Criminals Drop Bitcoin in Favour of Other Cryptocurrencies for Anonymity

Criminals are dropping bitcoin in favour of other cryptocurrencies in a bid to achieve greater anonymity for their criminal activities.

That’s according to the co-founder and president of Blockchain Intelligence Group. He estimates that the number of illegal transactions involving bitcoin fell from half the total volume to around 20 percent last year.

In an interview with CNBC, Shone Anstey, co-founder and president of Blockchain Intelligence Group, said:

“Now it’s significantly less than that.”

This is despite the fact that the overall transaction volume in bitcoin has grown. At the time of publishing, on the 31st August, bitcoin is trading at $4,614, a 0.77 percent rise in 24 hours. Over the past seven days its value has increased by 10.52 percent. Its market cap is now worth $76.3 billion.

After bitcoin recently soared above the $4,600 mark it would be natural to think that criminals would favour it more. However, it appears that that isn’t the case.

Criminals Look Elsewhere

Instead, it seems that criminals are now turning their attention to other cryptocurrencies. According to a U.S. Homeland Security official criminals are ‘looking more closely at other currencies like monero and ethereum.’

The official said:

“What the criminals are starting to see, and some of the trends we’re picking up as well, is that bitcoin also works equally just as much against you as it does for you.”

According to Chainalysis, the leading provider of anti-money laundering software for bitcoin, the rise of cybercrime in ethereum has risen with initial coin offering (ICO) financing. In a blog post, it states that total cybercrime revenue rose from $100 million in June to $225 million in August this year.

The highest grossing exploit was the DAO hack in 2016 after the DAO had sold over a billion tokens worth $150 million. Taking advantage of a vulnerability, criminals managed to steal around $74 million worth of DAO tokens from 11,000 victims.

Smart coding company Parity has also been subjected to a security breach. On the 19th July, it reported that more than 155,000 ether, worth $35 million, had been stolen.

Chainalysis states that as ICOs are time sensitive access to the sale necessitates investors to trade their ether quickly for alternative tokens. As a result, investors may find themselves tricked into providing their credentials to fake websites.

This was certainly the case for victims of the CoinDash ICO, which occurred prior to the Parity hack on the 17th July. A hacker was able to steal over $10 million after changing the contract address of the ICO project. Investors unaware of the situation continued to place their funds into the hacked CoinDash account. Consequently, around 43,500 ether was sent to the fake address.

Chainalysis adds:

“These credentials are then used to drain accounts. The average financial loss incurred per victim has increased by 20% from $6,700 in June 2016 to $8,000 since the DAO.”

Since the DAO, Chainalysis estimates that there has been around 30,000 victims of cybercrime on ethereum, each losing an average of $7,500.

Monero Gains in Value

Since the beginning of 2017 monero’s value has increased significantly. At the time of publishing its trading at $140, which is an 8.45 percent rise in 24 hours. Over seven days its value has increased by 60 percent. Its market cap is worth just over $2 billion.

As can be seen from the chart below, monero was trading at $16.40 at the beginning of 2017. Then its market cap value was worth nearly $224 million.

Its explosive growth could be down to the fact that it is designed to be more private than bitcoin. This means it’s completely anonymous and virtually untraceable. Consequently, this makes it the perfect altcoin for criminals to use.

The highest it has reached is $154, up over 1,000 percent this year, according to CoinMarketCap.

For those craving the need for secrecy on the dark web criminals are turning to monero. Darknet marketplace AlphaBay was one site that permitted people to use monero and ethereum as alternatives to bitcoin. However, AlphaBay was shut down by law enforcement on the 20th July. According to a report, authorities in the U.S., Canada and Thailand coordinated raids on the 5th July, which saw equipment being seized. Europol claim that since 2014, when AlphaBay was founded, an estimated $1 billion in transactions has been processed.

Authorities Get Savvy

AlphaBay is not the only darknet marketplace that authorities have shut down.

According to the U.S. Justice Department and Europol, another large dark web marketplace was also seized this year. Known as Hansa, it listed thousands of vendors selling illegal drugs, illicit products and counterfeit identification documents.

Following that was the announcement from the U.S. District Court for the Northern District of California. On the 26th July, a grand jury had charged Russian national Alexander Vinnik and the bitcoin exchange he is alleged to have operated, BTC-e, with money laundering and other crimes related.

Derek Benner, Homeland Security Investigations (HSI) Acting Executive Associate Director, said:

“Homeland Security Investigations is strongly committed to tracking down criminals who seek to strike at the foundations of global financial security through complex money laundering schemes. The resulting indictment is a clear representation of why our close law enforcement partnerships are vital to our shared missions. HSI will continue to aggressively target those who deliberately seek to exploit financial systems for personal gain.”

