News

For sports fans, DOGE is starting to look like crypto's real MVP
May 5, 2021 5:49 pm

Mark Cuban said the Dallas Mavericks are selling more merchandise in a day with DOGE than in a year with Bitcoin or Ether.

In addition to its increasing attention from investors, Dogecoin (DOGE) appears to have found a niche following among sports fans.

Speaking to Cointelegraph, Dallas Mavericks basketball team owner Mark Cuban said that the people had “taken control of DOGE,” as evidenced by the tickets and merchandise sales he had seen since first offering the token as a method of payment in March. Prior to adopting the asset, the Mavericks had already been accepting Bitcoin (BTC) payments through BitPay since 2019.

However, Cuban indicated that no other cryptocurrency had quite produced the numbers the team has seen from Dogecoin:

“We sell more Mavs merchandise for DOGE on a typical day [...] than we did in a year with BTC or ETH,”

Major League Baseball fans have begun to show similar enthusiasm in recent days. Oakland Athletics president Dave Kaval announced this week that the franchise had sold two plaza infield tickets the same day the team said it would be offering them for 100 DOGE — roughly $46 at the time. In contrast, it took more than two weeks for a sports fan to cough up the BTC needed to pay for one of the stadium’s six-person suites. However, at 1 BTC, the price of the tickets was significantly higher.

At time of publication, the price of DOGE is more than $0.63, having surged significantly over the last week, month and quarter to reach new all-time highs. Mike Novogratz’s Galaxy Digital recently published a report referring to DOGE as “the most honest sh*tcoin,” while many expect Tesla CEO Elon Musk to pump the price of the token during his Saturday Night Live appearance this weekend.

All the attention from social media and news outlets regarding the coin over the last several months may have demanded a lot from its co-creator Jackson Palmer. The San Francisco Bay Area resident’s tweets are now protected, and his website’s homepage includes a message stating he does “not have any thoughts to share” on crypto or Dogecoin.

Speaking on Dogecoin's value as an asset, Mark Cuban said “DOGE is the ultimate in strength in numbers,” elaborating:

“It's the ultimate decentralized evolution. Rather than an edict coming from an ivory tower that defines value, the law of supply and demand is defined by an algorithm.”

Back in February, the billionaire referred to DOGE as the "lowest cost economics teaching tool available that entertains at the same time,” later jesting that he expects the coin's price to reach $1 should the Dallas Mavericks sell an additional 6,556,000,000 DOGE worth of merchandise. At its current price point, the asset needs only to rise another 59% to reach that milestone. 

Bitcoin miners' revenue rebounds to $60M per day — Is the bull run about to resume?
May 5, 2021 4:30 pm

Miners are returning to Bitcoin as difficulty drops and revenues reach all-time highs.

Bitcoin (BTC) miners collected $60 million on a thirty-day average time frame as of May 5, showing the first signs of recovery after last month's severe revenue drop that followed mass miner outages in China's energy-rich provinces.

In April, coal mining accidents and subsequent inspections in Xinjiang lacerated energy supply to the regional cryptocurrency mining industry. That forced miners to turn off their ASIC hardware, which exclusively generates computing power to secure and put the "work" into Bitcoin's proof-of-work.

According to data from Blockchain.com, Bitcoin mining revenue fell from its 30-day average peak of $60 million — recorded on April 16 — to as low as $57.08 million on May 2. The resource collects miners' data from block rewards and transaction fees paid to miners.

Bitcoin miners' revenue. Source: Blockchain.com

The drop in profits coincided with a decline in the Bitcoin network's hash rate, signifying that many ASIC miners went offline after losing their chief energy source. The total hash rate per second (seven-day average) plunged from a record high of 172 exahashes per second on April 16 to 131 EH/s on April 23, a drop of roughly 30%.

Bitcoin hash rate. Source: Blockchain.com

It since recovered to 168 EH/s on May 5, indicating that miners are resuming their Bitcoin operations following a considerable mining difficulty drop four days ago.

Effects on Bitcoin spot prices

Bitcoin prices suffered significant declines following China's outages.

The benchmark cryptocurrency was already correcting lower after establishing a historic peak near $65,000 on April 14. The China FUD — fear, uncertainty and doubt — apprehensively accelerated the sell-off, causing the BTC/USD exchange rate to plunge to as low as $50,591 on April 25.

BTC/USD 1-day candle chart (Coinbase). Source: TradingView

Bitcoin's price and hash rate drop occurred almost simultaneously, providing further evidence for a higher positive correlation between the two metrics.

