Shanghai Man: Crypto media closes, bad news just repeats, mining laws are beneficial?
July 16, 2021 1:15 am

With government officials trying to clean up the image of China prior to the start of the Winter Games, miners are leaving in droves and media group Bishijie has been forced to close down

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

It has now been two months since the crypto crackdown and subsequent enforcement began. Most new stories are now just the trickling down of earlier national policies being enforced at a provincial level. The latest example was from the Anhui provincial government, as it announced a set of measures to reduce energy consumption, with cryptocurrency mining listed among the culprits. Anhui is a small province east of Shanghai, more known for its scenic rural landscape and agriculture than its contributions to the economic development of China. It’s likely other provinces, particularly ones that rely on coal for energy, will have similar announcements over the summer as the central government pushes for a carbon-neutral future.

On July 13, Chinese mining pool giant Bit Mining announced it had raised $50 million for expansion outside of China. The company is listed on Nasdaq and operates, which is currently a top 5 pool for Bitcoin, Bitcoin Cash, and Litecoin. This is another sign that Chinese mining companies aren’t giving up in light of the restrictions at home, instead choosing to relocate the data centers and mining machines abroad.

The disappearing industry left a trail of impressive photographs, including some published by Financial media Caixin. One image that grabbed the attention of social media depicted a woman who appeared to be an ethnic minority holding a bundle of mining equipment and power cables like a flower bouquet.

Going for gold?

Former Bitmain CEO Jihan Wu believes that the mining regulations will benefit the industry over the long-term, citing an improved public image and eradication of bad actors. It’s certainly a nice thought, but at the moment, China seems more intent on eliminating all actors, not just the bad ones.

With the upcoming Winter Olympics in February of 2022 looming, Beijing will have the perfect opportunity to show off clear blue skies and clean-energy industries. On top of that, China can showcase its state-of-the-art central bank digital currency, without the confusion stemming from more speculative digital assets that might appear to have similarities on the surface. Those with first hand memories of the 2008 Summer Olympics may also remember the strict regulation against technology and social unrest prior to that landmark event.

Lowest volumes in years

The impact is being felt by leading exchanges in China. Huobi’s BTC/USDT pair saw only 109K BTC transacted in the past week, the lowest weekly volume dating back to October of 2018. Global exchanges were also affected by slumping volumes, but not to the degree as these predominately Chinese exchanges. In today’s regulatory climate, there’s no doubt that exchanges proactive in decentralizing operations and risk are better poised to minimize damage from unfavorable policies.

Working together for compliance?

On July 13, the Nanjing Public Security Research Institute announced it was working with OKLink to combat money laundering. OKLink is a blockchain technology firm that has ties to OK Group, a company that used to manage leading exchange OKex. With exchange leadership under incredible scrutiny in 2021, there is no surprise in seeing attempts to placate regulators.

Abandoning ship

On July 15, cryptocurrency media company Bishijie announced it was shutting down after violating national laws against cryptocurrency. Bishije, which translates to Coin World, had enjoyed a lot of popularity in 2018, prior to the depths of the last bear market cycle. This recent bull cycle never saw it fully recover it’s previous position however, making this only a minor loss for the current cryptocurrency space. It remains to be seen whether other media platforms based in the mainland can survive this trying period of time.

Here’s 2 ways clever pro traders spot crypto and stock price reversals
July 16, 2021 12:16 am

Many successful traders look for double bottom and W bottom reversal patterns on technical charts in order to spot powerful price reversals.

Trading in the direction of the trend is one of the best ways to be profitable. If traders learn to spot a new trend early, it provides an opportunity to buy with a good risk to reward ratio. In addition to identifying a trend, traders should also be able to recognize when it has reversed direction.

While several patterns signal a possible trend change, one of the easiest to spot is the double bottom pattern. This can help traders change their strategy when the trend reverses direction from bearish to bullish.

Let’s take a look at the double bottom pattern and identify some of the best ways to trade it.

What is a double bottom?

The double bottom pattern forms after a downtrend and consists of two low points that are roughly formed near a similar horizontal level, with a minor peak in between the troughs. When the price breaks out and closes above the minor peak after the formation of the second trough, the setup is complete. This is a reversal pattern, which results in an intermediate to a long-term trend change. As the pattern resembles the shape of a ‘W’, some also call it a W bottom.

