Crypto-Fracking: Why advanced smart order routing is the next frontier for crypto

The power of smart order routing infrastructure on the cryptocurrency markets is exponential... and necessary.

Hydraulic Fracturing, also known as fracking, is a process where a pressurized liquid is injected into rocks forming tiny fractures to allow petroleum and natural gas to flow freely in order to extract it. There is debate over its impact on the environment, but there is no doubt it has revolutionized global energy. Fracking has created the ability to extract oil and gas where it was not possible before—it has literally created more liquidity in energy. Smart Order Routing can do the same for digital assets.

Traders looking to buy and sell cryptocurrencies at the best price need to traverse dozens of exchanges and chip away their position with no guarantee that they’re getting the best price at the moment they execute their trades. There is a better way.

At Mainbloq we’ve integrated a Streaming Smart Order Router into our TradeBloq execution management system that solves these problems. With the press of one button trades are executed across multiple exchanges to ensure the best price. Our SOR has direct, streaming connections to all of the major exchanges ensuring trades are executed faster than anyone else. Smart order routing reduces slippage since all trades executed near simultaneously, the market making bots don't have time to widen the spreads when they spot a large trade.

Before fracking, oil and natural gas could only be extracted from large, easily accessible wells. Fracking recalibrated the economics of extracting energy from smaller, less accessible sources. The same applied to digital assets—it wasn’t feasible for sophisticated traders to efficiently make large trades—that changes today. Our Smart Order Router gives traders the ability to press one button and extract slices of liquidity across dozens of exchanges and currency pairs, at the best price.

Smart Order Routing is just one small piece of what we’re creating at MainBloq. We’re building a best-in-class cloud-based modular platform joining data, tools, research, and insights for digital assets. It’s time that cryptocurrency got more sophisticated.

Ready to trade smarter on the MainBloq +Schedule a Demo 


Coinbase CEO Brian Armstrong Commits His Digital Currency Fortune to Charity

Brian Armstrong Coinbase CEO | Twitter | LinkedIn

Having launched GiveCrypto.org earlier this year to make direct cryptocurrency transfers to people living in poverty, Brian Armstrong — CEO of US crypto exchange giant Coinbase — has now promised to give a huge chunk of his fortune away to charitable causes.

“This year, I started my first philanthropic effort, GiveCrypto.org, which makes direct cash transfers to people living in poverty. I’m excited about the potential for this organization to help people, but I’m still early on my journey of discovering how to have the most impact via philanthropy.”

Per a report on CNBC, Armstrong signed the Giving Pledge, becoming the first cryptocurrency entrepreneur to pledge to donate the majority of his wealth for the greater good.

The Giving Pledge is a campaign started in 2010 by billionaires Bill Gates and Warren Buffett, which seeks to encourage the world’s wealthiest to use their fortune to help make the world...

 


Why billionaire investors remain positive on long-term trend of cryptocurrency

jim breyer bitcoin crypto blockchain
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Mike Novogratz, Jim Breyer, and Tim Draper are some of many billionaire investors in the traditional financial market who remain optimistic towards the long-term trend of digital currencies.

How are these investors able to maintain their positive stance in regards to the growth of the cryptocurrency sector following an 85 percent decline in valuation across the board?

It’s About Cycles

For the most part, high profile individual investors are able to handle severe losses in emerging asset classes and high-risk assets like cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) because they account for a small part of their wealth and portfolios.

As is the same in real estate and other traditional markets, wealthy investors have the ability to hold onto assets and properties even during the event of an unexpected market crash or the occurrence of a bear market.

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But, normal retail investors and individual traders who need quick cash to cover day-to-day operations and expenses have no other option but to sell most of the high-risk assets they hold in their portfolios.

bitcoin price
Source: TradingView

In bear markets, retail traders often suffer a significant loss because they are unable to handle an...