Simply put, the hash rate represents the computational power of the Bitcoin network. This means that the higher the hash rate, the higher the theoretical cost of "attacking" Bitcoin, making this metric synonymous with the network's security.

Bitcoin's price has recovered to a little over $55,000 as of May 5, much in line with the hash rate, signifying that the network reset is helping to maintain the cryptocurrency's prevailing bullish bias.

More upside tailwinds come from Bitcoin mining difficulty projections. For example, data from BTC.com shows it should rise by a modest 1% in the subsequent bi-monthly (or 2,016-block period) adjustment on May 13.

The network difficulty, which shows how difficult it is for nodes on the Bitcoin network to solve the equations necessary for mining operations, had dropped 12.6% on May 2. That tends to increase margins for both inefficient and efficient miners, promising lower risks of a Bitcoin sell-off at the producers' end.

Meanwhile, with an upside adjustment looking more likely and mining activity rising on the Bitcoin network, the long-term projections for the cryptocurrency remain bullish.

An earlier report from Cointelegraph compared the correlation between Bitcoin's price, hash rate and mining difficulty, ruling out that the first has a lagging correlation with the latter two, despite the popular mantra that "Price follows hash rate."

The BTC/USD exchange rate closed 2020 at $28,990 after Bitcoin's network difficulty plunged to 17.438 terahashes per second from 19.679 TH/s in the November–December 2020 session. The period also saw a significant drop in the hash rate but left Bitcoin's overall upside bias untouched.

Is China softening on Bitcoin? A turn of phrase stirs the crypto world
May 5, 2021 4:28 pm

They were only two seemingly innocuous words: investment alternatives. But when applied to Bitcoin the seminal cryptocurrency by an official from the Peoples Bank of China in a recent panel discussion, they reverberated like a firecracker.

A remarkable step for BTC, Lennix Lai, director of financial markets at OKEx, calls the statement. Michael Peshkam, executive in residence at European business school INSEAD, describes the central bankers remarks as a significant shift in the countrys position on crypto.

To recap: On April 18 at a CNBC event at the Boao Forum for Asia, Li Bo, deputy governor of the PBoC Chinas central bank said: We regard Bitcoin and stablecoin as crypto assets. […] These are investment alternatives. CNBC reporter Arjun Kharpal commented:

Industry insiders called the comments progressive and are watching closely for any regulatory changes made by the Peoples Bank of China.

Yes, I do see a change in tone in China, a softened and more open approach to considering the role of Bitcoin, Kevin Desouza professor of business, technology and strategy at Queensland University of Technology Business School tells Magazine. I still do not see a full embrace of Bitcoin.

This is a very important development, Daniel Lacalle, chief economist at Tressis SV, tells Magazine one that involves a significant change of heart on the part of Chinas government as it separates itself from its former monetary policy.

The government is saying, in effect, that it isnt going to ban or put the brakes on the growth of Bitcoin and other cryptocurrencies, which have been an ever-present risk for both China and other governments, Lacalle suggests.

If so, why now? China is close to rolling out one of the worlds first major central bank digital currencies at scale sometimes referred to as the Digital Currency Electronic Payment, or digital yuan. If it wants a digital yuan that works, it cant ban crypto, Lacalle says. Rather, it needs to show that its DC/EP is as attractive as a crypto alternative.

Connecting the dots: BTC and DC/EP

What exactly, though, is the connection between Bitcoin and Chinas DC/EP? Arent they two different things one an emerging global store of value, like gold, and the other a domestic payment system?

The Chinese yuan, as currently constituted, is used in very few international transactions. It is underutilized globally because China maintains capital controls, Lacalle tells Magazine. China has long feared that if it were to drop these controls, its economy would quickly become dollarized i.e., its citizens would send dollars away from China to the United States.

As things stand today, the rollout of a digital yuan would be an international failure, though it might succeed domestically. Outsiders would assume that the Chinese government wants to control it like it does its traditional yuan.

 

 

But if they open the market for crypto in China, they are signalling that capital controls wont apply to the digital market, including a digital yuan, Lacalle explains. This is arguably an intelligent move on the part of the Chinese government, which like Russia before it now sees benefits in opening its economy to crypto. In fact, cryptocurrencies may eventually albeit, in a distant future hurt Western fiat currencies, authorities speculate. But in the meantime, a new tolerance with regard to Bitcoin can make its digital currency more viable beyond its borders.

A potential currency?