W Bottom pattern. Source: TradingView

The above image shows the structure of the double bottom pattern. The asset has been in a downtrend but at a certain price level the bulls believe the asset is undervalued and start buying. This helps in the formation of the first bottom where demand exceeds supply and a relief rally begins.

However, most bears are still not convinced that a bottom is in and they initiate short positions again after a pullback. The price turns down but when it nears the level of the first bottom, the bulls again start accumulating, which arrests the decline and starts another relief rally. The second bottom within 3% of the level of the first bottom is usually considered valid. This is not a number set in stone and traders should use their discretion in real-life trading.

When the price rises above the resistance line, it signals a change in trend from down to up. The minimum target objective for the pattern can be arrived at by calculating the distance from the resistance line to the bottom and then adding the number on top of the resistance line.

Let’s view a few examples to better understand the concept.

XTZ/USDT daily chart. Source: TradingView

Tezos (XTZ) price was in a downtrend before hitting the first bottom at $1.78 on Nov. 4, 2020. From there, the XTZ/USDT pair started a relief rally that stalled at $2.96 on Nov. 25, 2020. At this level, the bears again fancied their chances and sold aggressively.

Although the pair broke below the $1.78 support and dipped to $1.57 on Dec. 23, 2020, the bears could not sustain the lower levels. The pair quickly recovered on the next day and started a recovery, forming the second bottom.

The bears aggressively defended the resistance line and tried to trap the eager bulls following the breakout. The bulls purchased the dips and the pair made a strong breakout on Feb. 5, which started the new uptrend.

The depth from the resistance line to the bottom is $1.18. Adding this value to the level of the resistance line at $2.96 gives a minimum pattern target at $4.14. However, in this case, the pair overshot the target objective and rallied to $5.64 on Feb. 14.

Double bottoms also show on the weekly timeframe

Along with the daily chart, the double bottom pattern also works well on the weekly chart. This is because when the reversal setup forms on the weekly chart, it results in a long-term trend change and the new uptrend generally sustains longer.

ETH/USDT daily chart. Source: TradingView

Ether (ETH) had been in a strong downtrend since topping out at $1,440 in January 2018. The demand exceeded supply when the price hit $81.70 in December 2018, resulting in the formation of the first bottom. Thereafter, the price recovered to $366.80 in June 2019 where bears again stepped in.

The subsequent decline formed the second bottom at $86 in March 2020. The duration between the two bottoms is very large, but in trading, no pattern is set in stone. As both levels were close to each other and the price action forms a clear W, traders can consider this as a double bottom.

The bulls pushed the price above the neckline in July 2020 but that did not start a new uptrend because the bears made one more attempt to trap the bulls. The price dipped below the breakout level but the bears could not sustain the lower levels. This showed that sentiment had changed from sell on rallies to buy on dips.

That completed the reversal and the ETH/USDT pair started a strong uptrend. Although the minimum target objective of the pattern was only $651.90, the pair rose to over $4,300 during the bull run.

This shows that the double bottom is an important reversal pattern, which sometimes leads to strong uptrends.

Some bottoms can be misleading

Many times, traders preempt a double bottom and buy before the price breaks out of the resistance line. That could sometimes result in losses because the pattern may eventually never complete.

BTC/USDT daily chart. Source: TradingView

Bitcoin (BTC) was in a downtrend since topping out at $19,798.68 in December 2017. The buyers stalled the decline at $6,000.01 on Feb. 6, 2018. Thereafter, the relief rally reached $11,786.01 on Feb. 20, 2018. This level proved to be a resistance and the price again dipped down to $6,430 on April 1, 2018.

This looked like a double bottom but the bulls could not push the price above the $11,786.01 resistance. This meant the double bottom pattern did not complete.

Although the $6,000 level held for a long time, the trend did not turn from down to up. Finally, the BTC/USDT pair plunged below the support and resumed the downtrend on Nov. 14, 2018.

Key takeaways

A double bottom is a key reversal pattern, which signals a change in trend but there are some important points to bear in mind.

Before the first bottom forms, the trend should be down because if there is no downtrend then there will not be a reversal. Traders should wait for the pattern to complete by breaking out of the resistance line before buying because many times the pattern fails in a downtrend.

