🤷 Opinions Alexander Goborov

From Russia with Love: Moscow's Affair with the Blockchain

Opinions
While many think of Russia as conservative and backward, the country is seemingly finding its progressive side in the fintech sector
From Russia with Love: Moscow's Affair with the Blockchain
Contents

Most people know that Russia is the biggest country in the world by size, a major political player on the world stage, and a country with huge reserves of timber, oil, and natural gas.

Fewer know that Russia is now also becoming ever more involved in the world of Blockchain and cryptocurrencies; in fact, it is believed that most programmers who work on the Blockchain today speak Russian in addition to English and Chinese.

To top it off, Russia has now also become home to many international crypto events, such as the Blockchain Life forum held in St Petersburg.

Mining

Statistics from this year, corroborated by the Russian Association of Crypto Industry and Blockchain (RACIB), show that more and more companies in Russia are doing mining: the numbers have grown by around 17% this year taking the total number of mining companies in Russia ― the ones that have been accounted for ― to around 80 000.

According to many fintech specialists, Russia, particularly the Eastern region of the country known as Siberia, is an ideal place for mining because of its abundance of mining resources, namely inexpensive electricity.

This must have something to do with the fact that today, as some sources claim, around 3 million individuals own cryptocurrencies in Russia against 2.5 million individuals from last year. The crypto figures are said to be growing.

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Huobi

One of the top crypto exchanges in the world, Singapore-based Huobi has recently moved in to conquer the Russian market. Although those who trade cryptocurrencies in Russia are no strangers to exchange platforms, Huobi is the first platform to have an actual office in Russia with a Russian-speaking call centre. According to those much satisfied, this is one of the key features Huobi has to offer that no other platform currently has, i.e. ease of real-time client to representative communication in Russian, which has long been overdue.

Huobi
Huobi’s phone app

The new office opened in Moscow at the start of last week. While at present deposits in Russian roubles are not permitted due to regulatory reasons, those who wish to trade will be able to buy cryptocurrencies using roubles and have them put in trading accounts via Huobi’s OTC service. Moreover, Huobi will also offer loans to potential  miners to purchase mining equipment, an important additional service which is to be made available in early 2019.

To make their intentions even more recognizable, Huobi will also be training its future specialists at the Department of Entrepreneurship and Logistics in Moscow’s Plekhanov University of Economics.

LocalBitcoins and Other Players

Helsinki-based LocalBitcoins is one of the most popular Bitcoin to local fiat currency exchange platforms. What is fascinating to learn is that the Bitcoin to Russian Rouble exchange pair is actually the most popular one of all, trading at close to 2 million USD every day: all that despite the Russian government’s ongoing ban of access to the LocalBitcoins domain since 2016.

LocalBitcoins
A LocalBitcoins ATM

Not only does it show that the BTC-RUB trade is strong and plentiful, but also that the crypto traders and owners in Russia have moved way past any government-imposed web regulations in technological terms.

But this is not all. According to independent sources, some places in Moscow exchange cryptocurrencies for roubles in numbers totalling close to 9 billion USD, which is five times LocalBitcoins’ turnover. Among such places are believed to be the large shopping centres “Moskva”, “Sadovod”, and “Food City”.

Sadovod
One of the entrances to the “Sadovod” shopping centre in Moscow

 

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🤷 Opinions David Dinkins

Let Them Regulate Cryptocurrencies: Soon It Won’t Matter Anyway

Opinions
Governments have taken even greater interest in regulating cryptocurrencies in recent month. That’s okay because eventually, they won’t be able to anymore.
Let Them Regulate Cryptocurrencies: Soon It Won’t Matter Anyway
Contents

Regulation of cryptocurrency has been in the news a great deal over the past month. As the price of digital currencies has dropped since their peak, some officials are beginning to worry about investor losses. Others are bringing up the age-old bugaboos of money laundering, terrorist financing and drug dealing. Still, others are talking nonsense about how cryptocurrency may undermine the economy one day.

Nonsense!

But wait...what if that’s not nonsense after all? I have a theory, and I’ll start by saying this: let them regulate crypto as much as they want. Let them tax our gains. Let them enforce their anti-money laundering (AML) and know your customer (KYC) laws. Let them warn about volatility, let them regulate ICOs. Let them do their best.

Why? Because the government cannot regulate cryptocurrency.

I’ll say it again: the government is incapable of regulating digital currency.

Border zone

What the government can regulate is fiat money, meaning they can regulate the transition area between crypto and fiat. Governments can require exchanges to follow AML/KYC laws, and they can make banks file suspicious activity reports. Governments can make you pay taxes on your gains and send you to jail if you don’t. These are the laws they can actually enforce.

