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Bakkt Begins Testing Bitcoin Futures

Bakkt has begun testing its physically delivered Bitcoin futures, as experts predict a full launch this quarter.

Bakkt, the long-awaited Bitcoin (BTC) futures platform from the Intercontinental Exchange (ICE), has begun testing the delivery of BTC futures, according to an official tweet on July 22.

Per the tweet, user acceptance testing for Bitcoin daily and monthly futures began today with participants from around the world.

The platform initially announced the launch of futures testing in June, when Bakkt COO Adam White stated, “On July 22, two days after Apollo 11’s 50th anniversary, Bakkt will initiate user acceptance testing for its Bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US.”

White then said that the introduction of Bitcoin futures will help usher in more institutional participation in cryptocurrency markets. 

Bakkt’s Bitcoin futures are physically delivered via a process called “warehousing,” which will purportedly bode well from a price discovery standpoint, but cause some concern among regulators. 

Bakkt has experienced several delays regarding its launch as regulators like the United States Commodity Futures Trading Commission investigated the platform’s compliance procedures and its possible effect on markets.  

Last week, Sam Doctor, the managing director and quant strategist at Fundstrat Global Advisors, predicted that full futures trading on Bakkt will launch this quarter. Doctor said:

“There appears to be a critical mass of adopters ready to come on board on Day 1 of the Bakkt launch, with the sales team gaining traction among brokers, market makers, prop trading desks and liquidity providers.”

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Crypto Payment Platforms Offer Working Examples — Competition Heats Up

A new deposit functionality has been rolled out following news of a Bakkt payment app and Coinbase Card’s expansion into six European nations…

Once seen by the mainstream zeitgeist as a fringe technology destined to languish on the outskirts of society, cryptocurrency today is alluring many leaders of the fintech sector by offering companies the prospect of being at the forefront of the largest financial revolution of the past century.

With mainstream society increasingly accepting Bitcoin (BTC) as a means of payment, financial firms are increasingly seeking to offer a frictionless and convenient means for consumers to make payments using crypto.  

Square introduces BTC deposits

On June 26, San Francisco-based mobile payments provider Square announced that users of the company’s Cash App can now receive bitcoin from external wallets. However, Cash App users are restricted from receiving more than $10,000 worth of BTC deposits within a seven day period.

While most Cash App users have been able to purchase or sell Bitcoin since February 2018, a functionality facilitating payments between friends and family has been notably absent, given that such has long-comprised a major value proposition underpinning the app’s fiat utility.

News of the deposit functionality was a poorly kept secret, with crypto Twitter pundit Dennis Parker announcing that Cash App had enabled BTC deposits on June 25, a week following a similar tweet from Marty Bent that also claimed the function was live. Thus, the competition for the crypto payments sector is beginning to heat up.

Platforms compete to corner crypto payments

The integration of deposit functionality reasserts Square as a major contender among the companies seeking to lead the burgeoning crypto payments sector. Revolut, a United Kingdom-based fintech startup, is offering a platform featuring payment processing services, commission-free stock brokerage and foreign currency exchange — and it announced that it had introduced cryptocurrency exchange services to its platform in December 2017. However, users are only able to transfer cryptocurrencies within the Revolut network and cannot receive deposits from external wallets.

On June 20, The Block reported that Bakkt had hired a former Google payments product strategist, Christ Petersen, to assist the company in rolling out an upcoming mobile digital asset wallet application. The app, dubbed Bakkt Pay by anonymous sources, is expected to launch by the end of 2019.

On June 11, a Singapore-based cryptocurrency payments firm, TenX, celebrated its fourth birthday by announcing it had become the first company funded through an initial coin offering (ICO) to receive an e-money license. The license was issued by the Liechtenstein Financial Market Authority, allowing the company to provide “electronic money institution” services across the European Economic Area (EEA). TenX plans to launch its prepaid Visa cards across the EEA during the fourth quarter of 2019.

Square seeks to expand presence in crypto sector

Square first announced that it was “exploring” allowing Cash App users to purchase or sell BTC  during November 2017 in response to customer demand. The announcement followed a trial of the functionality among select users, with a spokesperson stating:

“We’re always listening to our customers and we’ve found that they are interested in using the Cash App to buy Bitcoin. We’re exploring how Square can make this experience faster and easier, and have rolled out this feature to a small number of Cash App customers.”

During March of this year, Jack Dorsey, the founder of Square and Twitter, revealed that Square was seeking to hire several full-time cryptocurrency engineers and a single designer to work on open-source contributions to the Bitcoin and cryptocurrency as part of an initiative called Square Crypto. Recruits would report directly under Dorsey, with the option to receive remuneration in the form of BTC also available.

In an interview with The Next Web published on June 14, Dorsey discussed the progress of the Square Crypto venture, indicating that regulatory challenges were forcing the company to move slowly in its endeavors pertaining to cryptocurrency.

“An Internet company can launch something and it’s available around the world. Whereas with payments, you have to go to each market and pay attention to regulators. You need a partnership with a local bank. This is a very slow process in any new market.” 

Coinbase expands payment operations

On June 11, Coinbase announced that its Visa debit card had been made available to citizens from in Spain, Germany, France, Italy, Ireland and the Netherlands. The announcement also indicated that the company expects to make the Coinbase Card available to more jurisdictions in the coming months.

