ICOs Raked in $13 Billion Despite 90% ETH Price Drop, New Research Finds

ICOs made almost $13 billion in profits from their token sales despite the 2018 cryptocurrency bear market, new research from BitMEX reveals.


BitMEX: ICO Issuers ‘Gave Themselves $24 Billion’

Published January 16, the third instalment of the trading platform’s dedicated series on ICO statistics also suggests ICO teams “gave to themselves” tokens worth over $24 billion at the time of issuance.

“Today this figure has fallen to around US$5 billion, with the difference primarily being caused by a fall in the market value of the tokens, alongside ($1.5 billion) of transfers away from team address clusters (Possibly disposals),” BitMEX summarizes.

In total, combined with findings from the second installment in October 2018, a figure of $12.8 billion is now circulating as the total profit wrought from the ICO craze of the past two years.

While some teams have since launched products and demonstrated application of funds, many have yet to do so, staying dormant since their token sales.

As Bitcoinist reported, ICOs that raised hundreds of millions of dollars each faced a highly volatile market over the last twelve months with over 70 percent now underwater.

Others have since fallen foul of the law, with Paragon and Airfox both required to pay back huge sums to investors along with fines for flouting US securities regulations.

2020 ICO Renaissance?

Responding to the BitMEX findings, Blockstream CEO and Hashcash inventor Adam Back thus appeared unsurprised.

“[W]hen people start startups, they take usually a paycut (versus a) big (company), so modest pay, relatively,” he commented on Twitter.

[A]and take illiquid stock, that is not tradeable (sic) until they achieve technology and market success. [A]m I reading it right that ICOs just dipped into investor capital (and) gave it to themselves?

BitMEX CEO Arthur Hayes was also palpably nonplussed.

“When you create poo poo out of thin air, gravity is a bitch,” he tweeted.

Ethereum (ETH) 00, the major network used to issue ICO tokens, currently trades around $120, equating to a drop of over 90 percent versus its all-time highs.

Earlier this month, Hayes suggested that both ETH and the ICO market could see a resurgence within the next eighteen months.

What do you think about BitMEX’s new findings? Let us know in the comments below!


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Source: Blockchain

Swiss Vontobel Bank to Offer Cryptocurrency Custody in Global ‘First’

Bank Vontobel Switzerland

Swiss private bank Vontobel is planning to offer custody services for cryptocurrencies in a move executives described as a worldwide “first.”


Vontobel To Create ‘Digital Asset Vault’

In an interview with local finance magazine Finews.ch, Vontobel, which has offered cryptocurrency-related investment products since 2016, said it now wanted to increase its integration.

“As far as I know, Vontobel is the only bank globally to offer itself as a custodian for digital assets,” investment banking head Roger Studer told the publication.

Alprockz Partners with Swiss Banks to Issue a New Stablecoin Backed by Swiss Franc

Switzerland continues to position itself as a leader in banking attitudes to cryptocurrency, with multiple entities seeking to open up the market to institutional and private investors.

However, Vontobel, Studer says, will be the first bank-sponsored custody solution to market, not just in Switzerland but in the world.

“…We decided two years ago to make the new crypto investment world available to our clients,” he continued. “Our custody offering is a further step in this direction.”

Legacy Finance Sidles Up To Crypto Assets

The move will come via a partnership with Geneva-based startup Taurus, which specializes in crypto custody and storage. Vontobel will ultimately operate what it calls a “Digital Asset Vault,” a label synonymous with the physical bunker currently operated in Switzerland by Xapo.

“The cooperation between Taurus and Vontobel is of high importance for the Swiss financial market because we are linking up two worlds: traditional banking and crypto finance,” Taurus co-founder Lamine Brahimi continued to Finews.

As Bitcoinist reported, 2018 already saw more direct support for Bitcoin specifically from Swiss financial sources.

IT consulting firm Inacta AG, one resident of the country’s Crypto Valley community in the city of Zug, became one of the first users of Blockstream’s Liquid sidechain in December.

What do you think about Vontobel’s cryptocurrency custody plans? Let us know in the comments below!


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Source: Blockchain

Lightning Network Without Invoices Brings Us Closer to Streaming Money

lightning network bitcoin streaming money liquid

A new feature for Bitcoin’s Lightning Network (LN) implementation allows users to send funds instantly without needing to first create an invoice.