However, authorities can’t do anything about your favorite crypto. No central authority can tell you what you can or cannot do on the Bitcoin network. Nobody can force you to file paperwork or pay taxes on crypto-only transactions. The network is uncensorable, and particularly if you use a privacy-centric currency, is untraceable.

Technically, the government can require you to pay taxes on capital gains whenever you exchange crypto for an item of value. Whether these laws are enforceable or not depends in part on what you’re buying. There’s no way the authorities will know if you bought some coffee with crypto, but they may figure it out if you pay for a house that way.

Of course, I don’t condone lawbreaking in any form, but I’m merely pointing out that in a totally crypto-based economy, regulation is nearly impossible.

Tale of two stages

Crypto adoption will come in two stages. The first is where we are now- investors generally realize gains on their digital currencies when converting to dollars. Not enough merchants accept crypto for day-to-day purchases, meaning that conversion to a more widely-accepted fiat currency is necessary.

However, one day this will no longer be the case. I’m reminded of a gentleman on Reddit who was asked at what price he would sell his Bitcoins. He replied that when it came time to “cash out,” fiat would be irrelevant and he’d spend his coins directly. Purists dream of an era where crypto is totally untouchable by governments. It will come.

Until then, let them regulate. Soon, it won’t matter.

 

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🤷 Opinions Katya Michaels

As Technological Singularity Looms, Investors Must Fight for the User

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In the battleground for eyeballs, pulses, lifestyles and wallets, the fight for the user is a zero-sum game for competing companies.
As Technological Singularity Looms, Investors Must Fight for the User
Contents

If you are brave and agile enough to follow daily news from the various fields of modern technology, you are likely finding yourself obliged to admit that the idea of the technological singularity becomes less far fetched by the hour.

Artificial intelligence, machine learning, big data, cryptography have been moving along swimmingly while you weren’t looking and now they are in your toothbrush.

The singularity is coming, and while the average Amazon shopper is reasonably concerned about a robotic vacuum cleaner going rogue and maliciously chewing up their best shoes, the average tech investor is wondering how to be prepared for the unknown.

The big AI bang

The technological singularity, for the purposes of this discussion, is the hypothetical moment when the combined effects of artificial intelligence and machine learning will produce explosive technological development, leading to societal changes at a rate and on a scale unfathomable to the human mind.

Indeed, unfathomable even to the very imaginative, but unmistakably human minds of such extraordinary individuals of the species as Elon Musk, Bill Gates, Sergey Brin, Mark Zuckerberg, Jeff Bezos and Tim Cook.

Those who possess the intellectual or financial resources for guiding humanity’s socio-economic progress into the future are yet unable to look over the singularity horizon.

However, some facts are undeniable. The way we rely on traditional commodities and resources is constantly in flux, with some being relegated to the past and others coming to the forefront of new, sustainable planning. Values shift and consumption models change. Usage changes; the user stays – in fact, as global population grows, the user keeps on coming…

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The matrix: users as commodity

The conduit through which most investments and returns are flowing today is neither the oil pipe nor the conveyor belt – it’s the retina display. In the aftermath of the Facebook scandals, a saying that seems to have been around for the entire history of advertisement has acquired a new poignance.

If you’re not paying for it, you are the product – Facebook, Instagram, Google. In fact, even if you are paying for it, there are higher-order proceedings in play, and you are still the data product even as you consume – Netflix, Amazon, Apple. In this battleground for eyeballs, pulses, lifestyles and wallets, the fight for the user is a zero-sum game for competing companies.

The pressure will only intensify as highly personalized interactive technologies come into full power. The internet of things, or as Werner Herzog’s 2016 documentary Lo & Behold styles it, the Internet of Me, is the ultimate shrine to the user.

Connectivity and screens on household appliances and wearables mean untapped minutes, nay – hours, of user attention and consumption.

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The bearer is the bond: users as security

Some of the most valuable US companies – and the ones that brought the most returns for their investors in the past decade – have no tangible assets or products. This phenomenon has been extracted into an absolute with some cryptocurrencies and ICOs, where there are no tangible or intangible products, only their expectation.

What gives such assets and products value is user demand and participation. If all Facebook users offloaded to a different platform tomorrow, the valuation would go with them. The fundamental things apply as time goes by – strength is in numbers.

In the opinion of many tech experts, wide adoption of new technologies is the main challenge – in fact, adoption takes longer and is more difficult than scaling. Now, companies and their investors can only depend on user numbers, user loyalty and user data to sustain their financial health through the uncertain future.

As fragile as those factors can be, they are the ones that make or break public companies’ fortunes in the modern economy.

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No taxation without representation: users as community

Barring nuclear winter and cosmic apocalypse, people will continue to desire meaningful connections, to buy meaningless possessions and to watch adorable cats do silly things for hours. The singularity will certainly enable the best and the worst expressions of humanity, to the nth degree.