When a long-term trend changes direction, it generally overshoots the pattern target of the setup. Hence, traders may use the target objective as a guideline but should not be in a hurry to close the position on that basis alone.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

DeFi on Bitcoin: Jack Dorsey says Square's new division will make it happen
July 15, 2021 11:25 pm

Jack Dorsey has outlined plans to build an open developer platform focused on creating Bitcoin DeFi services.

July 16, 1.45AM UTC: Updated with additional details

Square CEO Jack Dorsey has revealed that the firm is building a new division that will focus on building decentralized finance services that utilize Bitcoin.

Dorsey made the announcement via Twitter earlier today and revealed that Square’s new division will be building an “open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services. Our primary focus is Bitcoin.”

Dorsey named engineer Mike Brock as the head of the division, who previously led a development team that was working on integrating Bitcoin features for the Cash App back in 2018. Brock has experience with open source projects through his work with enterprise open source solutions provider, Red Hat Inc.

A firm of Square’s stature working to make easy-to-use DeFi services on Bitcoin could potentially ramp up adoption and provide greater competition to Ethereum-based DeFi.

The Bitcoin network currently does not have smart contract capability which makes it difficult to compete with Ethereum-based DeFi and its interoperable 'Money Legos'. Decentralized finance on Bitcoin relies on additional infrastructure such as bridges and sidechains to initiate smart contracts.

According to data from Defi Llama, Ethereum dominates top 100 DeFi platforms in terms of locked value (TVL), with AAVE topping the list with $9.09 billion TVL. Binance also provides competition with platforms such as the eighth ranked Pancake Swap which has $3.76 billion TVL.

In comparison, the highest ranked Bitcoin-based project on DeFi LLama is the Lightning Network, which ranks at 103 with TVL of $58.7 million. However TVL may not be the best way to measure the utility of the Lightning Network.

DeFi on Ethereum has exploded in 2021 and according to Data from Dune Analytics, the total DeFi user base (as measured in terms of unique addresses) has grown from 1.1 million at the start of January to around 3 million in July.

Related: Pomp sparks debate: Has Bitcoin DeFi project Sovryn really overtaken Uniswap v3 by TVL?

Along with Square’s latest project, another factor that could aid the adoption of BTC-based DeFi is the Taproot upgrade slated for mid-November.

Cointelegraph reported on June 26 that the upgrade will reportedly open the door to BTC smart contracts.

Square’s new division adds to its business lines that include Cash App, Square Seller, and the Tidal streaming service — which Dorsey also recently teased that would have potential blockchain tech integrations such as smart contacts and NFTs.

The Bitcoin DeFi announcement follows up from earlier this month when Dorsey took to Twitter to announce that Square will be launching its own Bitcoin hardware wallet to provide assisted custody to make the process easier for mainstream users.

PayPal increases crypto purchase limits to $100K
July 15, 2021 9:10 pm

The company said the move was aimed at giving customers “more choice and flexibility" to purchase crypto.

Payment provider company PayPal now allows U.S.-based users to purchase up to $100,000 in crypto weekly.

In a Thursday announcement, PayPal said it had increased the crypto purchase limit for certain customers based in the United States from $20,000 to $100,000 per week. The company said the move was aimed at giving users “more choice and flexibility in purchasing cryptocurrency.”

PayPal announced it would be moving into the crypto space in October 2020, later allowing eligible customers based in the United States to use cryptocurrencies for trading and payments. Though the company initially announced users would be limited to purchasing $10,000 in crypto each week, the feature launched with a $20,000 limit.

The platform has been expanding its features for crypto users since last year, partnering with Coinbase to allow crypto purchases through the major exchange, while the PayPal-owned payments firm Venmo launched crypto trading in April. Before the Venmo announcement, CEO Dan Schulman said he expected the average monthly volume for crypto transactions on PayPal to reach $200 million in a matter of months.

Related: PayPal to start letting US customers pay in Bitcoin at global merchants

According to analytics site Statista, PayPal had roughly 392 million active user accounts as of the first quarter of 2021. The company has continued to invest in blockchain-focused firms including Blockchain Capital and blockchain intelligence platform TRM Labs.