Sphinx Enables ‘New Use Cases’

The latest upgrade, ‘Sphinx,’ which developers describe as being a “work in progress,” is nonetheless already available to anyone.

“The coolest part about this new feature is that it can be used today in the wild as long as both nodes are updated to this branch!” author Olaoluwa Osuntokun wrote in a Github repository dedicated to the project.

The Lightning Network is a protocol currently active for Bitcoin and Litecoin which allows users to send tokens instantly and for a fee averaging less than 1 US cent.

The technology debuted on the Bitcoin network a year ago, and has grown rapidly, but remains in an experimental state as developers iron out stability and reliability issues.

At present, sending or receiving a transaction still requires some technical understanding, which has made Lightning an unattractive option for entry-level users despite its time and cost benefits.

Lightning’s ‘Best’ Feature Yet?

Sphinx, which Osuntokun says “allows users to start exploring a new set of use cases,” aims to solve that predicament.

It removes the need to create a payment invoice for a transaction, allowing more “spontaneous” activity and sidelining a major technical element potentially off-putting for novices.

“This is only a draft implementation and while it works today on mainnet out of the box (if both sides are upgraded) much this will likely change,” he added.

Sphinx caps a frenetic development period for LN which continued throughout 2018. Despite fluctuations, capacity, node and channel numbers have all reached new highs in recent weeks.

According to data from monitoring resource 1ML, Bitcoin Lightning’s capacity is now 571 BTC ($2,076,000) among 5234 nodes and 19,500 channels.

Sphinx meanwhile has already begun to see a warm reception, commentators variously saying it had attracted them to start using Lightning and that it was now the network’s “best” feature.

What do you think about the Lightning Network’s Sphinx? Let us know in the comments below!


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Source: Blockchain

Mongolia Will See At Least 1000 New Bitcoin Miners In 2019

Participants in Mongolia’s Bitcoin mining industry plan to significantly expand the scope of their operations, local media report January 11.


Japan’s Ginco Doubles Down On Mongolia

The East Asian country, known for its cheap electricity and being home to the world’s northernmost desert, will see one of its miners almost treble in size this year alone, despite the ongoing Bitcoin bear market.

“The business environment is increasingly harsh, but we can still produce a profit,” Yuma Furubayashi, CEO of Ginco  Mongol told Nikkei Asian Review.

Ginco is originally from Japan, where is offers cryptocurrency wallets, but operates two mining facilities in the Mongolian capital Ulaanbaatar.

As Bitcoin 00 dropped in value over 2018, miners have felt the pinch, with a lower price impacting on the profitability of minting new coins, though mining difficulty has adjusted since.

As Bitcoinist reported, China bore the brunt of the downturn, images appearing on social media of vast numbers of mining rigs being dumped due to being too expensive to keep running.

Bitmain, the Chinese giant which has traditionally held a monopoly over the market, has sparked multiple rumors about its debts, senior management reshuffles and plans to fire up to half its 2500 workers.

A Washington County is Taking Steps to Halt Illegal Cryptocurrency Mining

Bear Market Bulls

When raw materials need to be as cheap as possible, it is thus countries like Mongolia that are set to profit.

Although it only started in October, Ginco Mongol plans to increase the number of units it has dedicated to Bitcoin mining from 600 to 1600 by the end of the year. In an interview prior to the launch, Yuma also revealed ideas for spin-off projects, including miner repair services.

With the legal situation regarding mining also a gray area in China, it is little surprise that the Bitcoin industry is spreading more evenly across multiple countries worldwide. Increasingly, it is eco-friendly schemes in places as varied as Spain and Canada which plan to contribute to the market.

However, in future, the world’s Bitcoin mining crown will likely belong to Paraguay, the country’s government signing off on plans to build the largest mining farm on the planet under a project dubbed the ‘Golden Goose.’

What do you think about Mongolia’s Bitcoin mining expansion? Let us know in the comments below!


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Source: Blockchain

Grandma-Friendly Bitcoin Lightning Network Wallet Launches in Australia

Australia Sydney Lightning

A partnership to roll out Bitcoin payments using the Lightning Network across Australia went live January 4 with the beta launch of Wallet of Satoshi.