The Homeland Security official added:

“We’re getting a lot better through law enforcement tracking those [criminals] and holding the exchanges more accountable. I think [bitcoin]’s a lot more legitimate than people give it credit for.”

Bitcoin Will Still be Used

Even though a July report from the EU suggested criminals were rarely using cryptocurrencies, they will still find it attractive. This is because they can convert it easily into cash without any middle men.

However, while bitcoin was perceived to be anonymous when it first emerged, it doesn’t offer the same level of anonymity that monero does. So much so, that Llew Claasen, the executive director of the Bitcoin Foundation recently said at a conference:

“Bitcoin is not completely anonymous and it is fairly easy for someone, say a revenue officer, to work backwards to find who was responsible for a transaction.”

Featured image from Shutterstock.

Bitcoin Price Soars to New All-Time Record High Above $4,600

The number one digital currency has gone and done it again. The bitcoin price has scaled to over $4,600 for the first time, pushing its market cap value to over $76 billion.

At 13:54 UTC, on the 29th August, the bitcoin price was recorded at $4,602. As a result, the combined market value soared to $164.4 billion.

At the time of publishing its price has dropped to $4,542. However, it marks a significant time for the digital currency.

Since the beginning of 2017, the bitcoin price is up by around 350 percent from roughly $1,000 on the 1st January. It has since quadrupled in value. On the 13th August, bitcoin finally managed to scale the $4,000 mark amid strong Japanese interest. Geopolitical turmoil in North Korea has also impacted its price as investors continue to consider it as a safe haven.

The week prior to that the bitcoin price had re-scaled the $3,000 mark when it reached $3,200 for the first time. Since then it has continued its upward trajectory, pushing the currency to new heights.

Ethereum Scales $360

Ether prices have also surged to new heights not seen in two months.

At the time of publishing, ethereum is trading at $369, pushing its market cap to $34.8 billion. In 24 hours it has risen by 7.30 percent whereas in seven days it has increased by 17.24 percent.

As can be seen from the chart below, ethereum’s price dropped to a low of $149 on the 16th July. Since then it has steadily been climbing up in price back to its current listing. Prior to dropping to $149, ether prices were trading below $400, at $391. It has yet to re-scale to that previous high. However, with its steady price gains it’s expected to see new heights.

Litecoin Climbs Above $60

Fifth-placed litecoin has also recorded new highs. Strong trading has helped to push its price over the $60 mark for the first time.

This price rise is due to increased trader interest from Japan and Korea. According to a report, Korean exchange Bithumb was responsible for over 20 percent of trading in litecoin in the past 24 hours.

At the time of publishing, litecoin is trading at $62.51, with a market cap value of $3.2 billion. In the past 24 hours its value has decreased by 1.07 percent. Meanwhile, in seven days its has risen by 34.13 percent.

At its peak, litecoin was trading at $64.92 on the 28th August. Yet, considering litecoin was trading just above $4 at the beginning of 2017 this is a significant milestone. It remains to be seen how much further the currency can go.

Charlie Lee, the founder of litecoin, recently took to social media to express his delight.

New Price Heights

What we are witnessing now, however, is just the start. According to Ronnie Moas, Standpoint Research founder, he predicts great things for the market.

Back in July, Moas said that bitcoin would reach $5,000 by 2018. He also said that ethereum would rise to $400 whereas litecoin double to $80.

At the time Moas said:

“$5,000 could happen in a few months. It’s only starting to gain traction right now. It’s starting to spread like wildfire right now.”

He determined that its price would go up as demand increased for its coins. At present, 16.5 million coins out of the capped 21 million has been issued.

Since making his prediction in July, Moas has increased the value to $7,500. This was after the bitcoin price scaled $4,000. He believes, though, that by 2027 each unit of bitcoin will be worth $50,000.

Furthermore, Moas thinks that the combined market cap will reach $2 trillion in 10 years. At a conservative estimate, he thinks that one percent of the $200 trillion global market will be invested in cryptocurrencies.

He said:

“A lot of people say there is a bubble out there. I see a bubble when you get down below the top 50 cryptocurrencies. There are more than 800 names right now. In my view, what happens outside the top 50 is irrelevant.”

Whereas, Aurelien Menant, CEO of regulated digital currency exchange Gatecoin, has said in the past:

“I would not be surprised to see the bitcoin price doubling again to around $6,000 by the end of the year.”

One bullish analyst thinks bitcoin’s price will reach $15,000 by the end of 2017. Even though there are only four months left of the year veteran trader masterluc has great confidence in bitcoin. Masterluc is of the opinion that bitcoin will continue its bull run into 2019. At which point he thinks that its worth will between $40,000 and $110,000.

Long-Term Price Heights

Others, however, have been thinking long-term for the currency’s future. So much so, that Dennis Porto, bitcoin investor and Harvard academic thinks it will scale $100,000 by February 2021. He thinks this is possible by simply following Moore’s law.