The Coinbase Card was launched in the U.K. during April 2019. The card’s app makes payments from the balance of a user’s Coinbase account, with Coinbase instantly converting the chosen cryptocurrency into fiat currency upon execution of the payment. Transactions incur a fee of 2.49% within European countries, however, using the card outside of Europe currently draws a 5.49% fee. U.K.-based payment processor PaySafe is the issuer of Coinbase’s cards.

According to unverifiable reports from May, Coinbase had entered into “advanced talks” to purchase pioneering cryptocurrency custody provider Xapo for approximately $50 million plus an earn-out. Xapo is estimated to hold more than $5.5 billion in assets under custody, with the company also offering an app that allows users to send BTC and fiat currencies to other Xapo users without incurring fees as well as facilitates payments to banks accounts in more than 30 countries. The report noted that Fidelity Digital Assets had also shown strong interest in purchasing Xapo.

Circle to sunset payment platform

On June 13, Circle announced that it will start winding down support for the company’s payment app during July, after five years of operations. At the time of the announcement, Circle Pay supported fee-free payments denominated in U.S. dollars, British pounds and euros, and was available to customers from the U.S., the U.K. and 27 other European countries.

The company attributed the decision to sunset the app to the emergence of stablecoins such as Circle’s USD Coin (USDC), describing fiat tokens as superior means of frictionlessly transferring fiat value between entities. By contrast, the company stated that Circle Pay “largely relied on interfacing with the traditional financial system and untokenized fiat currencies.” 

The announcement was published one month after Circle laid off 30 staff members, who then comprised 10% of its entire workforce. Circle’s CEO, Jeremy Allaire, attributed the downsizing to a response to market conditions and regulatory hurdles in the U.S.

Paxful partners with BitMart

In February 2019, peer-to-peer (P2P) Bitcoin marketplace Paxful announced a joint venture that saw Paxful integrated as a means of facilitating BTC payments on the global digital asset trading platform BitMart. 

The partnership will see BitMart users able to make payments using Paxful without being charged listing fees, while Paxful users will be provided the option to convert BTC into alternative cryptocurrencies using BitMart’s exchange. Both companies expect that the agreement will bolster liquidity on their respective exchange platforms.

At the time, Ray Youssef, the CEO and co-founder of Paxful, stated: “We’re excited to integrate with BitMart in efforts to bring more trading options to emerging markets. It has always been our mission to provide financial freedom worldwide and we see this as the next big step in the financial revolution.”

The founder and CEO of BitMart, Sheldon Xia, emphasized that the partnership will significantly expand the number of ways by which the exchange’s users can purchase BTC, stating: 

“With this partnership, investors will now have direct access to multiple payment approaches including bank transfers, gift cards, debit/credit cards, and cash deposits, lowering the barriers to entry for new adopters of digital currency investment.”

BitMart currently has a user base of more than 600,000 and a reported 24-hour volume of approximately $1.18 billion, while Paxful has hosted approximately $20 million worth of bitcoin trades on a weekly basis for the last 12 months.

Centralization vs. adoption

While the proliferation of cryptocurrency payment platforms is undoubtedly pushing the ecosystem toward mainstream adoption, popular payment apps could prove to be a centralizing force upon the crypto community as a handful of major companies compete for consumer loyalty.

However, the increasing presence of large financial corporations within the cryptocurrency economy may create pressure on lawmakers to provide clear guidelines pertaining to crypto, with the prevalence of an unclear or exclusionary regulatory apparatus comprising the primary barrier to a rapid and global expansion of the cryptocurrency payments industry.

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Beat Bakkt: LedgerX to Launch Physically-Backed Bitcoin (BTC) Futures

LedgerX Can Launch Bitcoin Futures

Just a few weeks back, Bakkt revealed that it would be launching its Bitcoin (BTC) futures product for user testing in late-July. But, it seems that another cryptocurrency exchange has beat the New York Stock Exchange-backed initiative to the punch, so to speak.

Announced Tuesday morning, LedgerX, a crypto asset derivatives platform headquartered in the Big Apple, has received clearance from the U.S. Commodity Futures Trading Commission (CFTC). This regulatory green light will allow the company to list physically-settled BTC futures, which are far different than the paper contracts offered by the CME.

You see, unlike cash-settled futures, those holding ‘physical’ (as physical as a Bitcoin can be anyway) contracts are entitled to receive the underlying commodity when the contract matures, compared to just receiving a cash credit. Many analysts have claimed that this new form of Bitcoin-related asset, whether launched through Bakkt or what have you, will allow for better price discovery, presumably on the upside, especially considering the importance of the futures market today in cryptocurrency.

As JP Morgan analysts recently explained in a note, if you disregard all the exchanges deemed “fake” by analytics companies, you’re left with an interesting picture about the Bitcoin market: cash-settled futures make up nearly half the volume. The thing is, none of the capital flowing into this future actually find their way onto the spot BTC market, reducing buy-side or sell-side pressure.

Now back to LedgerX. According to CoinDesk, chief operating officer Juthica Chou has claimed that her company has no exact timeline, but she noted that LedgerX is looking to be the incumbent in this market. Chou adds that LedgerX intends to “serve customers of all sizes”, hinting that there may be a much-needed retail component to this upcoming product, something that Bakkt is seemingly not focusing on yet.