What a Crypto Mining Scam Looks Like

Featured Image3
Featured Image3

Whether it’s Power Mining Pool today or Bitconnect yesterday, the crypto space is festering with parasitic scams and opportunistic swindlers. The conditions are ripe for them and there’s money to be made.

Among the dangers, Bitcoin mining scams are a tough one to identify and parting the good from the nasty can be tricky. Mining scams are wrapped up in an already technically demanding task of Bitcoin mining. They are billed as a consumer-friendly method for building exposure to Bitcoin mining, and when run like this, they really do provide value for investors looking to diversify.

Legit Bitcoin cloud mining pools are too often buried in search results and outranked by throngs of fly-by-night operations. Finding the legit pools can be a tall order and require sifting through Reddit posts and Bitcointalk forum entries.

With that said, there are legit mining operations out there. As always, do your own research and stay skeptical as we settle and develop this wild frontier. For now, let’s take a look at what a crypto mining scam looks like to hopefully better prepare us to identify the key red flags.

Cloud Mining Pools and Ponzi Schemes: A Match Made in He….

Let’s take a moment to clear up what a cloud mining pool is and why they attract Madoff-like Ponzi schemes faster than ants at a picnic.

What’s a Cloud Mining Pool?

A cloud mining pool is the most hands-off version of crypto mining you can get. They allow a participant to rent or lease hashing power not directly owned by themselves. The rented hashing power is then pooled and paid out proportionally to the members (after fees and operational costs).

A traditional mining pool instead requires participants to supply their own hashing power and pool it with other miners. The participant owns and operates their own hardware and contributes to the pool’s overall hashing power.

The critical difference between a cloud mining pool and a traditional mining pool is the ownership of the hardware.

Cloud mining: you don’t own the hardware (hashing power).
Traditional mining: you own hardware (hashing power).

Why pool at all? In short, block rewards become more difficult to obtain as overall hashing power of a particular blockchain increase.

Take Bitcoin as an example. There was a time in Bitcoin mining when a standard CPU could mine whole blocks itself. Gone are those days. Bitcoin mining is now big business with plenty of stakeholders leveraging their resources into the security of the blockchain.

Miners with serious hashing power make it improbable for small miners to reasonably expect block rewards. Their hashing power is just not enough to compete.

The solution: gather together all these smaller players and pool their hashing power. Miners in a pool no longer compete for blocks of their own, instead, they work together and proportionally share the booty.

What’s a Ponzi Scheme?

It’s theft, let’s just clear that up. If you’re in a Ponzi scheme you are either being robbed or doing the robbing yourself.

A typical Ponzi scheme involves enticing participants to invest their money into a fund or investment strategy that has seemingly guaranteed returns. In reality, and with variation, the returns are not gained by real-world trading or superior business acumen. Conversely, new investments to the funds are distributed around existing investors and represented as market returns.

Power Mining Pool - Charles Ponzi
Charles Ponzi – infamously known to have created the investment scheme.

Ponzi schemes require a constant flow of new investment to keep the machine moving. Once things fall apart or new investment slows, the scheme is often revealed for what it is. In the world of crypto Ponzi schemes, a collapsing Ponzi scheme is followed by a hasty exit scam.

Keep in mind that Ponzi schemes thrive in times of economic expansion and speculative bubbles. Capturing collective optimism is pivotal to its success. Bitconnect is a choice example of the market fervor getting the best of investors.

Identifying the Red Flags of a Cloud Mining Ponzi Scheme

Firstly, the duck test. If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.

The duck test isn’t scientific by any standard but can be used to leverage your gut feeling to identify early warning...


Security tokens from Zurich’s Cryptosummit

#Cryptosummit — Zurich 28–29.10.18

One of the key events of the year took place last week in Zurich´s “Crypto Valley”. The Cryptosummit was — for me — both engaging and stimulating because the broad focus and main topic of it was the tokenization of securities, which is where — with Untitled-INC — I am more involved.