1000 Beta Wallets Launch

The product of payment gateway Living Room of Satoshi (LRS) and TravelbyBit, billed as “Australia’s first cryptocurrency travel agency,” the wallet aims to bring Lightning payments to entry-level Bitcoin users.

As Bitcoinist often reported, LN has made significant progress over the past year, breaking records for both capacity and adoption.

The technology nonetheless remains in an experimental state, and only technically-proficient users could previously navigate it efficiently.

Wallet of Satoshi’s developers wanted to change this, issuing a Lightning wallet with a user interface, which could make it simple to send and receive payments.

“We want everyone and their Mum to be able to participate in the new international economy, so it is focused on ease of use, and is available on iOS and Android,” LRS CEO Daniel Alexiuc told local cryptocurrency magazine Nugget’s News.

Lightning Emerges From The Tech Shadows

While uptake of Bitcoin for small-scale payments remains modest, LN has undertaken preparations to dramatically scale the number of transactions the Bitcoin network can handle.

Interest is tangible; Lightning now has over 5000 nodes, almost 18,000 channels and a total capacity of 543 BTC ($2,050,000) according to data from online monitoring resource 1ML.

“Lightning is the real world retail payment system we’ve been anticipating for years, and it is finally here!” Alexiuc continued.

Wallet of Satoshi is currently only available to 1000 beta users, prior to a full release “in the coming weeks.”

TravelbyBit meanwhile announced it had brought LN payments to all its Point of Sale merchants in Australia, which include Brisbane Airport. In October, exchange Binance invested $2.5 million in the company.

At the same time, other development teams are seeking to corner the ease-of-use market in Lightning, with BlueWallet last week releasing its own offering to which it is still adding features such as the ability to issue invoices (receive LN payments) and make withdrawals to on-chain BTC wallets.

What do you think about Wallet of Satoshi? Let us know in the comments below!


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Source: Blockchain

Vitalik Buterin: Bitcoin is ‘Genuinely Cool Tech,’ Bitcoin SV Is ‘Pure Dumpster Fire’

dumpster fire

Bitcoin Cash ‘Satoshi’s Vision’ (BSV), the new hard fork of Bitcoin Cash (BCH), is a “pure dumpster fire,” Ethereum co-founder Vitalik Buterin has said.


Cool Vs. Dumpster Hot Air

In a Twitter discussion with cryptocurrency commentator and entrepreneur Tuur Demeester December 25, Buterin debated the pros and cons of two algorithms used by many cryptocurrencies: Proof-of-Work (PoW) and Proof-of-Stake (PoS).

As part of its long-term upgrade schedule, Ethereum plans to transfer from PoW to PoS, with Buterin saying he “doesn’t believe” in the former.

Vitalik Buterin

BSV, which plans to use giant block sizes to solve scaling difficulties ‘on chain,’ has faced technical and publicity hurdles since it came into being on November 15.

The altcoin unwittingly became collateral damage from the debate after an advocate requested Buterin’s opinion on it.

The user had claimed the scaling plans from Bitcoin (BTC) developers – specifically ‘off-chain’ scaling via the Lightning Network, was a “joke.”

Buterin slickly disagreed.

“I have my disagreements with the bitcoin roadmap, PoW, etc but they’re trying to do something that’s genuinely cool tech,” he responded.

“BSV is a pure dumpster fire.”

Traders Stay Warm This Christmas

In a curious move, the BSV proponent did not criticize Buterin for his negative perspective, something which has become commonplace among the coin’s better-known activists.

Craig Wright, the self-proclaimed ‘Satoshi Nakamoto,’ has continued to earn a notorious reputation for his lack of tolerance of BSV 00 naysayers.

As Bitcoinist reported, an apparent spat with BCH advocate Roger Ver prior to the hard fork saw Wright pen an email calling Ver his “enemy.”

“Have a nice life. You will now discover me when pissed off,” he wrote.

BCH, BSV and ETH have meanwhile all staged something of an unlikely recovery over the past week. BCH had led the rally, more than doubling in value to hit more than $200 before correcting nearer to $170. ETH managed $160 from a low of $73.

Do you agree with Vitalik Buterin’s comments? Let us know in the comments below!


