This Week in Bitcoin: Expanding Exchanges, New Crypto Fund, Patent, and Laws
In this week’s editions of Bitcoin in Brief we’ve covered a number of interesting developments in the crypto space. Several prominent exchanges have announced plans to increase their presence in new markets and locations, while a newly launched platform aims to rate them according to their liquidity, security, and volume. The weekly roundup also mentions a $300 million venture fund launched by Andreessen Horowitz, a new crypto vault offering safe storage in Switzerland, a patent promising to prevent the next Mt. Gox, and more.
Exchanges Moving in and out of Markets
This week saw a number of announcements by major crypto exchanges indicating serious plans for expansion and involving lots of moving in and out of markets. Two leading platforms, Huobi and Coinbase, have confirmed their intentions to open offices at new locations. Huobi, which recently announced it suspended services in Japan, will be setting up a new office in London. Coinbase, which is about to introduce GBP deposits and withdrawals, will open a branch in Portland, on the US West Coast. The US-based exchange also informed its clients it is replacing GDAX with Coinbase Pro.
Kucoin is another trading platform ceasing operations in Japan. The world’s largest exchange by trading volume, Binance, which has also taken steps in the same direction and is moving to Malta, is now eyeing Africa, as well. It is launching a fiat-crypto platform in Uganda, which will be offering zero trading fees for the first month of operation. The Chief Strategy Officer of Bitfinex, the trading platform which shares management with the company that issues Tether (USDT), is leaving his post as the exchange pivots away from the United States.
Bitfinex is currently the fourth-largest cryptocurrency exchange by trading volume. According to a research paper by the University of Texas, Tether may have been used to manipulate the price of bitcoin last year – an allegation that Bitfinex rejects. Moreover, Tether’s critics have asserted that the company doesn’t have enough US dollars in reserve to cover the amount of USDT in circulation. According to a recent report, the token is also vulnerable to double spend attacks.
This week, we also covered the launch of a new platform that rates exchanges according to their liquidity, security, volume, and other metrics. Crypto Exchanges Ranks (CER) has been developed by Hacken and is now live.
Patent Promises to Prevent Mt. Gox 2
BCH-focused R&D company Nchain has announced its second patent, on “Determining a common secret for the secure exchange of information and hierarchical deterministic cryptographic keys,” which has been granted by the European Patent Office. The Deterministic Key Generation technique is said to provide for improved secure communication between a pair of nodes, while being able to keep their private keys secret. According to Nchain CEO Jimmy Nguyen, it will help prevent Mt. Gox-type hacks of cryptocurrency exchanges and wallets in the future. Its developers claim the invention can provide significant security benefits for situations in which sensitive data, assets, communications or controlled resources need to be secured.
In another development within the R&D field, a new Center for Blockchain Research has been set up at Stanford University. Headed by leading computer scientists, the center will be supporting researchers in developing best practices in the crypto and blockchain sphere, while also organizing educational courses for students. The initiative aims to position Stanford at the forefront of “efforts to improve, apply and understand the many ripple effects of this technology,” said Professor Dan Boneh, one of the project leaders.
Study Links Social Media Posts to Bitcoin Prices
According to a new study by the Stevens Institute of Technology, public sentiment expressed on social media can manipulate the value of bitcoin. The authors of the paper claim that periods of predominantly positive social media commentary significantly affect crypto markets and can determine price fluctuations. The researchers believe, however, that it’s not the vocal minority, but the silent majority that really moves crypto prices up and down. The scientists have found that social media comments from very active users do not change market graphs so much, while infrequent posters exert much more influence, especially when they are sharing positive opinions.
Crypto Fund and Crypto Vault Announced
Venture capital firm Andreessen Horowitz is launching a new $300 million venture fund that will invest in crypto companies and protocols. The a16z crypto fund will be led by Katie Haun, former US DoJ federal prosecutor who worked on the Silk Road case, seats on the board of directors at Coinbase and has taught cybercrime and cryptocurrency at Stanford Law School. “We plan to invest consistently over time, regardless of market conditions. If there is another ‘crypto winter,’ we’ll keep investing aggressively,” commented Chris Dixon, general partner at Andreessen Horowitz.
And while some are preparing for serious investments, others are working to make storage of crypto holdings as safe as possible. Swiss Crypto Vault is a venture headed by two Swiss entrepreneurs – Niklas Nikolajsen, a well-known bitcoin speculator, and former UBS Group AG investment banker, Philipp Vonmoos. The project aims to lure ultra-high net worth individuals and institutional investors with its “deep underground storage, state-of-the-art encryption, multi-signing authorization processes and many more security features.” Bitcoin Suisse, Nikolajsen’s cryptocurrency broker, has already transferred to the former bunker the digital currency it controls on behalf of thousands of clients, including 10 banks.
Maltese Parliament Approves Three Crypto Bills
Malta, one of Switzerland’s competitors when it comes to creating crypto-friendly business climate, has just approved three crypto and blockchain related bills. The island nation’s legislature voted unanimously to support on second reading the draft laws which are expected to increase the country’s attractiveness for crypto businesses. Stephen McCarthy, former CEO of the Maltese Housing Authority, has been appointed as the first chief executive of the Malta Digital Innovation Authority.
Pornhub Adds Two Coins to Its Payment Options
A business taking advantage of the anonymity offered by crypto technology is the adult entertainment portal Pornhub. After announcing it will accept payments in the anonymous cryptocurrency verge (XVG) a couple of months ago, Pornhub has now decided to expand its crypto payment options by including tron (TRX) and zencash (ZEN). Corey Price, VP of Pornhub, gave the reasoning: “Decentralized payment systems have continued to grow in popularity, and cryptocurrency adoption is exploding across a broad economic spectrum. Today, cryptocurrencies are especially viable in the adult entertainment industry because they are privacy-centric and incorporate more anonymity tools than traditional tender.”
What other stories in the Bitcoin space caught your attention this week? Share your thoughts in the comments section below.
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