Peshkam tells Magazine that Lis statement goes beyond recognizing BTC as just another investment asset, which is scarcely an earth-shaking revelation. China now sees crypto as a future potential currency in global trade.

Using Google Trends data from 2014 to the present, Peshkam notes that interest in Bitcoin within China i.e., among its domestic population follows a similar pattern as in the U.S., as well as the world at large, as measured by the number of searches for the word Bitcoin. Ignoring this growing interest on the part of its populace might not be economically and financially prudent for the country in the long run, thus the shift in Chinese policy, opines Peshkam.

 

 

Chinas DC/EP will probably become the main means of daily trade from grocery shopping to payment of bills and larger ticket items domestically, Peshkam says. But it is too early to gauge its international impact, including whether or not it will be a threat to the U.S. dollar as the worlds primary trading currency.

Just in case, continues Peshkam, China would like to have BTC on hand to reduce its dependence on the dollar for global trade. A strong BTC could also similarly weaken the dollars hold on Chinas regional neighbors, making them more open to using the new digital yuan. The shift in Chinas position seems to be a strategic move to safeguard its future economic dominance should Bitcoin move from investment alternative to trading currency alternative, says Peshkam.

Who is Li?

Perhaps one is reading too much into a single persons statement? Li, after all, is just one of seven deputy governors of Chinas central bank. Might these remarks on the matter of Bitcoin and cryptocurrencies simply be one bankers opinion?

No, Lacalle tells Magazine. That doesnt happen in China. Not in forums like these. When they want to alert the world about some new [financial] policy, the first comment is often from an analyst in a state-owned bank. Next, typically, is a statement by a central banker. And finally, at a later date, the policy is officially announced, explains Lacalle. This is what happened when China devalued the yuan in 2015, for instance. It is subtle but efficient.

Chinas central bank is not as independent as some of its Western counterparts, including the U.S. Federal Reserve, another source, who wished to remain anonymous, tells Magazine: In his [Lis] place, it would be natural to check whether his statement is in accord with the government view. Or, alternatively, he has been tipped that this is the government view.

 

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So, Li is simply acting as a government spokesperson? It can be viewed this way, says Molly Jane Zuckerman, head of content at CoinMarketCap, in a conversation with Magazine. She adds: The vice governor of the Peoples Bank of China and the former governor of the PBoC both mentioned Bitcoin while explaining the progress of CBDC development in the recent forum. They considered Bitcoin a special asset and said the government would bring it under supervision and regulation. Earlier, the central bank had called Bitcoin a virtual commodity.

But maybe an alternative investment is just an alternative investment and nothing more?

Its hard to be confident, but perhaps PBoC Deputy Governor Li Bos intent is simply to say that Bitcoin is a valid alternative investment, Darrell Duffie, Dean Witter distinguished professor of finance at Stanford Business School, tells Magazine. China probably remains against the use of Bitcoin as a payment medium, which is a different application. This would be consistent with Lis prior remarks, continues Duffie, adding:

As a payment medium, Bitcoin makes it more difficult for the authorities, in any country, to monitor payments for compliance with laws and regulations, such as anti-money laundering. When used as a payment medium, Bitcoin also makes it somewhat easier to bypass Chinas capital controls, which China would not want to see.

Li may have been saying that Bitcoin is all right as a store of value i.e., as gold 2.0 but not as a payments platform. James Barth, finance professor at Auburn University, tells Magazine: Bitcoin, like gold, might be viewed and allowed as an investment with the ability to serve as an inflation hedge. He adds that it makes sense to view Bitcoin as an investment alternative. […] This still allows China to impose restrictions by barring financial institutions within its borders from facilitating transactions involving cryptocurrencies.

The banker also may have simply been describing the current reality. Kevin Werbach, professor of legal studies and business ethics at the Wharton School of the University of Pennsylvania, tells Magazine: Calling cryptocurrencies investment alternatives is a factual statement. It doesnt necessarily imply anything about whether and how those alternatives would be available to Chinese investors.

 

 

Contrary to what some believe, Werbach says that China has never attempted to thwart Bitcoin and blockchain activities. China has never been uniformly hostile to cryptocurrencies, he says, adding: Chinese authorities shut down initial coin offerings and renminbi-to-crypto exchanges in 2017 because they were concerned about excessive speculation, fraud, and capital flight. There has been no indication of that view changing.