However, Kay Van Petersen, Saxo Bank analyst thinks it will reach $100,000 by 2027. Many may have confidence in Van Petersen’s prediction considering he correctly predicted when bitcoin would reach $2,000.

Some less bullish estimates include one from Tom Lee, a strategist at Wall Street firm Fundstrat. He thinks that bitcoin’s worth will be between $20,000 and $55,000 by 2020.

In a report, Lee said:

“We believe one of the drivers [of bitcoin] is crypto-currencies are cannibalizing demand for gold. Based on this premise, we take a stab at establishing valuation framework for bitcoin. Based on our model, we estimate that bitcoin’s value per unit could be $20,000 to $55,000 by 2022.”

At the time Lee’s prediction was considered bullish. However, since then others have made bigger predictions for the currency.

It remains to be seen who is right. Yet, at present it seems that the market will continue its upward trajectory to reach new heights.

Caution Urged

Interestingly, Llew Claasen, the executive director at the Bitcoin Foundation, has urged investors to be cautious with their investments.

Speaking at a recent conference in Africa, Claasen spoke about the potential bitcoin has in the continent. Yet, he stated that users should only invest what they can afford.

He said:

“To be honest bitcoin is not a great form of cash right now. Don’t think of it as cash, think of it as a digital form of gold that enables you to save outside of the current financial climate.”

Featured image from Shutterstock

Morgan Stanley: We Don’t Expect Cryptocurrencies to be Fully Disruptive

Leading global financial services firm Morgan Stanley has given its view as to how disruptive cryptocurrencies are going to be to fiat monies.

According to the bank, the crypto-revolution is not going to replace traditional currencies.

In a report, Morgan Stanley said:

“We think that cryptocurrencies as a group are likely to see some adoption outside of the incumbent financial system, but we do not expect them to be fully disruptive.”

In a ‘Fintech Gauntlet chart,’ Morgan Stanley has illustrated that disruption is possible, but it will be slow to take place. However, the bank suggests that only through regulation will cryptocurrencies be capable of gaining trust among the people. This will also enable them to enter the financial system.

The bank adds that digital currencies such as bitcoin are acting more as assets than as a way of transacting with.

It stated:

“With high volatility, low acceptance, relatively slow transaction times, and negligible fraud/transaction validity advantages (at least for now), bitcoin (and all cryptocurrencies) are functioning more like assets than true currencies or transaction mechanisms.”

High Electricity Use

One thing that is often debated is the amount of electricity required to mine each bitcoin. When bitcoin first appeared all that was required to mine it was a simple home computer.

However, as the mathematical problems to unlock new bitcoins became more complex to solve, networks with greater power than home computers were set up to mine the coins. As a result, this requires the use of more power and electricity.

According to Morgan Stanley, in the early days of bitcoin the energy generated could power a small power plant. Fast-forward to 2017 and the power generated is more than enough to power one million homes.

Additionally, as reigning networks don’t require huge amounts of electricity to function, it will be interesting to see how cryptocurrencies continue to mature.

Bitcoin Acceptance is Shrinking

This isn’t the first time that Morgan Stanley has made a statement regarding the crypto market.

In July, the bank said that bitcoin acceptance among top merchants was on the decline. In a research note to analysts it said that ‘bitcoin acceptance is virtually zero and shrinking.’

According to the bank, in 2016 the cryptocurrency was accepted at five of the top 500 online merchants. Yet, in 2017 that number had dropped to three. Of course, while the numbers may hardly be drastic, it does give some insight into what merchants are thinking. This is that accepting the digital currency may not be worth it.

It’s believed that this drop is down to the fact that people are more likely to hold on to their coins when its value goes up, rather than spend them.

The analysts said:

“The disparity between virtually no merchant acceptance and bitcoin’s rapid appreciation is striking.”

Overstock’s Confusion

Online retailer Overstock is confused. Confused by the fact that so many online companies don’t accept bitcoin as a payment option.

In July, Jonathan Johnson, the president of Medici Ventures, the venture capital subsidiary of Overstock, said that there had been a ‘modest’ uptick in the number of bitcoin transactions on the site. He also added that it was ‘crazy that so many retailers don’t accept bitcoin.’

One of the reasons may be down to the fact that retailers aren’t willing to pay for the costly transactions of bitcoin. Yet, Johnson believes this is irrelevant.

He stated:

“The cost of accepting bitcoin is very low. It’s actually cheaper for us to complete a bitcoin transaction than it is to complete a credit card.”

When Overstock first began accepting bitcoin in 2014, the company kept 90 percent of bitcoin and converted 10 percent back into cash. Now the company keeps 50 percent in bitcoin.

