Posted on

Cadence Launches Blockchain-Based Tokenized Debt Marketplace

Cadence, a Coinbase-backed alternative investment provider, launched a blockchain-based investment platform for debt.

Cadence, an American blockchain-based alternative investment provider, has launched an investment platform for debt, according to a press release on July 10.

By launching its private credit investment platform, Cadence aims to bring more transparency and efficiency to the asset class in order to help companies grow their businesses. Cadence turns commercial debt into digital tokens that can be traded on its platform.

Private credit, or private debt, is a type of alternative investment which has only been accepted as a separate asset class very recently. Private debt investments are not backed by banks and are not issued or traded in an open market, and are used to fund business growth and provide working capital. Citing data from the Alternative Investment Management Association, the press release notes that total global assets in private credit are expected to reach above $1 trillion.

Cadence’s founder and CEO, Nelson Chu explained that the securitization market for private credit has been in “desperate need of innovation.”

The company, which has been recently listed on the Bloomberg Terminal, intends to contribute to the growing asset class by offering its digital securitization technology to expand private debt investments for institutional and accredited investors.

Securitization is the process of establishing a financial instrument that merged from various financial assets into one group. 

According to the press release, Cadence is backed by major United States crypto exchange and wallet service Coinbase, having raised $2 million in a funding round co-led by the exchange’s investment arm Coinbase Ventures earlier this year.

Recently, Luxembourg-based securitization firm Argento teamed up with London Block Exchange (LBX) to issue a bitcoin (BTC)-based bond.

Posted on

Major Coins See Red Following Reports That FOMO Fueled May’s Rally

Bitcoin and Ether are in the red, Ripple is in the green. Top 50 cryptocurrencies are mostly in the red in a more uncertain crypto market.

Thursday, June 6 — Bitcoin (BTC) and ether (ETH) are trending down slightly following the slump from the recent rally. Top cryptocurrencies are seeing a mix of ups and downs, according to data from Coin360.

Market visualization courtesy of Coin360

Market visualization courtesy of Coin360

After its surge to $9,000 last week, BTC is down by 1.67% on the day, and is trading at just $7,676 according to CoinMarketCap. The leading cryptocurrency has fallen in market capitalization by about $10 billion since May 30, with a market cap of approximately $136 billion at press time.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: CoinMarketCap

Top altcoin ETH is currently down by 1.8% and is trading at $241.77 at press time. With the recent market adjustments, ETH currently has a market cap approximately 19% the size of Bitcoin’s.

Ether 7-day price chart

Ether 7-day price chart. Source: CoinMarketCap

Ripple’s token XRP, however, is trending up by 2.32% on the day, and is trading at $0.408.

XRP 7-day price chart

XRP 7-day price chart. Source: CoinMarketCap

The total market capitalization of all cryptocurrencies is currently at $243 billion. 24-hour trade volume is $62.3 billion.

Total market capitalization of all cryptocurrencies 24-hour price chart

Total market capitalization of all cryptocurrencies 24-hour price chart. Source: CoinMarketCap

Looking at the data provided by MarketWatch, gold is in the green, trading at around $1,342.40, up by 0.66% on the day. Oil, on the other hand, is down by .21% on the day, trading around $51.57 at press time. Aside from oil, however, other traditional assets listed on the website remain in the green.

As previously reported on Cointelegraph, investment advisory group San Francisco Open Exchange (SFOX) released a volatility report on June 6, saying that the crypto market has transitioned from “mildly bullish” to “uncertain.” SFOX cautioned that the bullish growth in May could have been unsustainable growth due to investor FOMO (fear of missing out).

In the report, SFOX conjectured that bitcoin’s major rally on May 13 might have been the result of the on-going trade war between the United States and China. It also noted that the “flash crash” on May 17 may have been the result of a sale on cryptocurrency exchange Bitstamp, in which 5,000 BTC was sold significantly below market value at $6,200.