Meanwhile, China has tolerated a huge crypto mining industry within its borders and has actively promoted blockchain technology as part of its new infrastructure agenda, adds Werbach. Many of the worlds largest crypto exchanges, such as Binance, Huobi, and OKcoin, have major ties to China, even if officially they are headquartered elsewhere. In summary, Werbach tells Magazine:

My guess is that Li Bo was saying that Bitcoin should be viewed as a speculative investment, not as an alternative currency or payment system. That would be very consistent with Chinas approach. I think the crypto community took the wrong message from his remarks.

Others, however, continue to discern a policy shift behind the bankers statement. For instance, OKExs Lai tells Magazine: The new statement from the PBOC banker gave a very clear stance to the market that BTC would be considered as an alternative investment tool. We think its a remarkable step for BTC and we will likely see BTC regulated with a similar framework as those for other alternative investments.

Distrust of China

Others were quick to see ulterior motives on Chinas part. Chinas latest move softening its position on cryptos should be taken with a healthy dose of skepticism, Pablo Agnese, lecturer in the department of economy and business organization at UIC Barcelona, tells Magazine. He adds: China is and has been for long a big black box, and the old adage beware of Greeks bearing gifts seems as fitting as ever.

But Bitcoin may be getting too big to ignore, even for China, suggests Agnese especially considering it has a market cap that recently surpassed the $1 trillion mark. China will still try to ride the crypto wave just to undermine the power of the USD in international trade transactions which accounts for roughly 60% of foreign exchange reserves as there is a trade war still going strong. As for Chinas own CBDC project, Agnese comments:

Cryptos at large, and BTC in particular, have precisely come to challenge the financial status quo, not only by introducing much needed competition, but also by exposing its long-standing weaknesses.

Yu Xiong, associate dean international at Surrey University and chair of business analytics at Surrey Business School, tells Magazine that the statement by Li only meant that China was starting to pay more attention to cryptocurrencies with the intent of regulating them. This will not mean China will play a softer position toward cryptocurrencies. China will only become soft when the government can really monitor the transactions and cash flows. […] This will not happen in the foreseeable future.

An asset class that should be regulated

In sum, the Chinese government has shown little interest until now in regulating Bitcoin which would be tantamount to acceptance of the cryptocurrency. But last month, a deputy governor of Chinas central bank, presumably with the governments knowledge and approval, signaled that the central bank will not only not block Bitcoin in China but spoke for the first time in positive terms about the digital currency.

This is extremely significant for both domestic institutional investors and high net worth individuals looking to invest in alternative assets such as Bitcoin in the future, Zuckerman tells Magazine.

Lai adds: After years of development, I think all major governments and regulators now including China have recognized BTC as a viable asset class that should be regulated instead of a complete ban.

There is a growing realization in China that the nation could benefit from a rising crypto sector. The electricity that powers crypto mining, after all, is largely based in China. The Chinese already have a stake, too, in many blockchain-based enterprises. And meanwhile, the nation has an ambitious digital currency project underway, so some softening with regard to BTC may also be tied, as Lacalle posits, to its desire to have a [globally] functioning digital yuan.

 

Bitso reportedly becomes Latin America’s first billion-dollar crypto exchange
May 5, 2021 4:27 pm

The startup has a total value of $2.2 billion following its latest Series C investment round.

Mexican cryptocurrency exchange Bitso has concluded a $250 million Series C capital raise, putting it in the upper echelons of Latin America’s fintech industry. 

The latest investment round gives Bitso a total value of $2.2 billion, making it the first Latin American cryptocurrency exchange to be worth over $1 billion. It’s also the third-most valuable fintech company on the continent.

The raise was led by Tiger Global and Coatue, with additional contributions from Valor Capital Group, Bond and Paradigm.

Daniel Vogel, Bitso’s co-founder and CEO, said it took the exchange six years to get its first million customers and less than 10 months to reach 2 million. As Cointelegraph previously reported, Bitso registered its one-millionth user in July 2020.

“People in Latin America are using this technology in their everyday lives,” Vogel said, referring to the cryptocurrency exchange. “We are proud to grow with the industry and continue to make these powerful financial enablers available to everyone.”

He explained that the latest investment round will be used to grow company capabilities as the exchange continues to expand its regional operations:

“Last week we launched operations in Brazil. This round will be used to expand our capabilities, our product offering, and to continue to make cryptocurrencies useful throughout Latin America.”

Launched in 2014, Bitso offers cryptocurrency exchange services settled in Mexican pesos. The platform processes deposits and withdrawals using the Ripple payment gateway and is available in both desktop and mobile versions.

The Series C fundraiser follows a successful Series B raise in December 2020 that brought in $62 million from various investment funds, including Kaszek Ventures and QED Investors. At the time, Vogel said the funds would be used to further expand company capabilities across Latin America.

