400 comments by of members of the Ethereum community for one year.

Radomski, who in June 2018, proposed the ERC-1155 jointly with his colleague Andrew Cooke, highlights among the main features of the token the fact that it offers the possibility of creating both fungible and non-fungible assets in a single smart contract. With this, it becomes an alternative to the ERC-20 and ERC-721 standards, which require a separate contract for each token (ERC-20) or a token index (ERC-721).

In this way, through this ability to create both types of assets, game developers can create hundreds or thousands of elements in a single contract without having to create a redundant code for each of them. It is a very useful proposal for the development of blockchain games, since additionally to the different characters participating in a game, there are weapons, suits, attributes and properties, which are configurable according to the different scenarios and levels of difficulty.

Some Features

The developer explains that the new Ethereum standard allows multiple tokens to be sent in a single transaction, thus making operations faster, without the need to wait for each block in individual transfers. Besides, savings in gas costs are generated and the ability to mass-produce tokens increases with minimal effort. In that sense, it is also mentioned as an advantage to avoid the duplication of codes that usually occurs with the ERC-20 and ERC-721 token standards.

To exemplify this, Radomski recounts some game developers’ experience with the ERC-1155 standard. He says that Sandbox developer Ronan Sandford was able to coin more than 1,500 tokens in a block while Horizon Games developer Phillippe Castonguay used a technique that stores 16 low-resolution tokens in a single identification command (“Balance Packing”) to achieve gas savings of 80 to 90%, compared to regular transfers.

Additionally, he affirms that the standard is also useful for atomic swaps:

“Projects using ERC-1155 can also build atomic swaps with the same basic design, which allows users to exchange one type of token for another with absolute security against fraud and no intermediate parties involved,” said Witek Radomski.

This is how, with the new standard, several groups of tokens can be exchanged simultaneously in a single operation that is executed in two steps, while with the ERC-20 and ERC-721 standards, 4 steps are required.

In addition, the token ensures that the event logs issued by the smart contract provide enough data to create an accurate record of all current token balances. This is because a database can provide indexed and categorized searches for each ERC-1155. Radomski explains that this feature will become increasingly valuable as the Ethereum ecosystem continues growing.

According to the data published by Enjin in March 2019, until now more than 45 games, applications and websites have been created using ERC-1155, which is why full support for these tokens was added to the Ethereum browser, EnjinX, at the end of that month.

By Willmen Blanco

The Never-Ending Quest for Compliance: Facebook Applies for New York BitLicense

Andres Chavez
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The Never-Ending Quest for Compliance: Facebook Applies for New York BitLicense

Facebook has a dream: to become an accessible, decentralized, frictionless, and globally available crypto payments network. However, to achieve it, the social media giant will have to fight against the current challenges; especially considering the different regulation challenges that will arise in specific locations.

The company will face what Reuters, in its latest report, defines as regulatory obstacles. They will be plentiful, as Facebook and the Libra Network will have to convince financial watchdogs in several countries. This week, though, the social networking app and services provider took a considerable step forward.

The Path towards Regulation

Calibra, which was announced last month as the Facebook subsidiary that will have the responsibility of developing a wallet and other financial services for the cryptocurrency ecosystem, registered this week with the United States Financial Crimes and Enforcement Network (FinCEN) as a money services business. According to reports, Calibra applied for money-transfer licenses in America and started the process of earning a BitLicense from the Department of Financial Services in New York.

The path towards regulation will need to include full cooperation and orchestration with financial agencies, central banks, and law enforcements, involving “literally hundreds, perhaps thousands, of licenses from hundreds of different regulators,” according to the Founder and Chief Investment Officer at Anthemis, Sean Park.

Of course, since the United States of America will not be the only country in which Facebook plans to engage investors and users with the use of the Libra coin, the firm has also began the process for regulation in the United Kingdom. They have spoken with officials at Britain’s Financial Conduct Authority and the Bank of England. Facebook has also reached to the FINMA, which happens to be the financial watchdog in Switzerland.

The Swiss authorities have stated that they will treat Libra as any other cryptocurrency or digital asset. The same has been said in Russia, specifically by the Ministry of Finance. These are welcomed news, but it means that there is still work to be done for Libra to reach its full potential. Park says that Facebook “will not get a free pass anywhere.”

Heavily Scrutinized

Naturally, the whole world reacted to Libra’s announcement last month. The mentioned reactions, however, were mixed. Officials in European countries, the United States, and India stated that they would examine the project with a closer look just hours after the project was unveiled. The Singapore Central Bank expressed that more data is needed to provide its stance.