Bakkt Hard at Work

Despite the fact that Bakkt was kind of beat to the punch, the company is still hard at work. According to a recent report from trade publication The Block, Bakkt has just signed a former Google contractor, Chris Peterson, onto its team. The former UX consultant, according to a “person familiar with the situation”, is likely working on a digital asset wallet, dubbed “Bakkt Pay”.

The Block’s sources say that following the release of the long-awaited financial vehicle, the crypto platform may launch the mobile application. Not many details were given about this product, but the outlet points out that Bakkt’s recently-updated website mentions digital payments. 

This news comes months after The Block broke the news that contrary to skepticism, Bakkt is actually working closely with Starbucks, one of the world’s largest restaurant chains. Per their source, the coffee giant has managed to secure a substantial stake in Bakkt in return for “commitment to allow Bitcoin payments in store in 2019”.

Photo by Rohit Tandon on Unsplash

The post Beat Bakkt: LedgerX to Launch Physically-Backed Bitcoin (BTC) Futures appeared first on Ethereum World News.

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How Tyler Winklevoss Converted His Biographer Into a Bitcoin Believer

Tyler and Cameron Winklevoss are portrayed as the good guys this time in Ben Mezrich’s new book.

This interview has been edited and condensed.

I don’t normally write the stories here at Cointelegraph — I edit them. But when I got an email from a publicist asking if I was interested in speaking with Ben Mezrich, author of “Bitcoin Billionaires,” and oh, did I want the Winklevoss twins to jump in on the interview? I couldn’t say no.

Ben had the lucky chance — as he calls it — to already have an in with Cameron and Tyler Winklevoss, as they had been portrayed as the Men of Harvard, slightly “bad” guys in his book that ended up being adapted into the film “The Social Network.” As Ben tells it, after he saw The New York Times article about their bitcoin billionaire success, a book about their crypto escapades that picks up right as their court battle with Mark Zuckerberg ends seemed to be an obvious next step.

The timing for the publication of “Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption” couldn’t be better or more coincidental. The book spends almost 300 pages detailing the journey of how the Winklevoss twins have succeeded in crypto to the extent that it has wiped away the stain left by their battle over Facebook’s origin with Zuckerberg, only to then coincide with Facebook’s public unveiling of the Libra cryptocurrency project.

However, Ben’s latest book involving both the Winklevii and Zuckerberg — which was reviewed by Cointelegraph this week — reverses his previous narrative of Zuckerberg as the good guy and the Winklevii as his opponents. But, as Ben explained, it wasn’t the writing that got it initially wrong, but the reality that changed the perspective over time. He told me:

“I think reality flipped everything on its head, not just in the writing of it, but Facebook went from being something that everyone saw as this revolution and Zuckerberg as this revolutionary that was going to free the internet and make us all happy, into something much more nefarious, and Zuckerberg is now somewhat reviled.”

And Zuckerberg’s cryptocurrency project has not been without criticism from those that align themselves more with the cypherpunks of the 1990s than with the Winklevii of today. That is an important distinction that Ben makes in his book, shown through the twins’ highly skeptical attitudes toward the manic bitcoin passion of Charlie Shrem and the slightly dangerous libertarianism of Roger Ver. The twins, albeit very sincere bitcoin believers, could kind of care less about the sacredness of decentralization.

When asking Tyler Winklevoss about Facebook’s Libra project, I expected potential scorn, derision, maybe even thinly veiled frustration about losing some crypto limelight to a past adversary. But Tyler surprised me with his even keel:

“So, first off, I think that Facebook being in this space is huge validation for it.”

I waited for him to continue.

“I think that if you are a company in 2019, and you don’t have a crypto story or game plan, it’s kind of crazy. And if you don’t, I’m sure you’re scrambling around to get one.

“Ultimately we think it’s great validation in the space. I’ve read some of the technical papers and whatnot and it looks like it is evolving and they’re still figuring out exactly all the details. But there’s a plan to start, in some way move it to more decentralization.

“It’s still really early, and this is all one big experiment and iteration on the evolution of money. And I think it’s really healthy that people are trying different approaches. It’s not necessarily one size fits all.

“If you’re trying to be digital gold, decentralization may be the most important thing. If you’re trying to be more like a currency, then perhaps you can give on decentralization for speed. So I think it is really good. All approaches are very valid and we’ll sort of see how it plays out.”

On the straight and narrow

The main takeaway from Tyler’s comments throughout our entire conversation was regulation, regulation, regulation. Once you got past the “bitcoin does gold better than gold” standard line, he was ready to explain his somewhat unusual (what I would dub “hodler traditionalist”) views.

For starters, he was not onboard with my joking idea about selling “Bitcoin Billionaires” for actual bitcoin:

“Maybe you shouldn’t buy it with bitcoin, because if you believe in bitcoin, it is going to only appreciate in value.”

According to Tyler, there is no reason for bitcoin to even become a medium of exchange or a “good currency” because of “how regulation is allowing that to play out, at least in the U.S.”

And now that he’s started speaking about regulation, he gets on a roll that is nevertheless persuasive despite being well-practiced.

