Day: August 4, 2018

Intercontinental Exchange (ICE), owner of arguably the most important stock exchange in the world, the New York Stock Exchange (NYSE), is introducing a new company, Bakkt. The idea is to weave bitcoin into 401(k)s, credit cards, and retail. The project is getting a lot of hype due in large measure to two very powerful backers: Microsoft and Starbucks. Is this the mainstreaming ecosystem enthusiasts have been urging?

Also read: Bitcoiners Hope to Have a Friend in Top US Regulator Jay Clayton

NYSE Wants Bitcoin in 401(k)s, Credit Cards, Retail Stores

ICE’s digital assets head, turned CEO of the new project Bakkt, Kelly Loeffler, explained in a company blog, “Formed by Intercontinental Exchange — an operator of global exchanges, clearing houses, data and listings services — Bakkt will work with companies that include BCG, Starbucks, Microsoft and others, to create an open ecosystem that supports growing needs in the ~$270 billion digital asset marketplace.”

ICE quietly owns and operates two dozen regulated markets and exchanges, from the United States and Canada to Europe. It also holds clearing houses in the Netherlands, Singapore, greater Europe, the US, and Canada as well. It has revenues well in excess of $5.5 billion. It’s also the parent company for the NYSE, an exchange with great prestige among traditional finance: the NYSE is 226 years old, and is easily the globe’s biggest exchange by market cap, some $21.3 trillion as of last summer.

Ms. Loeffler told Fortune how for over a year ICE built Bakkt in secrecy. The company name is a twist on asset backed securities, Bakkt, which by design is to engender trust. And trust is everything in the legacy marketplace, but it has a decidedly different meaning in the cryptocurrency world. Trust on Wall Street usually means regulations, and lots of them.

Indeed, by late Fall this year, Bakkt hopes to have a fully federally regulated space for all things bitcoin. Fortune notes how “ICE aims to transform Bitcoin into a trusted global currency with broad usage.” That’s an interesting admission for enthusiasts wondering what Wall Street is ultimately up to with this enormous announcement and marketing/public relations campaign. Trust in the Bitcoin ecosystem is established through mathematics, voluntary adoption, by completely bypassing third party fragility, frictions, and gatekeepers for which legacy finance is famous.   

Speculation and Coffee

“By combining regulated infrastructure with institutional and consumer applications,” Ms. Loeffler continues, “we’ll apply our track record of bringing transparency and trust to previously unregulated markets. In this way, we intend to play a key role in boosting institutional, merchant and consumer participation in digital assets.” Investment, also according to Fortune, includes Boston Consulting Group, Fortress Investment Group, Eagle Seven, and Susquehanna International Group in addition to better known brands Starbucks and Microsoft.

No doubt, ICE’s endorsement of Bitcoin lends a great deal of credence for other Wall Street investors to start exploring the cryptosphere. A futures market appears immediately in the works. Ms. Loeffler’s blog post details, “As an initial component of the Bakkt offering, Intercontinental Exchange’s U.S.-based futures exchange and clearing house plan to launch a 1-day physically delivered Bitcoin contract along with physical warehousing in November 2018, subject to CFTC review and approval. These regulated venues will establish new protocols for managing the specific security and settlement requirements of digital currencies. In addition, the clearing house plans to create a separate guarantee fund that will be funded by Bakkt.”

Fortune believes the bigger move Bakkt is proposing involves everyday retail ventures. “Using Bitcoin to streamline and disrupt the world of retail payments,” the magazine stressed, “by moving consumers from swiping credit cards to scanning their Bitcoin apps. The market opportunity is gigantic: Consumers worldwide are paying lofty credit card or online-shopping fees on $25 trillion a year in annual purchases.” Both Microsoft customers and Starbucks customers are very familiar with digital, smartphone related transactions. Transitioning over to bitcoin, with institutional blessing, should be a snap, ICE is assuming.

