cryptocurrency – The Blockchain Report

Bitcoin freefall continues

Bitcoin traded for below $8,000 Friday. It’s the first time bitcoin has traded for below $8,000 since November of last year. (CNBC) Bitcoin has lost more than $72 billion in market cap in 2018 (Business Insider via Yahoo).

Bitcoin isn’t the only cryptocurrency having a bad 2018.

Overall, cryptocurrencies are off 34% year-to-date. The entire cryptocurrency field has lost $207.7 billion in market cap, according to data from CoinMarketCap. (Fortune)

What’s going on? There are a variety of factor’s driving the bitcoin freefall and cryptocurrency selloff. Part of it is a market correction. Part of it is a response to regulatory concerns. India appears ready to ban cryptocurrencies as a payment mechanism. (Reuters). Meanwhile, Facebook is cracking down on coin promotions and the SEC and other regulatory agencies are in the midst of investigations.

Be smart: As the blockchain and cryptocurrency markets mature, there’s going to be more regulatory action and news. This is the nature of an emerging industry. On Tuesday, for example, there’s a Senate hearing on what the oversight role for the SEC and the Commodity Futures Trading Commission should have on “virtual currency.” At some point, the market won’t show the same volatility to regulatory intervention that it does now. But nobody knows when that moment will arrive.

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Monero malware incidents on the rise

Monero malware is becoming a serious problem. The number of different malware attacks, which use infected computers to secretly mine monero, is rising precipitously. January alone saw three new attacks. And there were more than a dozen attacks in 2017. (Bleeping Computer)

Key vulnerabilities: Machines running Cleverence Mobile SMART server, Apache Struts and DotNetNuke have all been targeted by malware. So have non-enterprise users in Thailand, Vietnam, Egypt, Indonesia, and Turkey. (Bleeping Computer)

Smart take: As long as mining remains a resource-intensive (and profitable) activity, it will remain a popular use for malware.

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Weiss gives ethereum higher grade than bitcoin

Independent financial ratings firm Weiss Ratings awarded ethereum a B and bitcoin a C+ in its first cryptocurrency ratings report. No cryptocurrency received an A. EOS was the only other currency to receive a B. (CNBC)

The key facts: Bitcoin was dinged for slow transaction times, high transaction fees and no method to upgrade its underlying technology. Ethereum, by contrast, was faster and had better underlying technology. (CNBC)

Market fears: Weiss Ratings had to overcome distributed denial of service attacks to publish the ratings report. The attacks appear to have originated South Korea. Fears of low ratings for certain cryptocurrencies may have prompted the DDOS attacks. (Palm Beach Post)

The bottom line: Weiss Ratings is considered a tough, but fair rating service. As cryptocurrencies gain mainstream acceptance, more ratings like this will come out. And as more ratings come out, cryptocurrencies will move from a speculative market play to a much more informed one.

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Sweatcoin rewards exercise with cryptocurrency

The quick read: Sweatcoin, which rewards exercise with its own private cryptocurrency, has rocketed up the app charts in recent weeks. It sits at number two in the App Store among free apps and claims to have 2 million weekly active users and 5 million users in the past year. (TechCrunch) It is available for both iOS and Android.

How it works: The app counts your steps and gives you “Sweatcoins” based on the number of steps you’ve walked (1,000 steps=0.95 sweatcoins). You can buy fitness gear, classes and other fitness related items using the coins.

Smart take: The key to creating a successful private coin is utility. Is there a market/environment in which the coin is desirable and can be acquired and used easily? The answer to that question in this case is yes. Acquisition is simple. The phone measures your steps. The more steps you take, the more coin you make. And because this is a fitness tracker, the presumption is you’ll spend this coin on items related to fitness and healthy eating. This is the perfect match between incentive and market.

