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New Demand for Cryptocurrencies: Trading on Bitcoin Cash KYC-Free Exchange With Blind Escrow | Promoted Bitcoin News

Governments are injecting record levels of new money into economies to contain the impact of shutdowns. Restrictions imposed on people in countries all over the world have forced many to look for alternative but safe ways of transacting. This is one reason why blind escrow bitcoin cash trading is increasing: it is not burdening users with KYC requirements.

Some countries hit hard by the pandemic like the United States, have reportedly printed more money in less than six months than they have in several decades.

Without a doubt, the deluge of new money entering the system will have dilutive effects on the value of money already in circulation. This has inevitability spurred on an increased interest in cryptocurrencies.

Similarly, the restrictions imposed on people’s movement have forced many to look for alternative but safe ways of transacting. That is why the recent increase in the number of cryptocurrency holders is in some ways linked to lockdown measures.

Increased cryptocurrency use

Events of the past few months have made it increasingly apparent that cryptocurrencies are not just speculative assets. They can be used as practical tools to shield savings or wealth from the effects of inflation. Furthermore, the use of cryptocurrencies fit very well with social distancing or stay-at-home measures.

Yet despite this, many people face obstacles to getting cryptocurrencies for the first time. Even those with adequate knowledge about this fintech still face difficulties in acquiring these.

It is true that cryptocurrencies are widely available at centralized cryptocurrency exchanges and at peer to peer trading platforms. However, these institutions use elaborate and sometimes cumbersome procedures that ultimately kill the interest of those searching for such alternatives.

For instance, the know your customer (KYC) processes, which are now a mandatory requirement with many leading exchanges, drive people away from cryptocurrencies.

Ordinarily, cryptocurrencies like bitcoin cash are not supposed to be subjected to such restrictions. Satoshi Nakamoto’s vision for a peer to peer digital cash was never premised on centralized third parties exercising veto powers as is the case now.

The KYC barrier to adoption

So while bitcoin appears poised to achieve Nakamoto’s vision, many potential users may not see it as that alternative because they lack an identity document. Clearly, the mandatory KYC requirement by exchange platforms is turning out to be an Achilles Heel for crypto adoption efforts. In fact, the same requirements are identified as the reasons why many adults globally lack access to financial services.

For instance, the 2017 World Bank Global Financial Index survey identifies the lack of proper identification as one of the major reasons why many adults are unbanked. Still, the survey notes that it was another financial technology, mobile money, that proved instrumental in reducing the number of unbanked adults from 2.2 billion to 1.7 billion between 2014 and 2017.

Many in the crypto community are hopeful that faster and cheaper to use cryptocurrencies can help narrow this gap even further. However, this is only possible if restrictions that preclude potential users from accessing cryptocurrencies are dropped.

Bitcoin.com Local & Blind Escrow

That is partly the reason why platforms like local.Bitcoin.com which are embedded with blind escrow for bitcoin cash trades are not burdening users with KYC requirements. Anyone can create an account on Bitcoin.com Local where they are not asked to disclose any personal details. The platform is, therefore, ideal for marginalized groups like undocumented migrants or those lacking identity documents for some reason or the other.

A platform like Bitcoin.com Local has the potential to hasten crypto adoption if only enough people know about it. Still, potential users might want to know how this service works in practice?

Put simply, blind escrow is the use of an autonomous contract capable of holding assets on behalf of two parties who are in the process of completing a transaction. The autonomous contract will hold the asset in limbo until the conclusion of a specific event or time.

Bitcoin Cash (BCH) and Bitcoin.com’s blind escrow system leverages Script called OP_CHECKDATASIG, which is a functionality that allows for escrows, covenants, and decision-based transactions.

Therefore, by having a blind escrow in place it means Bitcoin.com Local never takes custody of the bitcoin cash (BCH), even while it is in escrow. It is technically impossible for local.Bitcoin.com to spend the BCH in escrow. In the majority of transactions, local.Bitcoin.com is uninvolved, as both parties can complete the escrow on their own.

While Bitcoin.com Local does get involved when there is a dispute, however, the platform “can only allow the BCH to be spent by the buyer or seller.”

Moreover, every message sent via Bitcoin.com Local is end-to-end encrypted in the user’s browser. This means no one — including anyone at local.Bitcoin.com — can read those messages. To local.Bitcoin.com’s server, “the messages look like a bunch of random indistinguishable numbers.”

However, once the keys used to encrypt the messages are destroyed, that conversation is gone forever. According to the Bitcoin.com Local team, the “only time in which our staff can read messages is when the key required to decrypt them is volunteered by one of the parties (this is done in the case of a dispute).”

In other words, it means the buyer only interfaces with the seller and the blind escrow is there to ensure trustless trading. This type of platform is especially suitable for places or countries that are traditionally shunned by centralized exchanges.

Trustless Trading with Local.Bitcoin.com

In the absence of a trustless platform, traders need to “trust” each other but that has not stopped reports of fraud and scams. However, when Bitcoin.com Local is involved, traders have an increased sense of security.

Explaining how the blind escrow works, the local.Bitcoin.com developers say when the seller puts BCH in escrow, “they are creating an on-chain bitcoin cash transaction.” This transaction contains two relevant outputs, the escrow and the fee output.

The escrow output can be spent by either the buyer or seller. The second output is the fee portion of the trade. If the trade is unsuccessful, the fee can be reclaimed by the seller; if the trade is successful, the fee will be swept by Bitcoin.com Local.

Meanwhile, unlike many exchanges with limited base pairs and currency options, traders on Local.bitcoin.com can create a trade with any payment method. “You can even open a trade for items or services.”

What do you think of Local.bitcoin.com blind escrow? Tell us in the comments section below.

Tags in this story
BCH, bitcoin cash, Bitcoin.com Local, Blind Escrow, Centralized Exchanges, cryptocurrency adoption, financial inclusion, Fintech, KYC, Local.bitcoin.com, Mobile money, Unbanked

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Cryptocurrency This Week: Despite Possible Ban, Crypto Trade Blooms In India, & More

With India’s Supreme Court lifting the virtual banking ban on cryptocurrencies in March this year, global investors seem keen to enter the crypto market in India with investments in local exchange platform. Indian cryptocurrency exchanges have also witnessed a spike in trading volume ever since the SC quashed the 2018 Reserve Bank of India (RBI) circular which had introduced a banking ban on cryptocurrency in India, calling it unconstitutional. 