Among the high level speakers were ConsenSys Joseph Lubin in video streaming, Charles Hoskinson, CoinDesk´s Michael Casey, VC investor Jalak Jobanputra, Outlier Venture´s Jamie Burke and many other top businesspeople.

Of course, with such a packed agenda and thought-provoking panels running simultaneously on 3 stages, I had to make a choice and follow only those which were — for me at least — the most compelling. Most certainly I have missed interesting stuff, but the following were for me the key “take-aways” from the event.

Charles Hoskinson, formerly Ethereum CEO and currently at Input Output HK, gave me comfort that the global adoption path of crypto is nowadays irreversible. He captivated the audience mentioning his experiences while travelling for crypto projects in lands such as Mongolia where — perhaps not surprisingly — cryptocurrency adoption is progressing at a faster rate than in many western countries. He emphasized that Securities Token Offerings (STOs) will be the key instrument for driving the growth and capital allocation to developing countries. This is the first time in history that developing countries are not constrained in accessing capital for development. And of course this will be a radical shift for those countries which will have the unique opportunity to free themselves from the chokehold of western powers and financial institutions such as the IMF. For the first time in history those countries can now sell tokenized bonds backed up by their commodities and rare earth resources, without the need to sell them out to multinationals in exchange of “peanuts”. The first time in history that they can access a global, decentralized market of investors to fuel their growth. I find this is pretty exciting.

Juwan Lee, founder and CEO of Nexchange, presented interesting datasets to show where crypto investments stand today when compared with the hedge funds in the 90s. Crypto investments stand today where the hedge funds sector stood back in 1997, at the very beginning of its growth phase. Since then the hedge fund sector has grown in volume more than 15 times, going from the early phases, through institutionalization, consolidation and finally to the current maturity phase.

Crypto funds are also still quite minuscule in terms of managed funds. The large majority (approx. 208) have less than US$10m under management. Only the largest funds — approx. 28...


Crypto Market Update : Bears are Back, year-end rally nearby?

After a positive week for the alternative coins, a correction came to remind us of the risks involved with market volatility. However, the sharp declines have already been halted for the moment, getting closer to the dangerous $6000 zone.

Ahead of the expected Fork of Bitcoin Cash hard fork, the price of the currency has risen by tens of percent and has attracted considerable interest from traders and investors who are eyeing the market.

In light of the upcoming decisions regarding Bitcoin ETFs and other financial instruments related to the crypto markets, a trend has recently been initiated by regulators turning to large-volume crypto exchanges that affect the Bitcoin price and other altcoins in order to try to understand the price discovery mechanism.

The end of the year is near, and November began with a positive altcoin trend. The recent price hikes brought a positive sign to the market. But if we put the prices of the coins aside and look at the development of the infrastructure, the number of companies, employees and the partnerships that are being formed, one might expect another bullish wave in the near future.

Bitcoin continues to be the dominant and leading currency in the market and begins to show signs of stability with support around $6,200.

Bitcoin dominance 52.2% | Market Cap: $211 billion | Trading volume: $10 billion

Crypto News & Headlines

Market-Update05-min

SEC Charges EtherDelta’s Founder for Operating an Unregistered Exchange. The U.S SEC has heavily fined Zachary Coburn for operating an unregistered platform that allows people to buy and sell tokens that the agency had earlier...


The Faircoin price of $0.22 can be worth millions

Faircoin, this asset is worth only $0.22. Something so small can’t even register on the global financial radar. Even in crypto exchanges, if we look at daily trading volume it’s nothing more than a slight glitch.

Ranked at 1134 on CoinMarketCap, this little asset presents a very reliable lifeline for its users. According to Sporos, a crypto enthusiast based in Athens, faircoin can be found everywhere in the world. He says he hasn’t relied on banking services for no less than 8 years thanks to this asset. If we look at the events from the last decade or so, Sporos’ definitely did well to stay away from banks.