Argentina was one of Bitso’s first expansion targets in 2019 after the company deployed investment funds obtained from a Ripple-led capital raise. It took the exchange just six months to become Argentina’s most popular Bitcoin (BTC) trading platform.

Crypto is flourishing in Argentina as locals cope with a crumbling economy, high fiscal pressure and the sharp devaluation of the Argentine peso. Capital controls during the pandemic also hastened Bitcoin adoption as more people sought to navigate around a troubled banking system.

Bitcoin back above $57K as 'hundreds' of US banks prepare to HODL for clients
May 5, 2021 3:34 pm

Bullish news kickstarts a lackluster Bitcoin after an overnight slump neared $53,000 and altcoins kept surging.

Bitcoin (BTC) staged a characteristic comeback on May 5 as a day of losses turned around in a flash.

BTC/USD 1-hour candle chart (Bitstamp). Source: Tradingview

BTC price nears $58,000

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD passing $57,000 again during Wednesday trading, with daily gains knocking on 5%.

The move marks Bitcoin's second such "comeback" in a week. While the bearish trend reset, analysts were keen to see how much fuel Bitcoin had accumulated after dipping to near $53,000 overnight.

For Philip Swift, co-founder of trading suite Decentrader, fundamental indicators still pointed to a continuation of the longer-term bull market.

"I continue to think that Bitcoin will not crash and is more likely to range before breaking out to the upside," part of a series of tweets read on the day.

"Many other indicators suggest $BTC has much more upside and the cycle is not over."

Swift specifically noted that one tool, the Pi Cycle Top indicator, had "nailed" Bitcoin's most recent all-time high of $64,500 in April. As Cointelegraph reported, Pi has become increasingly popular for those tracking BTC price trends over successive years.

At the time of writing, BTC/USD circled $57,200, ruminating after reaching local highs of $57,400.

No plain sailing for altcoin bagholders

Hodlers thus received a welcome response from the largest cryptocurrency, which had spent much of the week being humiliated at the hands of a surging altcoin market.

Among the astonishing movers were tokens such as Dogecoin (DOGE) and Ethereum Classic (ETC), the latter having laid dormant for much of the past three years since the end of the previous broad "alt season."

Words of caution, veiled or not, were nonetheless not in short supply, as Bitcoin proponents warned about the fickle nature of such parabolic altcoin moves.

Acting in Bitcoin's favor meanwhile was news that it would be supported by "hundreds" of banks in the United States in 2021, along with investment giant Grayscale becoming a sponsor of NFL team the New York Giants. 

"What we’re doing is making it simple for everyday Americans and corporations to be able to buy bitcoin through their existing bank relationship," said Patrick Sells, head of bank solutions at crypto custody firm NYDIG, which is behind the scheme, revealing the scale of the rollout to CNBC.

Polkadot parachains full of promise, but lack of launch date raises concern
May 5, 2021 1:51 pm

The parachain slot auctions are the next big milestone due on the Polkadot roadmap. So, what can we expect?

Polkadot’s parachain auctions will mark the most significant milestone on its roadmap since the mainnet launch in 2020. Currently in the testnet on the Rococo network, the next stage of the launch will involve the rollout of parachains on Polkadot’s crazy cousin, the “canary network” Kusama. The rollout of Polkadot parachains on the main network will follow. 

What does this mean? The Polkadot mainnet has officially been in live operation for nearly a year now. However, only the central Relay chain has been up and running, with the last 12 months of development focused on implementing the platform’s decentralized governance.

The parachain rollout is the final stage in allowing decentralized applications to launch on the Polkadot network. However, with the rollout now past its initial rumored release date of Q1 2021 and with almost three months passing since the development roadmap was unveiled, there is still no exact date for when the deployment will eventually happen. So, what can we expect from this launch, and which projects will participate in the auctions?

How do the parachain auctions work?

Parachains are effectively shards on the Kusama or Polkadot networks, and the purpose of the auctions is to allocate parachain slots to projects wanting to operate on either network. The overall objective is to have 100 parachains operating concurrently. However, these will open up in batches, with the goal of having around 30 parachains operational within the first year.

Projects wishing to secure a Kusama parachain slot can participate in the auction by bonding their KSM tokens in a decentralized candle auction. These can be their own tokens, but a crowd loan mechanism is available for projects to source tokens from their communities.