3 altcoins showing signs of accumulation while Bitcoin price is down
July 15, 2021 9:02 pm

DeFi and NFT-related tokens like GHST, CNS and TLM defied the market’s bearish mood to post double-digit gains in the past 48-hours.

Crypto markets faced another day of struggle on July 15 as the price of Bitcoin (BTC) dropped to its "final support zone" near $31,000, which prompted traders to issue dire predictions about the future should bulls fail to hold this level. 

Despite the struggles facing the crypto market at large, relatively obscure altcoins like Aavegotchi (GHST), Centric Cash (CNS) and Alien Worlds (TLM) posted positive gains in the past 48-hours and appear to be in a stealth accumulation mode.

Aavegotchi volume spikes ahead of DinoSwap release

Aavegotchi (GHST) is a DeFi-focused nonfungible token (NFT) that operates on the Aave protocol and allows users to utilize in-game avatars called Gotchi’s as collateral to earn staking rewards.

GHST/USDT 4-hour chart. Source: TradingView

Data from Cointelegraph Markets Pro and TradingView shows that the price of GHST has rallied 21% from a low of $0.997 on July 14 to an intraday high at $1.21 on July 15 as its 24-hour trading volume doubled from the previous day.

A scroll through Aavegotchi’s Twitter feed indicates that the newfound enthusiasm for GHST is a result of the upcoming release of DinoSwap, a multi-chain farming protocol that helps attracts and builds liquidity on existing automated market makers (AMM).

The new way for token holders to earn an extra yield on the Polygon (MATIC) network has helped drive liquidity and trading volume higher, resulting in the price appreciation seen in GHST.

Centric Cash rallies after migrating to Binance Smart Chain

Centric Cash (CNS) is another token that has managed to post a positive gain in an otherwise red market thanks to its successful migration to the Binance Smart Chain (BSC).

CNS is a dual-token protocol that offers rewards for adoption in the form of a fixed hourly yield and “stabilizes over time as it self-regulates token supply to meet ongoing changes in demand,” according to the project’s website.

The project’s migration away from the Tron blockchain to the BSC was done as a way to help increase exposure and trading volume through gaining access to the wider Binance ecosystem.

As a result of the increased attention and trading volume that CNS garnered following the migration, its price rallied 36% from a low of $0.0003 on July 14 to an intraday high at $0.00042 as traders looked to acquire tokens and supply liquidy for its launch on PancakeSwap.

Alien Worlds shows signs of accumulation

Alien Worlds (TLM) has also outperformed the field this week. The blockchain gaming platform provides a DeFi-connected NFT metaverse where users can collect and play with unique digital items in an environment that stimulates economic competition and collaboration between players.

TLM/USDT 4-hour chart. Source: TradingView

The price of TLM skyrocketed by 307% over the past week, rising from a low of $0.08 on July 9 to an intraday high at $0.33 on July 15 with a 24-hour trading volume of $884 million.

Related: New data hints why Bitcoin price action has spent two months at $30K

While there has not been a major protocol announcement that is readily identifiable as the cause for increased momentum, the project’s Twitter feed shows a handful of new NFT releases recently that can be earned through gameplay, as well as an announcement that the planet Binance will soon be added to the Alien Worlds ecosystem.

Overall, projects that include NFT functionality and a select few DeFi protocols continue to perform well while the large-cap projects in the crypto market are negatively impacted by Bitcoin's repeat excursions to the $31,000 level.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

Rep Tom Emmer introduces bill to provide certainty for digital assets
July 15, 2021 8:38 pm

The Security Clarity Act seeks to lessen regulatory burdens for blockchain-based technology.

U.S. congressional representatives introduced a bipartisan bill on July 15 with the goal of providing a clear definition of assets, such as digital tokens and other emerging technologies, under current securities law.

Known as the Security Clarity Act, the bill was introduced by Rep Tom Emmer (R-MN), Rep Darren Soto (D-FL), and Rep Ro Khanna (D-CA). This legislation seeks to change the definition of a term that has been used for more than 75 years. The status of any asset sold as an “investment contract” would become an “investment contract asset.”

According to the release, this bill would provide a solution for those who have complied with current securities registration requirements or qualified for an exemption. After meeting these requirements, entrepreneurs would be able to distribute their assets without the fear of any additional regulatory burdens.