Such is Overstock’s commitment to the advancements of digital currency acceptance that the firm now accepts over 40 cryptocurrencies. Earlier in August, the company announced that it would allow customers to use major digital currencies such as ethereum, litecoin, Dash, Monero and bitcoin cash to buy online from Overstock’s nearly four million products. By integrating with ShapeShift, the world’s leading instant digital asset exchange, Overstock will be able to convert the cryptocurrencies into bitcoin.

Patrick M. Byrne, CEO and founder of Overstock, said:

“Overstock is pro-freedom, including the freedom of individuals to communicate information about value and scarcity without relying on a medium created through the fiat of unaccountable government mandarins. For that reason, we have been an early proponent and adopter of cryptocurrencies.”

Increasing Bitcoin’s Acceptance

Even though there are a handful of online merchants who accept bitcoin for payments such as Starbucks, Subway, Dell, Expedia and Microsoft, many would like that number to rise.

So much so that cryptocurrency fans launched a petition on Change.org urging Amazon to accept the digital currency. At press time, on the 25th August, there were 5,380 supporters of it with a goal of reaching 7,500.

Whereas CoinGeek, a bitcoin and blockchain news site, sent $100 in bitcoin to the financial directors at 20 of the top online brands. These included Alibaba, Amazon, Tesco, Staples, Uber, MacDonalds, Netflix, Airbnb, American Airlines, LVMH, AT&T, CVS Health, Tesla, Apple, FedEx, John Lewis PLC, Spotify, BMW and Red Bull.

Of those companies Airbnb was the first one to take up the offer in July. However, since then two other companies have followed suit: AT&T and American Airlines. Of course, this doesn’t mean the companies will automatically start accepting bitcoin. In fact the financial directors may simply just be taking the free coins on offer. Hopefully, though, in the not-so-distant-future more organisations will jump on board.

As Johnson said:

“I don’t know why a CEO wouldn’t want to make it easier for folks to spend money.”

Still a Long Way to Go

While the crypto market may be making an impact it still has a far distance to travel if it wants to disrupt finance. And yet, steps are clearly being made. The saying ‘Rome wasn’t built in a day,’ is very apt here and can certainly be applied to cryptocurrencies.

The finance world is witnessing a change in how people conduct their day-to-day finances and given time the digital currency market could replace incumbent networks.

Featured image from Shutterstock.

10 Digital Currencies Now Have Market Values Totalling Over $1 Billion

The number of digital currencies that have exceeded a market value of $1 billion is 10 with values ranging from $1.3 billion to $70 billion.

The top 10 cryptocurrencies with market values exceeding $1 billion include bitcoin, ethereum, ripple, bitcoin cash, IOTA, litecoin, NEO, NEM, dash and ethereum classic.

 

Bitcoin, the Number One Ranking Currency

In first place is bitcoin with a market value amounting to $70 billion. At press time, it is trading at $4,245, which has seen a 5.42 percent rise over the past 24 hours and a 27.03 percent increase in the last seven days.

After recently scaling the $4,000 mark, there is still huge demand for the digital currency. This is despite the 1st August user activated hard fork, which saw the creation of bitcoin cash. It remains to be seen how far bitcoin can go, but many are predicting it can easily reach $5,000 and even higher.

Ethereum Drops Below $300

Second place ethereum had attained the $300 mark again after flirting with the price for some time last week. Now, it’s trading at $297 with a 0.68 percent rise in 24 hours and 11.23 percent increase in seven days. Its market cap is worth $28 billion.

At one point, it looked as though ethereum may push bitcoin off the top spot as it steadily gained on the digital currency. Now, though, that doesn’t look likely. The currency has come a significant way since the beginning of the year when it was trading at $8.24, according to CoinMarketCap.

Ronnie Moas, Standpoint Research founder, believes it can go much further. He’s predicting that by 2018, ethereum’s price will be listed at $400.

Ripple Maintains Third Place

At the beginning of August, Ripple has lost its third place position to newcomer bitcoin cash; however, it has since reclaimed the third ranking spot.

Currently trading at $0.169272, it has a market value amounting to $6.7 billion. Over 24 hours its value has increased by 0.47 percent, but within seven days it has dropped in price by -5.95 percent. The digital currency is doing well to maintain hold of third place, but for how long?

Newcomer Bitcoin Cash Falls into Fourth

Bitcoin cash is the newest digital currency to enter the market. It’s also one that has entered the top 10 field so soon after its launch.

Created by supporters who wanted a solution to bitcoin’s scaling issues, bitcoin cash has garnered support since it entered the scene on the 1st August.

At the time of publishing, it is trading at $299, which has seen a slight drop in value over 24 hours of -2.96 percent. Yet, it has increased by 4.02 percent in the past seven days. Ranking third when it first came on the scene, it had a market value of nearly $12 billion. Now, though, it’s currently sitting at $4.9 billion.