A candle auction is a variation on the open auction where no fixed end time is given. This type of auction emerged in the 16th century when a candle was burned to determine the bidding time period. The idea is to encourage participants to make their highest bids as early as possible because they don’t know when the auction will end. Therefore, it prevents “sniping,” where a bidder swoops in during the final minutes with a winning bid.

Rather than a candle, a random number generator will determine the endpoint of each slot auction once bidding has been closed. Therefore, later bids will be disqualified if they come in after the retroactively determined closing time.

It’s worth noting that the successful bidders won’t “buy” their slots — only lease them, with the total value of the bid locked for the duration of the lease. Lease durations will be fixed (and the durations may differ between Polkadot and Kusama), and projects can bid for up to four successive periods. Therefore, the total duration of the bid will also be weighted into its value.

At the end of the final lease period, the slot will once again go up for auction.

Peter Mauric, head of public affairs at Parity Technologies — the company behind the Polkadot ecosystem development — said that it’s likely that competition will be fierce. Speaking to Cointelegraph, he said:

“Competition, especially for early slots on Kusama and Polkadot, is expected to be fairly intense, in my opinion. Because competitive auctions at the start are generally expected, I doubt projects will be severely disappointed, especially considering there is a new slot open every two weeks to bid on.”

Which projects will be bidding for a parachain slot?

In theory, any project can participate in the parachain slot auctions. However, they do need to have a codebase and either hold or have crowdsourced enough KSM or DOT tokens to outbid the competition.

Furthermore, the Kusama Council has stated its intent to award two Kusama slots to infrastructure projects deemed to be for the “common good” of the ecosystem. These are PolkaBTC, providing a bridge to the Bitcoin blockchain, and Snowfork, bridging to the Ethereum blockchain. Similarly, Statemint, a generic asset issuance platform, has been proposed as the first common-good project for the Polkadot network.

There have already been several projects that have expressed interest in participating. Acala, which aims to become Polkadot’s one-stop-shop for decentralized finance, will be bidding for its Kusama implementation, called Karura. Moonbeam, an Ethereum-compatible smart contract platform, will be seeking a slot for its Kusama version, dubbed Moonriver. And Kilt, which aims to bring decentralized credentials in the form of a universal log-on for Web 3.0 applications, will also be looking to secure a parachain slot. All three projects have been extremely active on the Rococo testnet and have active community participation.

Cointelegraph spoke with Dan Reecer, vice president of growth at Acala, about how the dual Kusama–Polkadot implementation will work in practice. He explained that both Acala and Karura aim to be the decentralized finance hubs of their respective platforms, and the project plans to run them concurrently in perpetuity. However, each has a role to play, as he stated:

“The difference between Karura and Acala is that with Karura, we’ll be more willing to take risks and experiment with new features and products. We are following the Polkadot ecosystem paradigm of testnet to experimental network (Kusama) to major network (Polkadot). Acala will remain the bank-grade, risk-averse network for DeFi on Polkadot with likely much higher TVL and assets under management in the Treasury.”

Despite the roadmap not having fixed any dates, it seems that projects are ready to go into production within weeks or even days of securing a slot. Derek Yoo, founder of the Moonbeam Network, confirmed that Moonriver is all but ready to deploy. He told Cointelegraph: “Moonbase Alpha has been running continuously since September 2020, and in that time, we have been able to release six upgrades to the environment, each with important new functionality,” adding:

“We have been able to iterate quickly because we have this stable testnet environment, and we feel that it has prepared us well for going live as a parachain.”

Ingo Rübe, CEO of Kilt Protocol, told Cointelegraph: “After winning a Kusama parachain slot, Kilt will go live within days rather than weeks. The functionality for decentralized identifiers (DIDs) and verifiable credentials is ready and has proven to be stable on our testnet.”

If demand for a slot indeed proves to be high, then many other projects will likely voice their interest in vying for a slot on Kusama, particularly considering that many projects have been waiting patiently for the parachain auctions without any confirmed date for when they’ll happen. Plasm, Darwinia, Robonomics and Crust are just a few of the other projects likely to participate.

What about prices?

Assuming that competition for the slots is high, then it’s a reasonable enough predictor for some bullish price action to come for KSM and DOT. On the most superficial level, more competition means bidders will be likely to go in high from the start. Because tokens are bonded for the duration of the lease, it will remove a share of the circulating supply of DOT and KSM from the markets, constraining supply.

However, the Kusama parachain auctions are the first live event of this kind, so there’s a chance that things might not pan out as planned. While the barriers to entry for acquiring a slot are set reasonably high, there is an outside chance that some actors may attempt to outbid the competition purely to sell it at an even higher price on secondary markets.