Emmer elaborated:

“There has been an unreasonable approach by regulators as to how federal securities laws should be applied to transactions involving the sale of blockchain-based tokens, and this lack of clarity is hurting American innovation. Between regulation by enforcement and the varying legal decisions regarding the classification of these assets, regulatory uncertainty has hindered the growth of blockchain technology, leaving many to take the technology overseas,”

The Securities Clarity Act is meant to be a technology-neutral bill, according to the representative. It would apply equally to all assets, tangible or digital, and states an investment contract asset, like a digital token, is separate and distinct from the offering it may have been a part of.

Congressman Soto explained:

“As Congress works to protect those who invest in this technology, the Securities Clarity Act will add critical definition and jurisdiction to create certainty for a strong digital asset market in the United States. This is an important first-step in promoting innovation and maximizing the potential of virtual currencies for the U.S. economy, all while protecting customers and the financial well-being of investors,"

Emmer has stated his concern about regulation interfering with Americans benefiting from cryptocurrency before. At a hearing held in June by the US House committee on financial services, Emmer said:

“Over the last few years I’ve been fortunate to meet with many great crypto and blockchain innovators. A common refrain during our discussion is that they so badly want to develop their crypto and blockchain ideas right here in the United States. But they don’t because of continuing uncertainty with crypto regulation.”

Related: Bitcoin sell-off continues as BTC nears $31K ahead of Powell’s speech

The introduction of this bill comes one day after the Chairman of the Federal Reserve Jerome Powell spoke to the House of Representatives about the need for stricter regulation for stable coins.

DoubleLine CEO sees Bitcoin buy moment at $23K, predicts US dollar will drop 'pretty substantially'
July 15, 2021 7:26 pm

According to Jeffrey Gundlach, the trading pattern for Bitcoin may suggest a price drop below $30,000.

Jeffrey Gundlach, the CEO of investment management firm DoubleLine, implied that Bitcoin could see more favorable activity in the long term than that of the U.S. dollar.

In a Wednesday interview on CNBC’s Halftime Report, Gundlach said he believed people would be able to purchase Bitcoin (BTC) for under $23,000 soon given the likelihood of the crypto asset forming a head-and-shoulders trading pattern. He was seemingly referring to a "head" when the BTC price peaked at more than $64,000 on April 13 and the shoulders as the early January surge to more than $40,000 and the recent drop to the $30,000s.

“I’m not a big believer in head-and-shoulders tops but this one looks pretty convincing,” said Gundlach. “Turning neutral at $23,000 was obviously too early, but I’ve got a feeling you’re going to be able to buy it below $23,000 again.”

Though the billionaire said he was bullish on the cryptocurrency early last year, he has always considered it a “highly speculative and highly volatile” asset, calling the current price chart “pretty scary.” While volatility would suggest price surges as well as drops, Gundlach’s views on the U.S. dollar beyond this year were seemingly more bearish.

The DoubleLine CEO speculated that both the U.S. trade and budget deficits, which have risen likely as a result of the economic fallout of the ongoing pandemic, may cause the dollar to “fall pretty substantially.” He added:

“In the short term, the dynamics have been and will continue to be in place for the dollar to be marginally or moderately stronger. In the longer term, I think the dollar [is] doomed.”

According to MarketWatch’s U.S. dollar index, the dollar was trading at 92.64 at the time of publication, rising roughly 0.25% in the last 24 hours. The price of Bitcoin has fallen roughly 4% to reach $31,436.

Related: 'I should have bought a lot more,' laments billionaire investor on Bitcoin

Gundlach, known by many as the “Bond King,” has previously called Bitcoin a good hedge against inflation along with gold but expressed concerns about cryptocurrencies’ traceability. DoubleLine currently has more than $135 billion in assets under management — none of which purportedly includes crypto — and the CEO has said he personally doesn’t “believe in Bitcoin.”

“I’ve never been long Bitcoin personally, I’ve never been short, it’s just not for me,” said Gundlach. “I don’t have that kind of risk tolerance in my DNA where I have to get worried to pull up the quote every day to see if it’s down 40%.”

Analyst highlights 3 macro metrics that clearly show DeFi sector growth
July 15, 2021 7:09 pm

Taking a bird’s-eye-view of the DeFi sector shows that even though asset prices are down, the ecosystem continues to rapidly expand.

