Author: Robert Drage

Robert is a freelance researcher, with a background in information science currently interested in blockchain technology and technical developments in the field.

Categories
Australia Blockchain Mining NFTs

Australian Mining Company to Use BSV Blockchain to Facilitate Tokens and NFTs

Progressive Minerals, an Australian mining company based in Queensland, is implementing a new infrastructure powered by the Bitcoin SV (BSV) blockchain to enhance its operations through the use of NFTs and tokenisation.

In a press release issued by Bitcoin Association, “MetaStreme scalable Bitcoin transaction engine has today announced it will partner with Predict Ecology, an environmental and ecological consulting firm”.

We are thrilled to be able to help build what we see as the future of mining.

Daniel Keane, managing director, Predict Ecology

These two companies were contracted by Progressive Minerals to develop new blockchain-based mining infrastructure that will be used across various mining operations.

How Is a Blockchain Useful for Mining?

The mining sector has many clear and present use cases for distributed data that stand to transform the industry at all levels – including monetising mining data and assisting in progressing and achieving environmental sustainability goals.

Paul Chiari, CEO, Prime Technology Services

Progressive Minerals’ business data streams will be stored on the blockchain (on-chain), including “environmental, operational, production and licensing data, demonstrating a commitment to data accuracy, integrity and transparency”. This will help the company stay abreast with compliance and streamline the analysis of mining data.

The company will also be implementing smart contract functionality to “offer a new level of surety and reliability for investors and business partners”. Smart contracts can be used to automatically execute orders after they have been filled to exact specifications, further automating some processes in the mining industry.

Mining and exploration leases, which act as rights or contracts to explore or prospect in a certain area, will be tokenised as non-fungible tokens (NFTs). These will be stored on-chain, and will allow for the assignment of rights and prospecting data, also allowing leases to have a clear line of ownership and to document changes through their life cycle.

Bitcoin SV Used for its High Throughput

The system will be powered by the enterprise-grade BSV blockchain, facilitating the processing of high volumes of mining data. In a public test, the BSV network has shown it could reach 50,000 transactions per second throughput, at the cost of two percent of a US cent, making it enticing for companies needing large amounts of data processed.

From an environmental perspective, the ability to record and audit resource sector data on the BSV blockchain will create new efficiencies and help to ease the regulatory burden that mining companies can often struggle to manage.

Daniel Keane, Predict Ecology

The data for a mine doesn’t need massively decentralised blockchains or public ledgers to be verified. It is for the exclusive use of the mine and its partners, thus using a more centralised high-throughput blockchain is ideal.

The mining industry, like many others, is one where the integrity of data is everything. This has historically been an issue within the sector, and the aim of Progressive Minerals is to change the way mining companies operate and provide a level of integrity and transparency of data for all stakeholders not previously realised.

Mathew Hancock, managing director, Progressive Minerals
Categories
Banking Crypto News Ethereum Institutions

Sygnum the World’s First Bank to Offer ETH 2.0 Staking as a Service

Swiss bank Sygnum is officially the world’s first digital asset bank to offer Ethereum 2.0 staking as a service. The bank will stake its clients Ethereum (ETH) to generate up to seven percent yield per annum.

Sygnum and regulatory body, the Swiss Financial Market Supervisory Authority (FINMA), can now offer clients Ethereum staking services on their institutional-grade platform via a simple user-friendly setup:

With Ethereum powering the exponential growth of decentralised finance (DeFi) applications, staking is a compelling choice for long-term Ethereum investors also seeking attractive yields.

Sygnum

Sygnum already offers staking for the Tezos blockchain, as well as yield generation for its Digital Swiss Franc stablecoin (DCHF). However, the bank has various exchanges and pools to compete with. This offer is one for those who don’t want to get down and dirty with buying crypto and the perceived intricacy of moving it to a staking pool.

Higher Yields than Traditional Interest Rates

With interest rates of savings accounts in the US barely breaking one percent, and some of the best in Australia nearing three percent, the offer is “a digital asset alternative for yield generation in today’s low or negative interest rate environment”.