Indeed, this is a scenario acknowledged in the Polkadot documentation. There’s also the possibility that such an actor may attempt to “squat” on the parachain slot simply to prevent other projects from using it.

Such a scenario wouldn’t look good for the Polkadot ecosystem and would make it difficult for projects hoping to secure a parachain slot. About the price of tokens, it’s difficult to say. On the one hand, a bidding war could be positive for prices, but on the other, the reputational damage could negate any bullish effects.

Another unknown is around how the lease rules and continuing auction process may affect the overall stability of the Polkadot ecosystem. Projects that are already operating could lose their slot further down the line. Again, bidding wars at auctions might spell good news for token prices, but they could deter smaller projects from participating.

However, Parity’s Mauric doesn’t believe this will be a problem. He explained to Cointelegraph that the early parachains will most likely end up in the hands of well-established projects “that have been building their Substrate-based chains for years,” elaborating further:

“There are several options for a project that doesn’t win a slot on Polkadot at first, including deploying a parachain on Kusama or exploring deployment as a parathread in the future. Many application-layer projects will deploy on parachains as they launch, opening additional opportunities for teams and projects to collaborate and build on the active parachain while awaiting their own slot if that is their community’s goal.”

A word of caution

Ultimately, the hotly anticipated rollout of parachains does not just mean good news for the projects involved or those holding on to KSM and DOT tokens. While BTC and especially altcoins have experienced a boom in recent months, for example, the price of DOT has mostly gone sideways ever since the initial surge above $40 in mid-February. Further delays to the release will likely put more pressure on the price of the token.

Finally, when considering participating in the crowd loan process, beware of scammers. The Kusama auctions page holds a warning that there may be fake crowd loan campaigns doing the rounds. So, if you’re planning to stake your DOT or KSM in a parachain crowd loan, make sure that you’ve done your due diligence on the project in question. 

None of this is to say that any of these potentially worst-case scenarios will come to fruition and negatively impact the milestone on the Polkadot journey. The project has a ready-made suite of projects that are ready to go, and from that perspective, this launch is perhaps a bigger deal than many other mainnet launches that subsequently have to work to attract development.

Bahamas central bank prepares national Sand Dollar push for summer
May 5, 2021 1:18 pm

The Bahamas is beginning a push for national digital currency adoption this summer, the central bank's governor, John Rolle, said.

The Central Bank of the Bahamas is preparing a national push for its digital currency this summer to get more Bahamians signing up for the Sand Dollar.

In another move toward the adoption of the Bahamas’ central bank digital currency, the CBOB is now focused on connecting mobile Sand Dollar wallets with commercial banking systems, CBOB Governor John Rolle announced.

According to a Wednesday report by the Nassau Guardian, Rolle said that the Bahamian government has initiated a number of measures to prepare itself and the Sand Dollar ecosystem.

“There is a focus now on enrolling individuals on those various platforms. So we are literally at the cusp of beginning that push for national adoption and that is a focus that is going to gain attention and momentum as we move over the summer months,” Rolle stated.

The official noted that a number of financial institutions, including payment providers, have already integrated their mobile wallets with the Sand Dollar platform. “We know that among the payment providers they are now able to communicate with each other and send funds across the platform,” he said.

As previously reported by Cointelegraph, the Bahamas is one of the first jurisdictions to fully roll out a CBDC, officially rolling out a digital version of its national currency in October 2020. Despite countries like China aggressively piloting CBDCs, some reports have ranked the Bahamas’ CBDC as the top global state-backed digital currency in terms of retail applications.

US banks to allow Bitcoin trading in 2021, says NYDIG execs
May 5, 2021 1:04 pm

U.S. lenders are keen to get in on the crypto trading action and could soon allow customers to buy Bitcoin right from their accounts.

The era of American banks regarding cryptocurrencies as evil might be coming to an end.

According to a report by CNBC on Wednesday, New Digital Investment Group has inked a partnership with fintech staple Fidelity National Information Services, better known as FIS, to provide a framework for United States banks to offer crypto trading services to their customers.

Patrick Sells, bank solutions chief at NYDIG, told CNBC that several banks have already signed up for the program, with the majority being smaller financial institutions. However, Sells also added that the company is in talks with major U.S. banks to participate in the program.

According to the NYDIG executive, major names such as Bank of America and JPMorgan may be incentivized to come on board once smaller banks begin to reap the rewards of retail crypto trading adoption. BoA is among one of the staunchest anti-crypto banks in the U.S., regularly disputing the value proposition of Bitcoin (BTC) and cryptocurrencies.