“We need to speak the same language as the largest funds and players in capital markets today,” Tyler said over the phone, in as far a cry from a cypherpunk as can be found. “I think it’s just really important to do things the right way. And that may not be the fastest way in the short term, but I think in the long term, it’s the one that ultimately will bring in the right audience and be the pay-off in the long term. Our sort of motto is: Look, we’re just trying to be the fastest tortoise in the race. And we’re playing on a game board that not everybody else is necessarily playing on.”

“We’re playing chess and, you know, there is checkers, but that’s a different game and we’re not playing that.”

What bitcoin lacks

When asked about the upcoming Bakkt physically-backed bitcoin futures testing, as well as the seemingly never-ending process of the United States Securities and Exchange Commission’s decision on a bitcoin exchange-traded fund (ETF), Tyler continued to play the role of the tortoise in it for the long haul:

“I think that people, traders, investors and consumers will ultimately want to see the same opportunities to express opinions through financial instruments in bitcoin as they see in gold. But because we live in the world of cryptocurrency, there may be much more, too. There may be decentralized exchanges and more decentralized finance applications that you can’t create outside of the crypto world.

“I think you’d expect to see what exists in gold but also much more in crypto.”

This attitude toward regulation, compliance and doing things the “right way” came from the twins’ negative experience with now defunct crypto exchange Mt. Gox, when they first started acquiring their bitcoin hoard. This is the main goal of the Winklevoss’ cryptocurrency exchange, the New York-based Gemini — to do everything the opposite of Mt. Gox.

And according to Tyler, doing things the right way is really the only way:

“We don’t believe in hacking our way around regulation or being too clever about it. We are transparent. We go into the front door, not the side door or in the back door. And that’s been our strategy and our DNA from day one.”

Ben Mezrich’s interest is piqued

According to Ben, Tyler’s passion for crypto and its regulation, obvious even over the phone on a group call, was one of the things that got him interested in the story and kept him interested:

“If there is a really, really smart person who gets incredibly passionate about something and everyone else is telling him that he’s wrong, that often leads to that thing that changes the world. People who are very smart get truly passionate about something, and you have to wonder why. How did they get so into this? That’s sort of rabbit hole that you go down.”

In fact, Ben — who admits that he knew almost nothing about cryptocurrency before he began this book — has become a bitcoin evangelist in a way that is abundantly clear both in the book and in our conversation. He tells me this on the phone with the conviction of a true believer:

“There’s no question that cryptocurrency is the future. That’s the way we’re going. It’s the science fiction money that we read about. And now, suddenly, it’s going to be adopted by everybody in the next couple of years.”

And Ben underlines that he was inspired specifically by the Winklevii, compliant, “right path” way:

“If you just talked to the Charlie Shrems and the Rogers of the world, it would frighten me, because it comes from this kind of crazy libertarian, anarchistic, Silk Road world, which is not something that would appeal to me, necessarily. But the way I think the twins came at it was completely different, and that perspective really won me over and it just made sense.

“The idea of digital money and the idea of digital gold — and something that you trust because it’s math and not people — just made a lot of sense to me.”

Ben’s goal in writing the book may have originally been to chase down his next interesting story, but his conversation with me sounds a lot like the Winklevoss twins in their early circuits of the crypto conferences — back when bitcoin was still in its nascency.

And according to Ben, people have seemed to take his past books to heart — as he noted that “Accidental Billionaires” and “The Social Network” actually launched many people toward Silicon Valley — which could spread the bitcoin gospel even further.

He told me confidently:

“I think this will launch all these people into this whole new world of money, and not just that, but the whole philosophy behind it.”

Tyler agreed with Ben’s assessment of the previous past influence of his books, noting that “if someone invested behind what Ben Mezrich found interesting, they’d probably have done pretty well.”

Ben concurred, joking that a hedge fund had once even wanted to rent him an office so that it could pick his brain as he searched for a new book topic. He didn’t end up taking the fund up on its offer.

Ben did add the caveat that “I foolishly never invest in anything I write about for a couple of reasons,” stating that he didn’t want to own bitcoin while also promoting his book, a highly moral stance for someone that also admitted he didn’t buy Facebook stock when writing “Accidental Billionaires” almost a decade ago.

Friend or foe?

I was curious how the characters that were portrayed in a more negative light viewed the book. After all, Ben had obviously gotten close to them in order to write a book that detailed all the various ways that BitInstant’s Charlie Shrem could be sweaty.

His answer also surprised me:

“Charlie loves it. Charlie read the book and the first thing he did was he texted me and said he cried, and thank you, thank you, thank you.

“I think Charlie’s a complicated character. So, even though you saw him warts and all, it really was his story. So, he liked it.”

Tyler chimed in to say, very seriously, that he and his brother Cameron are “cordial with everyone in the book. I’m friends with Eric [Vorhees], cordial with Roger [Ver], we’ve exchanged emails, obviously it’s no secret that we’ve had our differences with Charlie, but that’s all behind us now.” He went on, saying:

“I feel like we’re all cordial and respectful of the different viewpoints and opinions we have and paths we’ve taken.

“Everybody’s entitled to their different views and philosophies, and you know we don’t always have to agree, but we can respectfully have our differences.”

When I noted that his speech was more respectful than what goes on in crypto Twitter, he replied “someone’s got to set the example, you know?”

As for speaking with Zuckerberg for the second iteration of the Facebook-turned-crypto saga, Ben seemed doubtful, but as he said, “you never know, you never know.”