Posted on

Ex-Bitmain CEO Jihan Wu Set to Launch Crypto OTC Platform Next Month: Report

Speculation remains over whether Jihan Wu will serve as chairman or CEO of Matrix, the upcoming crypto services startup.

Ex-Bitmain CEO Jihan Wu could launch his newest venture next month, according to a report by The Block on June 5.

One unnamed source told the website that the crypto services startup, called Matrix, “will be the biggest over-the-counter (OTC) desk and asset manager overnight.”

Matrix’s OTC offering is likely to be boosted by its close ties to bitcoin (BTC) mining company, Bitmain. The new business will reportedly offer custody and lending services to the Beijing-based giant, receiving a liquid pool in return.

Another of the four unnamed sources told The Block that such high levels of liquidity could result in lower crypto prices, giving Matrix a competitive advantage in Asia.

The Block notes that speculation remains over whether Wu will serve as chairman or CEO of the new company — as well as over whether Matrix would be allowed to operate in China, which has a history of clamping down on the cryptocurrency industry and crypto trading.

Last November, Wu was reportedly demoted from being a “director” at Bitmain to a “supervisor.”

Bitmain is one of the biggest players in the cryptocurrency industry due to its huge mining capabilities, and Wu continues to hold a 20.5% stake in the business.

Posted on

Protocol Enables Real-World Assets to Be Tokenized on Bitcoin SV Blockchain

Tokenized says asset types including shares, loyalty points, admission tickets and memberships are supported through its ecosystem.

A company has launched a protocol enabling businesses to create tokens for real-world assets on the Bitcoin SV (BSVblockchain, according to a news release published on May 27.

Tokenized says asset types including shares, loyalty points, admission tickets and memberships are supported through its ecosystem — with the Australian firm placing an emphasis on offering a product that is regulation friendly.

Documentation has been released to help those with little technical knowledge about tokenization to understand the platform’s features, and the company is urging businesses, governments and investors to get in touch to find out more. James Belding, the company’s founder and CEO, noted:

“There is still a lot of work to be done in educating regulators, however, we are confident that all of the pieces are now in place to allow the protocol to be adopted globally as a replacement for all of the current financial messaging protocols.”

The company says its platform makes it possible for legal authorities to issue digitally signed court orders that can lead to smart contracts being frozen, also opening up the potential for tokens to be confiscated. Meanwhile, the company believes its technology would allow banks to tokenize national currencies.

Last month, a report by an EU forum concluded that the tokenization of physical objects could enhance trust, with author Tim Weingärtner suggesting that the Ethereum (ETH) blockchain is the best platform for token creation.

A few days ago, Switzerland-based company Swisscom unveiled plans to distribute tokenized artwork.

And back in January, the United States state of Wyoming passed a bill enabling corporations to issue blockchain-based tokens that represent stocks.

Posted on

Morgan Creek CEO Says Every Investor Should Hold Some Bitcoin

CEO of Morgan Creek Capital Mark Yusko says every investor should list bitcoin among their portfolio assets.

CEO of Morgan Creek Capital Mark Yusko says bitcoin (BTC) should be in every investor’s portfolio in an interview with CNBC on May 22.

Yusko remarked that he thinks BTC investments will far outperform the S&P 500 investment fund over the next 10 years.When asked about putting money into BTC, Yusko said:

“Bitcoin is a great diversifying asset. It has very low correlation. It should be in everybody’s portfolio.”

Yusko also recalled his $1 million ‘Buffet Bet 2.0’, in which Morgan Creek Digital made an open bet that its Digital Asset Index Fund would outperform the SPX from January 2019 to January 2029. The Digital Asset Index fund includes ten major crypto assets — not just bitcoin. The proceeds of the bet would reportedly be donated to charity.