Bankrate, one of the leading providers of rates and financial information, shows that its top-rated online high interest account returns 0.57% APY.

And when considering real interest rates (bank lending rate minus inflation) in developed countries, most of them are sitting under 4%, with Australia’s at 1.65% in 2019.

US 10-year Real Treasury rate. Source: Multpl

With the US currently sitting at a negative real interest rate, people are looking for places to keep their money where it won’t be eaten away by inflation and decreasing interest rates.

Staking as a Long Term-Investment

Staking involves the locking up of assets to participate in the validation of transactions on proof-of-stake blockchains, with a financial ‘reward’ provided in exchange.

Sygnum

By staking Ethereum, investors hold an asset that has had a year-to-date growth (YTD) of 220 percent. So not only can the asset grow in value, but one also receives a percentage growth of the asset itself as a reward for contributing to the consensus process.

Sygnum clients can participate in the new proof-of-stake Ethereum and benefit from potentially higher staking rewards now. This is a compelling choice for long-term investors in the Ethereum ecosystem.

Thomas Brunner, head of accounts and custody, Sygnum

Most recently the number hit 6.1 million Ethereum being staked, with more than 185,000 validators. The amount of ETH being staked equates to over US$14 billion in Ethereum.

The digital asset bank is also looking to support DeFi assets, launching regulated banking services for eight leading tokens including Uniswap (UNI), Maker (MKR), and Curve DAO Token (CRV).

Categories
Australia Banking Crypto News Institutions

The Reserve Bank of Australia is Researching Tokenised CBDCs and Financial Assets

The Reserve Bank of Australia (RBA) and its various bodies responsible for financial regulatory issues have been conducting research on implementing a Central Bank Digital Currency (CBDC) and possible uses of digital financial assets.

In a submission to the Senate Select Committee on Australia as a Technology and Financial Centre , the RBA in partnership with the Council of Financial Regulators (CFR) has “recognised the potential for SVFs [stored-value facilities] to play a more prominent role in the payment system, and the recommendations [are] aimed at modernising and simplifying regulatory arrangements for SVFs in a way that is conducive to innovation, while maintaining appropriate consumer protections”.

Reserve Bank Sees No ‘Policy Case’ for Digital Aussie Dollar Just Yet

Despite prior reservations about CBDCs, research has continued to consider if and how this technology can be applied for the benefit of Australian citizens and industry alike.

The RBA has stated that “[it] does not consider that a policy case has yet emerged for issuing a CBDC”. Nevertheless, it has continued research into possible use cases for a retail CBDC, or a wholesale CBDC for cross-border payments between other central banks. There is also no evidence indicating that a CBDC will even make use of Distributed Ledger Technology (DLT).

The new form of money will be a liability of the central bank and, like cash, the unit of account of the CBDC would be the sovereign currency, such as the Australian dollar. It would be convertible at a one to one with other forms of money, and would likely also be specified to serve as legal tender.

DLT-Based Proof of Concept is in Development

The work currently taking place in the RBA’s in-house Innovation Lab concerning Distributed Ledger Technology is an interbank payment system that began development in 2019. This project is close to finalisation and has included various external parties to extend the proof of concept in numerous ways.

The project explores the implications of delivery-versus-payment settlement on a DLT platform as well as other programmability features of tokenised CBDC and financial assets.

Reserve Bank of Australia

According to the submission, a report will be published soon regarding the outcomes of the project tests. The only fully live CBDC is the ‘Sand Dollar’ issued by the central bank of the Bahamas; other countries are still in development and testing phases.

Real-Time Trading Between Individuals or Organisations

The RBA is part of the Digital Finance Cooperative Research Centre (CRC) team, bringing together many academics from 20 different entities in finance to “develop and exploit the opportunities arising from the digitisation of assets so they can be traded and exchanged directly and in real time between any individual[s] or organisation[s]”.

Categories
Australia Blockchain Crypto News Monash University

Australia’s First International Blockchain Hackathon to Tackle Global Eco-Friendly and Social Issues

Monash University in Melbourne will be hosting Australia’s first international blockchain hackathon, aiming to tackle social and environmental problems through blockchain technology.