Since the SC order, there has been a spurt in cryptocurrency-related activities in India, with some crypto exchange platforms reporting a 400% spike in trading activity. According to UsefulTulips.org, the combined monthly trading volume between the Indian Rupee and Bitcoin has nearly doubled between March and July on two foreign crypto exchanges, LocalBitcoins of Finland and Paxful of the US. Their total volume in March was $8.14 Mn. By July the figure had reached $16.26 Mn.

In fact, Inc42’s Cryptocurrency Roundup from last week highlighted how Mumbai-based cryptocurrency exchange aggregator, CoinDCX, had seen a 62% month-on-month (MoM) growth in trading volume for its product Insta, since the SC order. CoinDCX’s Insta, launched on August 15, 2018, is a fiat-crypto exchange product that lets investors trade in INR. 

Users can purchase 100+ cryptocurrencies at competitive prices with close to zero deposit and withdrawal fees. Also, the company said that coins on Insta are protected through CoinDCX’s best-in-class security measures. Moreover, other crypto exchange platforms like WazirX, Unocoin, Bitbns, Cashaa, Oropocket among others have also witnessed a surge in users and transactions after the Supreme Court verdict.

According to CoinMarketCap, Mumbai-based crypto exchange platforms, CoinDCX and WazirX, are seeing monthly trading volumes of $8 Mn and $12 Mn respectively. While it stands pale in comparison to the trading volumes for crypto exchange platforms in the West, the signs of what could be a big market for crypto trading in the near future are visible. 

Global investors are also bullish about the same. CoinDCX attracted investments worth $5.5 Mn in two rounds, from a number of global investors including Bain Capital of the US, in March and May after the favourable court ruling. The world’s largest crypto exchange network, Binance of Malta, acquired WazirX last November, perhaps anticipating India’s ban on cryptocurrency trading would be lifted soon. 

While Indian legislators are said to be conducting inter-ministerial consultations on a draft law that proposes a blanket ban on cryptocurrencies in India, the stance of Indian IT and tech firms could be a deterrent. In the immediate aftermath of the SC ruling quashing the banking ban on cryptocurrencies, the National Association of Software and Service Companies (NASSCOM) said that banning technology was not a solution. India’s biggest IT company firm Tata Consultancy Services (TCS), is also seen to be a firm backer of cryptocurrencies. Last month, the company launched a crypto trading platform called Quartz Smart Solution for banks and investments, in collaboration with blockchain startup Quartz, incubated by TCS. 

However, with Indian lawmakers concerned about crypto’s links with terror financing, findings also backed by the Financial Action Task Force (FATF) — a global watchdog to curb money laundering — it remains to be seen if cryptocurrency will flourish in India, or whether the current spurt in growth is nothing but a false dawn. 

In other news, at the time of writing, Bitcoin was trading at $11,767, a decline of 4% from last week, when it was trading at $12,278. The market cap of Bitcoin, at the time of writing, was $217 Bn. 

Cryptocurrency This Week: Despite Possible Ban, Crypto Trade Blooms In India, & More

Cryptocurrency This Week: Despite Possible Ban, Crypto Trade Blooms In India, & More

Ethereum was trading at $392.12, a fall of 9% from last week’s $430.95. Its market cap was $43.86 Bn. 

Cryptocurrency This Week: Despite Possible Ban, Crypto Trade Blooms In India, & More

Cryptocurrency This Week: Despite Possible Ban, Crypto Trade Blooms In India, & More

Cryptocurrency News Of The Week

IMF Publishes Cryptocurrency Explainer

The International Monetary Fund (IMF) tweeted a video on cryptocurrencies this week, explaining its use, benefits such as removing middlemen, lowering costs, and increasing transaction speed. It also warns of what it sees as risks, such as anonymity and volatility. At the time of writing, the video had garnered 689.5K views and had been retweeted 6,700 times. Following the release of the video, many people saw it as an indication of the IMF’s endorsement of cryptocurrencies, even as many governments all over the world are opposed to it. The video ends with, “If we can counter the risks, then this new technology or some variation of it can completely change the way we sell, buy, save, invest, and pay our bills. And who knows, this could be the next step in the evolution of money.”

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China Sees $50 Bn In Cryptocurrencies Outflow

Owing to escalating trade wars with the US this year, as well as other countries, and a devaluation of the yuan, China saw $50 billion worth of cryptocurrency move from China-based addresses to overseas addresses, a report by blockchain analytics firm Chainalysis has found. The report notes that the East Asia region, which includes China, Hong Kong, Macau, Japan, Mongolia, South Korea, and Taiwan, accounted for about 31% of all cryptocurrency transacted in the last 12 months. A bulk of these transactions were made from China, where while the government allows citizens to send only $50,000 out of the country every year, wealthier citizens have found ways to circumvent the ban such as investments in shell companies and real estate. With the government cracking down on those methods, cryptocurrency is seen as being used as an alternative. 

The Bitcoin Network Now Consumes 7 Nuclear Plants Worth of Power

The Bitcoin mining process sees miners plugin high-voltage machines, that consume electricity as they try to solve complex computational math problems, which are so complex that they can’t be solved by human hands. The process is called bitcoin mining, where if the computer is able to solve the problem, more bitcoin is added to the blockchain network. Hashrate is used to measure the amount of computing power consumed by the blockchain network. 

According to industry estimates, the gigawatts of electrical consumption powering industrial bitcoin mining today consumes as much as seven nuclear power plants.

BitGo Weighs Building a Sidechain for WBTC as Ethereum Fees Climb – CoinDesk

Historic fee pressure plaguing the Ethereum blockchain is forcing one of decentralized finance’s (DeFi) hottest projects to consider swapping tires while driving.

Digital asset trust company BitGo is in the process of “reaching out” to community partners to build an Ethereum sidechain due to heightened fees, according to CTO Ben Chan in an email exchange. 