Yusko has previously been very bullish on bitcoin, going on record predicting a $400,000 high for the cryptocurrency at some point. In addition to his optimistic prediction, he commented on its potential for disrupting traditional banking and finance:

“This will change the supply and demand equation for banking. It is that big. I’m not surprised at all that bankers, financiers and Saudi Princes are coming out against it. This is a truly disruptive technology.”

As previously reported on Cointelegraph, bitcoin recently hit a peak of over $8,000. Bitcoin is currently trading at $7,902 and is trending up by 2.76% at press time, according to data from CoinMarketCap.

Posted on

ConsenSys-Backed Kaleido Launches B2B Tech Stack With ‘Plug-and-Play’ Features

Kaleido says the tech stack brings together the tools and technologies businesses need to build modern networks.

Kaleido has launched a new business-to-business (B2B) tech stack with a view to helping companies “reinvent their core payment systems and supply chains,” according to a news release obtained by Cointelegraph on May 15.

The ConsenSys-backed company said the stack brings together the necessary tools and technologies that businesses need to build modern networks delivering operational improvements and new revenue streams.

According to Kaleido, businesses that use its platform will easily be able to digitize assets by issuing custom tokens. Other features, including an asset registry, document store and app-to-app messenger, are “plug and play” — and the company says this means enterprises will no longer need specialized skills in order to build and benefit from decentralized applications.

Steve Cerveny, the founder and CEO of Kaleido, said:

“Blockchain has brought a radically better way for businesses to solve an age-old problem of transacting with trust and transparency. The leading networks we’re partnering with are spotting pockets of this future before everyone else does.”

Kaleido claims it has helped multinational corporations including T-Mobile, Heineken, Sony, Shell and Fox implement blockchain-based solutions in their businesses.

In November, Kaleido and Amazon Web Services launched a marketplace to help enterprises implement blockchain solutions — a move designed to eliminate the custom code required to build blockchain projects.

Last May, the Enterprise Ethereum Alliance released its architecture stack, which was designed to standardize specifications for Ethereum-based business applications. The group has hundreds of major companies among its members, including Santander and JPMorgan.

Posted on

How Supply Affects Crypto’s Value, Explained

Debate has been raging on whether cryptocurrencies with a fixed supply are good or bad. Do they increase prices and demand, or stymy spending?

So is crypto actually a currency?

This is open to interpretation.

While some crypto startups have sought to ensure that their tokens can be used to buy something specific — whether its collectible cats or stocks — others are creating assets with a deliberately limited supply to help crypto users store value and see it appreciate over time.

One example is Bitcoin Rhodium. Its commodity, XRC, has a total supply of 2.1 million tokens coded in the blockchain. Named after a rare precious metal, the new crypto asset argues that other solutions were not a tempting proposition for investors seeking a long-term investment in crypto securities. It describes itself as the final part of the “Crypto Trinity” — along with Bitcoin and Litecoin — which is designed to appeal to a broad spectrum of investors, many of whom have different needs and interests.

As well as bridging the gap between crypto and traditional investments by offering a  time-bound dividend, Bitcoin Rhodium also says it offers a decentralized peer-to-peer exchange between precious metal investors and users of XRC, BTC and LTC — efficiently matching supply and demand without the need for intermediaries.

What happens when there are no Bitcoins left to mine?

Firstly, it might not be something you need to worry about — it’s unlikely many of us will be around in 120 years.

As this Cointelegraph feature explains, miners will particularly feel an impact. They are currently rewarded when they mine a block, but these rewards are going to tumble over time and eventually disappear altogether when supplies are exhausted. Satoshi Nakamoto himself predicted that the onus would change from block rewards to transaction fees once this plateau is reached — after all, transactions will still need to be validated on the blockchain. This could mean consumers end up paying higher fees in order to ensure their transactions are processed quickly.

As the number of Bitcoins remains stagnant and prices fall, divisibility is going to prove to be a vital factor in keeping supply levels strong. This cryptocurrency has eight decimal places — and Nakamoto reasoned that this would ensure that small purchases could still continue to be made. Without this, you’d end up in a situation akin to paying for a $1.50 can of cola with a $5 note, and not getting any change.