Since the potential influence of Libra, being a Facebook project, is immense, it has been under scrutiny ever since rumours began to swirl. For instance, its privacy policies have been criticized, especially coming from a network that is known to perform privacy-invasive practices.

Barry Lynn, the Executive Director of Open Markets Institute, said that “this is a corporation that’s got fires all over the world with regulators. It’s only going to get worse.”

“The scrutiny that we’ve seen is something that we expected and welcome. We announced this early by design in order to have this discourse in the open and gather feedback,” Reuters quoted an anonymous Facebook spokesperson as saying.

However, if everything goes according to Facebook’s plan, the repercussions would be enormous. “I would say the risks are commensurate with the returns – potentially huge,” according to Pascal Bouvier, managing partner at MiddleGame Ventures.

Since Libra will not be officially launched until the first half of 2020, we still have time to see how everything, including regulation advances, unfolds.

By Andres Chavez

Minnesota House Bill Wants to Ban Crypto Donations to Political Campaigns

Andres Chavez
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Minnesota House Bill Wants to Ban Crypto Donations to Political Campaigns

In recent months, it has been announced that several political candidates, most notably in the United States, but also in other planet’s locations, are accepting donations in the form of cryptocurrencies, in an attempt to help fund campaigns for specific positions. That in addition to other, more traditional contributions.

However, not everybody seems to be on board with the strategy. This week, a group of Democratic Minnesota House Representatives expressed their opinion about cryptocurrencies and made it clear that they do not like when these assets become involved in political donations.

The Representatives behind the Initiative

Rep. Rick Hansen (D), Rep. Jamie Becker-finn (D), Rep. Raymond Dehn (D), and Rep. Peter Fischer (D) were the ones that introduced the Minnesota House Bill 2884, this is, the legal document in question.

The bill is looking to outlaw “from any source a contribution or donation of any digital unit of exchange, including but not limited to bitcoin, that is not backed by a government-issued legal tender.”

The thing to look for in this case would be where precisely stablecoins fall in the classification of assets, since they are essentially pegged to currencies issued by governments in the countries that have decided to embark on such projects.

The Text of the Bill

“An individual, political committee, political fund, principal campaign committee, or party unit may not solicit or accept from any source a contribution or donation of any digital unit of exchange, including but not limited to bitcoin, that is not backed by a government-issued legal tender. An individual, political committee, political fund, principal campaign committee, or party unit that knowingly solicits or accepts any digital unit of exchange is subject to a civil penalty imposed by the board of up to $3,000. A person who knowingly accepts any digital unit of exchange in violation of this section is guilty of a felony.”

Whilst it remains interesting to see the candidates’ legal background affected by a felony because of accepting donations in Bitcoin or any other cryptocurrency, it remains to be seen if this attempt will be successful, since it is evident that crypto is slowly entering the political arena.

In fact, the bill can be a serious deterrent for a specific profile of a voter. Political figures have been accepting bitcoin as a means of donation since 2014, when the asset was not such a prominent one like now. That person was Andrew Hemingway.

An Ever-Growing Practice

Each and every year, more and more candidates and political figures are accepting crypto as a payment method when it comes to donations and contributions. In fact, presidential candidate for the 2020 elections in the United States Andrew Yang is taking them in an attempt to help fund his campaign, and others will follow his steps.

The state of the industry is in an overall upswing, since Bitcoin and altcoins have been experiencing, for several weeks now, a bull market that has not only completed the recovery to pre mid-November “slump,” but even surpassed those numbers comfortably. As of the moment of writing this piece, the price of BTC was quickly approaching $12,000, and trending up in a hurry.

Whilst the mentioned representatives introduced the Bill in mid-May, the House is in recess right now.

By Andres Chavez

Mining Equipment Industry is Experiencing a Revival Thanks to Recent Price Surge

Andres Chavez
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Mining Equipment Industry is Experiencing a Revival Thanks to Recent Price Surge

When Bitcoin and altcoins were on a bear market, specifically from the middle of November 2018 until just a couple of months ago, the industry endured the consequences on several fronts. Among the most widely affected entities were the mining equipment sellers, for a natural supply and demand setting.

People lost interest in mining cryptocurrencies, most specifically Bitcoin, because for a few months if was not as profitable as, say, the end of 2017 and the beginning of 2018, a moment in time in which BTC reached an all-time high of nearly $20,000 regarding its price. It was still worth the investment and effort, just not so much as before. However, sales of mining equipment and hardware fell dramatically, forcing several companies to close or to perform massive cuts when it comes to personnel and expenses.

