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European Central Bank Prefers Stablecoins Whilst Users Support Cryptocurrencies

Maria Rodríguez

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May 20, 2019

European Central Bank Prefers Stablecoins Whilst Users Support Cryptocurrencies

Contrary are the positions regarding the reliability of cryptocurrencies. However, stablecoins enjoy better reputation for banks and more users want to handle cryptocurrencies like Bitcoin

The Governor of the Bank of France, Francois Villeroy, said that the European Central Bank (ECB) is closely watching the behavior of stablecoins. In recent months, the financial institution said that cryptocurrencies could allow scams and that, given their volatility, many people must distrust. But stablecoins make the difference.

Approximately, a total of 7.1 million users have Bitcoin (BTC) and 5% of Americans use this cryptocurrency, according to a survey made by the companies SurveyMonkey and Global Blockchain Council, published at the beginning of the year.

A report by the firm Chainalysis, leader in blockchain analysis, revealed that active Bitcoin users represent around a third of the number of BTC subscribers. In addition, 2.3 million people use BTC to make payments, while 4.8 million users retain their Bitcoin assets in order to obtain future profits.

The figures seem to continue increasing since the time Bitcoin was available in 2009. However, the ECB estimates that the number of users who have cryptocurrencies is still not enough to displace fiat or traditional money, which works not only as a means of payment, but also as a stable unit of account and a store of value.

Which Is the Disadvantage of Bitcoin?

At the discretion of the ECB, the volatility observed in the value of some cryptoactives “prevents their use as a deposit of value and discourages their use as a means of payment”. Similarly, the lack of a supervisory body such as a central bank or a monetary authority that protects both its users and the value of cryptoactives hinders its use as a form of money.

Earlier this month, ECB President Mario Draghi said that cryptocurrencies “are not significant enough in the entity to affect real economies in a macro way”. The comment is based on the report published this month, whose name is “Crypto-assets: implications for financial stability, monetary policy, and payments and market infrastructures”, where the potential impact of digital currencies on the evolution of money was analyzed.

However, the ECB closely watches the behavior of stable currencies, whose value is linked to physical assets, fiduciary currencies or is stabilized by an algorithm. These anchoring features guarantee continuous monitoring. The stablecoins could even be less volatile if central bank reserves guarantee them, as the ECB proposes.

Does the ECB Consider Cryptocurrencies as Money?

About the classification of these digital assets, which are already used to pay goods, taxes or products, Mario Draghi comments: “Cryptocurrencies are not really currencies, they are assets. One euro is one euro today, tomorrow, and the same in a month. It is always one euro and the ECB is behind the euro. Who is behind the cryptocurrencies? They are very risky assets”, he says, without changing his position regarding this type of asset.

But Villeroy, the leader of the Bank of France, differentiates the stablecoins from the cryptocurrency tokens. The official believes that stablecoins “are quite different from speculative assets such as bitcoins. The stablecoins are more promising”.

Although more and more cryptocurrencies are being created, their expansion is still limited until now. Few merchants, compared with the ones who use fiat money, are ready to allow purchases of goods and services with those digital currencies.

Users Give Support

The ECB report concluded saying that cryptocurrencies have no implications on monetary policy or in the “real economy”, however, millions of users give their support and make exchanges with cryptographic something real.

The study of Chainalysis found that the “holders” or long-term investors, are 6.4 million people, who trust in the cryptocurrencies that they possess. The number of users of the Coinbase wallet, one of the most used, is 13 million, a figure that does not include users from China, South Korea and Japan, who do not have the service of that wallet, as well as happens with other 29 countries.

It is estimated that 25 million people have cryptocurrencies, taking into account that, according to Statista, there are 32 million wallets, but that some users own more than one wallet, and that Coinbase serves 13 million people. Thus, the growth of the crypto community, with highs or lows, continues, as well as the regulatory projects around the world.

By María Rodríguez

Public Testnet with up to 15,000 TPS Launched

Willmen Blanco

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May 19, 2019

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Public Testnet with up to 15,000 TPS Launched

Blockchain increasingly gains traction in the everyday world, a greater number of use and application cases are generated daily in an increasingly globalized and competitive economy that generates demand for tangible, reliable and safe goods and services.

That is why Blockchain technology has gained space for some time since it managed to link real use cases with an increasingly technologically decentralized world. However, these changes also pose important challenges for large-scale Blockchain adoption, one of which is undoubtedly scalability.

It is known that most Blockchains have speed problems to process transactions (scalability). Consequently, if a platform wants to enter the everyday space it must combine three key factors: scalability, security and consensus.

In order to have a closer assessment, VISA achieves a maximum of 20 thousand TPS per transaction, hence its success as a payment bridge worldwide.

For that reason, in order to have smart contracts, decentralized applications (DApps) and daily payments made with Blockchain technology and through cryptocurrencies, there must be a platform that guarantees high transaction speeds together with network security and immutability to provide a reliable and very useful mechanism.

