According to the European Central Bank, CBDCs Are Better than Bitcoin for Cross-Border Payments

Alexander Salazar
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According to the European Central Bank, CBDCs Are Better than Bitcoin for Cross-Border Payments

The ECB does not think Bitcoin has emerged as a good option for cross-border payments and states that another solution is better. The financial institution says it has evaded equalitarian regulatory treatment regarding KYC and AML/CFT compliance.

The European Central Bank (ECB) recently published a paper examining the ideal model for cross-border payments. According to the study, central bank digital currencies (CBDCs) precede options like Bitcoin (BTC) and stablecoins.

The ECB Goes after the Holy Grail of Cross-Border Payments

The European Central Bank does not think Bitcoin and other cryptocurrencies emerged as great options for cross-border payments. The financial institution states that an excellent solution has some particular attributes that they believe BTC does not.

The ECB describes this possible means of exchange as the holy grail of cross-border payments. They say it is a solution allowing those transactions to be immediate, affordable, universal, and secure.

Nineteen countries of the European Union (EU) use the euro as their official currency. The ECB is not the only one with authorization to influence cryptocurrency laws, but it remains relevant in the EU.

According to the Study, BTC Has Potential for Cross-Border Payments

The working paper recognizes the potential of the pioneering cryptocurrency, highlighting its appropriate qualities. First, it indicates that its global reach is advantageous and notes that BTC needs no further interconnections. The ECB highlights those cross-border payments with the crypto asset work as efficiently as domestic payments.

Peer-to-peer (P2P) exchanges are also prominent among the notable merits of Bitcoin. However, the study describes the cryptocurrency as an expensive and wasteful technology, emphasizing the level of Proof of Work (PoW).

The ECB Thinks the Non-Regulation of Bitcoin is Disadvantageous

The document also raises that Bitcoin lacks a defined regulation. The ECB considers that cryptocurrencies are appealing mainly due to this problem.

The financial institution says that Bitcoin has circumvented equalitarian regulatory treatment regarding KYC and AML/CFT compliance. The study states that regulators will solve this situation while legal transactions with BTC experience an increase in costs.

The ECB states that the Bitcoin value proposition should not rely on a regulatory mismatch between payment solutions.

Finally, the ECB considers that central bank digital currencies are better for cross-border transactions. The financial institution suggests those crypto assets might be more compatible with foreign exchange conversions. They think combining a potential CBDC with a competitive level of currency conversion might lead to the Holy Grail.

However, There Could Be Challenges in a CBDC Solution

Since a CBDC-based solution combines feasibility with existing designs and systems, the ECB can maintain fiscal sovereignty. That way, it would ensure that local (fiat) currencies do not become obsolete.

However, the financial institution recognizes that this might also imply some difficulties. They include account routing and providing legal certainty at the same level as domestic payments. Adequate progress in AML/CFT compliance is also essential for a CBDC solution to succeed.

Regardless of these problems, the ECB believes a CDBC might be nearer the Holy Grail than the leading cryptocurrency. It is a matter of time before Bitcoin proves it is the best option for those interested in the crypto market.

By Alexander Salazar

How easy is it to Mine Cryptocurrencies in 2022?

Audy Castañeda
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How easy is it to Mine Cryptocurrencies in 2022?

If you plan to mine cryptocurrencies, here is information about how easy it is in 2022, and the best starting point for beginners.

Mining cryptocurrencies consists of making hardware (miners) available to a Blockchain to validate transactions and secure the network.

Cryptocurrency mining is profitable. In fact, miners receive transaction fees and a newly created amount of cryptocurrency upon validation of each block. Here’s how to get started.

Cryptocurrencies allow transactions to be carried out without going through trusted third parties. If cryptocurrencies are decentralized, what are transaction fees for? Who perceives them?

Cryptocurrency mining makes it possible to verify the validity of transactions while ensuring their journey from point A to point B. This is crucial for the integrity of the network (Blockchain). It is for this reason that the computer (the miner) that validates a block is rewarded with the transaction fees paid by users.

Mining a cryptocurrency is also, in most cases, participating in money creation. For Bitcoin, for example, every 10 minutes, after a block validation, 6.25 BTC is created and paid to the validators who participated in the block confirmation.

How Does Mining Work?