At its peak, bitcoin cash was trading at $727 on the 2nd August. However, the chart below indicates a steady decline in price.

At its lowest, bitcoin cash was trading at $201 on the 5th August. After making it easier to find blocks for the digital currency its price peaked up slightly, but it has yet to see $700 figures again.

IOTA Grabs Fifth Place, Pushes Litecoin into Sixth

IOTA has shown some positive returns on its price in August. As such its price has steadily increased over the month. At the time of publishing, the digital currency is trading at $0.885418 and has seen an 18.37 percent in the past 24 hours. Over seven days, its value has increased by 87.29 percent.

This surge in value is believed to be down to the fact that it has announced collaborations with several groups such as a non-profit organisation helping refugees. Joining the $1 billion club on the 4th August, IOTA currently has a market value of $2.461 billion.

Litecoin is Close Behind in Sixth

Sixth place litecoin is close on the tails of IOTA with a current market value of $2.401 billion. It’s currently trading at $45.66 and has seen a -0.70 percent in 24 hours and -0.33 percent in the past seven days.

Over the past couple of years the price of litecoin has remained within the $3-5 range. However, it wasn’t until April 2017 that its price increased. This was helped along by the activation of SegWit on its network. The support of litecoin on Coinbase also played a role. At its highest litecoin has achieved over $50.

Moas is of the opinion that by 2018, litecoin could easily see it trading at $80. It remains to be seen whether or not the digital currency achieves this price, but it is steadily rising in price, which is giving confidence to many of its traders.

‘Chinese Ethereum’ NEO Takes Seventh

Formerly known as AntShares, NEO – known as the Chinese Ethereum – has a market value worth $2.3 billion. Since undergoing a rebrand the digital currency has soared in value.

In the past 24 hours, it has seen a 1.17 percent increase, but over the past seven days its value has jumped by 154.80 percent. It’s trading at $46.63.

This chart, alone, indicates how far NEO has come in 2017.

NEM Takes Eighth Place

Grabbing hold of a $2.094 billion market cap value is NEM. It’s currently trading at $0.232741, but has seen a -12.14 percent decrease over the past 24 hours and a -13.89 drop in seven days.

As can be seen NEM has experienced a surge in price over the first half of 2017. As we continue into the second half it remains to be seen if the digital currency can produce a higher price.

Dash Falls into Ninth

With a market cap of $1.471 billion, Dash is currently sitting in ninth position. At the time of publishing it’s trading at $196, but has seen a -3.43 percent drop in 24 hours. Over seven days, however, its value has risen by 1.29 percent.

On the 6th July, its value was trading at $222 when its market value was listed at $1.648 billion.

Ethereum Classic Makes Number 10

In tenth place is ethereum classic with a market cap value of $1.3 billion. Even though this is the original ethereum before a hard fork took place, which saw two ethereum coins, the community hasn’t shown too much support for the original version.

At the time of publishing this altcoin is trading at $14.14, which has seen a -1.81 percent decrease in 24 hours and a -7.81 percent drop in seven days.

As shown from the chart above, it was back in June when ethereum classic recorded a high of nearly $23, helping to push its market value to $2.1 billion.

Of course with the market producing such changeable values the top 10 could easily change, pushing some down and others not mentioned up. Who knows who will be next to join the $1 billion club.

Featured image from Shutterstock.

Goldman Sachs: It’s Harder for Investors to Ignore Digital Currencies

Goldman Sachs has said to clients that the boom in value that digital currencies are experiencing is ‘worth watching.’

Analyst Robert D. Boroujerdi and his team, said in a note to portfolio managers, that:

“With the total value nearly $120 billion, it’s getting harder for institutional investors to ignore cryptocurrencies.”

On the 5th August, the price of bitcoin reached $3,200 for the first time in its history. Prior to reaching that milestone it hadn’t seen $3,000 figures since the 12th June. Then it recorded a price of $3,041, according to CoinDesk’s Bitcoin Price Index (BPI). Ethereum also recorded a new high price when it soared through $400.

More recently, bitcoin’s price has pushed through $3,300 and $3,400 with its sights set on reaching $3,500.

At the time of publishing bitcoin is trading at $3,390 and has a market cap worth just under $56 billion on the 10th August.

Over a 24-hour period, its value has increased just over two percent with a 23 percent rise within the past seven days.

Ethereum Flirts with $300

Ethereum, too, is seeing a rise in its value. At the moment it is trading just two dollars under the $300 mark.

Its price has risen by 2.17 percent over the past 24 hours and 33.50 percent within the past seven days. Of the top five digital currencies it has seen the biggest increase in price over the past week. Its market cap is now worth just over $28 billion.

The entire market value of the digital currencies is worth $122.6 billion. On the 7th August, it was $117 billion; however, on the 8th August it rose again to $121.8 billion. The lowest recorded price was down at $60 billion in July.