According to the event posted by Monash, the initiative is a joint venture between the university’s Blockchain Technology Centre and fintech company and cryptocurrency provider Algorand.

We want to see participants apply their interests and knowledge in blockchain technology to address a global need that can really make a difference in the world.

Professor Joseph Liu, Director of Blockchain Technology Centre, Monash University

Algorand has established itself as the world’s first pure proof-of-stake foundational blockchain. It claims to bring forth the “future of finance” by enabling the creation of tokens, NFTs, stablecoins, securities and cryptocurrencies on a simple and cost-effective infrastructure.

How to Participate

The hackathon starts on Friday, 9 July at 10am and ends Sunday, 11 July at 11:59pm. Interested individuals can register for free here, and registration closes at 10am on 7 July.

Contestants can choose from four topics – education, digital health, construction and energy – and must use tools developed by Algorand (ALGO). They must build solutions with blockchain technology to improve on some aspect of these services. Algorand has a wealth of use cases from which contestants can borrow tools and ideas.

Blockchain technology has so many applications and we want this hackathon to demonstrate how this technology can be a driving force for social good.

Professor Joseph Liu

Some examples will look at solutions in digital certification and records management in a secure and efficient manner, as well as smart metering and real-time energy consumption, plus sharing IoT data across systems. The innovation potential of blockchain technology is endless.

Prizes Paid in ALGO Cryptocurrency

Algorand, the world’s first open source, permissionless, green blockchain, will be contributing A$6000 worth of ALGO cryptocurrency and a certification as part of the hackathon prize pool.

Professor Joseph Liu will be among the academics on the judging panel, joined by industry experts from Algorand. Winners will be announced on 28 July 2021.

Australia has long been a proponent of blockchain technology and cryptocurrency. With many fintech companies implementing blockchain technology, it’s crucial that individuals have the skills to utilise and apply these technologies to the benefit of the user. Many businesses are losing out due to a lack of skilled individuals in the blockchain space.

Bigturn, an international recruitment company, has implemented blockchain technology to help ease identity storage and verification for international hiring in Australia.

For more information, watch this video which describes the future of blockchain and how else it can be used within the context of business.

Categories
Bitcoin Crypto News Investing Market Analysis

Experts Predict Bitcoin Will Fall to $25,000 When Grayscale BTC Trust Unlocks In Two Weeks

In a newsletter sent out to clients, US bank JPMorgan has predicted that Bitcoin could fall to US$25,000. The situation could be brought on by the expiry of 16,000 GBTC held in a six-month lock-up period by the world’s largest cryptocurrency fund.

How Can the Grayscale Fund Impact the Price of Bitcoin?

On 18 July, the lock-up period for a total of 16,000 Bitcoin (BTC) is set to expire. This could encourage investors who entered six months ago at a lower Bitcoin price and are now sitting on some potential profits to sell their BTC instead of continuing to hold it.

Some analysts, including strategists at JPMorgan, believe that accredited investors will sell at least a portion of their GBTC holdings after the unlocking period, thus weighing further on the ongoing Bitcoin market downtrend. A selloff of 16,000 BTC, worth roughly US$540 million, could create even more pressure on the downside.

While weak flows and price momentum resulting from last month’s selloff have fuelled Bitcoin’s recent declines, potential sales of shares in the Grayscale Bitcoin Trust following the expiration of a six-month lock-up period could be an additional headwind.

Nikolaos Panigirtzoglou, a Managing Director at JP Morgan

According to JPMorgan, the trust saw record inflows of US$2 billion in December 2020, followed by $1.7 billion in January. Globally, trust funds have billions locked up in Bitcoin.

How Does It Work?

In arbitrage trade, institutional investors (like hedge funds) borrow Bitcoin to purchase GBTC shares. Then, after the lock-up expires, these investors sell GBTC shares to secondary markets (retail investors), typically for a premium. Then they return the borrowed Bitcoin to their lenders and pocket the difference.

Each share represents 0.00094716 BTC, with the share tracking Bitcoin’s market price. It has a minimum holding period of six months and a minimum investment requirement of $50,000.