Cryptocurrencies are mined using extremely powerful specialized computers, to process each of the transactions that take place on their network. How do they get there? In short, they must solve complex mathematical problems, inaccessible to a human brain.

Solving these problems allows for the creation of new transaction blocks within the Blockchain. For a block to be secure, it must find a key that “seals” the block and creates a new one. The network user who manages to find this key will be rewarded. This process is called “proof of work.”

How easy is it to mine cryptocurrencies in 2022?

Since mining is all about implementing hashing power to solve computer calculations, the miner with the most capable hardware has a better chance of finding a block. That is why mining has become a frantic race behind GPU processors.

The battle has been such that a GPU is no longer useful for mining Bitcoin, and it is due to the requirements of this robust network. BTC can only be mined with more powerful and therefore more energy-consuming chips – ASICs.

For now, ASIC mining remains at the forefront, but newer and more powerful models are regularly released, making older versions obsolete.

Tips for Beginners

Mining with a mining team is the most ideal way to enter this world; however, some technical knowledge is required to get the equipment up and running.

For a beginner, the easiest way to mine crypto in 2022 is to use cloud mining as it allows users to mine crypto without owning the necessary hardware. Also, it allows them to participate in mining no matter how much or how little they can contribute.

Cloud mining is suitable for investors who do not want to obtain the necessary computer equipment for mining. Be it Bitcoin, Ethereum, Litecoin, and even Dogecoin, they are possible to mine with this method.

When choosing cloud mining, one should also beware of scam sites that offer exorbitant profits. Several reputable companies offer to mine cryptocurrencies in the cloud. In any case, it is worth doing your own research before making decisions.

By Audy Castaneda

The Idea behind Changing to the PoS Consensus Mechanism May Be to Kill Bitcoin

Alexander Salazar
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The Idea behind Changing to the PoS Consensus Mechanism May Be to Kill Bitcoin

Some believe that PoS reduces power consumption, but a lacking historical precedent makes it unsuitable to Bitcoin and its value proposition. Ripple reportedly thinks its bet on crypto may benefit from the demise of Bitcoin, as it has always helped existing financial institutions.

Rick Delaney, Senior Crypto Analyst at OKX, considers that Bitcoin (BTC) should maintain the consensus mechanism it has tested for 14 years.

Over the last two months, Ripple, Greenpeace and other environmental organizations have shown they do not know why Bitcoin is superior. The campaign Change the code, not the climate, announced in March, attempts to pressure influential bitcoiners to support the still-experimental proof-of-stake (PoS) consensus mechanism.

The campaign relies heavily on the ongoing transition to PoS of the Ethereum network. Besides, the anti-PoW crowd will increase their pressure on Bitcoin when Ethereum (ETH) miners switch definitely.

The Difference between Proof of Stake and Bitcoin Proof of Work

Although the reason for changing the code base is that Ethereum can do it, this completely misses the point regarding Bitcoin. Advocates of the network of the pioneering cryptocurrency highlight its predictability and adherence to sound financial principles.

Some claim that PoW offers unsurpassed security, but others believe that PoS favors the reduction in power consumption. Despite the ongoing debate, the lack of a historical precedent of PoS is unsuitable to Bitcoin and its value proposition as the hardest currency.

The Predictability of Bitcoin Allows Building Trust in It

BTC has existed for 14 years with over 99% uptime, but people do not yet trust it. Despite the many changes to the protocol, its limited supply, protected by the most powerful computing network, remains the same.

Those changes without historical precedent often raise doubts among investors about what might happen. If a Fortune 500 company fired a successful CEO to hire a stranger, that would impact its share price. In the case of Bitcoin, its entire value proposition lies in its predictability.

The Belief that Ethereum Is Ultrasound Money Is a Lie

The staunchest Ethereum followers launched a popular meme saying that increasing the number would also increase the price. In other words, they even believe ETH is an ultrasound form of money compared to BTC.

People consider that BTC is valid due in part to its limited supply of 21 million coins. However, that would mean nothing if its users do not trust that it would continue to be so. If Bitcoin left its proven consensus mechanism for one lacking 14 years of battle testing, they would not believe in it.