BitGo’s premiere product wrapped bitcoin (WBTC) is an ERC-20 token with a 1-1 peg to bitcoin. It currently secures some 46,000 BTC worth just north of $500 million through a custodial patchwork. 

“During the time the white paper was written, we wanted to consider potential solutions to rising fees. What we’ve seen this year is that WBTC traction has been largely thanks to the highly composable DeFi industry,” Chan said. “We will reach out to the community partners to see if they are interested in embarking upon a sidechain together.”

Ethereum fee pressures have continued to escalate over the last six months, reaching all-time highs on Aug. 13. A general technical fix remains months to years away.

As for timing, Chan said BitGo is not “committed to anything in 2020.” He said the most difficult part of the undertaking is not technical but organizing community developers. (It’s worth noting that the definition of a general-purpose sidechain remains a hotly contested question in developer circles.)

“Community building and operational overhead is what we predict will take up more of this time, and this is difficult to estimate,” Chan said. 

DeFi, Ethereum’s latest runaway hustle, has led many competing blockchains to play catch-up. For example, the Tezos community launched a wrapped bitcoin project of its own last April.

But at least three larger blockchain players are coming for Ethereum’s crown from a more technical angle: baselayer interoperability.

For NEAR Protocol, Polkadot and Cosmos, composability with Ethereum’s Virtual Machine (EVM) could allow established billion-dollar DeFi projects such as Compound or Aave to jump ship.

NEAR describes itself as a more developer-friendly, EVM-compatible alternative to Ethereum, while Polkadot continues to market itself as a “protocol for protocols” and has at least one Ethereum/Polkadot bridge in the works.

Cosmos, on the other hand, now has one project running. On Monday, developer houses Chainsafe and Tendermint released Ethermint, an EVM-compatible project built on a variant of the proof-of-stake (PoS) consensus algorithm called Tendermint.

Composability means the project natively “supports solidity smart contracts and assets from Ethereum,” Cosmos core developer Federico Kunze said in a private message.

The point was not lost on ShapeShift CEO and founder Erik Vorhees in a Monday tweet.

$RMPL Launches, Revolutionizing the Cryptocurrency Market with a Decentralized Elastic Supply Model | Press release Bitcoin News

Dex Platforms Trade Over $2.4 Billion in 7 Days, Defi Swaps up 68% Since Last Week

Dex Platforms Trade Over $2.4 Billion in 7 Days, Defi Swaps up 68% Since Last Week

Years ago the cryptocurrency community did not have access to a plethora of decentralized exchanges (dex). In 2020 with the rise of Ethereum, dex platforms have grown exponentially with trading applications like Uniswap, 0x, Kyber, and more. Dex trading growth … read more.

Capital One Files Patent for Cryptocurrency Market AI Prediction System

Capital One Files Patent for Cryptocurrency Market AI Prediction System

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Excessive Flooding in Sichuan Causes 20% Hashrate Losses for Chinese Bitcoin Miners

Excessive Flooding in Sichuan Causes 20% Hashrate Losses for Chinese Bitcoin Miners

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Report: Bitcoin Untied from the Economic Cycle, 'Largely Uncorrelated to Other Asset Classes'

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NSA Whistleblower Edward Snowden Was Paid $35k to Discuss Bitcoin

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The notorious NSA whistleblower, Edward Snowden, was paid to discuss bitcoin and other digital assets at virtual conferences, according to a new court filing called “Edward Snowden Speaking Engagements 2015-2020.” Snowden has always been a supporter of digital currencies and … read more.

Massive $2,000,000 Prize Pool in the Biggest Ever Promotion Launched on Bitcoin Games

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Japanese Court Orders Seizure of Cryptocurrency Linked to Coincheck Hack of 2018

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US Says North Korea Has 6,000 Hackers: Many in Belarus, China, India, Malaysia, Russia

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North Korea allegedly has about 6,000 hackers, many of whom operate abroad, according to a recent report published by the U.S. Army. The infamous Lazarus Group, thought to be linked to a number of cryptocurrency exchange hacks, is among them. … read more.

12 Crypto Firms Authorized to Operate License-Free in Hawaii for Two Years

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Russia and China De-dollarization Approaching ‘Breakthrough Moment’

China and Russia are collaborating to reduce their dependence on the U.S. dollar. Trade settlements in USD between the two countries have fallen below 50% for the first time. De-dollarization in Russia and China The dollar’s share of trade between … read more.

Onecoin Allegedly Tied to Racehorse Firm, Phoenix Thoroughbreds Removed from France Galop Race

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Last week the firm Phoenix Thoroughbreds was reportedly banned from horse racing in France over the founder’s alleged involvement with the crypto Ponzi scheme Onecoin. Last November, Onecoin cofounder Konstantin Ignatov, the Cryptoqueen’s brother, told New York prosecutors Phoenix Thoroughbreds … read more.

Hollywood Royalty Flexes Crypto-Art Goals: Ashton Kutcher Auctions NFT Digital Art for ETH

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Actor and venture capitalist Ashton Kutcher’s first attempt at digital art, an awful piece titled “The Eye of the Beholder”, is auctioning at Cryptograph. At the time of writing, the highest bid stood at 13.26 ethereum, or about $5,400, with … read more.

Why the Rise of the CBDC Is Bad for Your Privacy

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OCC Chief Says Americans Gravitating Toward Digital Currencies: Urges Banks to Embrace Innovation

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John McAfee Ditches Ghost Crypto Project: He Says It Will Fail

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Two-time U.S. presidential candidate John McAfee has announced that he is leaving the ghost cryptocurrency project, claiming that it will fail “without a doubt” and his reputation has been damaged. His Ghost phone service, however, will be launched as planned, … read more.

Nigeria's Foreign Currency Crisis Boon for Bitcoin: Country Tops Wallet Downloads Ahead of the US

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Nigeria’s weakening naira currency, as well as the shortage of U.S. dollars, are forcing businesses to switch to bitcoin as the means of settling payments for international transactions. Nigerian businesses need the American currency to buy new supplies, as well … read more.

Grayscale's Litecoin and Bitcoin Cash Trusts Trade for Tremendous Premiums

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This week data from Arcane Research shows there’s been massive demand for Grayscale’s recently launched publicly traded crypto trusts. Following the trusts getting DTC eligibility last monday LTCN (litecoin) shares have been selling for a 753% premium while BCHG (bitcoin … read more.