Ethereum tokens are divisible to 18 decimal places — and as this article explains, this is important because it ensures that they can easily be exchanged for different crypto assets or fiat currencies with differentiating value.

Over time, divisibility could prove to be more important than you may think. By 2017 — more than a year ago — a report had suggested that 3.8 million Bitcoins have already been lost. That’s 18 percent of the overall supply. Loss, theft and destruction were all likely factors, and you can bet your bottom dollar this figure is higher now.

What are the downsides of deflation?

One of the main downsides is a concept known as a “deflation death spiral.”

Like with hyperinflation, this is where things go to extremes the other way. Demand decreases because fewer people are spending money — yet, at the same time, prices are tumbling. Because the number of consumers buying goods or services has reduced, wages are vulnerable to falling, and economic productivity tumbles with it. This can lead to companies going out of business altogether.

It’s almost like a staring contest, where companies and consumers are waiting to see who blinks first. Businesses keep cutting their prices in an attempt to woo customers, but the public is holding out because they expect prices to fall. Ultimately, there’s a risk it could all become a race to the bottom.

This goes back to the Austrian School of Economics’ perspective that people would still need to spend money for essentials. It also believes that, as long as a currency or economy isn’t built on foundations of debt, the levels of deflation would stabilize to prevent such a death spiral.

In a way, this leaves cryptocurrencies at an impasse. How can it be transacted in order to gain momentum and attract mainstream adoption without missing out on the fact that their assets could be worth more in the future? Some advocates, like this Medium blogger, argue that the best way to remedy this is to make purchases using crypto — and then instantly buy more of it using fiat. If small things like coffee and lunch are bought using crypto, it can help demonstrate its utility and boost demand, with more merchants accepting it as a method of payment.

How do deflationary, fixed-supply assets affect consumer behavior?

When done right, it can reduce consumption — in a good way.

Many economies around the world are driven by the principle that it’s better to spend money now before it devalues in the future because of inflation. Debts — in the form of loans and credit cards — are rampant, and this applies at a government level too.

Deflationary assets encourage consumers to spend their money wisely so they can see their remaining funds appreciate in the future. But as Jorg Guido Hulsmann from the Austrian School of Economics points out, this doesn’t necessarily mean that crypto holders wouldn’t end up spending anything at all. Consumers would still spend money on essentials — food, fuel and mortgage payments — fully acknowledging that it could be cheaper in the coming years, as urgency is a factor.

Also, in an economy with a deflationary currency, there would still be times where you want to treat yourself — going to a bar, having a nice meal out or going to the cinema. Hulsmann argues that such crypto assets don’t have to be the death knell for consumer spending altogether, but it would make someone think twice before buying something they don’t really need.

It could also change the public’s relationship with debt — and make them more reluctant to borrow money for flashy cars and big televisions when they know that their payments would be increasing in value with every monthly repayment that passes.

So, Bitcoin may be deflationary. Isn’t deflation a bad word?

Not necessarily — this can help the cryptocurrency remain valuable.

Deflation relates to a decrease in the price you pay for goods and services. It’s the opposite of inflation — a term you’ve probably heard of if you’ve ever wondered why prices keep rising in supermarkets. Although it is considered a bad thing in the traditional economy, it isn’t necessarily a bad thing in the crypto world.

Inflation is a problem because that $1,000 you store in a safe for a decade could end up buying you a lot less. Just look at the United States Inflation Calculator, which shows that a $1 item in 1913 would cost $25.43 today.

As Blockonomi’s Brian Curran explains, inflationary markets also lead to “rampant debt levels” and push economies to live beyond their means. It can also end up going to extremes — and in Zimbabwe, inflation rates soared from 59 percent in 2000 to 80,000,000,000 percent (yes, 80 billion) in 2008. This is hyperinflation, and it renders currencies unusable. Venezuela, a country suffering from extensive political instability, has become one of the world’s biggest crypto markets because of hyperinflation, with one trader saying: “Even though Bitcoin is volatile, it’s still safer than the national currency.”