Located in an anarchist stronghold in Athens, Sporos runs a faircoin information center. There are over a few hundred similar centers located all around the world. The centers are stocked with many homemade products like honey, soap, perfume, olive oil, tea and even jewelry. Of course all the products vary depending on the location on the center, but they all have one thing in common. They can all be purchased with faircoin.

If the provided information is accurate, we’re looking at over 620 centers all around the world. Sporos refers to them as the ecosystem of faircoin. This ecosystem includes a transportation sharing app combined with an AirBnB alternative and faircoin-based financial institution. The institution is called the Bank of Commons and is completely tax-free.

Faircoin redefines being human

In this global network, nodes aren’t exactly nodes. Usually, nodes are the computers, but...


Zambia cracks down on crypto companies

Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender
Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender

The Bank of Zambia has started to clamp down on cryptocurrency-related businesses, mere days after declaring that it does not view digital coins such as BTC as legal tender. The crackdown began on Oct. 14, when the central bank announced an investigation into Heritagecoin Resources Ltd. for allegedly laundering money, according to local media reports.

Also read: Zambian Central Bank Declares Bitcoin is Not Legal Tender

Bank of Zambia Probes
Heritagecoin’s Deposits Business

In addition to the ongoing probe, the Lusaka-based fintech startup faces allegations that it has taken on traditional banking activities, such as accepting deposits — something it is not certified to do.

“The company … has since been offering financial services and collecting deposits from members of the public,” Kamufinsa Manchishi, a spokesperson for the Zambian Drug Enforcement Commission, told the Lusaka Times. The organization, which is assisting with the investigation into Heritagecoin, did not reveal the amount of money involved.

Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender

Manchishi added that: “As such, the commission together with the Bank of Zambia (BoZ) are currently investigating the company for activities contrary to the Prohibition and Prevention of Money Laundering, as well as the Banking and Financial Services Acts.”

On Friday, the BoZ declared that cryptocurrencies such as BTC are not legal tender, warning that those conducting transactions in the cryptocurrency would have nobody to turn to or blame in the event of market failure. However, it appears that the bank issued the decree solely because it wants to promote its depreciating fiat currency, the kwacha.

That said, the central bank has neither the power nor the legal backing to shut down the nascent Zambian cryptocurrency market. The BoZ would need parliament to amend the law that enabled its own establishment for it to be able to claim any authority over cryptocurrency investments or trading.

Nonetheless, the BoZ does have full control of the banking sector within which Heritagecoin...


Crypto and South Africa – a Conservatively Optimistic Approach

South Africa and Crypto – a Conservatively Optimistic Approach

Blockchain and cryptocurrencies have proliferated the minds of millions across the world, as trading and crypto asset ownership continues to rise.

In the same breathe, many countries across the world have taken a tough stance against cryptocurrencies in particular. Some, like China, have outlawed their use, while others like Malta are at the forefront of cryptocurrency and blockchain development.

In an African context, this sector is slowly growing. At the southern end of the continent, South Africa sits in an interesting position. As one of the bigger economic hubs of Africa, it has the potential to lead the way in terms of blockchain development and cryptocurrency adoption.

With that being said, it's worth considering what the current climate is like in the country and what efforts are being made to drive innovation and acceptance of this burgeoning new industry.

The tax man

Cryptocurrency trading has become immensely popular over the past two years — as was demonstrated in the latter half of 2017, when Bitcoin and a number of altcoins cruised to all-time highs.

During this period, plucky investors flocked to the market in the hopes of cashing in on a spiralling bull run that made many early investors substantial sums of money.

Across the world, cryptocurrency exchanges were inundated with new users looking to open up accounts and get their hands on the increasingly valuable Bitcoin and the like.

Some people made massive profits while others were left watching their investments decline in value during the resulting correction. That didn’t change the fact that the tax man wanted his pound of flesh from those that had cashed in their profits.

This was the case in South Africa, where the South African Revenue Services (SARS) made it clear to registered taxpayers that they would be liable to pay tax on cryptocurrency gains.