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MoneyGram to test Ripple’s XRP cryptocurrency

The quick read

The technical and financial infrastructure that supports cross-border payments is an absolute mess. That’s why banks and payment companies are looking for better, more efficient ways to process these transactions. Blockchain technology holds promise in this space, which is why MoneyGram has agreed to test out Ripple’s XRP cryptocurrency. (American Banker)

MoneyGram, the world’s second-largest cross-border payments company, is a big get for Ripple. Ripple has faced significant public scrutiny over the value of its XRP currency and the centralized nature of its coins. (TechCrunch)

The key details

International bank payments are slow and the associated fees often remain unknown until after a transaction has reached its final destination. MoneyGram, a major player in the $600-billion-a-year remittance market, is similarly afflicted. Enter Ripple. The San Francisco startup is offering on-demand liquidity and rapid foreign exchange through XRP, theoretically allowing financial institutions to send payments around the world without the need for multiple corresponding accounts. Fees would be lower and the payment flows more transparent. (American Banker)

The bottom line

This is a big get for Ripple after a wave of bad publicity and an ever bigger test for blockchain technology. The current cross-border payments system is extremely inefficient. If blockchain technology can solve this problem, it’s a huge win for the platform.

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South Korea eyeing cryptocurrency trading ban

The quick read

The trading of cryptocurrencies is booming in South Korea. And government officials are not happy about it. Authorities raided local exchanges Wednesday and are pressing forward with tax evasion charges. The government also announced that legislation to ban the trading of cryptocurrencies is in the works. The raids and planned legislation initially sent local coin prices tumbling 21 percent and global bitcoin prices down about 10 percent. (Reuters)

The key facts

South Korea is a major player in cryptocurrency trading.

(Bitcoin) still trades at around a 30 percent premium compared to other countries. (Reuters)

And it’s not just bitcoin. The South Korean market trades heavily throughout the cryptocurrency space. Any disruption in South Korea is a disruption in the global market.

The bottom line

The South Korean legislation is still being written and needs a majority vote in the National Assembly to pass. That’s still months away. But regulators and politicians are concerned. And that’s not a good thing.

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Kodak set to launch new blockchain platform (and cryptocurrency)

Kodak announced plans Tuesday to launch a new digital rights management platform for images based on blockchain technology and a new cryptocurrency to buy and sell images on that platform. Kodak is calling the rights management system KODAKOne and the cryptocurrency KODAKCoin. Kodak will hold an ICO for KODAKCoin on January 31 that “is open to accredited investors from the U.S., UK, Canada and other select countries,” the company said in a press release. (Kodak) Kodak stock prices surged 30 percent after the announcement. (CNBC)

Key details

Utilizing blockchain technology, the KODAKOne platform will create an encrypted, digital ledger of rights ownership for photographers to register both new and archive work that they can then license within the platform. With KODAKCoin, participating photographers are invited to take part in a new economy for photography, receive payment for licensing their work immediately upon sale, and for both professional and amateur photographers, sell their work confidently on a secure blockchain platform. KODAKOne platform provides continual web crawling in order to monitor and protect the IP of the images registered in the KODAKOne system. Where unlicensed usage of images is detected, the KODAKOne platform can efficiently manage the post-licensing process in order to reward photographers. (Kodak)

Smart take

Shares of Kodak stock rose quickly because anything remotely associated with bitcoin, like the new KODAKcoin, is hot with investors. But the real value here is the KODAKOne platform. Blockchain technology is well-suited for digital rights management. And photographers have been looking for a digital rights solution for almost two decades.

It’s no accident Kodak CEO Jeff Clarke focused on photographers in the company’s press release:

“For many in the tech industry, ‘blockchain’ and ‘cryptocurrency’ are hot buzzwords, but for photographers who’ve long struggled to assert control over their work and how it’s used, these buzzwords are the keys to solving what felt like an unsolvable problem. Kodak has always sought to democratize photography and make licensing fair to artists. These technologies give the photography community an innovative and easy way to do just that.”

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Telegram turns to blockchain and crypto to challenge WeChat

The quick read

The popular messaging system Telegram (100 million active users according to the company in 2016) is building its own blockchain platform and cryptocurrency. (TechCrunch)

The key facts

The “Telegram Open Network” (TON) will be a new, ‘third generation’ blockchain with superior capabilities, after Bitcoin and, later, Ethereum paved the way. The launch will be funded with an enormous Initial Coin Offering, with forthcoming private pre-sales ranging into the hundreds of millions, potentially making it one of the largest ICOs to date. (TechCrunch)

The bottom line

Telegram is positioning itself to be the global version of Chinese juggernaut WeChat. WeChat is much more than a messaging platform. It is the hub of mobile payments, commerce, social networking and communication in China. Tencent, which owns WeChat, is valued at more than $500 billion. Telegram is betting its new blockchain platform and cryptocurrency will propel it to similar heights.

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