Starbucks’ Vice President of Partnerships and Payments, Maria Smith, was quoted in the press release, noting, “As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted, and regulated applications for consumers to convert their digital assets into U.S. dollars for use at Starbucks.” That also appears to fly directly in the face of Bitcoin’s ultimate point. To nearly everyone familiar with its power, bitcoin as a currency is an end in-and-of-itself, it is the value, and was meant to leave fiat — not to be simply a keen transfer mechanism to government paper. Nevertheless, Bakkt’s CEO, Ms. Loeffler, concludes, “We’re excited about the opportunity to help unlock the transformative potential of digital assets across global markets. Bakkt is preparing for launch in upcoming weeks, and we look forward to keeping you updated.”

Is bringing Wall Street into crypto a good thing? Let us know in the comments section below. 

Images via Pixabay, ICE, NYSE. 

Be sure to check out the podcast, Blockchain 2025; latest episode here. 

The post NYSE Owner: Bitcoin Should Be in Retirement Funds, Credit Cards, Retail Stores appeared first on Bitcoin News.

Europe

Welcome to our weekly roundup of all important blockchain and cryptocurrency news from around the world. Follow the latest developments in the cryptocurrency space continent by continent, country by country.

France

Spike in French blockchain interest shows Macron future: French President Emmanuel Macron’s interest in blockchain and cryptosphere seems to have paid off as a sharp spike is being witnessed in the growth of blockchain technology innovations in France.

Under the previous president Francois Hollande’s tenure, whose popularity hit as low as 4% at one time, blockchain development was stagnant but under the young, energetic leadership of President Macron, the French blockchain economy is reaching new heights.

Macron has set his sights on helping France become a fintech trendsetter. The government is also mulling on legislation for ICOs and has heavily reduced cryptocurrency tax rates as well.

United Kingdom

Coinbase gets into primary banking with new support for pound: Coinbase, one of the world’s largest cryptocurrency exchanges, has made a change in its system that allows users to deposit and withdraw UK pound sterlings easily.

The previous system had been causing problems for users for having their UK bank linked to the exchange account. The new system will in effect be a first step towards converting the Coinbase account into an “effective primary bank account”. The exchange also used a digital gift card program recently that allowed European users to access cash in other ways than conventional fiat.

Pro football team paid in cryptocurrencies in Gibraltar: A professional football team Gibraltar United in Gibraltar, UK is paying its team in cryptocurrency as the island opens up to the idea of cryptocurrencies.

Gibraltar United’s owner Pablo Dana who is also an investor in the digital currency Quantacoin has said that he hopes it will encourage foreign players to easily set up banking and crypto accounts in Gibraltar and help stamp out corruption that is rampant in the game.

Gibraltar is aiming to lure new and old fintech companies in cryptosphere to its shores. Together with Switzerland and Malta, Gibraltar makes three most progressive places in Europe to adopt cryptocurrencies and blockchain platforms.

Denmark

Copenhagen blockchain school up and running in university: The blockchain school in Copenhagen, Denmark is marking its third year in offering latest blockchain courses for enthusiasts around the world.

The school was initially developed as a partnership between the University of Copenhagen, IT University of Copenhagen and Copenhagen Business School. It describes blockchain as “a revolutionary technology that has the potential to disrupt multiple industries”.

The primary focus of the blockchain schools has been “the design and implementation of blockchain-based systems require interdisciplinary knowledge as well as mindful consideration of broader economic and societal issues”.

The weeklong course was devised by the computer science department of the University of Copenhagen. Dr Omri Ross, Assistant Professor at the University is one of the main driving forces behind the Blockchain programs being offered in the university. Various partnerships in the program reflect the wide-scale application of the program including a recent segment by the World Wildlife Foundation.

Dr Ross explained: “While we do work on Ethereum-based Dapp development we are also collaborating with QTUM’s protocol (they are the second biggest blockchain in China) as well as the protocols of Ontology, Hyperledger, and Firmo.”

