October 2018 News Report

In Short

In the last month, current cryptocurrency trends have continued with the overall market dropping from 223.2B to 203.4B according to CoinMarketCap. Bitcoin has dropped from $6619 too roughly $6323. Cryptocurrency projects and companies have continued to boom however though with many new innovative ideas/projects still coming to light which makes the future of cryptocurrency bright.

 

Bitcoins White Paper is now 10 years old

October has celebrated the 10th anniversary of the original Bitcoin whitepaper. The original paper can be read here and was written by Satoshi Nakamoto who as we know is anonymous. Bitcoin has given a chance for people to compete with centralized financial services such as banks, and allow for a global digital currency. Although Bitcoin has changed since its first paper release in 2008, it has survived and boomed to a peak of roughly $19,000 USD. Bitcoin has come a long way and will continue to grow and work with innovative applications as the market has called for change.

 

Bank of America lanches a new blockchain patent

On October 30th Bank of America announced its plans to move its private key storage forward. The patent states the reasoning is such that “A need exists for a secure means for storing private cryptography keys. The desired storage means should reduce the risk of misappropriation of keys due to the keys being stored internally within a computing node that is frequently or, in some instances, continuously accessible via a public communication network, such as the Internet.” This is very important for blockchain technology as Bank of America, although a centralized company shows signs of real world use and application. Security has always been a concern in the blockchain/cryptocurrency market and so BoA could actually make some good advancements if they are able to complete what they aim to. Oodlebit which is launching in early 2019, is also taking the initiative of prioritizing security.

Coinbase Cuts Employees

According to Yahoo Finance Coinbase has recently cut an undisclosed amount of workers in the customer support, compliance, and fraud departments. Cryptocurrency exchanges should pride themselves on customer support which has been an issue with past exchanges like Poloniex. Fraud detection and compliance is also a big challenge for cryptocurrency exchanges as regulation has recently been a huge concern. So by cutting some important roles, Coinbase is going to face many challenges moving forward. At Oodlebit we want to put the customer first, and so we offer state of the art customer service that is dedicated to supporting any needs.

Possibly a new Hardware wallet

 

On October 23rd, Sony announced plans to create a new hardware wallet that could have many new use cases. The smart card technology would be able to communicate with Bitcoin and allow for safer transactions when dealing with it. This isn’t the first time Sony has worked in the blockchain sector, Sony has launched two different patents. (1 and 2 ) It is not guaranteed that Sony would launch a cryptocurrency product since it has not publicly announced, but if Sony does decide to launch the product it would greatly increase the utilization of cryptocurrency.

September 2018 News Reports

In short

September has been a very active month for cryptocurrencies, as prices have seemed to be soaring rapidly in both directions. Regulation seems to have been moving at a slightly slower pace which is typical, and some big fortune 500 companies have announced plans to develop blockchain experiments.

 

Austria and Ethereum

On September 25th Kleinezeitung announced that the Austrian government will be using the Ethereum blockchain to facilitate the opening of over $1,000,000,000 worth of purchasable government bonds. The Oesterreichische Kontrollbank or OeKB bank plans on opening this transaction. This news is very important because it shows the interest in blockchain technology as financial instruments being used by top global banks. In order to grow the advancement of cryptocurrency, institutions need to be adopting the technology and so this is certainly a good step in the right direction.

Wall street Journal Study

 

On September 28th the Wall street Journal conducted a study which found that over $88,000,000 of illegal funds have been exchanged through cryptocurrency exchanges. The Wall Street Journal conducted their study by looking at over two thousand “blacklisted” addresses and then following the links between the transactions. There are a number of different problems that could arise from this experiment though, one being the purchase of legal goods. If a hacker has stolen 1 BTC and then sends it to a vendor which in return sends the coin to an exchange after sending the product/service to the hacker. The money is not being funneled or hidden using an exchange, but rather being traded legally at that point. So the extent to which the coins are used is not clearly defined. Using exchanges to facilitate illegal transactions has been proven to be minimal, with regulatory laws such as the KYC/AML. At oodlebit we take the regulatory laws very seriously and you can check out our policies and procedures on our website.