Rising GBTC premium shows a higher inflow of Bitcoin into the trust, while a decreasing premium indicates a declining BTC inflow and a transition into discounted premiums. If premiums are discounted, the seller would take a financial loss because the above-mentioned difference is gone.

GBTC shares traded at a premium of 40 percent or more to the spot Bitcoin price (current price in the market). So for the big investors it looked like a sure-fire way to profit, especially with such bullish market sentiment. There was little fear of the premium falling sharply.

Money flowing into Grayscale Bitcoin Trust as its premium flips negative.
Source: Skew

However, in the second quarter the Bitcoin market has been in a backslide, and in February the GBTC premium flipped to a discount, leaving little motivation for new investors to attempt the once-popular trade. As of early July, GBTC shares traded at a discount of 10.5 percent, according to data provided by Skew. 

Others Have a More Positive Narrative

Some think it is premature to consider the potential consequences of this event. Nevertheless, other analysts believe it will flush sellers from the market in July, possibly creating bullish potential.

In contrast with what JPMorgan is saying, some digital-asset analysts and investors claim it’s possible some of these investors might need to enter the market to buy Bitcoin again to repay cryptocurrency loans they used to finance their original purchases of the GBTC shares. The negative impact of the GBTC selloff may be balanced by the repurchases of Bitcoin in the spot market.

Additionally, those who deposit their Bitcoin holdings need to buy back coins to return to their base portfolio. 

Since the beginning of the year, analysts have been forecasting a Bitcoin price of $146,000 in the long run. This may also cause some investors to hold.

Categories
Crime Crypto News Illegal Scams

Stolen COVID-19 Vaccines and Fraudulent Certificates Sold on Darknet Markets for Crypto

An investigation undertaken by the Coinfirm blockchain analytics team has uncovered illicit trade in Covid-19 vaccines, certificates, and tests on darknet marketplaces.

According to a July 1 report, Coinfirm has identified addresses linked to various vendors selling illicit Covid-19 essentials for crypto assets including Bitcoin (BTC), Ethereum (ETH), Dash (DASH), Litecoin (LTC), Tron (TRX), Monero (XMR), and Zcash (ZEC).

Privacy coins are commonly used as assets on Darknet Markets (DNM) to pay for illicit goods. This is due to properties that allow users to transact anonymously, as well as darknet platforms that cater for people who wish to stay anonymous.

The ‘Vaccine Shop’ wallet was found to be linked to 145 other payment-accepting addresses that have been flagged for stolen/cloned credit card vendors, drug traders, and perpetrators of scams – specifically Bitcoin “doublers” (fully automated investment platforms operating with no human intervention).

Vaccines Including AstraZeneca For Open Sale

One darknet vendor known as ‘COVID-19 Vaccine Shop’ was openly selling an assortment of vaccines in bulk ranging from AstraZeneca to SputnikV.

Screenshot of the ‘COVID-19 vaccine’ shop. Source: Coinfirm

Another vendor, the similarly named ‘Vaccine Shop’, openly states it is selling stolen vaccines.

Screenshot of ‘Vaccine Shop’. Source: Coinfirm

A vendor on one of the largest darknet marketplaces, Hydra, claims to deliver “certification of the completion of a full course of vaccinations from Covid-19, the dates of the vaccine and the series, the doctor’s signature and the seal of the medical organisation”.

Notwithstanding “the obvious dangers of having rogue agents within the medical profession”, one of the most worrying aspects is that some of these services are linked to people who can input and alter information within national health systems.

A US-based vendor, catering to US residents, claims to be able to input client details into the system.

Coinfirm report

Rigorous KYC Measures Remain Vital

The importance of stringent Know Your Customer (KYC) standards have long been a topic of debate. Exchanges and other entities that handle and swap crypto and don’t have KYC built into them can play host to criminals and malicious interest groups seeking an easy way to cash out their funds.

It is for these reasons that every obliged entity should institute rigorous KYC policies.

Coinfirm report
Categories
Bitcoin Crypto News Institutions Regulation

Up to $435 Billion Could Flow into Crypto as New Legislation is Approved in Germany

Updated regulations around crypto investments in Germany could lead to a US$435 billion inflow to the crypto economy from German institutional funds.