Liechtenstein

Fully European legislation compliant crypto exchange to open in Liechtenstein: The first fully compliant cryptocurrency exchange, Blocktrade.com, under latest guidelines from the European Securities and Markets Authority (ESMA) is now open for registration in the small European nation of Liechtenstein.

The latest regulations were a string of stringent policies that were the cornerstone of of Anti Money Laundering (AML) and anti-corruption steps taken by the European parliament. The exchange is offering trading in Bitcoin, Bitcoin Cash, Litecoin and Ripple for now.

CEO of Blocktrade.com Luka Gubo said, “This is an ideal way for regulators across Europe to recognize cryptocurrencies as a new asset class and put in a regulatory framework.”

Cryptocurrency exchanges across the continent are scrambling to become compliant under the latest rules and are currently under a grace period offered by the ESMA.

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While the market saw a collective decline of over 10% as the speculative mania surrounding the Bitcoin ETF deflated, positive developments in this budding industry were still prevalent all throughout the past week.

The NYSE’s Parent Company Is Set To Launch Cryptocurrency Platform 

On Friday morning, cryptocurrency investors awoke to a promising sight, with corporate giants, like Microsoft and Starbucks, announcing that they were standing behind an upcoming cryptocurrency platform. As Brian Kelly, CNBC’s primary crypto expert and CEO of the crypto-centric BKCM fund, put it, “this (announcement) is the biggest (crypto) news of the year.”

At the head of this plan is the Intercontinental Exchange, or ICE as some like to coin the name of the company behind the NYSE. Bakkt, the name assigned to this newfangled company, intends to first support the trading of crypto-to-crypto and crypto-to-fiat (and vice-versa).

Eventually, as Bakkt matures, the partners behind the platform hope to offer a “scalable on-ramp for institutional, merchant and consumer participation” in this industry, hopefully facilitating higher levels of efficiency, security, and utility for this often-competitive space. As a press release issued by ICE notes, this first Bakkt product/service could go live as soon as November of this year, on the condition that this newly-founded firm receives approval from the CFTC.

This innovative platform has already garnered financial support from a jam-packed roster of investment firms, like Fortress Investment Group, Eagle Seven, Mike Novogratz’s Galaxy Digital, Pantera Capital, and Susquehanna.

Binance Acquires Trust Wallet, Aims To Expand Its Services

Binance, the world’s foremost cryptocurrency platform, has recently made its first-ever acquisition, purchasing an American cryptocurrency wallet provider for an undisclosed sum.

For those who are unaware, Trust Wallet is a highly-secure wallet solution aimed at retail investors, that hopes to dampen fears of cryptocurrency insecurity to mobile users. Along with support for Ethereum and over 20,000 Ethereum-based tokens, Trust also facilitates an in-app decentralized application browser, allowing its users to interact with a growing array of smart contracts.

Unlike its competitors, the startup allows users to “control 100% of their funds,” with private keys only being accessible through a user’s device, rather than a centralized server. Trust Wallet has extended this security-centric vigilance to other sets of sensitive information, with the public addresses, contact information and social media handles of a user being the only information routed through a company-operated server. Discussing the acquisition with TechCrunch journalists, Changpeng Zhao, Binance’s CEO, stated:

“The Trust Wallet team shares the same values as us and the products are very complementary. For users who like to withdraw funds into a wallet now, we have a product they can use.”

While the exact details of the deal weren’t revealed, as aforementioned, Binance employees noted that they used a combination of cash, Binance stock, and BNB tokens to finalize a deal with the Trust Wallet team. Zhao also added that the deal was not of a high value, as the startup doesn’t support an expansive user base at the moment.

It is important to note that following this deal, Trust Wallet will still operate as an independent entity, with the Malta-based Binance only assisting in the operation of the “admin side of the business,” along with marketing campaigns.  Many speculate that Trust will be the first to be integrated into Binance’s upcoming decentralized exchange, which will allow users to directly transact with one another through a permissionless and non-censorable system.