Cryptocurrencies such as Bitcoin are finite — with some economists comparing them to “digital gold” as a result. As output rises, the prices of goods are going to fall, but crypto as a store of value could rise simultaneously. Advocates of deflation argue that this is far more stable than what we see in the global economy today.

Ethereum doesn’t have an overall cap, and instead, new crypto is injected into its ecosystem every year. Although this makes it inflationary, inflation rates are decreasing as more ETH enters circulation.

Are cryptocurrencies with fixed supplies a good thing or a bad thing?

This is a hot topic for debate, and crypto companies have taken different approaches when creating their own assets.

The world’s biggest cryptocurrency, Bitcoin, has a fixed supply of 21 million — and last April, it was confirmed that 80 percent of this total had already been mined. Although newly minted Bitcoins aren’t going to be around forever, as the number available is going to decrease over time, there’s still a long way to go before they will all enter circulation. In fact, as things stand, the supply of new coins won’t be fully exhausted until 2140.

Those in favor of fixed supplies, as seen in Bitcoin, say that this creates digital scarcity. Lower supply can mean higher demand, thereby increasing prices. They also say that this sets crypto aside from the global financial system, in which central banks can effectively print more money through a strategy known as quantitative easing, which can lead to inflation and mean the dollar in your pocket isn’t worth as much as it used to be.

But in terms of cryptocurrencies achieving mainstream adoption, some opponents argue that fixed supplies actually stop people from spending, meaning that digital assets are speculative investments that people hoard. As this Bloomberg article argues, depreciation is impossible when an asset is finite, and this creates the risk of crypto owners waiting to get their goods cheaper. When it comes to conventional currencies, inflation is something that disincentivizes consumers from holding onto their cash — the longer it’s in their wallet, the less purchasing power it has.

Posted on

Gibraltar Blockchain Exchange Insures Its Crypto Assets With Local Broker

The Gibraltar Blockchain Exchange has insured all of its assets with local insurance broker Callaghan.

The Gibraltar Blockchain Exchange (GBX) announced that it is offering insurance on all of the assets listed on its platform, in an official GBX blog post Dec. 10.

The exchange reports that it will use local firm Callaghan Insurance Brokers to insure its assets, specifying that “all assets in the custody of the GBX are fully insured, including both hot and cold wallets.” The policy also reportedly “covers all forms of professional indemnity.”

GBX, a subsidiary of the Gibraltar Stock Exchange (GSX), opened in July of this year and has raised a total of $27 million in funding. In the past 24 hours, the exchange saw about $8.5 million in trades, currently placing it in 60th place on CoinMarketCap’s exchange rankings by adjusted trade volume.

As Cointelegraph reported, last month the exchange was awarded a license by the Gibraltar Financial Services Commission (GFSC).

As the firm’s blog post states, Callaghan Insurance Brokers is a privately held insurance company based out of Gibraltar The firm’s managing director is also a member of the GFSC’s board.

This is not the first crypto exchange that has managed to obtain insurance on the assets it holds. Gemini, the cryptocurrency exchange owned by the Winklevoss twins, also secured coverage for its custodied digital assets from insurance firm Aon this October.

For its part, Gibraltar’s government has recently shown interest in the regulation and development of blockchain technology in the country. As Cointelegraph reported in October, the local government launched an advisory group meant to develop blockchain-related educational courses.

Posted on

Financial Exchange Patent Explores Tamper-Proof Blockchain Bidding

A state-backed financial asset exchange in China’s Chongqing city is turning to blockchain to make online auctions tamper-proof and transparent.