“I like to think of it like ‘The Avengers.’ You have ‘The Avengers’ as ‘The Social Network,’ and like the Marvel Universe, we go off into each character. Now, we’re talking about Wolverine, and next we’ll be talking about whatever. But it is really an incredible story that just keeps on going. And it’s definitely not finished yet.”

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Bakkt Names Launch Date for Bitcoin Futures Testing

Executives compared the launch to the 1969 moon landing after Bakkt faced multiple delays due to compliance issues.

Institutional cryptocurrency platform Bakkt will begin testing its first product, physically-delivered bitcoin (BTC) futures on July 22, the company announced in a blog post on June 13.

Bakkt, which has seen multiple delays over regulatory compliance since its original announcement in August 2018, will offer futures as the first in a series of offerings, full details of which remain unclear.

“On July 22, two days after Apollo 11’s 50th anniversary, Bakkt will initiate user acceptance testing for its bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US,” chief operating officer Adam White wrote in the blog post, adding:

“This is no small step. This launch will usher in a new standard for accessing crypto markets. Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty.”

White compared the move to the first moon landing in 1969, echoing the hurdles the company has had to cross in order to provide the fully-regulated cryptocurrency products it wants to for institutional investors.

The announcement comes the same week as data that showed bitcoin futures from CME Group turned record high volume in May.

At the same time, CBOE, the first-ever provider of bitcoin futures, will stop offering contracts when its final contracts settle later this month.

Unlike traditional platforms, Bakkt will settle its contracts in physical bitcoin, rather than fiat currency.

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Blockchain for Retail: Use Cases and Potential Applications

From fixing ads and loyalty programs to ensuring ethical sourcing of products, here’s how blockchain can make retail more efficient.

Cryptocurrencies have gone a long way since the day when, nine years ago, Laszlo Hanyecz had paid 10,000 bitcoins for two large Papa John’s pizzas, marking the first purchase of tangible goods for digital money. Although bitcoin is still far from being universally accepted by retailers, thousands of merchants around the world are taking crypto in exchange for goods — and their ranks grow daily. The latest of the big developments in this vein came up at this year’s Consensus conference, as blockchain startup Flexa made public its partnership with a number of major U.S. retailers. Flexa’s payments app, Spedn, will allow users to pay for their purchases in more than a dozen stores of the caliber of Barnes & Noble, Office Depot and Whole Foods with cryptocurrencies.

Payments, as we know, are just a tip of the blockchain iceberg, though. While expanding the number of stores and chains that accept digital money remains an important avenue leading toward mass adoption, there are several other domains where distributed ledger technology (DLT) can be of help to the retail industry. Some of these solutions are already up and running, and some hold the promise to bring about massive changes within the next few years.

Crypto payments

There is evidence that cryptocurrency payments are gradually moving away from the fringe. The Kaspersky Lab Global IT Security Risks Survey, published in February, reported that a respectable 13% of more than 12,000 consumers across 22 countries have used cryptocurrency to pay for their online purchases.

The most popular payment methods

Companies that step on the path of accepting crypto might be driven by various motivations. Some might want to appeal to younger, technologically advanced customers by appearing savvy with the cutting-edge tech, while others embrace the promise of the technology and are bullish on crypto themselves. Digital money’s volatility remains the main deterrent for large corporate retailers. Intermediaries like Flexa, which are ready to stand in between corporate businesses and the dicey crypto market to absorb part of the uncertainty, come in handy as the big players find themselves willing to experiment with the new payment method yet are wary of potential risks.

It appears that this indirect model could become a dominant means of easing major retail chains into digital money payments in the next few years. For instance, this is how the recently announced crypto-payment partnership between Starbucks and fintech firm Bakkt is expected to work.

This running list tracks major stores and services that accept cryptocurrencies. You can already spend your digital money on travel, gift cards, jewelry, games and movies, moving services, gadgets, goods for your home and more. The list will surely keep growing.

Blockchain’s capacity to facilitate transmission of both value and information can give rise to more sophisticated, multifunctional forms of payments in the near future. A recently unveiled Civic Pay app is a vivid example: The solution will enable vending machine operators to simplify access to age-gated goods by combining payment, identity verification and earning reward points in one transaction.

Loyalty programs

Another important domain of the retail business that could use some optimization and enhanced fraud protection is loyalty programs. A primary tool for building a lasting relationship with a customer, these transaction-based programs oftentimes rely on infrastructure that is less secure than that of “real” payments, leading to a substantial increase in loyalty-fraud crime in recent years. Both value and personal data are subject to theft. In addition, many reward programs fall short of providing enough value to customers, as the ways of spending the hard-earned points are limited.

Introducing blockchain into the equation could help retailers address both issues. On the security side, hackers and fraudsters will have a much harder time penetrating a system that relies on a distributed ledger than one that stores all the data in a centralized database. In terms of consumer value, creating a token-based rewards ecosystem open to third-party businesses is a means of giving customers a wealth of diverse ways to spend their points.

This is exactly what American Express is looking to achieve with its Hyperledger-based rewards platform, which is geared toward enabling partner merchants to create customized rewards offers for the financial corporation’s clients. A prominent player in the space is Swiss firm Qiibee, which specializes in helping businesses tokenize their loyalty programs.