While the Trust Wallet buy-out marks Binance’s first stab at an acquisition deal, this will be far from its last. Zhao noted that his firm is in “early-stage talks” with other crypto startups, in a bid to acquire other firms that may appeal to Binance’s extensive list of aspirations.

$10.7 Trillion Financial Giant Steps Into The Cryptosphere

As reported by NewsBTC earlier this week, Northern Trust, a Chicago-based institution with over $10 trillion in assets under management, has recently gone down the metaphorical rabbit hole that is blockchain technology.

Speaking with Forbes, Pete Chercewich, the President of the firm’s corporate and institutional services subsidiary, disclosed a set of moves that Northern Trust has been taking to aid hedge funds which are investing in cryptocurrencies. Since the start of 2018, the financial giant has been completing and verifying accounting work done on crypto holdings, ensuring that the financials are consistent on both the fund’s balance sheet and crypto custodian. Northern Trust has also begun to evaluate cryptocurrency-related investments, relaying the analytics and information researched to a hedge fund’s clientele.

Additionally, Northern now offers a series of cryptocurrency-focused services, namely anti-money laundering (AML) compliance, asset existence validation and crypto-trade reconciliations.  Chercewich told Bloomberg that his firm has commenced the development of a low-fee custodial solution for crypto assets, hoping to edge out competitors by providing this essential service at relatively cheap prices.

Most recently, the financial services provider has worked with three “mainstream hedge funds” to diversify their portfolios into crypto assets, sadly not making Forbes privy to which funds they were accommodating.

Despite holding a traditional outlook on the financial industry, the 129-year-old firm seems to see some promise in blockchain-related technologies and applications. While the firm’s June report noted that it still holds a “cautious” sentiment regarding the cryptocurrency space, the work Northern Trust has conducted in this nascent industry tells a different story.

Coinbase Commerce Sees Integration Into WooCommerce

In a recent move, Coinbase’s commerce-focused division has announced the release of a WooCommerce plugin, which will allow online merchants using the popular payment solution to accept cryptocurrencies. WooCommerce is the by far the most popular eCommerce platform, with developers boasting nearly 50 million downloads. The platform allows online retailers, or businesses to sell products/services through an easily-customizable system, facilitating thousands of unique tools and plugins that can enhance one’s online store.

As an announcement from Coinbase Commerce points out, over 28% of all online stores utilize WooCommerce to operate properly, meaning that this new Coinbase plugin could reach hundreds of thousands, if not millions of avid online shoppers.

While this may sound like a negligible announcement on the surface, many speculate that this new plugin could directly lead to higher levels of the real-world adoption of cryptocurrencies. Echoing this sentiment, Coinbase Commerce wrote:

“This increased access will lead to more widespread adoption, and ultimately, moves us closer to our goal of an open financial system.”

According to Bloomberg, the use of crypto in commerce payments has hit an all-time low, at a relatively measly $60 million in May 2018, down from a staggering $411 million in September 2017. So many are hopeful that this new system will hail in the reversal of the death of retail-related cryptocurrency transactions.

Altcoins Extend Losses, Despite Positive Crypto News Cycle 

Since reaching monthly highs last week, Bitcoin has since pulled back, with the price of the asset currently sitting at $7,450, or approximately $1,000 from the peak seen last week. As is normally the case, altcoins followed the market leader, with some top-25 cryptos even extending the losses made by Bitcoin by up to 10-15%. It is currently unclear if there was a specific catalyst for this pullback, but many attributed the decline to an amalgamation of technical and fundamental indicators, namely bringing attention to the delayed reaction of the denial of the Winklevoss-backed ETF.

While this week’s pullback may have irked more than just a few investors, some industry leaders have remained bullish. Bart Smith, Susquehanna’s head of digital assets, noted that as long as Bitcoin doesn’t break the heavily-contested $6,800 level, the asset could be set for a mid to long-term price gain. Mike Novogratz, the CEO at Galaxy Digital, doubled-down on this sentiment, taking to Twitter to assure his over 90,000 followers to “stay long.”