 

 

Regulatory Clarity needed

CNBC reported that members of the United States Congress are asking for more clarity around cryptocurrency regulatory practices/rules. These regulatory clarifications are not simply aimed at Bitcoin, but all cryptocurrency as Congress has identified the practice of ICO’s and other forms of cryptocurrency coins/tokens. Different government entities classify bitcoin and other cryptocurrencies differently, like the IRS, CTF, CFTC and SEC all have different ideas. This puts businesses and customers wondering what will actually happen to cryptocurrencies from a regulatory state. It is good that some sort of regulatory urgency coming from Congress at trying to understand the exact classification of cryptocurrency since it is damaging everyone who is involved.

 

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Cryptocurrency Events in August-September 2018

Eminem Mentions Bitcoin in his brand new album

On August 31, 2018, Forbes breaks the story that in Eminem’s new album he mentions Bitcoin. During the song Not Alike Royce Da 5’9 says

Remember everybody used to bite Nickel, now everybody doing bitcoin.

This might not seem super important since Eminem nor Royce Da 5’9 have particular notable cryptocurrency influence, however, it does show the change in society. Bitcoin still isn’t at mainstream adoption yet, but as the spike of December 2017 occurred people are now becoming more and more interested in cryptocurrency. Many different rappers have joined the cryptocurrency wagon, and many of these rappers are a plug into the younger generation which is something cryptocurrency is targeting.

CBOE plans on adding Ethereum Futures in 2018

The Chicago Board Options Exchange or CBOE is planning on launching Ethereum Futures as early as 2018 according to Business Insider. Gemini will be used to price the token in the future contracts which it already uses with its Bitcoin contracts. This opens up a brand new market for Ethereum and will allow some institutional investors to make bets on the market. Buying a futures contract does not mean the Ethereum Token will necessarily be bought however it does bring added value to Ethereum. The overall futures market with Bitcoin has shown to be successful and beneficial.

 

Commercial Bank of China shows interest in blockchain technology  

On September 1st, 2018 Bianews announced that the Commercial Bank of China will be taking a good look into blockchain technology. Cointelegraph states that the Commercial Bank of China has over 530,000,000 customers. China has been particularly grey in the realm of cryptocurrency as some regulations have hurt the innovations of cryptocurrency in the country, while some positive advancements like the Commercial Bank of China taking a look at blockchain have been made. Regardless of if blockchain technology is actually being used in the financial instruments within the bank, it is a good step in the right direction that the bank is familiarizing with its beneficial technology. If the bank does not use blockchain, it is at least an option for other banks or new projects to adapt its technology and create a competitive advantage.

 

IBM and Stellar payment network

IBM in a recent blog post has announced that “IBM Blockchain World Wire makes it possible for financial institutions to clear and settle cross-border payments in seconds.” The platform in which IBM is building on is the Stellar protocol, and so they plan on allowing users to actively connect to different Blockchain World Wire API’s to current fiat to digital currency. IBM’s current market cap is over $132,000,000,000 and so they have a potential to invest a lot of money into their blockchain technology endeavors. Any advancements that can be made are a positive step forward even in centralized companies like IBM. The beautiful space that we love is open for anyone to develop and release products, and so seeing IBM attempted to get their foot on the ground is something to keep an eye on. Many different benefits exist within blockchain technology that can help the financial transactional space like low fees, fast payment processing, increased efficiency and so much more. This makes it important for financial businesses to be interested in blockchain technology and build on it.

 

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Bitcoin ETF

What is an ETF? –

Cryptoren explains that an ETF or exchange-traded fund

 

 “Is a passive investing instrument that tracks underlying benchmark indexes (such as the NASDAQ-100 Index, S&P 500, Dow Jones, and others), commodities, bonds, or portfolios of assets and replicates their performances. ETFs can be traded like a common stock on exchanges, combining the diversified holdings of a fund with the low cost and tradability of a share.”