Bitcoin Cash Still Stays in Fourth

As can be seen from the table above, bitcoin cash, the newest altcoin on the block, remains in fourth place. It’s currently trading at $287 with a market value worth $4.7 billion. Over the past 24 hours, its value has dropped by 14.66 percent whereas it has declined by 33.77 percent over the past seven days.

On the 8th August, its value had risen to $358, experiencing a 35.45 percent rise which saw a market value of $5.9 billion. This was down to the fact that it is now easier for miners to find blocks. At the time it was questioned whether this would subsequently rise the coin’s value. As can be seen, though, bitcoin cash is still going through a fluctuating phase, which will continue to see its price rise and fall.

Digital Currencies Are Worth Watching

Now, in a significant step forward, Goldman Sachs believe that the rise of digital currencies are worth watching.

This year bitcoin has seen a 200 percent rise in price while ethereum has experienced a colossal 3,500 percent increase. The year 2017 is certainly proving to be a great year for the market and we’re only into August. It will be interesting to see how much further the sector can go.

Not only that, but the market has seen a rise in interest with initial coin offerings (ICOs), which is attracting a large number of investors.

It was earlier reported that in the first six months of 2017, over $1.2 billion in digital currencies had been risen through ICOs. So much so, that this figure outpaced venture capital funding in blockchain and bitcoin companies.

Yet, according to Charles Hoskinson, ethereum’s co-founder, who now runs research firm IOHK, they are a ‘ticking time-bomb.’

In an interview, Hoskinson, said:

“People say ICOs are great for ethereum because, look at the price, but it’s a ticking time-bomb. There’s an over-tokenisation of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.”

Despite this, though, people are still flocking to ICOs. In July, it was reported that Tezos, a blockchain project, had announced the largest ICO to date after raising $232 million in bitcoin and ethereum coins. This outpaced the ICO for blockchain project Bancor, backed by Tim Draper of VC fund Draper Fisher Jurvetson, which raised $153 million in ether in June.

According to Goldman Sachs:

“Whether or not you believe in the merit of investing in cryptocurrencies (you know who you are) real dollars are at work here and warrant watching especially in light of the growing world of initial coin offerings (ICOs) and fundraising that now exceeds Internet Angel and Seed investing.”

Yet, while digital currencies are attracting a mammoth amount of interest, the bank adds that the market cap of all the cryptocurrencies equals to less than two percent of all the gold that is mined in the world.

Not only that, but while there are over 1,000 altcoins on the market, only around 800 of them actually have a market cap value. Yet, of those some have relatively small market caps. The smallest, at 817, has a market cap of just $18.

Boroujerdi and his team adds:

“There are currently over 800 cryptocurrencies out there, though just 9 have a market cap in excess of $1 billion.”

Bitcoin’s Value to Increase?

Many are projecting, however, that the value of bitcoin will increase.

Despite the recent user activated hard fork (UAHF), which saw the creation of bitcoin cash, bitcoin’s price hasn’t been affected. In fact the opposite of what was expected to happen, happened. Such a situation indicates that bitcoin has matured to such an extent that even a new digital currency won’t impact it.

According to Ronnie Moas, Standpoint Research founder, he believes that bitcoin will rise to $5,000 by 2018. He also predicts that ethereum will increase to $400 and litecoin will trade at $80.

Back in July, Moas indicated that bitcoin could reach $5,000 ‘in a few months,’ but has now extended the time he thinks this will happen. Confident as to where the market is going, he said:

“In my view, 10-15 years from now, the charts on a few of the top 20 names will look like the Amazon, Apple, Tesla, Facebook, Netflix and Goggle charts look today.”

Others believe that its value can increase even further. By 2020, a Wall Street analyst has made a bullish prediction and thinks bitcoin will be worth $55,000. With such varying prices, it remains to be seen who is the closest.

Featured image from Shutterstock.

Russian Airline Uses the Ethereum Blockchain for Flight Tickets

Russian airline S7 has revealed that it is now utilising the ethereum blockchain to sell flight tickets with backing from the country’s largest private bank.

Reported in regional newspaper Kommersant, Russian airline PJSC Siberia Airlines, known as S7, and Alfa-Bank started using the blockchain to sell flight tickets on Monday 24th July. The report states that one of the key benefits was faster settlements.

However, this is not the first time that S7 has experimented with the blockchain. In December, the airline undertook the first-of-its-kind payment service with the ethereum blockchain smart contracts through a letter of credit with Alfa-Bank.

Services giant Deloitte, who acted as the advisory consultant to the airline, said in a statement that:

“Legally, this transaction meets all the requirements for a letter of credit as a form of bank settlement, and demonstrates the potential of smart contract application in the framework of Russian legislation.”