The new Fund Location Act (Fondsstandortgesetz) comes into play from July 1, pending a final decision by the German Bundesrat (Federal Council).

Big Investment Managers Can Now Invest 20% in Crypto

The new act allows existing German special funds (Spezialfonds) to invest up to 20 percent of their portfolios in Bitcoin (BTC) and Ethereum (ETH). Before this new regulation was passed, these funds were prohibited to invest in crypto.

Spezialfonds are considered the German institutional fund vehicle of choice for most liquid asset classes, and for property within distinct structures.

Jacqueline Winter, Blockchain Capital
blocksize-capital

Sven Hildebrandt, CEO of Germany-based Distributed Ledger Consulting (DLC), said there could be a theoretical inflow potential for crypto assets in the order of US$435 billion.

This won’t happen overnight, but we are talking about the largest investment vehicle that we have in Germany – literally all the money is in there.

Sven Hildebrandt, Distributed Ledger Consulting

This amounts to around 20 percent of the estimated assets under management of these wealth and institutional investment fund managers. Their 4,000 open-end domestic special funds currently have an estimated €1.87 trillion tied up, some of which could flow into crypto. This legislation being passed by one of the economic powerhouses of the world could spell good news for wider institutional acceptance.

Coinbase Crypto Services Approved in Germany

According to a report, Coinbase has recently secured a Federal Financial Supervisory Authority (BaFin) licence to conduct business in Germany.

The Nasdaq-listed company holds the first licence issued by BaFin for crypto custody and trading, which is now legally seen as a financial service in Germany.

In an attempt to combat money laundering and fraud, the German government has issued new regulations that require a licence to deal with digital assets. Coinbase can now legally conduct business in Germany and Japan and could open the doors for new investors.

Coinbase Germany will launch in coming weeks to serve both new and existing German customers more effectively, including by localising our service and increasing our product offering.

Coinbase Germany press release

Will we see the German giants put up a fight against the various other institutional powerhouses across the globe? Watch this space …

Categories
Australia Blockchain Crypto News Industries

ASX’s New CHESS Platform Set to Enter Testing Phase This Year

The Australian Securities Exchange (ASX) is updating its broker platform with blockchain-based technology. The upgraded CHESS system has been undergoing rigorous testing to ensure it can deal with the increasingly large sharemarket in Australia.

The Clearing House Electronic Subregister System (CHESS) is essentially the ASX’s system for securing, settling and clearing the Australian AU$2.5 trillion sharemarket.

The Need For Blockchain Technology

The exchange started the replacement project in 2015 and selected Digital Asset as its technology partner in January 2016 to develop a prototype based on blockchain technology. The new system improves on the previous one by creating a “single source of truth” through distributed ledger technology, where previously messages of ownership were sent back and forth leading to multiple records of share ownership.

At the start of the Covid-19 pandemic, trading volumes had reached unprecedented levels, hitting equity volumes around 7 million trades a day in March 2020 compared to normal daily averages around 2 million. Thus, creating a scalable solution became imperative.

The New System Might Not Be Available to the Public until Mid-2022

The project has already been delayed three times. In September 2018 ASX pushed the live date to late 2020, and in July 2020 it was further extended to April 2022. The testing program will continue to the end of the 2022 calendar year before the system goes live in April 2023.

One of the reasons for this extension was to allow participants and regulators to cope with the volatility of early pandemic trading, and then to allow the new system to be redesigned to accommodate a huge increase in trading volumes.

ASX chief executive Dominic Stevens said the synchronised ledger was being stress-tested to see if it could deal with high daily trading volumes, with about 40 market participants also testing the clearing and settlement system’s new code. By the end of July, ASX predicts it will have completed the code and will publish this into a “customer development environment” at the end of August.

The project is moving to operational implementation, as opposed to a technology build. We are reaching that turning point over the next six months.

ASX Chief Executive, Dominic Stevens

Since the ASX’s equities trading outage last November, some have questioned the necessity of such an ambitious technological endeavour that has far-reaching economic implications.

