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Metals Wants to Solve Payments for the Unbanked with the Bitcoin Blockchain

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Editor’s note: Headline altered to reflect Metal’s endeavor to bring payments for the unbanked via the bitcoin blockchain.

Hacked discussed with Marshall Hayner the evolution of his startup, called Trees. Once focused on  delivering marijuana by drone – a la Snoop Dogg’s big music via drone push – the service has since been put on hold as Hayner develops Metal, a consumer-friendly approach to melding the world of high-risk payments, rewards and blockchain technology.

What’s on the agenda for Metal in the coming months?

MH: We will be unveiling our payment processing platform, which uses blockchain technology to solve a lot of problems in payments. Circle and others have alluded to using Bitcoin, but their models are not really seamless and don’t incentivize anyone to participate in the blockchain network powering Bitcoin. Rather they are money transfer services with bitcoin exchanges where you can buy marked up bitcoins. We intend to go beyond our competitors, linking credit and debit to our system to send payments, attaching a prepaid debit card, and using a proprietary patent pending system – so our users are charged minimal to no fees. This should incentivize the use of crypto. We also clear payments immediately, thanks to crypto-currency.

Last time we spoke, you were considering a marketplace. How has the model evolved?

MH: We started working on a marketplace and payment processor, and Gateway helped us to realize that we were doing too many things at once. They advised us to focus on logistics, the marketplace or payments. We know payments is a struggle for all high-risk industries industry. This is why we believe bitcoin plays a big solution for the unbanked.

Some are lucky and get banks if they have connections, but the relationships are tenuous at best. Most dispensaries do not want to deal with digital currency because of price fluctuations, legal status and taxes. But they would like to benefit from some of what it has to offer.

What is Metal’s product currently?

MH: We started building this platform, “Metal,” not just for the unbanked, but for everyone to send and receive payments and get rewarded. We are targeting digital currency enthusiasts, mainstream consumers and small businesses in high-risk areas that services like Square and Stripe don’t serve.

Another problem those services have is that they are not out of the box. We plan on creating an out of the box payment solutions platform that does not require high-risk merchants spending weeks or months to find a merchant processor. Because people don’t necessarily understand Bitcoin, we’ve created a friendly system that pegs digital currency to fiat value to neutralize price fluctuations. We also have incorporated a reward system for when users send and receive payments. We are using multi-signature technology with bitcoin as well as omni layer and other alternative cryptocurrencies.

What’s the goal of the platform?

MH: We want to realize the original goal of PayPal, and that is to freely send encrypted money from anywhere in the world with nothing more than an email address or a phone number for zero fee.

Is the platform tailored only for high-risk industries?

MH: Metal is not solely focused on high risk, we are however targeting this area as many are unbanked. The ability to invoice for digital currency in a friendly way through credit card – that’s something not yet available out of the box, for anyone.

We are developing Paypal functionality, linking a debit card,  the ability to buy gift cards, virtual credit cards, yet with freedom of bitcoin and digital currency. We are also going incorporate a rewards aspect.

Traditionally, you are paying a processing fee. With PayPal, you’re paying high rates, paying three percent to six and a half percent to send money. High-risk processors charge as much as 7-10%. We are building a system proprietary and patent pending to process for nothing or in some cases get an extra 5-10% in rewards.

Change needs to happen from the bottom up, from the consumer and retail level. Imagine a system with the benefits of PayPal style transactions without the stress of holding onto funds in a way where you have to trust one centralized entity with the keys.

Featured image from 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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5 stars on average, based on 1 rated postsJustin O'Connell is the founder of financial technology focused CryptographicAsset.com. Justin organized the launch of the largest Bitcoin ATM hardware and software provider in the world at the historical Hotel del Coronado in southern California. His works appear in the U.S.'s third largest weekly, the San Diego Reader, VICE and elsewhere.




