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Ethereum Founder Says Central Banks are Incapable of Creating Own Cryptocurrency

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Central banks have expressed keen interest in creating their own cryptocurrencies, probably in realization that blockchain-powered assets are more than just a fad. It’s too bad they lack the paradigm to do so, says Ethereum founder Vitalik Buterin.

Vitalik Doesn’t Think They Can Do It

A central bank-backed cryptocurrency would simply amount to “a server and a bunch of marketing buzzwords to make it look like a blockchain,” says Buterin, according to Jeff John Roberts’ latest Fortune report.

The 23-year-old Buterin said it would take years for central banks to mint their own coins, suggesting that existing blockchains needn’t be worried about competition from government.

Indeed, central bankers have spent the past few years mulling over the impact of cryptocurrencies on traditional payment methods. It’ll be another few years before they develop a system comparable to bitcoin or Ethereum, if at all.

Russia could become the first case study in government-backed cryptocurrency. Reports from TASS suggest that central regulators are embarking on a ‘CryptoRuble’, or a digital currency system backed by fiat money.

Buterin is a native of Russia, but currently resides (at least partially) outside Toronto. That may explain his recent visit to the three-day Swell conference in the city. The event was hosted by Ripple, the world’s third-largest digital asset by market cap.

Can Governments Contain Cryptocurrency?

Buterin has raised awareness of the irony in proclaiming a centrally-controlled cryptocurrency. By definition, a cryptocurrency cannot be contained within a single jurisdiction, since mining can carried out by anyone, anywhere. This is perhaps what’s making central bankers so nervous. Although Russia’s CryptoRuble aims to centralize the mining of cryptocurrency, it’s unclear how such a system would be administered.

The inherent tension between central banks and cryptocurrencies will likely grow over time as more people use digital tokens as payment. With the exception of bitcoin, cryptocurrency has yet to take off as a payment method. Japan could very well be the first case study in how quickly bitcoin will be adopted to pay for goods and services. The world’s third-largest economy has already recognized cryptocurrency as a legal payment method, leading to speculation that hundreds of thousands of domestic merchants will start accepting payments within the first year.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 664 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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XRP Price Analysis: XRP/USD Performing Better than Peers; Another New Partner Announced

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  • Ripple’s XRP weighted to the downside, but not performing as bad as some of its peers.
  • CIMB Group are the latest financial organisation to be utilizing Ripple’s technology.

XRP/USD has been firmly on the back foot during trading over the last two sessions now. Selling pressure had hit the whole market on 13th November. This went on to further intensify in the following session, 14th November. A total blood bath was observed across the board, with huge areas of support being breached. The wave hit the entire market. Ripple’s XRP has managed to hold a firmer ground, in comparison to some of the losses encountered with its peers.

Ripple Reveals New Partner – CIMB

CIMB Group, one of the largest south Asian banking organizations, are the latest to be utilize Ripple’s technology. CIMB will leverage Ripple’s technology for its SpeedSend remittance product, this coming from a joint press release. The SpeedSend product is available in a spectrum of Southeast Asian markets. Countries include: Thailand, Philippines and Vietnam. Ripple continue at a rapid pace adding large financial institutions to its network.

Ripple via their announcement stated the following: “Ripple’s blockchain-based solution has been deployed to enhance CIMB’s proprietary remittance product called SpeedSend. This service allows customers to send and receive money with direct account crediting and instant cash collection. The enhancement improves their access to cross-border remittances across the globe — both inbound into ASEAN and outbound to other countries. It is already enabling remittances to corridors such as Australia, USA, UK and Hong Kong.”

Technical Review – XRP/USD

XRP/USD daily chart

XRP/USD is running at three consecutive sessions in the red, nursing chunky double-digit losses over this period. The price dropped over 20%, a move that was very much in line with the rest of the cryptocurrency market. Price action had been moving within a triangular pattern formation, since 21st September. Thie XRP price observed much narrowing over this period. During the heavy selling pressure on 14th November, the bears had pierced the lower support of the mentioned pattern.

Despite the large lower wick seen on 14th November candlestick, the price managed to close within boundaries of the triangular formation. In terms of current price action on the latest for today, XRP/USD is seen below this area of support. Should the market bears manage to push for a breach and daily close underneath the supporting trend line, this could cause large devastation. Eyes could be on a return to the $0.3000-$0.2500 region. Lastly, worth noting, looking to the upside, the resistance would likely be seen around $0.4800, and this level is critical. This is where the lower trend line is seen tracking.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 50 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Cryptocurrencies

Why Investors Should Pay Attention to Decred

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Bitcoin has massive potential as an investment, there’s no denying it. Anything with the goal of becoming a global currency has the ability to be an option to replace “all the money” in the world and gain a similar market capitalization.