It needs a lot of testing as it’s a big ecosystem of value. But when you look at what was [designed] during the course of 2018, that is basically finished and is out there in the market.

Categories
Crypto News Cryptocurrencies Regulation United Kingdom

50+ Crypto Companies Withdraw Licence Applications Amid UK Crypto Regulation Fears

More than 50 crypto companies have withdrawn their applications to conduct business in the UK due to demanding requirements set by the Financial Conduct Authority (FCA).

Applicants Not Up to Scratch?

Early in June, the FCA released a report concerning a “significantly high number” of crypto firms that had been warned for not meeting anti-money laundering (AML) standards. This legislation is intended to stop criminals from hiding money used for or gained from criminal activities.

A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations. This has resulted in an unprecedented number of businesses withdrawing their applications.

FCA

Only 5 crypto asset firms have been admitted to the FCA’s formal register so far. They reportedly had 90 pending registration requests, of which 51 had withdrawn in early June and another 13 have since followed suit.

The FCA had previously issued a notice to UK consumers to inform them there were 111 unregistered crypto companies operating in the country.

Registration Period Extended

At the start of the new year, it was announced that companies that failed to meet the FCA’s AML requirements would be forced to refund all customer deposits and stop services until they could comply with the requirements set up by the regulatory agency.

The FCA has extended the temporary registration regime to 31 March, 2022. This allows businesses that have applied for registration to continue operations while awaiting the outcome of the assessment.

Additionally, there are schemes in the UK that help investors if a company were to go bust, but these don’t apply to those in the crypto industry. This law could possibly sway investors against putting their money in crypto.

It is unlikely that consumers will have access to the Financial Ombudsman Service or Financial Services Compensation Scheme, irrespective of whether a firm has temporary or full registration.

FCA

In January 2020, the FCA became the official AML regulators for the UK’s crypto market. The FCA has since taken action against some major platforms, including Binance. Apart from regulators in the UK and Japan, Canadian authorities have also issued warnings to Binance.

Binance must cease any financial promotions in the UK, but in the meantime its trading services have not been affected.

Categories
Australia Crypto News Cryptocurrencies Investing

Approximately 3.3 Million Aussies Own Crypto, According to Research

A recent survey shows an estimated 3.3 million Australians own crypto and 40% of Aussies are still likely to buy in 2021.

According to a survey conducted by Savvy, one of Australia’s largest online financial brokers, 40% of Australians range from “likely” to “extremely likely” to buy cryptocurrency in 2021.

Savvy Survey

With 17% of respondents saying they currently own crypto, 35% stated that they would like to own some cryptocurrency in the future.

Savvy Survey

The biggest barrier, according to 79.8% of Australians, it that they feel there should be more safeguards in place and that crypto should be more regulated to protect the consumer.

Younger Generations More Interested in Crypto

Close to a third of Australian crypto owners are Gen Z and 24% are Millennials. Younger generations show much more interest in digital assets and believe they have value. In comparison to traditional assets, 40% of Australian Millennials and 31% of Gen Zs would prefer to invest in crypto rather than property.

This month’s Millionaire Survey conducted by CNBC showed that nearly half of millennial millionaires put at least 25% of their wealth into crypto.

Female respondents expressed a higher interest in learning about the technology compared to men. However, more men than women claimed exceptional or average understanding of cryptocurrencies. Altogether, 71% of Australians either understand or are interested in learning more about cryptocurrency.

How Much are Aussies Investing in Crypto?

Savvy found 15% of Aussies had invested up to $5,000 in cryptocurrency, 2.5% had thrown in $5,000 to $10,000, and the 1% in the upper echelons had invested between $10,000 and $20,000.

This could mean more than 500,000 Australians have sunk at least $5,000 to $10,000 into cryptocurrency. With such heavy investing going on down under, the Australian Tax Office is bound to make sure Aussies are paying taxes.

Cryptocurrency may very well be the currency of the future. It’s time for the wider finance sector to embrace it rather than treat it as a fad, or they’ll be left behind.

Bill Tsouvalas, Savvy Managing Director