Supply chain tracking

Another well-established and profusely covered family of blockchain use cases in retail has to do with the technology’s capacity to make the goods’ origins transparent and verifiable. The demand for such transparency may stem from different considerations, depending on a particular industry, with three key concerns being safety, authenticity and ethical sourcing.

The United States Centers for Disease Control and Prevention, the arm of the federal government responsible for promoting and protecting public health and safety, estimates that each year, 48 million people get sick, 128,000 are hospitalized and 3,000 die from foodborne illness. Outbreaks of diseases like E. coli and salmonella caused by bad groceries are still nothing irregular, and once the contaminated produce makes it to a large retailer’s enormous supply chain, it becomes difficult to track its origin in order to quickly extinguish the threat. It may take days until the source is identified, potentially causing the chain heavy losses and putting customers at risk.

Industry leaders have come to realize that recording every actionable event along the produce’s journey — from farm to table — on a blockchain is an efficient solution to this problem. It could also enhance stores’ ability to quickly identify and remove recalled foods, among other logistical benefits. The IBM Food Trust initiative, which offers its members a blockchain-based platform to track produce on every step of the supply chain, launched in the fall of 2016, when the U.S. retail giant Walmart began testing the system. Since then, Walmart has started requiring suppliers of certain types of produce to implement the DLT-powered solution. Other U.S. and global players in the field — such as Albertsons, Unilever, Nestlé and Carrefour — have joined the club as well, and many more are poised to follow suit.

Closely related to food safety but a conceptually different consumer demand is the need to verify that the product in question has been ethically sourced. As millennials and gen Z-ers are becoming the driving force of global capitalism, concerns over businesses’ environmental and social responsibility are becoming an increasingly conspicuous factor in purchasing behavior. Again, recording the product’s journey on an immutable ledger and creating a consumer-friendly interface enabling customers to obtain a clear picture of its origins can become a powerful tool for companies to build trust and get rewarded for transparency and responsible sourcing practices.

Some examples include the World Wildlife Fund-Australia championing the use of OpenSC, a supply chain tracking tool built on blockchain, to enable consumers make ethical choices when purchasing food. Customers will be able to obtain information regarding the products’ origins and life cycle by scanning a QR code on the package.

On another note, the Ford Motor Company is testing an IBM-built system running on Hyperledger Fabric that will trace supplies of cobalt — a material used in lithium-ion batteries that is seeing increased demand as the electric vehicles market expands. A large share of the world’s cobalt is mined in the Democratic Republic of Congo, where child labor and slave-like working conditions are widespread. The blockchain initiative would address these issues by providing Western corporations with a means of ensuring that the cobalt they purchase comes from the mines where a certain level of labor protection is enforced.

Finally, when it comes to luxury consumer goods, being able to establish the provenance of an item is of utmost importance. The diamond industry’s largest players, such as Alrosa and De Beers, have adopted blockchain-based solutions to track gems from mine to store and verify that their origins are clean — in both literal sense and with respect to previous ownership. Luxury apparel brand Alyx will implement Iota’s blockchain solution to showcase sustainable practices used on every step of its supply chain.

Customer data management, security and sharing

Retailers routinely record, store and utilize vast amounts of customer data. Blockchain applications related to streamlining processes in this line of their work present a less explored yet immensely promising area. Harnessing the benefits of distributed ledger technology could improve security, give customers more control over their data, and create new forms of marketing to help retailers meet consumer needs with higher precision and capture the value otherwise missed.

With the help of an artificial intelligence-powered recommendation system, retailers would be able to identify customers’ needs and advertise highly tailored offers to them. With advertising expenditures thus optimized, merchants will be able to reward those who opted into opening their data with tokens spendable at the store.

With a blockchain data-sharing system in place, customers could also proactively let retailers know about their needs and preferences, sending them shopping lists in the form of smart contracts. Coupled with the potential affordances of the Internet of Things to outsource the execution and delivery of such orders to machines, blockchain could become a fundamental infrastructure for the new era of fully automated shopping.

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Recent Bitcoin Price Rally Was Due to These Three Reasons: Expert Says

The chief of digital assets at Susquehanna has recently shared on CNBC
the reasons for the most recent Bitcoin price surge

On Thursday, May 30, the head of digital assets at Susquehanna International Group, Bart Smith, gave a stream interview during CNBC’s Squawk Box program.

Bart Smith first stated that there are numerous reasons for the recent rise of Bitcoin, such as geopolitical, technological and regulatory, among other factors. However, the expert picked out three most important drivers for the BTC price growth.

Reason 1. The US-China trade war

This was the first driver mentioned by Smith. Since the US imposed high tariffs on Chinese goods, the yuan began dropping. This made many Chinese investors start using Bitcoin to hedge their financial risks against the sliding rate of the native fiat currency.

However, as Forbes has assumed recently, the situation may change for the best for Bitcoin even further thanks to China. The article author mentioned that China is seriously considering beginning to sell US Treasuries back to the US. An almost incredible thing was assumed that the Chinese government would start purchasing Bitcoin instead of Treasury bonds of Germany or Japan (the most valuable after US Treasuries).

Should this indeed happen, Bitcoin price would
fly high up.

Reason 2. The Consensus 2019 conference

The second driver that Smith put forward was
to do with the Consensus 2019 conference that has recently taken place in New
York.