FLETA

Recently, FLETA, a Blockchain platform designed to create a sustainable DApp ecosystem, has launched a public testnet in its open-source beta phase that promises to solve current typical Blockchain problems.

They informed that their repository in Github is available for all those interested in testing the benefits of their platform, which promises to cause a disruption in the decentralized world of applications thanks to its scalable architecture, efficient operations and demonstrated TPS capabilities that have a proven maximum of 15,000 TPS so far, closer to the current capacity of VISA.

FLETA is a public Blockchain platform with supporting business technology and services for DApps. The company’s medium-term objective is to accelerate the large-scale adoption of Blockchain technology through a friendly environment that generates new use cases.

FLETA Gateway allows interoperability with other existing platforms such as Ethereum, EOS and Tron, among others.

Through its innovative technology it promises to raise strong competition with current large platforms for developing decentralized applications. Therefore, it has proposed a new consensus algorithm, Proof of Formulation (PoF), which has achieved a maximum of 15 thousand transactions per second in its testing phases.

In addition, the company plans to revolutionize the cost of developing DApps, a major nerve center that currently discourages many developers from generating real use cases, due to the high fees to be paid on traditional platforms such as Ethereum, EOS and Tron, among others.

Paul Seungho Park, co-founder and CEO of FLETA, said that that “the launch [the testnet] marks a monumental milestone in our roadmap. The ultimate goal of FLETA is to create a highly efficient Blockchain system and achieve a successful merger of existing services and technology with unparalleled speed.”

FLETA opened the Open Developer Portal in last March and its mainnet is expected to be launched in July this year. Developers interested in generating DApps and testing the benefits of its platform can go to its open source on Github.

Finally, large-scale Blockchain adoption promises to be a reality in the short term, as stated by large crypto space influencers. The release of FLETA with its high TPS promises to create a milestone within the industry that allows the massification of applications that generate utility in many everyday areas, where technology will be used almost unnoticeably.

By Willmen Blanco

Facebook’s Smart Move: US $19 Billion in Cryptographic Ambitions

Willmen Blanco

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May 19, 2019

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Facebook’s Smart Move: US $19 Billion in Cryptographic Ambitions

Those at Wall Street have an ability to ignore the obvious. In the case of Facebook, that implied really examining below daily headlines

Wall Street has been worried about the problems of social media giants with respect to regulators and politicians for the restriction of user privacy violations on Facebook. The firm anticipates losing up to US $3 billion due to possible fines from Federal Trade Commission (FTC).

However, a merger was made to significantly increase its movement toward a new hot field that could easily generate over six times that amount in less than three years. That is a reason why the news published on February 4^th is so important to understand Facebook’s true cryptocurrency ambitions.

The firm discretely started a Blockchain project about a year ago. Nevertheless, the recent purchase of Chainspace’s boot chain in February led Facebook to seek the type of scale meant by Big Money.

Facebook’s Cryptocurrency Ambitions

A purchase like Chainspace would actually not attract many headlines as this was not a blockbuster. Facebook has not disclosed the purchase price, but it must have been a pittance as the company only had a few workers.

It must be clear that Facebook bought Chainspace because it wanted to hire the startup’s group of Blockchain geniuses. The main goal of the young company was to make Blockchain technology more scalable.

In its native state Blockchain technology simply cannot scale to handle the billions of transactions seen in payment firms like Visa, MasterCard, PayPal, among others.

That is the reason why Chainspace is Facebook’s secret weapon. With a figure of about 2 billion monthly active users, Facebook has created one of the biggest technological platforms in history.

In a few words, the firm’s new cryptocurrency, “Facecoin”, could turn into a gold mine.

Barclays’ Internet analyst, Ross Sandler, believes that a Facebook currency could yield up to US $19 billion in additional revenue for the social media platform by 2021. The aim is that, like Google, Facebook could generate revenue by charging the company’s users a small fee for using the service.

“Facecoin” for Payments

Facebook has been working on its crypto project, “Project Libra”, for over a year, and has recruited dozens of financial firms and online merchants to help launch it, according to The Wall Street Journal.

It has been reported that Facecoin could become a stable digital currency that would allow people to send payments from one place to another or buy articles on Facebook and all over the Internet.

Facebook has been trying to raise billions of dollars from firms like Visa and MasterCard to support its currency and thus avoid the ups and downs that the regular cryptographic market could have. A key feature of stable currencies is that each of them is often supported in fiat currencies such as the US dollar, which provides more stability.

Now, regardless how exciting this development for the world of cryptographic investment is, buying available Facecoin is not necessarily the way to take advantage of this opportunity. After all, as Mark Zuckerberg states, the main goal of this currency is to maintain the same price over time.

By Willmen Blanco

Public Testnet with up to 15,000 TPS Launched

Willmen Blanco

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May 18, 2019

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