 

A Bitcoin ETF would allow investors to get into Bitcoin without actually buying the asset themselves. This means that investors don’t actually need to hold bitcoin, go through the purchasing process, or even safely store their private keys. An ETF would also allow investors to short shares if they believe that bitcoin will go down and so it gives more avenues for investors to make money. One of the biggest reasons institutional investors are not getting into Bitcoin is because of the security aspect of it. Institutional investors with millions of dollars, don’t want to get hacked and lose their irreversible bitcoin. So instead, having a platform for these investors that will allow them to invest without actually dealing with the coin is an incredible opportunity.

 

Market Effect –

 

Yesterday on August 7th, 2018, the SEC has delayed its decision on the Bitcoin ETF until September 30th which has the market shaking. The VanEck and SolidX Bitcoin Trust is set at $200,000 to market towards institutional investors and away from individual seasonal investors. As a result of the uncertainty that bitcoin will be accepted the market has taken a huge dive with Bitcoin dropping almost 9% and Ethereum dropping over 10%. The investing strategy of buying the rumor and selling the news has certainly been played.

 

How bad is this really? –

The ETF would help bring in a lot of money from institutional investors and would help the bitcoin community and cryptocurrency community in general. The ETF would potentially bring in more interest from people when bigger investors enter the market, and people see interest from “whales”.  As a Bitcoin community and as enthusiasts this delay in a decision by the SEC shouldn’t really be a huge downfall. The core values of Bitcoin is resistance and moving away from the regulatory traps in the fiat world. Delaying the Wall Street institutional investors from buying into Bitcoin and its core beliefs shouldn’t have to be rushed. These institutional investors will bring in a lot of money, however, will also be a part of something that they have tried to destroy. As an enthusiast or current investor, the ETF delay should not be a scary sight as the play on Bitcoin in the long term won’t have a negative effect. Short term Bitcoin has taken a big hit, but if the value and utility of Bitcoin remain the same, then this downfall will clear up in time. Keeping institutional investors out and building on the technology will not be harmful to the market in the long run, timing the institutional investor’s entry will be key.

 

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Recap of recent cryptocurrency events

Cryptocurrency is a new and innovative field that is changing every day, something new can be something outdated tomorrow. In this blog, we will be taking a look at some recent cryptocurrency events.

 

Regulation in Crypto

 

Bill Huizenga a Congressman in the United States asks for more cryptocurrency regulation and more rules regarding ICO’s. The main issue Bill pressed was the lack of transparency that ICO’s have with their investors and potential investors. Unlike traditional investments in the stock market, cryptocurrencies bring a grey area of regulation where some aspects of insider trading and other activities that would otherwise be illegal are present. Currently, in the United States, there are mixed feelings from government agencies as to what cryptocurrencies should be categorized as such that the IRS, SEC, and CFTC all have different classifications. Regulation often times can hurt innovation, and pinning cryptocurrency to the same rules as traditional markets can be harmful so finding a middle ground or new standards would be more beneficial.

Long Blockchain Corp. which was a beverage company has been subpoenaed by the SEC. The Securities exchange commission has taken a stance on companies that change their business plan to enter the blockchain space. Companies like RIOT blockchain have also been subpoenaed after their stock pumped after the name and business change into blockchain. Since the booming of ICO’s and the peaked interest of blockchain technology and cryptocurrency in general, companies have found that announcing their interest in blockchain has had a tremendous effect on their business and in some cases stock price. Restaurants like KFC have done promotional campaigns around cryptocurrency to spark conversation and deploy marketing antics.