But at the same time, Bitcoin has its problems. Having been released in 2009, there has been plenty of time for some of its weaknesses to be exposed. One of the largest weaknesses is with how it is governed, but there are several more. This is why Decred was developed.

Free of Third Party Influence

As an autonomous coin, there have naturally been many questions with how Bitcoin is governed and what the best way to continue advancement in the area is. This is to be expected, but there are also many things about Bitcoin to be envied, such as the fixed supply, fungible coins, and diehard community that surrounds it.

The founders of Decred were Bitcion developers in teh beginning, but they saw issues with the protocol. In their analysis of the coin, they identified 3 main issues: governance, funding, and security.

The governance issue is to do with stakeholders. The way Bitcoin is designed, miners are decision makers. This doesn’t mean they will always act in accordance with what is best for token holders though.

Additionally, the method of funding development is uncertain, to say the least. Incentives need to be in place to get developers dedicated to teh long-term prosperity of the proejct, and right now, that just isn’t happening.

Finally, security is in question due to the vulnerability to 51% attacks from miners. All of these issues essentially come down to planning a way to align the incentives of miners with those of tokenholders.

New Solutions to Old Problems

Upon proposing their solutions, these developers were essentially excommunicated, which led them to start Decred in 2013.

One of the main innovations of Decred was the Proof of Work/Proof of Stake hybrid they invented in order to solve teh governance issues. Additionally, the algorithm was designed to pay 10% of block rewards to developers from the very beginning.

And as for security, with the new POW/POS protocol in place, potential attackers would need both the majority of hashpower and the majority of tokens. This makes it far too costly for any entity to ever attack Decred without ruining themselves in the process.

Governance Issues Create Opportunity

Governance has always been an issue in question with a protocol whose original reaosn for being designed was to move away from the centralized model of doing business that led us into so many financial crises. Decred is designed to start aligning the incentives of all stakeholders, and still holds true to many of the original promises of Bitcoin (its maximum supply is even the same at 21 million).

The DCR token is currently trading around 0.006 BTC and is ranked 25th in market capitalization ($312 million). This is a relative low for the coin and it may be worth picking up a small position as a minor hedge against Bitcoin.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Why Investors Should be Paying Attention to Substratum

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Decentralization has become one of the key buzzwords surrounding the blockchain craze, but sometimes people forget the main reason decentralization is important: control. Right now, studies show that Amazon controls 40% of cloud services and Netflix controls 15% of the world’s Internet traffic. This is borderline insane, especially when you consider how all of these companies are native to the United States.

Similarly, a need for privacy exists, and with the growing NSA and CIA threat of being spied upon at home, as well as any foreign agencies, it would be useful to be able to have control of your own Internet services.

Substratum to the Rescue

Would you give computing resources to help make the internet a better space, and get paid along the way? Substratum is betting on the idea that people would be keen to participate in this market, and have been building a company that is able to facilitate it.

They ran their ICO in August 2017, with the goal of raising the funds necessary to create a market for hosting services.

Their proprietary token, SUB, is used as payment for serving requests. Network members are compensated with microtransaction for hosting sites, databases, and applications.

On a longer time horizon, Substratum aims to help maintain net neutrality, which has become a consistent topic of discussion in the tech world as of late. Their services will focus on privacy and security (by using encryption) to provide superior hosting services in the beginning and then expand to other services like decentralized storage and service of content, as well as development tools for the new “decentralized web”.

The End Mission

The end mission of a company like Substratum is to create a decentralized version of the web that doesn’t have any of the setbacks that results from many of the  oligopolies currently in effect. Net neutrality has become a major topic of argument in the last few years, and finding new ways to avoid anti-competitive practices is absolutely essential as we move into the next phase of mankind’s technological development.

We can all imagine how this would affect the western world, but the promise carries even more importance when you look at more restricted parts of the world, like China or Vietnam. The firewalls currently in place may be circumvented without needing Tor or a VPN.

Substratum has the ability to solve a lot of the current issues regarding censorship resistance. There have been occasional threats or suspensions of service by hosting platforms when they deem something to be “outside their terms of service”, but this is a slippery slope that can be mitigated by having a platform like Substratum. The main difference is that nodes are fully encrypted so they can’t even tell what they are hosting.

A Profitable Opportunity

Whenever a coin hits an all-time low, that makes for a great buying opportunity. Substratum has been hit recent lows, and this makes for a great trade. You may either wish to get in around 0.00001-0.00002 BTC and sell off when you break 0.00005, or you can turn this into a longer-term trade. It really depends on your risk appetite at this moment in time.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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