Aeroflot, Russia’s largest airline, is also conducting research into the technology, namely digital currencies and how they can be used for flight ticket payments.

The experiments with S7 and Aeroflot are expected to end the 10th December, 2017.

Airlines Turn to Bitcoin

S7 is not the first airline carrier to embrace this innovative technology. There have been several airlines to do so before.

The most recent is low-cost Japanese airline Peach Aviation Ltd., which announced earlier in 2017 that it was to start accepting bitcoin as a form of payment for flight tickets. After the recent interest in the digital currency, which has seen rapid growth in Japan in recent months, it is hoped this will provide an attraction to tourists to visit the country.

Shinichi Inoue, chief executive officer of Peach, said:

“We want to encourage visitors from overseas and the revitalization of Japan’s regions. This is a real first step in partnerships for Japan and we are aiming for more company and service tie-ups.”

The heightened interest in bitcoin in Japan is due to the fact that in April regulations were changed which now see the digital currency as a legal form of payment for goods and services.

As a result, it’s expected that by the end of 2017 there will be as many as 300,000 stores in Japan accepting bitcoin for payments.

Aside from Peach other airlines have also embraced the most popular digital currency for their services too.

These include Latvian airline airBaltic, LOT, the Polish airline and Washington D.C.-based airline Universal Air Travel Plan (UATP).

Three years ago, airBaltic revealed that it was to begin accepting bitcoin payments in an attempt to focus more on the customer. By taking this step the airline became the world’s first to accept the digital currency for its tickets to 60 destinations in Europe, the Middle East, Russia and the Commonwealth of Independent States (CIS).

In 2015, LOT announced that it was going to start accepting bitcoin for its flights to over 60 destinations as well.

UATP also revealed in 2015 that it had joined up with Bitnet as a payment processing partner. As a result, the U.S. airline now has the opportunity of providing its network of over 260 airlines the option of accepting bitcoin for flight payments.

These are just a few of the airline carriers which are embracing the digital currency who see the benefits it can provide to customers. This is in contrast to Morgan Stanley’s claim that bitcoin acceptance among top merchants is in decline.

Russia and Bitcoin

While Russia appears to see many benefits with the blockchain – after all, ethereum’s founder, Vitalik Buterin, is reported to have met with Russian President Vladimir Putin – the country is still sitting on the fence when it comes to bitcoin.

However, its current stance is somewhat different from where it lay in 2016. Last year, a new amendment to the Criminal Code by the Ministry of Finance in Russia saw the regulator proposing a seven-year prison sentence for management and executives of banks and financial services firms for the use of bitcoin. The sentence was less for everyday people caught using it at four years.

Fast-forward to 2017 and the country has shifted gears after the central bank’s governor revealed that the authority is ‘analyzing’ the possibility of regulating the digital currency.

Yet, Elvira Nabiullina, governor of the Russian Central Bank, stated that she views bitcoin as a ‘digital asset’ instead of a currency.

She said:

“We don’t consider that bitcoin can be considered as a virtual currency. It’s more digital assets with the regulation of assets.”

She also claimed that there were some doubts as to what benefits the digital currency could bring to the economy.

While it’s not clear as to what Russia’s next move will be, in an April Bloomberg report Deputy Finance Minister Alexey Moiseev said that the Russian authorities hope to regulate digital currencies such as bitcoin by 2018 as they undertake steps to enforce rules against illegal transfers.

This will no doubt help bump the price of the digital currency up while also increasing its user base in the currency.

Bitcoin’s Price Slumps

As of the 26th July, the price of bitcoin has dropped to $2,490 with the total market cap of all currencies down to just under $85 billion, according to CoinMarketCap. In a 24-hour period, the price of bitcoin dropped by 2.14 percent while the market cap has yet to climb back up to $90 billion.

It’s thought that this recent slump is down to caution among investors in light of the potential Bitcoin Cash (BCC) hard fork that is expected on the 1st August.

With many people in the bitcoin community not happy with the SegWit2x solution to scaling issues, proponents are venturing to create their own coin, called Bitcoin Cash. Roger Ver, a self-described bitcoin evangelist and a supporter of Bitcoin Unlimited (BU), was reported as saying that a coin split would be ‘a good thing.’

Now supporting Bitcoin Cash, Ver claims that projects such as Omni and Counterparty would choose Bitcoin Cash.

Yet, while SegWit2x is gathering support, one person said that if SegWit2x didn’t activate a lot of people would lose their faith in the currency:

“Not because I have any particular support for 2X or any particular problem for Segwit, but because it shows fickleness and underhand moves based on politics not sensible technical decisions.”

Featured image from Flickr via Takashi Nakajima.

Ethereum Co-Founder Hoskinson Claims ICOs Are ‘a Ticking Time-Bomb’

The popularity of initial coin offerings (ICOs) has taken off to such an extent that ethereum’s co-founder has said that there is now ‘an over-tokenisation of things.’