 

Celebrities in Crypto

Bill Clinton who is a former United States president will be speaking at a Ripple conference. Ripple has used celebrities at conferences before as they brought in rapper Snoop Dogg for a performance. The conference will be held in October according to the blog post and notes that Bill Clinton has helped companies get past the “digital divide”. Ripple is heavily criticized as their company owns a large stake in the cryptocurrency XRP, and some argue that the interaction between the company and the cryptocurrency itself is very limited. Celebrities and public figures do have a positive impact on the cryptocurrency community, as they can reach a large audience and potentially introduce them to cryptocurrency.

Kim Kardashian West who is a popular TV celebrity was invited to a Poker Charity Event where she was given a Bitcoin. Kim posted an Instagram story of her poker chips with a physical representation of a bitcoin on the table with the caption “we moved onto bitcoin”. Kim has over 100,000,000 followers on Instagram which reaches a huge audience and is good for the overall cryptocurrency community. Many people that have never heard of bitcoin will certainly be enticed to look into it after seeing the support of Kim Kardashian West.

 

Non cryptocurrency celebrities are not the only people that are admired and have a pull. Celebrities like Vitalik Buterin although in the cryptocurrency community, have a large pull. When Vitalik tweeted about liking the staking economics of the project Omisego, the coin pumped over 10% within hours. Projects or coins that are then endorsed or talked about by Vitalik are then greatly looked at or purchased without much research.

 

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A cryptocurrency downtrend might not be bad

According to CoinMarketCap the cryptocurrency market lost a collective $11,420,496,785. This might seem devastating at $11B is a lot of money even in a market like cryptocurrency. However, there are many positives that are coming out of the cryptocurrency market.

 

One thing to take a look at is the recent ICO funding trend which is currently mooning, new projects are still entering the market every single day. This shows that creating blockchain startups is still profitable and that dapps or decentralized applications are still of value. With the creation of ICO’s and decentralized applications, news projects have been able to appear and it is apparent that people are still interested in investing in startups.

Often times people will look at cryptocurrencies and shame it based on its volatility. Many known traditional investors warn others to not get involved into cryptocurrency because of this. Cryptocurrency is a very speculative market, however, when someone doesn’t understand something they oftentimes pin it to something they do know. So outside investors might look at cryptocurrency as a stock, and many will say cryptocurrency is in a bubble or over evaluated. On July 26th, 2018 Facebook’s stock saw a drop from $217 to $174. This is important because it shows that even traditional investments in “safe” companies can have violent swings. Facebook does have their stock tied to the company’s earnings however it yields a high P/E ratio. This makes an investment in Facebook even more speculative because the stock’s value is coming from innovations or partnerships that have yet to exist. Many features of the stock market are criticized that the cryptocurrency market potentially fixes like the cost of premium stocks, and pre IPO investments.

 

Cryptocurrency like other innovative technologies and assets need time to adopt. In order for cryptocurrency to become adopted, more projects need to enter the market and build platforms that can be utilized with the benefits of blockchain technology. This means more companies are going to need to accept payment assets like Bitcoin and more decentralized platforms will need to run on assets like Ethereum in order to make the cryptocurrency space scale. This comes at a number of different avenues including building on the actual blockchain themselves and developing more efficient ways to scale and perform.

 

Cryptocurrency is slowly developing and working towards mass adoption, but can’t get there without good development. When prices jump the gun without the advancement of the underlying technology downtrends occur. In times of downtrends, more coins can be purchased at lower prices which will, in turn, make a profit if the market for that asset recovers. If cryptocurrency is to be the future then the prices day to day won’t matter to those who are investing in the technology and are supporting its value long term.

 

Our Commitment

 

A huge barrier to entry is the exchange market and the usability of transferring ownership between people whether it be buying or selling orders. If cryptocurrency is going to be adopted it needs to start with the usability, and people need to be able to exchange seamlessly without faulty problems. Bad technology and usability will drive more people away from getting into the market, and poor security and mismanagement of user funds will cause more people to leave the market. At Oodlebit we strive to push the innovation and drive for cryptocurrency because it starts as a passion for us. We believe in cryptocurrency and want a safe and trusted platform to help facilitate trades.

 

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