Misunderstanding or Willful Misconduct regarding Switching to the PoS Consensus Mechanism

The campaign Change the code, not the climate, announced by Ripple and Greenpeace, goes against what Bitcoin users consider the core value proposition of the network.

Some environmental with tunnel vision on energy use say the apps using electricity that they dislike should disappear. Since Greenpeace and the Environmental Working Group do not see any value in Bitcoin, killing what makes it superior poses no problem.

Ripple, the company behind the XRP cryptocurrency, reportedly thinks its bet on crypto may gain much from the demise of Bitcoin. The money transfer network has always helped existing financial institutions protect their status quo, which justifies suspicions.

By Alexander Salazar

Nearly $200 Million Stolen from Nomad Bridge in New DeFi Exploit

Audy Castañeda
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Nearly $200 Million Stolen from Nomad Bridge in New DeFi Exploit

A cryptocurrency bridge saw nearly $200 million drained on August 1. The attackers are also posing as Nomad employees. Bridge attacks have been common this year, and the Nomad attack adds to a growing list.

Cryptocurrency bridge Nomad suffered a nearly $200 million exploit on August 1. The team is investigating the attack and warned users not to send funds to people posing as Nomad employees.

Nomad has been the subject of an exploit that caused the attackers to make off with nearly $200 million worth of WETH and WBTC. The attack took place on August 1 and the team said they were aware of it and were conducting an investigation, according to a post on Twitter:

“We’re aware of impersonators posing as Nomad and providing fraudulent addresses to collect funds. We aren’t yet providing instructions to return bridge funds. Disregard comms from all channels other than Nomad’s official channel: @nomadxyz_”

The attack took place within a few hours and almost all of the bridge funds had been depleted. Samczsun, a researcher at Paradigm, said that a recent update to a smart contract made it possible for attackers to spoof transactions. He added on Twitter that, “It all started when @officer_cia  shared @spreekaway’s tweet in the ETHSecurity Telegram channel. Although I had no idea what was going on at the time, just the sheer volume of assets leaving the bridge was clearly a bad sign.”

The attackers also try to pose as Nomad employees to steal more funds. The team said they were aware of these impersonators sending fraudulent addresses to raise funds. They clarified that they had not yet given instructions for the return of the bridge funds.

This exploit deals a serious blow to Nomad, which has been experiencing a significant few weeks. The company raised $22 million in a seed funding round just days ago, with participants including Coinbase Ventures, Polygon, Wintermute, Polychain Capital, Gnosis, and OpenSea.

Bridges Exploit: A Popular Attack Vector

Bridge attacks have become an increasingly popular method for malicious actors. Several have taken place this year alone, including the massive $600 million attack on Axie Infinity’s Ronin Bridge, which has just been relaunched. North Korean hackers have been linked to the attack on Ronin.

Wormhole was another major incident, with attackers siphoning off approximately $300 million from Solana’s bridge. The most recent of these attacks was on Harmony’s Horizon Bridge, in which $100 million was stolen.

Security Remains a Priority for DeFi

Security has become a top priority for DeFi projects, which have been under attack for years. In 2022 alone, hackers have stolen more than $1.2 billion from the DeFi space.

The teams are now working on how to prevent bridge attacks, and this will be necessary if the teams are to maintain their reputation and hold on to users. Nomad has been working on new solutions, although that doesn’t mean they aren’t completely invulnerable.

By Audy Castaneda

The SEC Charges Eleven People with Running a Cryptocurrency Ponzi Scheme

Alexander Salazar
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The SEC Charges Eleven People with Running a Cryptocurrency Ponzi Scheme

The founders of Forsage offered the ability to deposit money into smart contracts by paying old investors with the funds of new members. Three persons, including a former Coinbase product manager, used privileged information on future tokens lists to help his brother make a profit.

The Securities and Exchange Commission (SEC) recently charged the founders of a cryptocurrency Ponzi scheme targeting retail investors. The fraudulent business, called Forsage, has requested over USD 300 million from investors worldwide.

Vladimir Okhotnikov, Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov, presumably living in Russia, the Republic of Georgia, and Indonesia, were four of the founders charged. The SEC also accused three US-based promoters of selling the Ponzi scheme among retail investors.

In January 2020, the SEC filed a lawsuit against the founders of Forsage, who offered the ability to deposit money into smart contracts. They operated the business as a Ponzi scheme where old investors made a profit by recruiting new members.