It was during this event that the BTC rate
surged from $6,000 by one third of that amount.

The expert pointed out that there was a lot of excitement in the community regarding the approaching launces of state-regulated crypto platforms, such as Fidelity Digital Assets, Bakkt and ErisX which were discussed at the event.

As per Smith, the recent fact of Starbucks and Whole Foods embracing Bitcoin also gained a lot of attention at the conference.

Reason 3. Brokerage firms offering Bitcoin to retail clients this year

The third reason for the recent BTC price surge, as per Smith, is the fact that a great number of US brokerage firms, online ones especially, have begun to offer BTC to their retail clients in 2019. He mentioned this reason as the most important one among all the three.

“While no one has come out and said that openly, there’s a lot of talk about that, and I think people are buying bitcoin ahead potentially of that new investor demand.”

When he was asked to give some positive
assessment to a few things to do with Bitcoin, Smith refused, though.

“I’m not a bitcoin evangelist, so it’s not my job to convert the
unconverted,” said Smith. “And I’m not necessarily rooting for anything. I’m a
market maker. I provide liquidity . . . I’m not making a price prognostication.
I’m simply pointing out there’s a lot of optimism from people within the
bitcoin community over things that have happened in recent months, and I think
that’s reflected in the price.”

Bitcoin price is rebounding

Over the last few days, Bitcoin price has been
in a correction, pulling the rest of the market down as well.

However, as per another expert, this is
actually good for the market in the long run.

Josh Olszewicz, a crypto trader and a person with an influence on the crypto community recently said, when speaking on an Apple podcast, that he has been expecting a small pullback of the BTC price soon.

He believes that this is good if the market
wants to avoid a tremendous retracement later on.

“It’s to the point now where it’s like if we don’t pull back, the pullback eventually that will come will just be super painful. There’s really no other good reason to pull back, other than we should have already pulled back.”

The post Recent Bitcoin Price Rally Was Due to These Three Reasons: Expert Says appeared first on Ethereum World News.

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Hodler’s Digest, May 13–19: Top Stories, Price Movements, Quotes and FUD of the Week

Bitstamp processed a very large sell order, while Bakkt’s bitcoin futures should be tested in July.

Top Stories This Week

Coming every Sunday, the Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Bitstamp Starts Investigation After Large BTC Sell Leads to $250 Million Liquidated on BitMEX

Major crypto exchange Bitstamp launched an investigation this week after a large bitcoin (BTC) sell order heavily impacted its order book. Bitstamp reported on the execution of the large bitcoin sell order from BTC to United States dollars, without specifying themselves the details of the transaction. Other crypto media noted that it involved a sell order that led to a liquidation of $250 million long positions on the BitMEX exchange with 5,000 BTC sold at $6,200, which further resulted in price declines on other crypto exchanges. Some crypto commentators suggested that the sell order could be made by mistake, with the order’s owner having meant to sell his/her bitcoin at $8,200 instead of $6,200.

Flexa Launches App Where Shoppers Can Spend Crypto at 15 Major U.S. Retailers

Payments startup Flexa unveiled an app this week that allows consumers to spend cryptocurrencies at major American retailers. The app, called Spedn, is currently set up to work with retailers including Barnes & Noble, Bed Bath & Beyond, GameStop, Lowe’s, Nordstrom, Office Depot and Whole Foods Market, with more stores to be added in the coming months. Stores that aren’t able to accept cryptocurrency will require the crypto to be instantly converted to fiat when an item is purchased. As of now, purchase on Spedn can be made with bitcoin, ether (ETH), bitcoin cash (BCH) as well as the gemini dollar (GUSD) stablecoin.

U.S. SEC Delays Decision on Bitwise Bitcoin ETF, Seeks Public Comment

The U.S. Securities and Exchange Commission (SEC) has again delayed its decision to approve or disapprove cryptocurrency index fund provider Bitwise Asset Management’s bitcoin (BTC) exchange-traded fund (ETF) application. In this week’s filing, the SEC also noted that it requested public comment from interested parties, asking for “written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal.” Bitwise had initially filed for an ETF in February, under the condition that the SEC would reach a decision in 45 days, with its application differing from others in that it draws prices from a variety of cryptocurrency exchanges, with the aim of better representing the market.

Bakkt to Roll Out First Bitcoin Futures Testing in July 2019

Institutional crypto exchange Bakkt plans to roll out testing for bitcoin futures trading in early July 2019, according to its CEO, Kelly Loeffler. Loeffler noted in a Medium post this week that Bakkt is working with both the Intercontinental Exchange (ICE) Futures U.S. exchange and ICE Clear U.S. clearing house to prepare the first testing of bitcoin futures trading and custody. In the announcement, Bakkt noted that it has been working with the U.S. Commodity Futures Trading Commission in order to be compliant with federal regulations, as well as to meet major requirements in terms of investors protection. Bakkt was first introduced in August 2018, with the stated goal of offering physically backed bitcoin futures.

EBay Denies Rumors It Will Start Accepting Crypto, Despite Advertising at Crypto Event

EBay has denied rumors after Blockchain Week that it is going to start accepting cryptocurrency as a payment method. Rumors have mounted that the online retail giant would be offering crypto as a payment option since ads were shown at crypto conference Consensus stating: “Virtual currency. It’s happening on eBay.” However, it does currently have a section marked Virtual Currency, where people can use traditional monetary forms to purchase crypto from sellers. In response to the rumors, an eBay spokesperson said that “cryptocurrency is not accepted as a form of payment on the eBay platform, nor is it part of our payments strategy.”