The Bulls Have Taken Over

Now the tables have turned once again, this time for the bulls. Bitcoin has surpassed $10,000 for the first time since January 2018, even approaching $12,000 in the last few hours. The industry seems revived, and experiencing an evident revival. And, not coincidentally, the sales of mining equipment have not only returned to customary levels, but it is currently outstripping supply.

Some of the most notable bitcoin mining hardware brands were forced earlier in the year to significantly lower the prices on some of their products because the supply was significantly more than the demand. Thanks to Bitcoin’s surge, however, that is no longer the case.

Now, companies have ever-growing pressure to manufacture enough machines to meet buyer’s demands. Quoted by a prominent specialized crypto site, Steven Mosher, currently the Head of global sales and marketing at Canaan Creative (the manufacturer of the Avalon miner) stated that “the surge in bitcoin resulted in increased demand and supplies were already short.”

A Return to 2017 Levels

Mosher essentially confirmed that the industry is returning to the levels in which BTC reached its all-time high in value. The executive did not, however, reveal the precise company’s order volume.

“The current state of the industry is that inventories are down and demand is high. It looks like a return to the 2017 Q3, Q4 conditions, where demand was three times the supply.” It is safe to say that mining equipment manufacturers have plenty of work to do, as the industry stabilizes and cryptocurrencies continue to earn value.

A Growing Trend

Experts in the crypto community have stated that Bitcoin’s price will keep going up in the next few weeks, at least, and forecasts for the long-term are awfully positive, as well. Some have even said that the world’s premier digital asset will approach $60,000 in the not so distant future.

According to recent data, the average payback period for the majority of the mining equipment in Q2 has decreased from 60 to 150 days, a fall from a figure that was in the range of 120 to 280 days.

Canaan Creative is surely taking advantage of the current circumstances and has already launched its newest “toy.” The world met the AvalonMiner 1041 in May. It can, allegedly, compute a maximum output of 37 terahashes per second (TH/s,) at 2,361 watts per hour of energy consumption.

By Andres Chavez

US House of Representatives Will Have Audience about Libra in July

Maria Rodríguez
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US House of Representatives Will Have Audience about Libra in July

The announcement about the launch of Libra led to discussions about the lack of uniform regulation in the cryptocurrency market

The United States House Committee on Financial Services will hold an audience on July 17th about Facebook’s cryptocurrency, Libra. The meeting will take place since US lawmakers request the technology giant Facebook to give more details about its cryptocurrency.

Representatives of governments such as Russia, France, Spain, and the United Kingdom have been “concerned” because of the large amount of information that Facebook has about its users, and because the company can handle user passwords as well as malicious people can commit hacking.

A few days ago, these reasons led both US lawmakers and Congresswoman Maxine Waters to ask Facebook to stop the project until it was presented in Congress to clarify these points and give regulators the opportunity to examine the proposal.

“Given the company’s troubled past, I am requesting that Facebook agree to moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action”, Waters said a few days ago. Now, the official was in charge of giving the announcement about the audience that will take place in a few weeks.

Lack of Regulation

The announcement about the launch of Libra led to discussions about the lack of uniform regulation in the cryptocurrency market. According to Waters, regulators should consider Facebook’s plans for Libra as “a wake-up call to get serious about the privacy and national security concerns, cyber-security risks, and trading risks that are posed by cryptocurrencies”.

France is one of the countries that direct the efforts to create an international working group that has the mission to work in the regulation of cryptocurrencies through central banks. Until now, the working group will be a G7 committee that will operate under the direction of Benoit Coeure, Member of the Executive Board of the European Central Bank.

Precisely, the Vice-President of the European Central Bank (ECB), Luis Guindos, warned a few days ago that the cryptocurrency of Facebook must comply with all regulatory conditions; both confidentiality and money laundering. However, he also stressed that if the instrument will be created only to facilitate payments to consumers, it is “positive” and then the ECB “will not have much to say”.

Authorities Consider Libra a “Threat”

On the other hand, José María Roldán, President of the Spanish Association of Banking (AEB), believes that Libra will not be a threat to Spanish banks, but rather to regulatory authorities, as it will be linked to online payments and no to more traditional transactions.

The Senate Banking Committee seeks to know more details about Libra. It will discuss this point during a session next July 16th called “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations”.

Reportedly, France is against Libra operating as a sovereign currency and is concerned about how to enforce regulations, as in the case of anti-money laundering laws.

By María Victoria Rodríguez

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