The Scammers Ignore the Warnings Issued by Regulators

The Philippines and Montana securities regulators issued a cease and desist order against Forsage in 2020. However, the promoters continued selling the investment program, denying any financial wrongdoing.

The SEC filed a lawsuit in the US District Court in the Northern District of Illinois. They charged persons from Missouri, Idaho, Kentucky, Virginia, Illinois, Florida, and Wisconsin with violating securities registration and anti-fraud provisions of federal securities law. Two defendants settled the issue out of court, refunding the investments and complying with civil penalties without admitting or denying their guilt.

The SEC Talks about the Indictment

The SEC accused three persons, including a former Coinbase product manager, of insider trading. They took advantage of privileged information on future tokens lists to make a profit.

The exchange had warned its employees not to reveal this sensitive information. Ishan Wahi, the former product manager of Coinbase, ignored the warnings from June 2021 to April 2022.

Wahi provided insider information to his brother Nikhil Wahi and his friend Sameer Ramani, who made USD 1.1 million illegally. The SEC said that the 25 tokens traded included stocks, placing the perpetrators in violation of securities laws.

At the beginning of August, the SEC launched an investigation into Coinbase for allegedly trading unregistered securities. The agency increased its scrutiny of the exchange since it expanded the number of tokens in which it offers transactions.

The acting head of the Crypto and Cyber ​​Unit of the SEC said the founders of Forsage could not avoid securities laws. Although the Ponzi scheme of the alleged criminals only focuses on smart contracts and blockchains, they have to face justice.

The government agency thanked the regulators from the Philippines and Montana for assisting them in the investigation.

Meanwhile, Bitcoin is trading at around USD 22,886 and has accumulated a 7.3% gain over the last week. Its daily trading volume is above USD 45.35 billion, while its market capitalization is about USD 437.35 billion, according to CoinGecko.

By Alexander Salazar

The Bitcoin Price Reaches Its Second Bullish Candlestick in Two Weeks

Alexander Salazar
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The Bitcoin Price Reaches Its Second Bullish Candlestick in Two Weeks

The price of BTC has rebounded from the USD 19,200 long-term support area. It has broken out of the descending resistance line in place since March.

The price of Bitcoin (BTC) has not stopped dropping following its all-time high price of nearly USD 69,000 in November. Since then, it reached a low of USD 17,622 in June, after which it has risen to a high of USD 24,668.

According to the weekly RSI, which offers a bullish outlook, it has left its oversold region and is at 36. However, it maintains the same bearish trend held since the all-time high. The price needs to break the current level to confirm the bullish reversal.

The rebound in the price of Bitcoin has allowed it to validate its USD 19,200 support in the sideways zone. The area had previously acted as the highest all-time resistance.

A Breakout in the Price of Bitcoin Is Underway

The daily chart shows a bullish outlook as the price of BTC has left a descending resistance line in place since late March.

In addition, it broke out of the USD 21,750 sideways area and validated it as support.

Then the daily RSI moved above 50 and bounced off its ascending support trendline.

If the increase continues, USD 29.370 would be the closest resistance area, created by the 0.382 Fibonacci retracement resistance level.

The 6-hour chart reveals that this assessment shows the breakout of a short-term descending resistance line.

BTC is trying to find support above the 0.382 Fibonacci retracement support at USD 23.175. The price might drop toward the 0.5 and 0.618 Fibonacci retracement support levels at USD 22,700 and USD 22,240, respectively.

The Short-Term Wave Count of BTC

According to the most likely short-term wave count, BTC has started wave three of a five-wave upward move. Since the former is usually the sharpest and highest of the five, there might be a considerable rise.

There is a sub-wave count in black, suggesting that the price has completed sub-wave two. After that, a significant rise in the value of the cryptocurrency would follow.

That resembles a 1-2/1-2 wave formation, so a drop below the ascending support line and the 0.618 Fibonacci retracement support level would invalidate this count.

Bitcoin is trading at around USD 23,311 and has accumulated a 3.1% gain over the last week. Its daily trading volume is above USD 39.70 billion, while its market capitalization is about USD 445.46 billion, according to CoinGecko.

By Alexander Salazar

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