Images courtesy of Shutterstock, Bitcoinist archives

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Source: Blockchain

Why Bitcoin? Patreon Pushed By Mastercard to Ban Accounts in ‘Terrible Precedent’

Mastercard Patreon

Crowdfunding platform Patreon is grappling with fiat currency centralization after MasterCard demanded it must block the account of a prominent US author and several others.


Spencer: Patreon ‘Axed’ Me

Citing an email from the company in August, Robert Spencer, who penned multiple books about countering Jihad and advised law enforcement agencies, said it had “axed” him and he could no longer put contributed funds to any use.

“I’ve been axed from Patreon, without explanation, warning or notice – no doubt as part of the ongoing efforts of the Left to deny all platforms to those who reject its agenda,” he wrote on Twitter. “To those who supported me there, thank you, and I’m sorry we couldn’t follow through on plans.”

Responding publicly, Patreon denied it had chosen to ban Spencer, alleging that “unfortunately Mastercard required” it to “remove” his account.

Patreon has since gained negative publicity for further bans, including last week’s move against podcast host Sam Harris.

A History Of Censorship

It remains unknown what had led to the decision, with commentators from both within and outside the cryptocurrency community immediately accusing the payment processor of censorship.

“Trusted third parties are security holes (a phrase coined by Bitcoin pioneer Nick Szabo). Escape through bitcoin,” one wrote, while a popular response to the Twitter thread accused Patreon of providing a “fairly lame excuse.”

“Your agreements clearly say nothing about Mastercard. So what gives?” it reads.

Are you saying that this 3rd Party has control over who you support and protect, and who you do not? Sounds like you’ve set a terrible precedent.

Patreon is far from the first company to fall foul of payment networks. As Bitcoinist reported, PayPal has regularly blocked or limited activities of Bitcoin businesses and users over the years.

In October, the practice continued, PayPal banning censorship-resistant social media platform Gab several months after US exchange Coinbase did the same. Coinbase also targeted WikiLeaks in April this year.

Crypto pundits have become visibly more irked by censorship policies this year, calling for mass boycotts of payment processors and other platforms such as Twitter in favor of politically-neutral open-source payments alternatives such as Bitcoin.

What do you think about Patreon blocking Robert Spencer? Let us know in the comments below!


Images courtesy of Shutterestock

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Source: Blockchain

Bitcoin’s Lightning Network is Quietly Scaling for the Next Bull-Run

Lightning network

Bitcoin passed more significant milestones this week as data reveals its Lightning Network (LN) implementation passed 500 BTC ($2,066,000) capacity for the first time.


Lightning Network Sees Parabolic Rise

Statistics from monitoring resource 1ML.com confirmed the record capacity for payments at press time, with the number of accessible nodes also rocketing 13.7 percent and channels close to 25 percent.

The figures cap a period of constant improvements for Lightning, which has only added to its growth in both technical prowess and popularity in recent weeks and months.

Last week, the sale of what became known as the “cheapest work of art in history” using an LN payment sparked renewed applause for the technology.

Adam Back, CEO of Blockstream, whose technology facilitated the sale, subsequently claimed that the cost of the microscopic artwork was cheaper than a single grain of sand at 1 millisatoshi ($0.00000004143).

Bitcoin ‘Not Going To Zero’

Lightning’s achievements were just some of the encouraging signs Bitcoin remains in a stronger technical position than ever in its history, despite the Bitcoin price 00 continuing to hover around $4000.

Further advances came in areas such as block propagation, the time transactions take to reach network nodes, which roughly halved through 2018.

A robust technical basis has become a key argument for proponents combating claims Bitcoin will ultimately trend to zero following this year’s extended bear market.

Other aspects, including institutional uptake of Bitcoin for trading, also see regular attention, this week from crypto-focused venture capital firm  Dragonfly Capital Partners.

“Bitcoin could maybe fall as low as $2,000, or even $1,000, but not $0. And that’s a milestone for an asset,” managing partner Alex Pack told Forbes December 23.

“For something like bitcoin, which is a landmark in the history of money, it has become a more dependable store of value. People buying and using it have got to be confident it’s not going to zero.”

Last week, Bitcoinist reported on a definitive bear market reversal occurring around the next block reward halving, set for May 2020.

What do you think about the Lightning Network’s growth? Let us know in the comments below!