Decentralized finance (DeFi) has been one of the hardest-hit sectors since Bitcoin (BTC) price corrected from its all-time high in early May and this can be seen by the decline in the total value locked (TVL) on all protocols. 

According to data from DeFi Llama, the total value locked in decentralized finance platforms dropped from $154 billion and currently sits at $108.7 billion.

Total value locked on all DeFi protocols. Source: Defi Llama

While the roughly 30% decline in TVL over the past two months looks bad, the year-over-year growth from $2.02 billion to $110 billion represents an increase of 5,500% for the sector as a whole.

Decentralized exchange volume reaches new highs

One of the best metrics to help gauge the sentiment within the DeFi ecosystem is the volume traded on decentralized exchanges.

According to data from Messari, the quarterly DEX volume at the end of Q2 2021 was $404.9 billion, the highest value on record.

Quarterly DEX volume. Source: Messari

This represented an 11,751% increase from Q2 of 2020, demonstrating the significant amount of growth seen in DeFi over the past year. It was also an increase of 83% when compared to Q1 of 2021 which is a testament to the amount of growth seen in Q2 despite the market downturn.

DEX volumes were cut in half from $203.5 billion in May to $95.1 billion in June, a figure which still registered as the third-highest monthly volume on record.

Monthly DEX volume. Source: Messari

After a brief challenge to its dominance from PancakeSwap (CAKE) in April, Uniswap (UNI) is back on top as the dominant DEX which accounts for more than 40% of all DEX volume.

Layer-two protocols become more dominant

Another emerging theme in the DeFi landscape is the growing prominence of layer-two solutions such as Polygon (MATIC), which help bring increased scaling and lower fees to the Ethereum (ETH) network.

While Polygon has already established itself as one of the go-to layer-two solutions for the Ethereum community, there are several other solutions in the works that could challenge Polygon as the top solution.

According to Messari, the upcoming Q3 launch of optimistic rollups by Arbitrum and Optimism are “the most anticipated launches of these solutions” due to their ability to allow “thousands of transactions to be bundled into a single rollup block.”

Related: BarnBridge unveils application to maintain portfolio weightings of ERC-20 tokens

Fixed income markets are the future

According to Messari, fixed income products are “any instrument that generates a steady and predictable stream of cash flows such as corporate bonds, treasury bills, and fixed-income mutual funds.

The three categories of fixed-income investments include securitization and tranching, fixed-rate lending and borrowing and interest rate swaps.

Examples of some emerging fixed income-focused DeFi protocols include Saffron Finance (SFI), Barnbridge (BOND), Yield (YLD) and Pendle (PENDLE).

Despite the short-term bearish conditions seen across the DeFi landscape, the long-term view shows significant year-over-year growth and building momentum for the sector as a whole as mainstream finance continues to open up to the possibilities offered by DeFi.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

Fruits of the land: Blockchain traceability gives farmers a competitive advantage
July 15, 2021 4:07 pm

Traceability is key for helping small-scale farmers achieve big benefits, but will blockchain solutions catch on in developing countries?

The global food and agriculture industry is a trillion-dollar sector that is growing exponentially. According to findings from the World Bank, agriculture alone accounted for 4% of global domestic product, or GDP, of the United States in 2018. The report further noted that agriculture could account for more than 25% of GDP in developing countries. 

Meanwhile, it’s important to point out that large corporate farms play a dominant role in the agriculture industry. For instance, research from the United States Department of Agriculture (USDA) shows that major farms accounted for 89% of food production in the U.S. in 2015.

This appears to still be the case, as key agricultural markets remain dominated by very few companies. This has become even more apparent, as the USDA recently announced plans to invest $500 million to help ensure that U.S. agricultural markets are more fair and accessible to small farmers and ranchers.

Although government funding could help significantly, farmers across the globe are also beginning to adopt smarter agriculture technologies — such as blockchain and data analytics — to ensure that the growing agricultural demands are met. At the same time, these technologies are allowing small-scale farmers to obtain a number of benefits that were not previously possible.