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Bitcoin

Is Bitcoin Really Un-Tethered? Yes, Says University Researcher

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The debate surrounding Tether’s (USDT) effect on the price of Bitcoin has been around since the start of the year when Tether Limited was subpoenaed by the U.S Commodity Futures Trading Commision. A short while later this anonymous report was published which claimed USDT was being printed willy-nilly and that it was subsequently manipulating the price of BTC.

The BTC-Tether Connection

The debate was sparked again in June when this research paper was presented by two University of Texas researchers. The paper, titled Is Bitcoin Really Un-Tethered?, written by John Griffin and Amin Shams, arrived at the conclusion that Bitcoin was indeed being manipulated by Tether issuances:

“Overall, our findings provide substantial support for the view that price manipulation may be behind substantial distortive effects in cryptocurrencies. These findings suggest that external capital market surveillance and monitoring may be necessary to obtain a market that is truly free.”

The paper noted how little Tether activity had to take place for Bitcoin to be affected, stating at one point that a mere 1% fluctuation in USDT could affect BTC prices hugely:

“Indeed, even less than 1% of extreme exchange of tether for Bitcoin has substantial aggregate price effects. The buying of Bitcoin with Tether also occurs more aggressively right below salient round-number price thresholds where the price support might be most effective. Negative EOM price pressure on Bitcoin only in months with large Tether issuance indicates a month-end need for dollar reserves related to Tether.”

A Case for the Defence

The above paper grabbed headlines and was viewed close to 90,000 times on SSRN, however, an alternative case laid out by Dr. Wang Chun, Ph.D. in Finance at Queensland University has been viewed only 1,500 times, and arrives at the opposite conclusion – namely that no correlation is found between Tether issuances and Bitcoin price.

Furthermore, the report even suggests that issuances of Tether are broken down into time-marked clusters to avoid having an effect on BTC:

“…we find Tether grants are strongly autocorrelated. This suggests Tether Limited is intentionally breaking down large grants into smaller blocks to be issued over several days, perhaps in a bid to reduce price impact on Bitcoin exchanges. It may also suggest demand for Tether coins are clumped and exhibit time clustering.”

Either way, Dr. Chun admits that Tether issuances frequently impact BTC trade volumes, albeit briefly. But ultimately, returns for Bitcoin holders are not affected by USDT:

“In conclusion, we do not find any evidence suggesting that Tether issuances cause subsequent increases in Bitcoin returns. However, we do find that Tether issuances are highly autocorrelated and cause subsequent increases in Bitcoin (and Tether) trading volume over the short term.”

Both sets of analysis use different methods in their approximations. The report by Griffin and Shams of Texas University approached the problem by monitoring wallet activity on exchanges where USDT trades were popular.

Dr. Chun used vector autoregression, or VAR analysis. Both reports make for interesting reading without appearing conclusive in their findings.

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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4.4 stars on average, based on 62 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Analysis

Long-Term Cryptocurrency Analysis: Bearish Trend Intact Despite Explosive Rally Attempts

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The negative trend in the cryptocurrency segment continues to be dominant, with almost all of the top coins trading below the structural support levels that were broken during the summer months. Bitcoin is still above the $5850 level, the last base support before last winter’s explosive speculative event, but Ethereum, Ripple, Litecoin, and the other main altcoins all continued relentlessly lower.

Most of the majors formed a bottom in August, even though Ethereum continued to lead the way lower amid the bleak sentiment and capital flight. Several oversold rally attempts already failed in the segment, leaving the long-term declining trends intact, with last week Ripple providing hope for bulls with its explosive move higher.

While some of the coins tried to follow Ripple higher, the development of a healthy leadership failed yet again, add our trend model continues to be overwhelmingly bearish from a long-term perspective. With that in mind, the short-term buy signals should still be treated cautiously by traders. The August lows are not in direct danger right now, and a more durable bottom might already be in, but a broader rally would be needed to confirm a trend change.

BTC/USD, Daily Chart Analysis

While BTC has been holding on relatively well during the summer months, in the past weeks, as the largest coin was hurt by selling related to large wallets. The coin failed to show bullish momentum despite its stability, and a break below the key long-term support zone near $5850 is still possible here.