Former RBI Governor and IMF Chief Economist Sees Value in Bitcoin and Facebook Libra

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IRS Prioritizes Cryptocurrency, Now First Question on 1040 Tax Form

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The new U.S. tax form is out and the cryptocurrency question is the first one on the main 1040 tax form used by about 150 million people to file their taxes. The Internal Revenue Service (IRS) requires all tax filers … read more.

Stock Trader Dave Portnoy Dives Into Bitcoin, Only to Panic-Sell After Chainlink Plunges

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Canadian Restaurant Chain Tahini's Converts All Cash Reserves Into Bitcoin

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Canada-based Middle Eastern restaurant chain Tahini’s has converted all of its cash reserves into bitcoin. The company says bitcoin offers a much better alternative to cash savings. From Cash Savings to Bitcoin Middle Eastern restaurant chain Tahini’s has announced via … read more.

Bitcoin.com Wallet Launches Cred’s 1-Touch “Earn” Button

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12 Bitcoin Cash-Fueled Flipstarter Campaigns Raise $1 Million

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Iran Shuts Down 1,100 Illegal Bitcoin Miners; Whistleblowers Rewarded $2,400

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Re-Mining Simulation Shows Satoshi Used a Single High-End PC to Mine 1.1M Bitcoin

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Darknet Giant Empire Market Offline for 36 Hours, Blame Cast at Massive DDoS Attack

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New Demand for Cryptocurrencies: Trading on Bitcoin Cash KYC-Free Exchange With Blind Escrow

Governments are injecting record levels of new money into economies to contain the impact of shutdowns. Restrictions imposed on people in countries all over the world have forced many to look for alternative but safe ways of transacting. This is … read more.

Brazilian Crypto Companies to Self-Regulate: Target a $100 Billion Market by Year-End

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IMF Publishes Video Explaining Cryptocurrency That 'Could Be the Next Step in the Evolution of Money'

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Bitmex Restricts Ontario Residents as Ordered by Canadian Regulator

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Corporate Crypto Reserve Status: Software Firm Snappa Swaps 40% Cash Reserves for Bitcoin

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The Bitcoin Network Now Consumes 7 Nuclear Plants Worth of Power

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Venezuela Blocks Opposition From Disbursing $18 Million To Health Workers via Bitcoin Exchange Airtm

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P2P Cryptocurrency Exchanges in Africa Pivot: Nigeria and Kenya the Target Markets

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Blockchain Bites: Bitcoin’s ‘Rich List,’ Ethereum’s Volatility, DeFi’s Shakeup – CoinDesk

There are more addresses than ever as part of Bitcoin’s “rich list,” the Federal Reserve is looking to change tack on inflation and another firm is putting its cash reserves into bitcoin, not a bank account.

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top shelf

Rich list
The “Bitcoin Rich List,” or the number of wallets with at least 1,000 BTC (~$11.5 million), is at a record high. There are approximately  2,190 rich list addresses, surpassing the previous record of 2,184 set Sept. 28, 2019. This could reflect increased interest in bitcoin from institutions and high-net-worth investors, CoinDesk’s Muyao Shen reports. The total amount of bitcoin held in accounts of 1,000 or more was 7,868,823 as of press time. That amounts to $92.2 billion.

Inflation watch
U.S. Federal Reserve Chair Jerome Powell is expected to signal tolerance for higher inflation during his keynote speech at the Jackson Hole Economic Policy Symposium on Thursday. According to analysts speaking to CoinDesk, that could ultimately lead to further drops in the dollar and greater buying power for bitcoin traders and investors, CoinDesk’s Omkar Godbole reports. The central bank has mostly missed its 2% inflation target since 2012. “The major impact for crypto out of this symposium would be a change in monetary policy and further depreciation of the U.S. dollar, which could propel bitcoin higher,” said Matthew Dibb, co-founder of Stack.

Company breach
hacker has stolen data on more than 1,000 users from CryptoTrader.Tax, an online service used to calculate and file taxes on cryptocurrency trades. Breaking into a customer service employee’s account, on April 7, the hacker downloaded a file containing 13,000 rows of information, including 1,082 unique email addresses as well as names, payment processor profiles and messages sometimes containing cryptocurrency incomes. Screenshots of this information were later posted to a dark web forum.

BTC over banks
Ottawa-based software startup, Snappa, said it will move 40% of its cash reserves into bitcoin, citing concerns of inflation, global economic uncertainty and the inferiority of traditional bank accounts. The initial 40% allocation is only the beginning for the seven-person startup, CoinDesk’s Zack Voell reports. “We’re still accumulating coins, and we don’t plan on selling anytime soon,” said co-founder Christopher Gimmer. “If we’re right about where bitcoin is heading then our allocation could get very high.”

Blockchain. Governments?
Chinese tech conglomerate Huawei has set up a blockchain-based platform for the Beijing government to better track and manage its citizens’ data in everything from medical records and property registration to real-time vehicle parking status. This is part of China’s larger “New Infrastructure Initiative” to transform digital governance with blockchain by making data immutable and transmissible. The Beijing government’s project aims to leverage the blockchain platform to make data shareable among more than 50 agencies within the municipality, CoinDesk’s David Pan reports.

Quick bites

At stake

Layer1, the U.S. bitcoin mining startup backed by high-profile investors including Peter Thiel, has misdescribed the role of a supposed core team member in a recent pitch deck, according to that team member.

The U.S. startup boasts a mission of not just building top-notch bitcoin mining facilities but also launching the U.S’s first proprietary mining chips to compete with Chinese miner makers.

Its deck – which was shared with CoinDesk by an investor who received it from Layer1 around June – shows a management team slide in which Layer1 told potential investors that Liu Xiangfu, co-founder and a former director of Chinese bitcoin miner maker Canaan, is its Head of Supply Chain. 

However, when reached for comment, Liu said he is not involved in Layer1’s business. “I introduced some of my friends to them. … That did help them when they [came] to China. But I’m not a shareholder [and do] not work for them,” Liu said via WeChat messages. 