As part of the collaboration between NYDIG and FIS, participating banks will be able to offer direct crypto trading for their customers straight from their existing accounts.

Banks greenlighting crypto trading could see U.S. lenders competing with platforms like Robinhood, Coinbase and Square, among others. As previously reported by Cointelegraph, about 9.5 million customers traded crypto on Robinhood’s platform in the first quarter of 2021.

Indeed, NYDIG president Yan Zhao said that the massive revenue being reported by the likes of Robinhood and Coinbase was the kicker for U.S. banks to set their sights on retail crypto trading:

“This is not just the banks thinking that their clients want bitcoin, they're saying 'We need to do this, because we see the data.' They're seeing deposits going to the Coinbases and Galaxies and Krakens of the world.”

U.S. lenders offering retail crypto trading will also constitute a 180-degree reversal on the consensus among financial institutions in the country regarding cryptocurrencies.

The likes of Goldman Sachs and Morgan Stanley recently announced plans to offer Bitcoin funds to institutional clients.

UFC to launch MMA fan token on Chiliz blockchain
May 5, 2021 11:42 am

Debuting in June, the new UFC fan token will have a maximum supply of 20 million.

The Ultimate Fighting Championship, the largest mixed martial arts association in the world, is launching its own blockchain-based fan token.

The UFC officially announced on Tuesday that it will debut a UFC Fan Token on fan engagement and rewards app Socios.com. Minted on the Chiliz blockchain, the token is scheduled for launch in June and will have a maximum supply of 20 million tokens.

Similar to other fan tokens from Chiliz and Socios, the UFC fan token is designed to enable new fan engagement opportunities such as access to exclusive content, fan voting, VIP rewards, promotions, competitions and others.

“UFC has more than 625 million fans around the world, and Fan Tokens are a unique way to connect with them through a compelling, authentic product that brings them closer to UFC and gives them influence, while also rewarding their passion for the sport,” UFC senior vice president of global consumer products Tracey Bleczinski said.

Chiliz and Socios CEO Alexandre Dreyfus said that UFC tokens will be exclusively available on the Socios app, with no pre-sale anywhere else.

The UFC and Chiliz first announced a collaboration last year to allow UFC fans to use Chiliz’s native token CHZ for experiences and rewards. The UFC has been expanding its moves into the blockchain and crypto industry recently, signing an exclusive partnership with crypto-powered online sportsbook Stake.com in March 2021.

The UFC is one of the first sports properties in the United States to launch a fan token using Chiliz and Socios’ ecosystem, marking an important milestone for their global expansion. The news comes two months after Chiliz announced a $50-million expansion plan for the United States.

Galaxy Digital to acquire crypto custodian and services provider BitGo
May 5, 2021 10:54 am

Under the acquisition’s terms, BitGo shareholders will get 33.8 million in newly issued shares of Galaxy Digital, in addition to $265 million in cash.

Galaxy Digital, a crypto and blockchain-focused financial services and investment manager founded by Mike Novogratz, is set to acquire institutional crypto custodian service and wallet operator BitGo.

According to an announcement on Wednesday, Galaxy Digital Holdings will pay $1.2 billon in stock and cash to settle the deal. Under the acquisition’s terms, BitGo shareholders will get 33.8 million in newly issued shares of Galaxy Digital, in addition to $265 million in cash.

To fund the cash part of the acquisition payment, Galaxy will use its balance sheet and defer a large part of the sum to be settled up to 12 months after the deal’s closure. It is currently expected to close by the end of the fourth quarter of this year. At the deal’s closure, Galaxy will issue incremental shares to BitGo’s shareholders in exchange for net digital assets.

BitGo’s shareholders will jointly own 10% of the pro forma new company, and Galaxy expects to retain the majority of current BitGo employees and management team. 

BitGo presently has over $40 billion in assets under custody and provides services to over 150 exchanges, in addition to over 400 institutional clients. Each month, the company processes over 30 billion transactions and provides custody services for over 400 different digital assets.

 In a statement, a Galaxy Digital representative said that the company believes the acquisition will “position Galaxy Digital as a leading global full-service platform for institutions seeking access to the crypto economy, offering an unparalleled breadth of industry-leading products and services at scale.”

As reported, Galaxy Digital recently submitted a Bitcoin (BTC) exchange-traded fund application to the United States Securities and Exchange Commission, which, if approved, would trade on the NYSE Arca exchange.

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