As noted earlier, altcoins have suffered as well, save for Ethereum Classic, which saw at 15% jump today as a result of the most recent set of news regarding ETC’s upcoming Coinbase listing. It has also become apparent that XRP also was spared from this round of bearish movement, currently down only 3% on the week, likely due to a variety of positive news regarding the use of the Ripple platform.

While this most recent round of news hasn’t sparked any bouts of positive price action, many cryptocurrency proponents believe that “bull season” is just around the metaphorical corner.

Featured Image From Shutterstock

The post Crypto Week In Review: NYSE and Starbucks Go Full Crypto, Market Highly Optimistic appeared first on NewsBTC.

Andreas Brekken, the operator of shitcoin.com, decided to review the Bitcoin Lightning Network by creating the largest node on the network. The Bitcoin Lightning Network is supposed to be a scaling solution for Bitcoin since it facilitates instant payments with very low fees. Andreas Brekken wanted to find out first hand how practical it is to use the Lightning Network instead of using the Bitcoin blockchain.

First Andreas Brekken, set up a Lightning Network node, which required setting up a full Bitcoin Core node. This process is very complex and quite difficult for inexperienced users. There is software available to make it easier to use the  Lightning Network, but since the Lightning Network is still somewhat in a beta even relatively easier software requires technical knowledge. Setting up the Lightning Network node required further effort that was just as complex.

The Lightning Network had a capacity of 20 Bitcoins (USD 130,000), when Andreas Brekken started his experiment. He then deposited a large amount of Bitcoin and became the largest Lightning Network node. Soon his node exceeded 40 Bitcoin capacity with 250 active channels. There were some centralization fears from his experiment, but he ran the node responsibly and there were no problems. Running the node required lots of work and constant checking, and there were some errors which took him many hours to figure out.

Lightning Network nodes get paid for their services; Andreas Brekken did the math and found he got USD 0.001 for each transaction. This illustrates how Lightning Network has very low fees compared to Bitcoin, which often has fees of USD 1 or more during high traffic times. However, it also illustrates how there is little incentive to run a Lightning Network node. During his entire experiment, Andreas Brekken profited less than 1 USD from transaction fees despite being the biggest node and having over USD 100,000 locked up in his Lightning Network node.

While Andreas Brekken was running his node he experimented with buying things using the Lightning Network. Practically everything he tried to buy resulted in errors along the way. He tried to buy a hoodie with the Lightning Network, and despite having the biggest node there was apparently no way to route to the store selling the hoodie. He tried a different Lightning Network wallet and that didn’t work, and he gave up. Bitcoin works 100% of the time when connected to the internet and paying a proper transaction fee, while Lightning Network seems to fail most of the time even for someone with good technical knowledge.

Andreas Brekken had enough of the experiment since there were more costs to run the node then profits from maintaining the network, and he shut his node down. This indicates that the Lightning Network could have a hard time gaining widespread adoption since there’s no incentive for big players to run a node. Shutting down the node was somewhat difficult, since there were hundreds of channels connected to his node which he had to individually shut down. Some of these channels had people who were offline, so he couldn’t shut them down quickly. If one side of a channel is offline and the node closes down, then the node has to wait a period of time before they get their Bitcoins back as a safety measure. This waiting time can be up to 2 weeks, meaning the node operator won’t get their money back for 2 weeks. For someone like Andreas Brekken who has a large sum of money this might not be a big deal, but for a normal person, it could really cause them trouble.

Overall, Andreas Brekken’s experiment seems to have illustrated how Bitcoin’s Lightning Network is in beta and needs plenty of improvement before it can be implemented as a scalability solution. There is a team of developers working with the Lightning Network though, and eventually, it should be a real scalability solution. Things are not that urgent now anyways regarding Bitcoin scalability since SegWit has increased block size and is acting as a temporary Bitcoin scalability solution. Hopefully, by the time Bitcoin scalability becomes a serious problem again the Lightning Network will be ready.

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