The transition to an intangible asset economy where users are a commodity is mostly complete, but a real achievement would be to win a fight for the user as a member of the global community.

While investing into users is clearly a solid strategy, there are different ways this can be manifested – from making money off the user, to making money with the user. Public ledger technology that brings transparency and immutability to data networks promises to give users back control over their own data.

As users get a sense of agency – not to mention compensation for their attention – companies enjoy a more substantive relationship with a more engaged audience.

Many Blockchain startups are treating the user as a collaborator, rather than a cash cow.  Whether creating a dating app, a governance model as in cultu.re, a decentralized social network such as Minds, an entertainment portal as in Verasity or a social ledger that is U.Community – they are interested in attracting users through objective benefits and positive social impact, rather than addictive gimmicks.

Potentially, this is the approach that can create a living for the founders, a return for investors and a positive experience for the community – and that’s a fight for the user that everyone could feel good about, technical singularity or not.

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Twitter Followers This Week: LEDU in Lead; Tron, Binance, and Bitcoin ABC with Promising Figures

Opinions
Despite a complex situation in the market, Twitter accounts are alive with new followers: here we look at the figures of the past seven days
Twitter Followers This Week: LEDU in Lead; Tron, Binance, and Bitcoin ABC with Promising Figures

Twitter is often considered to be a fair indicator of how well a company is doing. So, with a bit of help from our partners, we’ve decided to bring you the latest stats on new Twitter followers from the past seven days, between today and last Thursday. The figures are as follows:

Twitter

Bitcoin Cash ABC (BCH) has close to 2500 new Twitter followers this week. Roger Ver must be doing something right despite the recent fork’s tribulations.

Binance Coin (BNB), the crypto coin belonging to the world's largest crypto-exchange, has around 2650 new followers this week.

Tron (TRX) led by Justin Sun, known for his philanthropy among other things, has around 2750 new Twitter followers.

KuCoin Shares (KCS), a less known crypto-exchange platform compared to Binance, established in the fall of last year, has an impressive figure of around 3800 new Twitter followers.

And finally, Education Ecosystem (LEDU), a platform of online learning with its own token, headquartered in San Francisco, has close to 6000 new followers on Twitter, 5823 to be precise, making them this week’s leaders. According to the founders, the company is in the process of “building the world's biggest project-based learning library on any topic”, so good on them.

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How Swiss Government Helps Launch ICOs Legally: Exclusive Interview

🎤 Interviews
Matthias Michel, head of regional business development of Canton Zug, on challenges and possibilities for ICOs in Switzerland
How Swiss Government Helps Launch ICOs Legally: Exclusive Interview

The "Cryptovalley" located in Swiss Canton Zug has become famous internationally as the place where citizens can pay for government services in digital currencies including Bitcoin. Long-term vision, strategy, infrastructure and government support are the factors which attract many entrepreneurs to Zug. Generally, Switzerland with its strong focus on innovation now attracts those who invest into new financial technologies including Blockchain.

We met Matthias Michel, Head of Department of Economic Affairs of Canton Zug at the Blockchain Leadership Summit in Zurich. Mr Michel agreed to talk to us about the challenges and possibilities for ICOs and Blockchain-based businesses in Switzerland

Cyril Gilson: Is it easy to launch an ICO based on the legal framework developed in Canton Zug with your authorities?

Matthias Michel: This question you should ask lawyers or members of the crypto association because they have done it and they can tell you. But it seems it’s possible because a lot of ICOs with big volumes have been created in Switzerland and especially in Zug. There’s a lot of lawyers, of fintech people in Zug and in Zurich, and a lot of knowledge on the subject.

CG: What seem to be the main problems, the main challenges, main hurdles in doing it?

MM: They say the main problem is working with traditional banks. You get a bank account and here banks hopefully want to be very compliant with regulations, and at the moment not every regulation is clear because it’s a dynamic evolution going on.

With the whole crypto technology, not every regulation is clear yet, so the banks will wait for clear regulations to have relationships with ICOs, to accept them and so on. It seems that’s the main challenge.

CG: Almost every day we hear some banker or representative of the banking community saying that cryptocurrencies are essentially a bubble and that Bitcoin is a bubble. In Switzerland what is the attitude of the banks and the government? How would you describe the attitude of the government and the banks in Switzerland?

MM: I cannot speak for the banks as I speak for our government. First, we think that Blockchain technology is just a part of the digital revolution, digital development. It’s a technology that can be used for good things and bad things, but you have to approach it.

Let’s take the example of the city of Zug. They thought — okay, we are eager to know what’s going on and you can only know a technology when you apply it. So they apply it to their own administration. So let’s say you can pay some expenses in Bitcoin in the city of Zug.