Farmers break into global markets

Max Makuvise, president and co-founder of E-Livestock Global — a social enterprise that has developed a blockchain-based cattle tracing app for farmers in Zimbabwe — told Cointelegraph that Africa accounts for 20% of the global cattle population, yet the region only contributes 3% of the world’s beef consumption.

According to Makuvise, farmers in countries like Zimbabwe have a difficult time breaking into global value chains due to challenges involving visibility, ownership and trust. These issues worsened after the outbreak of a tick-borne disease in 2018 that caused the death of 50,000 cattle in Africa.

The lack of a reliable traceability system has resulted in Zimbabwe being unable to export beef to lucrative markets in recent years. In order to solve this, Makuvise hopes that a blockchain-based solution designed to bring visibility and proof-of-ownership to Africa’s cattle market could perhaps be the solution: “Blockchain provides trust and verification that can help bring farmers to global markets.”

Powered by Mastercard’s blockchain-based provenance solution, the E-Livestock Global app works by providing end-to-end visibility to the cattle supply chain. To put this into perspective, Makuvise explained that thousands of cattle in Zimbabwe are regularly “dipped” to prevent ticks and parasites. Yet, it is during this process when cattle ownership becomes challenging. “About 2,000 cattle will go through this dip tank, all of which can be owned by 500 or more cattlemen,” said Makuvise.

Kamran Shahin, vice president of blockchain product development and innovation at Mastercard MEA, told Cointelegraph that the E-Livestock Global solution solves this challenge by allowing commercial farmers and dipping officers to tag each of the cow's head with an ultra-high radio-frequency identification (RFID) tag, as mandated by the Ministry of Agriculture of Zimbabwe, to register the cow and its owner. Shahin added:

“Each time the animal gets dipped, vaccinated, or receives medical treatment, the tag records the event onto the traceability system. Leveraging Mastercard’s Provenance solution, E-Livestock Global records these events to maintain a secure and tamper-proof trail of each animal’s history.”

According to Shahin, this entire process captures valuable information for both the farmer and the beef buyers. “For farmers, it provides an irrefutable record that proves ownership, supports sales and exports, as well as allows them to obtain a loan, using their cattle as collateral.” On the flip side, Shahin explained that this enables buyers to efficiently manage their operations and guarantee product quality to customers.

More importantly, farmers enrolled in E-Livestock Global’s system now gain access to global markets due to the achieved visibility captured and recorded on the blockchain. Makuvise elaborated: “In Africa, we previously didn’t have any traceability system, making it impossible to export beef." He added that as a result, the "animal can then be slaughtered and exported, and farmers can earn a premium price for their beef.”

Cows with RFID tags on ears; Image source: E-Livestock Global

In addition to cattle farmers in Africa, coffee and cocoa farmers in Honduras are leveraging blockchain traceability to gain access to new markets. Heifer International, a global nonprofit that aims to end world hunger and poverty through sustainable farming, is using IBM Food Trust — a network powered by IBM’s blockchain technology — to achieve supply chain visibility for coffee and cocoa farmers in Honduras.

Findings from Heifer International show that small-scale coffee farmers operate at an average of between a 46% to a 59% loss, with farmers earning less than 1% from the sale of a cup of coffee at a coffee shop. Jesús Pizarro, vice president of financial innovation at Heifer International, told Cointelegraph that Heifer is specifically leveraging blockchain to manage the value chain for small-scale farmers since it solves the problem of traceability:

“Problems of traceability have always been a challenge. We believe that providing end-to-end transparency in the food supply chain can solve many social problems, starting with providing visibility to small-scale farmers.”

As such, IBM’s Food Trust platform traces coffee beans from small farms all the way to coffee shops. IBM Blockchain executive Kurt Wedgwood told Cointelegraph that this specific process begins with Heifer uploading information about the nurse plants shipped to farmers onto the IBM blockchain network. After harvest, Wedgwood noted that farmers tag and ship their beans to Copranil processors, a coffee cooperative in Honduras.

Additional data about the beans is then recorded onto the blockchain, including how the beans were cleaned, dried and roasted, and if they met the requirements for fair trade, organic or other specifications. Finally, this information is shared with corporate buyers who can also access the data about the beans to understand the prices.