According to a patent application filed in December and revealed on Friday by the China State Intellectual Property Office, the Chongqing Financial Asset Exchange (CQFAE) is exploring how to create a system that allows multiple parties to bid for a financial asset over a distributed network.

The document explains that the envisioned network would be run by invited validator nodes that are separate from the companies who participate in bidding for certain assets, such as letters of credit or corporate bonds.

When companies submit their bid to the network, the validator nodes authentic the data and then broadcast the new price for the next level of the auction, which is calculated based on various criteria encoded to smart contracts on the blockchain.

The asset exchange said the effort is necessary because the existing centralized database system is vulnerable to malicious alteration of data, either by bidding parties or even auction organizers.

It stated in the patent filing:

“The centralized online platform could make the bidding process become unfair and less transparent as the bidding parties are also unable to supervise the process. As such, the authenticity and security of the bidding data can’t be guaranteed.”

Founded in 2011 as an authorized exchange by the municipal government of Chongqing, the CQFAE functions as an intermediary between small businesses looking to raise capital and lenders such as investment firms and traditional banks. It further facilitates the trading of corporate loans and letters of credit.

While it’s so far unclear if the firm plans a blockchain product based on the patent application, it notably comes a month after the Chongqing city government revealed its plan to create a “blockchain digital asset exchange.”

As previously reported by CoinDesk, the news initially caused confusion in the Chinese cryptocurrency community, which speculated that it could mean a government-backed cryptocurrency trading platform.

A government officially reportedly clarified later that the platform is focused on facilitating exchanges of “non-standard assets” such as credit loans and letter of credit,

CQFAE Patent by CoinDesk on Scribd

Auction bid image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Wallet To Accept Collectibles Such As Crypto Kitties And Fighters As Functionality Expands

The new service will use ERC-721 compliant tokens to ensure rare and desirable assets are sold as a whole rather than in parts.

An established crypto wallet provider is developing a service where users can store collectibles – ranging from rare digital pets to desirable fighters.

Lumi says its service will allow users to swipe through their collection at ease – and it is currently invited interested crypto holders to sign up via email.

The company says it wants to help crypto holders bring all of their “unique collectible characters in one place” – including CryptoKitties, CryptoCuties, CryptoAlpaca, CryptoFighters and CryptoCelebrities. It hopes to support thousands more upon launch.

Most of these assets drive from games where players can breed and collect rare characters. In the case of CryptoKitties, “adorable creatures” cannot be replicated, removed or destroyed – meaning that unique creations retain their value. Given the immense value in the collectibles market, blockchain also helps ensure that ownership of these prized animals is tracked securely.

ERC-721 compatible tokens are going to be used by the Lumi Wallet for collectibles. The company says this is because rare collectibles such as Crypto Kitty have attributes such as color, age or breed which make them extremely desirable. In one case, it claims a particularly rare cat was traded for $110,000 through the platform.

The company adds that these tokens also ensure that assets are sold as a whole, rather than in parts. Although ERC-20 compliant tokens enable assets to be divided into small amounts when a sale is taking place, Lumi argues that this approach is incompatible with the collectibles industry – and it would be absolutely unheard of in the real world.

A thriving app

Lumi already offers an ERC20 standard-compatible wallet which is available through Apple’s App Store and Google Play, the marketplace for Android devices. The company also has a web version of its interface, and says it “never sits still” and is always offering new services to customers.

Its crypto wallet allows Bitcoin and Ethereum to be sent and received securely, and any account can be recovered through a 12-word backup phrase in the event that devices are lost or stolen. At a glance, it provides a clear indicator of how much assets – such as cryptocurrencies and collectibles – are worth in BTC, ETH and US dollars, with price graphs indicating any fluctuation in value during recent trading sessions. PIN codes and Face ID technology also helps guarantee that funds are protected.

When funds are being transferred, Lumi offers four different tiers of fees based on how long transactions will take to complete – meaning there are options for crypto holders on all budgets.

 

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.