The discrepancy came to light as Layer1 has been working to raise $50 million in senior secured debts since June, according to a separate term sheet seen by CoinDesk and confirmed by Layer1. 

It appears only a relatively small part of the raised fund came from external investors at the time, as the recent pitch deck shows that “Layer1 founders have contributed over $23 million of [their] own capital so far to this Series A financing.”

Market intel

Volatile assets
Investors are expecting more volatility in ether (ETH) compared with bitcoin (BTC), according to a key metric, CoinDesk’s Omkar Godbole reports. The three-month spread between ether’s volatility and bitcoin’s has risen to 29%, the highest level since Feb. 23, according to data source Skew. “Investors are focused on DeFi and mindful of a potential big move in ETH,” said Skew’s CEO Emmanuel Goh. Implied volatility does not tell us anything about the direction of the next big move.

‘Negative connotation’
CoinDesk’s First Mover further dives into the volatility conundrum. The three-month spread between ether’s implied volatility and bitcoin’s has increased to 29%, the highest in six months, they write. As recently as June 28, the spread was as low as -2.8%, meaning bitcoin had the higher implied volatility at that point. Volatility often carries a negative connotation because traders often consider it a barometer of risk. In this case the rising spread appears to indicate a wide range of expectations in how DeFi might ultimately affect usage of the Ethereum network and demand for the ether. Get the full story by subscribing here.

Tech pod

Aave overtakes
DeFi credit market Aave has pulled ahead of stablecoin mint MakerDAO for the title of most collateral staked on Ethereum, according to DeFi Pulse. Aave now has $1.47 billion worth of different crypto assets staked for credit lines, while MakerDAO has $1.45 billion in total value locked (TVL). This is only the second time that a project has had more “total value locked” (TVL) than MakerDAO, as measured by DeFi Pulse. In the recent surge of interest in DeFi, four projects have now broken $1 billion in assets as measured by DeFi Pulse at different times: MakerDAO, Compound, Aave and Curve, CoinDesk’s Brady Dale reports.

Op-ed

DeFi’s demise?
Donna Redel, a board member of New York Angels and Adjunct Professor of Law at Fordham Law School, and Olta Andoni, Adjunct Professor at Chicago-Kent College of Law and Of Counsel at Zlatkin Wong, think DeFi is playing a dangerous game. Drawing illusions to the initial coin offering boom, these prominent crypto lawyers see the industry’s “hottest” sector is flirting with regulatory violations. “We believe that, at a minimum, the industry needs self-regulation. Without it, it is on a trajectory to serious regulatory scrutiny and reputational risk… Calling a project an “experimental game” or an ‘innovation’ is not sufficient to take it out of the regulatory ambit,” they write.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Analyst picks top-5 altcoins, predicts correction for Ethereum and Bitcoin

  • Analyst Michaël van de Poppe shared his predictions for Ethereum, XRP and the altcoins market.
  • Van de Poppe predicts a correction for ETH, XRP and Bitcoin (BTC) if the $12,000 level does not becomes support.

In a new video on the state of the crypto market, trader and analyst Michaël van de Poppe shared his possible scenarios for the coming days. The analyst advised his audience not to fall in FOMO (Fear-of-Missing-Out) for altcoins that have moved strongly in the last days.

The trader first concentrated on some tokens from the Ethereum DeFi sector. With exorbitant profits, these tokens can be a huge opportunity for investors but also for a total loss. As an example van de Poppe cited BAND of the Band Protocol. As can be seen in the chart below, BAND has experienced a significant increase in a short time. The trader explained that the chances that BAND and other tokens with similar gains will continue the upward trend are low, at least in the short term:

Bringing a coin into this area is completely idiotic. If you want to take over the trade in this area, better donate the money to a charity and dedicate yourself to something else. (For BAND trading) I am more interested in a longer delay (in price) as we saw in the last price increase.

Bitcoin BTC XRP Ethereum ETH

Source: https://www.youtube.com/watch?time_continue=1&v=Gmljp7CQNz0&feature=emb_logo

The analyst stated that he is more interested in other coins such as Celer Network’s CELR. He believes that CELR’s performance indicates an upcoming rally. Comparing the current state of CELR with the state of BAND before the massive increase shown above, Michaël said:

Celer Network is showing a clear volume accumulation, which is showing that people are interested in this asset… We see that we are above the 100-day and 200-day (moving average) for the first time since the listing. So we’re getting into the bull territory for the first time since it has been listed.

Van de Poppe predicts an increase of the price of Celer Network’s token in the CELR/BTC pair towards 200 Satoshis which would represent an increase of 140%. Additionally, the analyst believes that Harmony’s ONE has similar indicators to CELR. In the ONE/BTC pair, the currency is priced at around 80 Satoshis with the potential for a parabolic increase of 110% towards 180 Satoshis.

The trader also advised investors to keep their eyes on the MANA token of Decentraland and the ALGO token of Algorand. According to Michaël, these tokens could have increases close to 100% if they manage to maintain their current support levels.

Correction for Bitcoin, Ethereum and XRP?

In a video titled “Ethereum And Ripple: Where To Buy The Dip?” van de Poppe also states that he expects a setback for ETH and XRP. According to him, ETH will reach 280 dollars while he recommends investors to wait until this level before taking a long position. He also expects that XRP will also go down after reaching $0.32. Van de Poppe determined as possible support level at $0.28 or $0.24 before establishing a long position.

Finally, the van de Poppe referred to the Bitcoin price (BTC) and stated that the cryptocurrency should turn the resistance level of $12,000 into support. Otherwise, he expects a drop to $9,800. Below you can see Crypto Michaël’s full analysis:

[embedded content]

The real story about getting rich by investing in gold, cryptocurrency and IPOs

Hermione Granger | Moment | Getty Images

The historic bull market that ran for nearly 11 years came to an abrupt end in February, and we’re officially in a recession.

That leaves you with two investing worries: Where you should invest now and whether you should pull money out of the stock market in order to preserve it.

You may feel anxious about investing in stocks, but you can’t just leave money sitting in cash. That’s taking on another kind of risk: that your money won’t keep pace with inflation.

The world may seem scary right now, but about the last thing you want to do when it comes to investing is trust your own emotions.