How crypto is classified in South Africa

As the SARS pointed out, the word ‘currency’ is not defined in the Income Tax Act. It’s important for people to understand this because it means that cryptocurrencies themselves are not taxable.

“Cryptocurrencies are neither official South African tender nor widely used and accepted in South Africa as a medium of payment or exchange. As such, cryptocurrencies are not regarded by SARS as a currency for income tax purposes or Capital Gains Tax (CGT). Instead, cryptocurrencies are regarded by SARS as assets of an intangible nature.”

However, the value of a given amount of cryptocurrency can be valued in South African rands, and any income received or accrued from cryptocurrency trading can be taxed under the laws of gross income.

Simply put, South Africans that are actively trading cryptocurrency will be liable to pay tax on any income made.

Don’t stress, it's legal

In a South African context, the use of cryptocurrencies is legal. There are no laws governing the sector although the South African Reserve Bank (SARB) is monitoring the situation.

The Reserve Bank issued a white paper outlining its views on cryptocurrencies in 2014. The institution does not recognize any cryptocurrency as legal tender.

In South Africa, the Reserve Bank has the sole right to issue and manage money, in...


The Privacycoins Battles and Why Dash Is Not Really That Private

 Battle of the Privacycoins: Why Dash Is Not Really That Private
Battle of the Privacycoins: Why Dash Is Not Really That Private

Based on blockchain technology, most cryptocurrencies have an open and public ledger. While this is required for these systems to work, it comes with a significant downside: Privacy is often quite limited. Government agencies, analytics companies and other interested parties — let’s call them “spies” — have ways to analyze the public blockchains and peer-to-peer networks of cryptocurrencies like Bitcoin, to cluster addresses and tie them to IP addresses or other identifying information.

Unsatisfied with Bitcoin’s privacy features, several cryptocurrency projects have, over the years, launched with the specific goal to improve on them. And not without success. Several of these privacycoins are among the most popular cryptocurrencies on the market today.

However, as detailed in this month’s cover story, Bitcoin’s privacy features have recently seen significant improvements as well and are set to further improve over the next months and years. This miniseries will compare different privacycoins to the privacy offered by Bitcoin.

In part one: Dash.

Background

Dash (DASH) is among the most popular but also the more controversial cryptocurrencies in the space today.

Originally a codebase fork from Litecoin (which is in turn a codebase fork of Bitcoin), Dash was launched by its founder Evan Duffield in January 2014 as Xcoin. The project was quickly rebranded to Darkcoin, seemingly in reference to Dark Wallet, a now-defunct, privacy-focused bitcoin wallet project. Darkcoin rebranded a second time in early 2015, to the current name Dash, which stands for "digital cash.” At the time of writing, Dash claims a 12th spot on the cryptocurrency market cap lists, down from a top five spot for some time in early 2017.

Much of the controversy surrounding Dash stems from the early days of the project. While the coin was not premined, it was instamined. As the cryptocurrency went live, miners created 2 million coins in a matter of days. Quite a significant amount, with a projected supply currently scheduled for a total of 22 million, and some 8 million coins in circulation today. According to Duffield, himself one of the early miners, the instamine was an accident. But instead of fixing the problem — for example, by changing the protocol rules or relaunching — it was decided that the coin would continue despite the instamine.

Since then, Dash has turned into (what it calls) a decentralized autonomous organization, or DAO, and prides itself on being the first successful example of such an organization. The DAO centers around Dash “masternodes” — DASH nodes that stake (proof of ownership) at least 1000 DASH — and should help the network in certain ways, for instance by confirming “instant transactions.” In return, these masternodes receive 45 percent of newly generated DASH.

Another 10 percent of every block reward is reserved for the Dash treasury. What happens with these funds is decided by the masternodes by vote. In practice, this money funds the Dash Core Group, effectively the company behind Dash, today headed...