In my register of commerce, within my governmental department they say — okay let’s accept a company to be founded with Bitcoin, so it’s not in cash but a deposit of Bitcoin evaluated in Swiss francs, so let’s try it out because if you try it out you’ll learn. That’s maybe a symbol of our open access to the technology to learn, and after learning only if you know how it functions you can create the goods and the right regulation.

We as Cantonal government are not a regulator. The regulation is done on the federal level but we help the federal government find the appropriate solution.

We work in the task force together with the industry on how to approach this technology and how to do it in a smart and smooth way. Our aim is not to forbid it, but to enable it, giving clear regulation on what’s possible and what’s not.

For the industry, it’s important to have stability and to know what right and what’s wrong - that’s why the regulation is needed. We are working in a dynamic way. I mentioned these examples to show that we are open to this technology, which will be important for the future in any case. As the Chinese say, ‘You had better build windmills than walls.’

CG: Switzerland is a very decentralized country. How decentralized is it in terms of financial regulation?

MM: Our financial regulation is centralized. The country is quite decentralized in taxes, tax laws, in other areas. As different cantons and cities, we compete with each other as locations. We can handle a lot of key factors ourselves: taxes, universities on the cantonal level, transportation, infrastructure. We have a lot of factors, which we shape in our small states. Therefore, we want to be the best within our country to be able to compete with other cantons. We try out to attract industries of the future to get them based in Zug. That gives us a sort of competition within the country and competition leads to the best solutions.

So let’s say the register of commerce in Geneva will apply a Blockchain-based solution, then we apply one. That’s the advantage of decentralization that different states, 26 states, compete with each other for the best solutions.

CG: But what about competition with places like Singapore or Puerto Rico with its special taxation regime?  

MM: This global competition — that’s not a new thing. It’s now applied to the Blockchain community, but we lived for decades with global competition before and that’s not new.

And finally our thinking is that you cannot compete only with one factor at hand. If you have a business that needs a lot of natural spaces to build big plants — you won’t come to Zug or to Switzerland because we don’t have that much space. If you want to build a solar plant you will build it better in a desert, not in green Switzerland.

Maybe there are places in the world where you don’t pay any taxes at all, but if you go there you won’t find any talents. You need to have a combination of a moderate tax system, reliable politics, stability, good infrastructure, good schools, good universities — it’s always the combination, which can attract companies and people.

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Fractals and Jackals in the Cryptocurrency Market

Opinions
A discussion of some hidden market patterns that can help us avoid succumbing to provocations.
Fractals and Jackals in the Cryptocurrency Market
Contents

On March 7, the jackals ripped the market open with razor-sharp teeth and bought whatever was on offer at 75-day record volumes (for the 4H timeframe).

Picture 1

These events transpired when the news broke about the Binance exchange hack. At first there were no details, and when it turned out that all the money was safe, the market had already tumbled down by 10-15 percent. But amidst the bacchanalia, I observed one elegant pattern that allowed me to enjoy very sound sleep and made evident that what happened was just an quick purchases by the hands of a frightened crowd.

Minute timeframes

I will begin with the fact that in technical analysis, I examine every timeframe, from the minute to the week. When there is a battle for a certain level or some kind of emotional movement, I deeply enjoy looking at the price movements within the minutes. That way, you can see the subtlest signs of the market and understand what exactly takes place on the battlefield.

Imagine my surprise when on the minute chart I saw a fractal duplicating the structure of a higher order! So, what is this structure like?

Fractal history repeating

The trek down to $6,000 is still fresh in our memories — at that point, I was looking at the events very carefully and observed an important detail. A large volume was coming directly onto the crowd. This happens occasionally… “Smart” money starts to come in a little before the decline targets, at the same time creating a trap for the buyers and attracting additional volumes. Then, the price is passed around this “trial” run, and met at the next level. Naturally, as a result the price is directed far above the “trial” entry and the costs of the initiative are paid off.

So, in the minute intervals I saw a painfully familiar picture. It was a small duplicate scenario of the decline to $6,000. I hurriedly took a couple of screenshots, such that I couldn’t be accused of falsifying the facts. Take a look for yourselves…

The hourly chart.

Picture 2

The minutes.

Picture 3

As a result of the trades, the fractal truly repeated itself with minor errors!

The hourly chart.

Picture 4

The minutes.

Picture 5

Further on, the fractal forms begin to dissipate and we move to a new logic. At the same time, I see the following probabilities for the recovery scenario: a return to the level of fair price — $10,800 — on March 8 by 10.55 p.m., on March 9 by 8.55 a.m. or 7.35 p.m. (all times given in UTC + 3).

Picture 6

Meanwhile, be vigilant and do not forget about the support at the $9,400 level. If it is broken, we can expect a continued decline by 10-12 percent.

Picture 7

As always, wishing you successful trades!

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