Winners and Losers

The top three altcoin gainers of the week are ultra coin, icechain and pwr coin. The top three altcoin losers of the week are segwit2x, blockport and sharpe platform token.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“The more interaction, and willingness that people want to engage with us, the happier we are because we want this to work. We want there to be innovation in these markets. We want there to be change.”

Amy Starr, chief of the office of capital markets trends at the U.S. SEC

“It is a useless currency, that’s what I believe. Look, I realize that people have different opinions, but to me, it’s garbage.”

Shark Tank’s Kevin O’Leary

“In a small number of months, we should have a fully operational testnet and possibly, by the end of this year we’ll have a fully operational phase 0 Ethereum 2.0.”

Joseph Lubin, Ethereum co-founder

“I believe that there are use cases that makes sense today, we have yet to find them at scale in financial services. We’re experimenting heavily, we have more patents than any other financial institution in the blockchain space, but have yet to find something that makes a difference for our clients or our customer.”

Catherine Bessant, chief technology officer at Bank of America

“There is a broad discussion in Washington around 5G being dominated by foreign firms and the U.S. being reliant on foreign technology and foreign expertise. […] With blockchain and crypto, I think there’s a recognition now that these will be part of our future infrastructure. […] It’s important both for national security and from an economic perspective, that the U.S. is a leader in that.”

Ryan Zagone, Ripple’s Director of Regulatory Relations

Prediction of the Week

Joseph Lubin on Ethereum 2.0: ETH to Become 1,000 Times More Scalable Within 24 Months

Joseph Lubin, Ethereum co-founder, said in an interview with Cointelegraph this week that the Ethereum blockchain will become about 1,000 times more scalable in 18 to 24 months. In the interview, Lubin noted that Ethereum 2.0, also called Serenity, will be responsible for bringing the drastic scalability increase to the ecosystem. The development, which Lubin noted is divided into four phases, already has eight groups developing clients for the new chain. He explained that there are several ways in which the new chain could be connected with the old one, noting “there may be bidirectional mechanisms” in moving ether (ETH) tokens from the old chain to the new chain.

FUD of the Week

Floyd Mayweather and DJ Khaled Escape Lawsuit Brought by Defrauded ICO Investors

High-profile boxer Floyd Mayweather and music producer DJ Khaled were dismissed this week from a lawsuit brought by investors in a fraudulent initial coin offering (ICO). The two celebrities had been involved in promoting Centra Tech’s ICO, and had originally been charged last November with unlawfully advertising the aforementioned ICO. This week, a judge ruled that the investors who had brought the legal action against the ICO had not proven that they had bought tokens as a direct result of the pair’s actions. In the settlement where neither of the parties admitted to nor denied the charges against them, Mayweather was fined more than $600,000, while Khaled was fined more than $150,000.

Tron Co-Founder and CTO Leaves Project, Alleging Excessive Centralization

Lucien Chen — the former chief technical officer and co-founder of blockchain protocol Tron — announced that he is leaving the project, citing an excessive centralization. In his announcement, Chen noted that in spite of the project’s success, irreconcilable contradictions between himself and co-founder Justin Sun have led him to choose to leave Tron. In the post, Chen noted that Tron is no longer staying true to its founding principle of decentralizing the web, critiquing Tron’s delegated proof-of-stake (DPoS) consensus mechanism and Super Representative governance and block production nodes.

Hacked New Zealand Exchange Cryptopia Appoints Liquidators, Trading Suspended

Hacked New Zealand-based cryptocurrency exchange Cryptopia said this week that trading was suspended and it was appointing liquidators. The exchange specifically said that it has appointed David Ruscoe and Russell Moore from consultancy and audit firm network Grant Thornton New Zealand as the aforementioned liquidators. In mid-January of this year, Cryptopia had said that it was the target of a security breach resulting in significant losses. According to the liquidators, the exchange decided to go into liquidation, as it has been unable to return the business to profitability, notwithstanding management’s reported efforts to reduce costs. The liquidators plan to conduct an investigation with the aim of securing assets for the benefit of the stakeholders.

Best Cointelegraph Features

Major Crypto Exchange in Korea Shut Down in April: 2018 Was a Nightmare for Most

Joseph Young explains what’s been happening with South Korean cryptocurrency exchanges, as they suffered through a freeze on accepting new registrations as well as the overall bear market.

What Crypto Exchanges Do to Comply With KYC, AML and CFT Regulations

Since most altcoins require crypto enthusiasts to purchase them via cryptocurrency exchanges, Cointelegraph takes a look at how these exchanges work with Anti-Money Laundering (AML), Know Your Customer (KYC) and Combating the Financing of Terrorism (CFT) regulations to ensure both safety and regulatory compliance.

Blockchain as Key to Vienna’s Digital Future — Interview with Ulrike Huemer, CIO of Vienna, Austria

Cointelegraph’s German division spoke with the chief information officer of Vienna’s digital future initiative about the ways the city can evolve to integrate more emerging technologies, including, of course, blockchain.