Speaking in an interview Charles Hoskinson, who helped to create the ethereum network, said:

“People say ICOs are great for ethereum because, look at the price, but it’s a ticking time-bomb. There’s an over-tokenisation of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.”

According to a report from financial research firm Autonomous NEXT, in the first six months of 2017 more than $1.2 billion in digital currency was raised through ICOs, outpacing venture capital investment in blockchain and bitcoin companies. Furthermore, in the last 30 days around $600 million has been raised. Of the ICOs by category, media and social has raked in just under $150 million in 2017 while gaming and gambling has raised less than $80 million.

Since the start of the year, the digital currency ether has jumped in value from $8 to around $400 in June. As of the 19th July, ether has dropped in value and is currently trading at $224, according to CoinMarketCap. As a result, its total market value has seen a decline bringing it down to just under $21 billion.

Hoskinson, who was part of the ethereum network between 2013 and 2014 and now runs technology research firm IOHK, is adding his voice to a growing number of individuals who are concerned about the way ICOs are increasing at a rapid pace, which is delivering a surge in prices.

Taking to Twitter, UASF BitNovosti.com, said:

“This bubble is a much more about ICOs than cryptocurrencies. And ICOs definitely can (and many will, no doubt) go broke.”

However, the rise and fall in ether prices is not just down to the increasing number of ICOs on the market. Other factors have also contributed to the shift in market prices.

Parity Wallet Theft

In latest developments with ether, its price has dropped by 10 percent as of the 20th July to $211.

The reason this is is alleged to be due to a security breach at smart coding company Parity. According to news reports, the company reported the theft of 150,000 ether, worth $30 million. Listing the situation as critical on the organisation’s blog users have been urged to move ‘assets contained in the multi-sig wallet to a secure address.’

Gavin Wood, Parity founder and CTO, said on the Gitter web channel that there had been three accounts there were compromised:

“There is an effort by the foundation underway to secure funds in other wallets to prevent any further compromises; they will make an announcement in their own time.”

This is the latest setback that the digital currency has experienced in a matter of days.

On the 17th July, it was reported that around $7 million had been stolen by a hacker during the CoinDash ICO. The hacker was able to do this after altering the contract address of the ICO project.

Fast-forward a few days and that number has been bumped up to $10 million as unsuspecting potential investors willingly hand over their money with 43,500 ether believed to have been sent to the fake address.

Vitalik Buterin Death Hoax

In late June, it was reported that ethereum’s founder Vitalik Buterin had to employ the blockchain network in a bid to disprove his death.

In a report from CoinDesk, it’s alleged that the death hoax came from an internet forum site – clicking on the web page brings up a ‘404 not found page’ – stating that Buterin had died in a car crash. Following the rumours the founder of the second most popular digital currency no doubt wanted to quickly quash any further speculation.

He did this by announcing on social media that he was in fact alive including an ethereum block number and a hash that corresponded to it.

Vitalik Buterin

However, while Buterin may have put an end to the rumours that he had died, he wasn’t able to prevent the price of ether from dropping below $300.

Bitcoin Split?

Another factor that is creating price waves within the cryptocurrency market is the talk that there could be a bitcoin split if a solution isn’t finally agreed upon to solve its scaling issues.

On the 15th July, the digital market saw its total value drop below $70 billion for the first time while the price of bitcoin suffered a 49-day low when it dropped below $2,000. The following day, ether prices fell by 22 percent to $159, a 60 percent decline from its record high in June.

And yet while early signalling support has started for BIP91 which would prevent a coin split in the bitcoin blockchain network, and prices have risen, there is still some concern as to what will happen come the 1st August.

ICO Regulation?

Hoskinson thinks, though, that when it comes down to it regulation is the biggest challenge to the market and that the Securities and Exchange Commission (SEC) will, essentially, label digital currencies as securities. He says that because digital ICOs don’t come with the risk safeguards that traditional security sales provide, future lawsuits could present themselves with investors claiming that they weren’t aware of the risks involved.

Regardless of this, however, he still believes that ICOs will continue to be used:

“Regardless of regulation ICOs are here to stay. After it collapses they’re going to pick up the pieces and say how do we do things differently.”

The digital market is certainly going through an interesting readjustment phase. How long it will last remains to be seen. Yet, with more ICOs being reported on frequently it’s clear that they provide the ideal avenue to raise funds for many companies.

Just as bitcoin’s price has risen and fallen during its history, so too will ether’s price. Of course, while bitcoin has store value and can be utilised for goods and services, ether isn’t. With the 1st August looming ever closer, a resolution to bitcoin’s scaling issues may finally help its price, which in turn may help to bump the price of ether back up as well.

Featured image from Flickr via tiendientu vietnam.