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“The entire premise of making a financial or investment decision because you feel a certain way is, in itself, a warning sign,” said certified financial planner Douglas Boneparth, founder and president of Bone Fide Wealth in New York. “We typically don’t want to make our decisions based on our emotions.”

Also avoid making investing decisions based on interest rates or headlines, Boneparth says.

And definitely take any ads you see with a grain of salt. Whenever the economy is uncertain, you’re likely to see more recommendations to buy gold or assets supposedly not linked to the stock market.

These may seem like an attractive and safe place to put your money, but here’s what to consider before investing in things, such as cryptocurrencies and companies’ initial public offerings (or IPOs), that may not help you meet your goals.

IPOs

Zoom Video Communications Inc. founder and CEO Eric Yuan at the company’s IPO at Nasdaq MarketSite in New York, April 18, 2019.

Victor J. Blue | Bloomberg | Getty Images

If you’re looking for a way to get in on the ground floor of a hot stock — who doesn’t wish they’d bought Apple at $22 in 1980? — know that the odds of getting rich from an IPO are slim.

First, Boneparth says, you have to take on a significant amount of risk. “Don’t invest your life savings in the hope that it will be Google or Facebook,” he said. “Most IPOs will not provide that same kind of performance.”

“If you get an email or watch a commercial that millions of people are reading, do you think you’ve come across something so unique you’re going to capitalize on it?” Boneparth said.

Gold

Several claims about gold — that it’s a safe haven or a hedge against inflation — have been debunked. “It has risks associated with it like any other asset,” Boneparth said.

Gold is a Godiva chocolate of an investment in that it is very tempting, according to CFP Stacy Francis, president and CEO of Francis Financial in New York. 

It may be the most strongly debated investment out there, and it’s unfortunately very attractive, she says. “You can hold it, you can touch it,” Francis said. “But compared to investing your money in the S&P 500, it hasn’t been able to keep up long-term.”  

Gold tends to perform better when the stock market is struggling, which can be tempting to those who want to time the market. “However, timing is not easy to get right,” Francis said. “If you own 100% gold, you missed out on the stock market rebound as gold under-performed during the stock market run-up of the last decade.”

Anyway, do you really want to time the market? In June 2018, stocks were beating gold. Then, slightly more than a year later, gold was outperforming stocks. Here’s what one successful investor — Warren Buffett — says: It is an unproductive asset. It doesn’t pay interest like bonds or dividends like stocks. 

Don’t fall for the graphs in advertisements. “Some charts can manipulate numbers to tell a different story,” Francis said. “There will be definitely be time periods that show gold is the best investment on the face of the planet.”

Digital or virtual currency

You’ve probably heard people declare the importance of cryptocurrency.

Francis herself owns some. Her husband purchased several Bitcoins at the bargain price of $10. He was naturally very happy when the price started rising, but two of their coins were stolen off an exchange, Francis says.

While there’s better tracking now, it still pays to be ultra-cautious when buying assets on  lightly regulated market.

All cryptocurrency has the same underlying risk, Francis says. This is not to say digital currency is an awful investment, but you need to know its place in your portfolio. And that place is not the money you’ll need in retirement to buy food and pay your living expenses. 

The current price of Bitcoin, around $11,000, also is a consideration. There’s a world of difference between buying Bitcoin at $10 and paying more than $15,000 for one coin, Francis says.

 “Thinking long-term is what allows people to meet their goals,” Francis said. “It’s not [as exciting as] winning the lottery or winning at the roulette table at Las Vegas, but sometimes boring is a good thing.”

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

Voyager Digital CEO on Building the Crypto Industry in a Post-COVID World | Finance Magnates

Even though 2020 has been an absolute rollercoaster ride for the global economy–including cryptocurrency–it can be argued that the crypto industry is stronger than ever.

Indeed, despite the fact that there were some significant price dives earlier in the year, crypto has made a comeback. In fact, it can be argued that certain cryptocurrencies, including Bitcoin, are the best-performing assets so far in 2020.

The Most Diverse Audience to Date at FMLS 2020 – Where Finance Meets Innovation

Recently, Finance Magnates spoke to Steve Ehrlich, chief executive of cryptocurrency brokerage Voyager Digital, about how the pandemic has shaped his business and the cryptocurrency industry at large–and why now may be the perfect time to get into crypto.

[embedded content]

This is an excerpt. To hear Finance Magnates’ full interview with Steve Ehrlich, visit us on Soundcloud or Youtube.

The biggest slice of the crypto pie: “we want the mass market.“

Finance Magnates asked Steve about how Voyager is approaching the market as a US-based company that primarily serves US customers.

“We see the market as three different parts,” he said. First, there are “customers that use the exchanges.”

These customers “want a deep, level-two platform; they want to see depth of liquidity. They’re the ‘pro’ users.”

In addition to these ‘pro’ users, there’s also a segment of users that engages with cryptocurrency markets on a more basic level. They’re looking for “a very simple solution to buy Bitcoin and Ethereum, and maybe one or two other cryptocurrencies in the US.”

However, Steve said that Voyager tries to focus on the third segment of users, which is “the biggest part of the market.” This group is comprised of “customers who have a little bit more experience than those just entering the market.”

Steve explained that this group has guided Voyager’s development: this is why the company has made the decision to list at least forty cryptocurrencies for trading. Steve explained that Voyager is attempting to ensure the delivery of “the widest range of services and products to the general public to the mass market: so they can adopt crypto and start creating their own wealth off of digital and crypto assets.

In other words, “we’re going for the biggest part of the market–not the most active sides of the market, where the pro traders are; we want the mass market, which is how online brokers have been built over the years as well.”

Steve also said that Voyager has established itself as a broker that aggregates liquidity rather than an exchange to address long-standing logistical issues in the crypto space: “the problem with a cryptocurrency exchange is that if you open an account with an exchange, [there’s only] one point of the liquidity.” Therefore, “if the happens to be offline or they run out of liquidity, you can’t trade that asset anymore.”

When it comes to regulations, “there are always challenges”–but not in the ways you might think

Voyager has also shaped its identity as an entity that is strictly based in the United States and primarily serves users who are also based in the United States. We asked Steve what the challenges have been on the road to establishing a crypto empire in the US have been when it comes to regulators.