Images courtesy of Shutterstock, 1ml.com

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Source: Blockchain

Bitcoin Private (BTCP)…Privately Pre-Mined 2 Million Coins for Its Founders

The creator of altcoin Bitcoin Private (BTCP) was battling accusations his project was a “scam” December 24 after an investigation revealed over 2 million ‘secret’ coins.


Coinmetrics: There Are 2.04M ‘Extra’ BTCP

BTCP 00, a so-called “fork merge” of the Bitcoin and ZClassic blockchains, fell 20 percent after research group Coinmetrics published the information Sunday.

After analyzing the BTCP blockchain, the company claims, it became apparent an extra 2.04 million coins were mined during its genesis – likely unknown to miners, users and perhaps most developers.

Known as a “covert premine,” the tokens were stored in a “shielded pool.”

“Three hundred thousand units of the covert premine were moved out of the shielded pool towards what appear to be exchanges,” a summary of the investigation continues.

Ultimately the lack of uptake of BTCP by the recipients of the airdrop meant that those additional 300k transparent units today represent close to 10% of the BTCP supply in circulation, with 1.80M covertly minted units remaining in the shielded pool.

Caught By Surprise?

The response from developers and creator Rhett Creighton, who also led the formation of ZClassic from ZCash, differed.

Creighton was first to respond to Coinmetrics, writing on Twitter he thought BTCP had suffered a “covert inflation attack.” He subsequently deleted the tweet.

Afterward, operations lead Jake Brutman conversely suggested Creighton personally sanctioned the 300,000 token deployment.

“This was some of the earliest code work done,” he tweeted.

From my recollection, it was a bounty placed by Rhett and the code was merged by Rhett when he was acting as Lead Developer.

In an update, Creighton meanwhile said he had “not been involved with the Bitcoin Private project for many months.”

“I never wrote any software for it. I was never paid or given any BTCP for free,” he continued.

I have no knowledge of who may or may not have been involved in the inflation hack.

He subsequently faced calls from well-known pundits that he was a “scammer” and even “deserved some years in prison.”

Consumers remain cautious about the impact of hard forks in the current climate following the debacle surrounded that of another Bitcoin fork, Bitcoin Cash (BCH).

Splitting into two chains in November, BCH and its new spin-off Bitcoin Cash SV (BSV) entered a bitter conflict in order to woo miners and build a reputation despite growing controversy about their technical prowess.

What do you think about the possible Bitcoin Private covert premine? Let us know in the comments below!


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Source: Blockchain

Bitfinex Opens Trading of USD-Pegged Tether Against USD

Tether Bitfinex USDT/USD

Cryptocurrency exchange Bitfinex has announced it will support trading of USD denominated stablecoin Tether (USDT) against fiat USD from Friday.


Bitfinex Hedging A Hedge

The curious decision, which the exchange revealed in a blog post just hours before the pair went live, appears to be the first of its kind in the cryptocurrency industry.

Each unit of USDT is notionally backed by 1 USD, and the stablecoin is designed to be used as a cryptographic hedge against volatile assets without the need to convert into fiat.

The exchange rate of USDT 00, in reality, tends to fluctuate slightly around $1. For example, this year saw Tether price drop to as low as $0.85 during a period of high volatility.

Bitfinex’s tacit admission that USDT is insufficient as a stable alternative to USD is made all the more unusual by the fact that the platform and Tether share the same CEO.

“Today, adding margin trading on USDT/USD pair will not only allow for more efficient price discovery, but in an important move for risk management, unlock the ability to hedge the exposure taken on stablecoins,” officials wrote in the blog post.

Along with a dedicated lending market, USDT will be available as collateral for margin positions.

Tether-Bitfinex Media Rumors

The move comes days after an investigation by Bloomberg allegedly put to rest rumors that Tether did not hold full USD reserves for its token supply.

Such rumors had abounded during 2018 since both Tether and Bitfinex received subpoenas from US regulators late last year and had grown to include accusations the latter was insolvent.

Last month, Tether succeeded in switching banking partners to Bahamas-based Deltec, capping separate scrutiny of the financial buoyancy of its original banking partner Noble Bank.

A wealth of both USD and other stablecoins has come to market in recent months, with exchanges adding multiple assets in a bid to provide users with options against rapidly declining major crypto tokens.

What do you think about Bitfinex launching trading of Tether against USD? Let us know in the comments below!


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Source: Blockchain