Primary support is at $6275, and in the case of a breakdown below $5850, the next major support zone is found near $5000, while resistance is ahead at $7000, between $7200 and $7300, and in the $7650-$7800.

ETH/USD, Daily Chart Analysis

After spiking below $180 and forming a panic-bottom, Ethereum rallied up to $260, but due to the extent of the preceding decline, it didn’t reach the declining trendlines which dominated the market for several months. The coin has been leading the selloff in the segment, and now a re-test of the lows is once again likely, even if a more durable bottom is already in.

Short-term support is found at $200 and $180, while below the recent low, further zones are found near $160 and $130, with resistance zones ahead between $275 and$280, near $300, and in the $330-$335 zone.

(more…)

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 353 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin

Bitcoin’s Notorious Whale Confirms Fire-Sale

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Bitcoin’s notorious ‘Tokyo Whale’ offloaded hundreds of millions worth of BTC over a three-month period, highlighting once again the impact of fat hands on a nascent market. The liquidation period was between Mar. 7 and June 22 – a three-and-a-half-month stretch with a peak-to-trough of roughly $9,900-$5,755 for the bitcoin price.

Tokyo Whale

On behalf of Mt Gox creditors, Tokyo’s Nobuaki Kobayashi sold approximately 24,658 BTC and 25,331 BCH between the creditors’ last meeting and the date of the court ruling. That ruling, on June 22, allowed the estate to exit bankruptcy and enter civil rehabilitation.

The sale earned creditors nearly 26 billion yen, or $230 million U.S. On average, bitcoin sold for about $8,100, which is 26% higher than today’s prices. Bitcoin cash yielded an average sale of $1,190, which is nearly three times higher than current prices.

In documents that appeared on CCN, Kobayashi said the bankruptcy trustee “has already secured a suitable amount of money to secure the interests that are expected to have obtained by BTC creditors under the Bankruptcy Proceedings in connection with BTC claims to be treated as non-monetary claims under the Civil Rehabilitation Proceedings.”

In April and May, more than 24,000 units of BTC and BCH were moved out of wallets thought to be associated with Mt Gox trustee in at least two separate incidents reported by Hacked and CCN. It is now safe to assume that the transfer was part of the liquidation undertaken by Kobayashi on behalf of the creditors.

For whale watchers, the good news is Kobayashi is not planning any additional fire sales now that Mt Gox has entered civil rehabilitation. Previously, he was prepared to offload billions more in cryptocurrency holdings.

Bitcoin whales are partly to blame for the yearlong downtrend in market prices. Several mysterious price collapses, including one earlier this month, have been traced back to a few wallet addresses transferring large sums of coin to virtual exchanges. As Hacked previously reported, a whale moved 110,000 units of BTC and BCH from multiple wallets during the month of August. Roughly 14% of the total made its way to Bitfinex and Binance, where they may have been liquidated.

BTC/USD Update

It didn’t take whales to sink bitcoin on Tuesday. The leading digital currency was retreating in lockstep with the broader market as last week’s sharp rally continued to fizzle. At press time, BTC was down 2.4% on Bitfinex to trade at $6,425. The downfall pushed prices below the 50-day moving average, a critical short-term inflection point.

Bitcoin’s daily trade volumes amounted to $4.4 billion, which is above the minimum threshold observed in past rallies. But even with Tuesday’s loss, bitcoin made off with 53.6% of the overall market capitalization for cryptocurrencies. Bitcoin’s dominance rate fell below 52% last week as XRP, XLM added billions to their respective market caps.

Based on current price trends, bitcoin is unlikely to test recent highs anytime soon. BTC remains firmly entrenched in a long-term bear market, with consecutive rally attempts fading out at or above the $7,000 hurdle. This psychological threshold has proved highly elusive in recent months.

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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4.6 stars on average, based on 614 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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