“There are always challenges,” he said, particularly in a “lightly regulated” market space like cryptocurrency.

Steve explained that if regulations are being followed correctly in the United States, a cryptocurrency platform must become a regulated Money Services Business (MSB) under the Financial Crimes Enforcement Network (FinCEN), which is responsible for creating and enforcing money laundering laws in the US.

“Then, you get registered in individual states, and work with banks in the states in the regulated capacity,” he said.

However, “I think the challenge is that a lot of individuals and consumers still don’t look at that regulation in the same way–they look at the Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC), or even the Office of the Comptroller of the Currency (OCC) or banking regulations.”

In other words, public misconceptions about which regulatory bodies are responsible for cryptocurrency platforms could make potential users hesitant: “I think people tend to be a little weary of trying to enter the space because they still think it’s unregulated.”

“But it is regulated,” Steve explained. “We have know-your-customer (KYC) rules we have have to follow, anti-money-laundering procedures we have to follow; we really do have to know our customers, and make sure that we’re abiding by all of the Patriot Act rules too.”

Hopeful for more regulation in the United States

In addition to the baseline regulatory requirements, however, there are other things that customers can look to for reassurance.

Voyager, for example, is publicly traded on the Canadian Securities Exchange and in over-the-counter (OTC) markets in the United States. Therefore, “we have audited financial statements…our internal controls are audited, so customers can get really comfortable.”

However, the perception of the cryptocurrency industry as unsafe and unregulated is still “the biggest challenge: getting the mass public to realize that this is here to stay, that it’s going to change the way you live over the next ten years, and it’s time to get in.”

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Still, Steve is “hopeful that more regulation comes in the United States.”

“We’re starting to see it globally, as more and more regulators are starting to pay attention and starting to work toward building regulatory frameworks that work for each and every jurisdiction,” he said.

However, he also believes that the United States could be dragging its feet when it comes to regulating the cryptocurrency industry: “unfortunately, I still think that it’s a little bit further out than it probably should be,” he said.

At the same time, though, “there’s a lot of things to be thought through when it comes to regulation, and I think the SEC is being thoughtful about it without reacting too fast.”

“But I’d like to see it come sooner, because I think the adoption will come even quicker.”

In the United States, a second round of stimulus checks could fuel further crypto adoption

And in fact, Steve said that he believes the rate of adoption in the cryptocurrency space seems to be accelerating–particularly after the spread of COVID-19.

Steve specifically spoke about the phenomenon of United States citizens using their government-issued stimulus checks for the first time: “we saw quite a few customers buy more crypto–taking their $600 or $1200 checks and buying Bitcoin, Ethereum, Voyager Token–quite a few.”

Indeed, “we’ve seen it across a lot of the online brokers, traditional and crypto,” he continued. “All of our volumes are up–[Voyager’s] is up significantly since March; we’re doubling and tripling our business month over month. It’s amazing what’s going on.”

And Steve believes that if another stimulus check comes, people who have the financial stability to consider the check as extra cash should think about getting into crypto: “If you have the ability to use that money as an investment opportunity…the simple case is that [crypto] is the highest-performing asset in 2020.”

Of course, “I would never say, ‘hey, take your $400 check and go put it into crypto’ if you need it to put food on the table… but I do think that if you have it as disposable income, it’s probably the best investment right now.”

COVID may have decreased public faith in fiat, causing investors to search for alternatives

Public perception of the value of fiat currency and other more traditional assets also seems to have shifted the narrative around cryptocurrencies.

“I think there’s something to be said about people wanting diversification of their assets,” Steve said. “Crypto is a great diversification; Bitcoin is part of a diversification strategy. I think people are starting to see that maybe [crypto] it’s not the most efficient payment mechanism, but it surely is a digital gold–it’s a hedge against the stock market and against currencies.”

“We’re seeing more and more people get involved,” he said. “And it’s not just millennials…our average consumer age is on the high-end of what’s considered to be millennial.

In other words, “I think you’re starting to starting to see people really flock to this,” Steve said. “There’s such uncertainty in the government,” he added, referring to the quantitative easing measures that the United States Federal Reserve has taken to prop up the economy.

“That’s a lot of money,” he said. “I don’t know how we will ever get out of that debt as a country–we probably never will. We won’t in my lifetime, I can tell you that.”

COVID has reinforced the case for the development of CBDCs

The COVID-19 pandemic may have also accelerated another area of development related to crypto: the development of central bank digital currencies, or CBDCs.

“I think it’s probable that we’ll get to the point where each government will have its own digital currency,” Steve said. “I think it’s likely that will happen, and I think that it’s necessary–COVID has brought that out.”

After all, “we were already starting to get closer to a digital monetary world where people were carrying out most of their transactions via debit or credit cards” in the pre-COVID days, Steve said.

And COVID has certainly cut down on the use of physical cash: “I don’t know too many people that want to go to a restaurant or bar and hand the bartender a $20 bill; I’m not sure the bartender wants a $20 bill anymore–they might prefer to be paid digitally as well.”

Additionally, a CBDC would allow money to be moved faster and “into people’s wallets” more quickly than it can currently be moved through the traditional ACH banking system, which “tends to take three to five days.”

What are your thoughts on the development of a CBDC in the United States? How do you think COVID has impacted the crypto space? Let us know in the comments below. 

This is an excerpt. To hear Finance Magnates’ full interview with Steve Ehrlich, visit us on Soundcloud or Youtube.

Capital One Files Patent for Cryptocurrency Market AI Prediction System | News Bitcoin News

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Brazilian Crypto Companies to Self-Regulate: Target a $100 Billion Market by Year-End

Brazilian crypto companies have signed a code of self-regulation that aims to legitimize and to boost adoption of crypto assets in the country. The document was signed under the auspices of Abcripto, the country’s association of cryptocurrency companies. According to … read more.

IMF Publishes Video Explaining Cryptocurrency That 'Could Be the Next Step in the Evolution of Money'

IMF Publishes Cryptocurrency Explainer, Saying It ‘Could Be the Next Step in the Evolution of Money’

The International Monetary Fund (IMF) has published a video explaining what cryptocurrency is. Besides suggesting that cryptocurrency could “completely change the way we sell, buy, save, invest, and pay our bills,” the video states that it “could be the next … read more.