While this process sounds pretty straightforward, the most important element to understand is how this opens access to global markets for small-scale farmers. Wedgwood said:

“By leveraging blockchain, we establish a connection between the farmer, producer and consumer while enabling the farmer to belong to a bigger market. Ultimately, this exposes consumers to more variety and a better experience in their coffee selection. We now have the ability to connect all these people at scale, which could allow producers to charge more as a result, and could lead to higher profits for small-scale farmers.”

It all boils down to visibility

Overall, farmers that are leveraging blockchain are able to achieve one major benefit that has been an ongoing challenge within the food industry — supply chain visibility. Once visibility has been established, farmers can break into global markets, generate greater profits and can even achieve benefits like financial inclusivity.

For example, Makuvise pointed out that financial inclusivity for farmers in many African countries has been challenging, since these individuals are unable to borrow money without proof of collateral. E-Livestock Global’s solution attempts to solve this by providing proof-of-ownership for the cows, allowing farmers to obtain a loan by using their cattle as collateral.

Cattleman scanning cows with RFID tags on ears; Image source: E-Livestock Global

Moreover, buyers and consumers also benefit from food visibility since it generates trust. Keith Agoada, co-founder and CEO of Producers Market — a digital platform dedicated to the economic and social well-being of farmers — told Cointelegraph that people want to know where their products are coming from and how it has impacted the environment and communities during its production:

“For those farmers and producers who are managing their operations in the ‘right way,’ blockchain can be part of the trust-building process to stand out in the market by connecting with brands and consumers who share these values.”

A report from The Blockchain Research Institute entitled "Agriculture on the Blockchain" further explains that “Traceability for food safety is thus far the most adopted application of blockchain for agriculture.” Although this may be, challenges hampering growth and adoption of these solutions remain.

For example, Pizarro mentioned that government support in regions like Honduras is needed in order for companies to understand how critical food supply chain visibility is for consumers: “The technology is available, but I don’t believe the status quo will change without governments pushing for this change."

While this may be the case in Central America, Makuvise shared that the governments in regions of Africa are excited about blockchain solutions due to the data being generated. According to Makuvise, the governments that E-Livestock Global has spoken with are excited about having access to data that shows how many cattle are in each provenance, which can help create better planning efforts that are typically done by guessing estimates. Makuvise further pointed out that sensitive data will never be shared in this instance, but relevant data that could help with city planning would be provided.

On the flip side, Makuvise explained that the real challenge for the adoption of blockchain solutions for supply chain visibility in Africa is general acceptance: “Blockchain-based solutions could take longer to be adopted in Africa because people are visual and want to see the benefits of the technology first. Once the benefits become apparent, more people will get on board.”

US government delves deeper into crypto accountability with $10M bounty
July 15, 2021 4:06 pm

The Biden administration reportedly intends to ramp up efforts to trace cryptocurrency payments.

The U.S. Department of State has announced it will be taking a seemingly more active role in the pursuit of keeping some crypto users accountable.

According to a Thursday Bloomberg report, the Biden administration intends to ramp up efforts to trace cryptocurrency payments, particularly when it comes to ransomware attacks. The government plans to address cybersecurity and crypto’s role as payment in such attacks.

The report comes as the State Department recently announced its Rewards for Justice program would be offering bounties of up to $10 million for assistance in identifying actors responsible for cyberattacks on critical infrastructure in the United States. The government agency said it had set up a tip line through the Tor browser network — developed by U.S. officials for anonymous internet communications — and may offer crypto payments for relevant information on ransomware attacks.

Last month, U.S. officials as part of a government task force seized more than $2 million in crypto used to pay for ransom following an attack on the Colonial Pipeline system. Deputy Attorney General Lisa Monaco said at the time the seizure of the assets was the first major operation in the task force’s mission to investigate, disrupt and prosecute cyberattacks on critical infrastructure, hinting it would continue looking into similar attacks.

Related: Report urges US government to focus on blockchain, crypto and a ‘digital dollar’

Traceability — or lack thereof — of cryptocurrencies is central to the appeal of users wanting their funds to be safe from government oversight while a seeming source of frustration from lawmakers attempting to levy taxes on crypto holdings and prevent funds from being used for illicit activities. Last year, the IRS offered a $625,000 bounty to anyone who could help trace transactions on the Bitcoin (BTC) Lightning Network as well as for privacy coins including Monero (XMR).

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