Bitmex Restricts Ontario Residents as Ordered by Canadian Regulator

Bitmex Restricts Ontario Residents as Mandated by Canadian Regulator

Cryptocurrency derivatives exchange Bitmex will be restricting access to users from Ontario, Canada, starting the beginning of next month. The company says the restrictions are mandated by the Ontario Securities Commission (OSC). Bitmex Stops Servicing Users in Ontario Bitmex, a … read more.

Corporate Crypto Reserve Status: Software Firm Snappa Swaps 40% Cash Reserves for Bitcoin

Corporate Crypto Reserve Status: Software Firm Snappa Swaps 40% Cash Reserves for Bitcoin

On Monday, Canadian graphics software company, Snappa, revealed that it was holding bitcoin as a reserve asset. Snappa follows the firms Microstrategy and the Canadian restaurant chain Tahini’s by deciding to convert cash reserves into the scarce crypto asset. The … read more.

The Bitcoin Network Now Consumes 7 Nuclear Plants Worth of Power

The Bitcoin Network Now Consumes 7 Nuclear Plants Worth of Power

The SHA256 hashrate that secures the Bitcoin network has grown massively during the last few years, as Bitcoin’s processing power has touched all-time highs in 2020. Moreover, the gigawatts of electrical consumption powering industrial bitcoin mining today consumes as much … read more.

Venezuela Blocks Opposition From Disbursing $18 Million To Health Workers via Bitcoin Exchange Airtm

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Venezuela has blocked the main opposition from distributing $18 million worth of cash previously seized by the U.S. from the Nicolas Maduro government. The money is being dished out via peer-to-peer (P2P) crypto exchange Airtm to 62,000 healthcare workers starting … read more.

P2P Cryptocurrency Exchanges in Africa Pivot: Nigeria and Kenya the Target Markets

P2P Cryptocurrency Exchanges in Africa Pivot: Nigeria and Kenya the Target Markets

Leading cryptocurrency exchanges are bullish about Africa’s growth prospects as evidenced by their ongoing forays into the continent. During the month of August, Kucoin crypto exchange announced the addition of Nigeria’s naira currency as a payment option on its peer-to-peer … read more.

Google Opens The Door To Mass Cryptocurrency Adoption

The following is a contributed article from a content partner of Benzinga

Over the last five months, the cryptocurrency market has experienced a dramatic recovery, catapulting most cryptocurrencies to their highest value so far in 2020. During this time, a number of online payment behemoths have been ramping up their presence in the space, helping to make cryptocurrency investments more accessible than ever before.

Among these, Alphabet Inc.(NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google is arguably the biggest player to enter the mix, after recently partnering with multiple prominent blockchain companies to add Google Pay as a payment method for cryptocurrency purchases. 

Google’s Crypto Ambitions

Despite being arguably one of the most innovative companies today — with a large number of ultra-ambitious projects like Project Loon Waymo being developed by X, a subsidiary of Google that is widely billed as “The Moonshot Factory” — Google has largely kept its distance from the innovative field of cryptocurrency and blockchain technology.

However, as a result of rapidly increasing demand for cryptocurrencies among retail investors, the need for trustworthy, well-recognized fiat on-ramps that make investment both safe and simple has become a major focus point for blockchain companies looking to make their services and products more accessible. Likewise, Google has stepped in to meet this demand by now allowing crypto firms to offer Google Pay as a payment method.

Peer-to-peer Bitcoin exchange platform Paxful became the first crypto company to facilitate Google Pay transactions, allowing users in dozens of countries to purchase Bitcoin from vendors using Google’s payment solution. Coinbase also partnered with Google Pay back in March to allow users of its crypto-powered Visa debit card to make payments using their cryptocurrency balance by adding their Coinbase Card to Google Pay.

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Most recently, cryptocurrency trading analytics and education platform NewsCrypto became the first platform to offer direct cryptocurrency purchases using Google Pay. Customers using the platform can now purchase the NewsCrypto Coin (NWC) directly using Google Pay, in addition to PayPal, Visa, and more. These tokens can be used to unlock more advanced trading tools or can be staked to earn 30% APR.

With more than 67 million users, Google Pay’s entry into the cryptocurrency space could pave the way for mass adoption, by ensuring practically anybody with a smartphone can easily and securely buy and use cryptocurrencies. 

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PayPal And Visa Recently Joined The Mix

Google isn’t the only online payment giant that has begun growing its presence in the cryptocurrency and blockchain space. Both PayPal Holdings, Inc. (NASDAQ: PYPL) and Visa, Inc. (NYSE: V) have also formed a large number of new arrangements with blockchain and cryptocurrency firms in recent months.

Back in June, PayPal revealed it was planning to launch its own cryptocurrency trading and direct purchase solution through a partnership with Paxos. It was later found that PayPal had originally outlined these plans back in March in a letter to the European Commission, where the California-based payment firm describes its intent to “achieve greater financial inclusion and help reduce/eliminate some of the pain points that exist today in financial services.” 

PayPal already works hand-in-hand with a small number of cryptocurrency brokerage platforms, including Coinbase, Coinmama, and CEX.io, as well as a handful of trading platforms, but it is clear from recent leaks that it has much larger ambitions in the cryptocurrency space. 

Visa also changed its tune on cryptocurrency this year, filing a patent for a cryptocurrency system that could be positioned to replace physical currencies. The patent, titled “digital fiat currency,” was filed by Visa International Service Association late last year, but was published back in May. 

The payment firm has also made strategic investments in crypto firms like Anchorage, and recently welcomed Coinbase onboard as a principal member, allowing it to issue debit cards without relying on a third-party provider. In a recent blog post titled “Advancing Our Approach to Digital Currency,” Visa highlighted its plans to develop its digital currency services by supporting the digital currencies their clients demand and pursuing projects that benefit their clients and partners.

Both Visa and PayPal were originally poised to form founding members of The Libra Association — a consortium of companies tasked with governing Facebook’s Libra cryptocurrencies — but pulled out after the project encountered significantly regulatory push back. 

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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