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Bitcoin Adoption Is Ghost: Hardly Anyone Uses BTC for Payments, Bloomberg Says

An analytical company Chainalysis shows that hardly anyone utilizes Bitcoin as means of payment, preferring to see it as a store of value and ‘hodl’

In spite of the recent massive price surge, Bitcoin seems to have a problem that few are aware of. An analytical firm Chainalysis Inc. from New York has recently shown that merely 1.3% of economic transactions were made by merchants in the first quarter this year. Bloomberg says that this amount has remained the same over the last few years.

The current pace of adoption is too slow

Recently, some big market players, such as AT&T. Inc., have adopted crypto, allowing for customer payments. Still the number of platforms that allow clients to pay them with virtual coins, when Bitcoin rate may go much higher within just a few weeks, is tiny.

This is the major difficulty for cryptocurrencies: Bitcoin was meant and developed to be an alternative to fiat money currently in circulation. However, people prefer to ‘hodl’ BTC, whereas hedge funds are merely using it for financial speculations. Thus, it is currently a hard job to raise hype around Bitcoin to attract mass appeal.

Kim Grauer from Chainalysis has told
Bloomberg:

“Bitcoin economic activity continues to be dominated by exchange trading. This suggests Bitcoin’s top use case remains speculative, and the mainstream use of Bitcoin for everyday purchases is not yet a reality.”

Hardly any merchants actually use Bitcoin

As part of its research, Chainalysis tracks the work of companies, such as BitPay, that process payments for merchants. The aforementioned AT&T telecom giant has recently chosen BitPay to conduct crypto payments through it. In 2017 and 2018, BitPay processed payments of $1 bln, according to Bloomberg.

All crypto payments to AT&T are made through BitPay. Then the service provider chooses whether to take Bitcoin or fiat currency or a mixture of those. BitPay then charges 1 percent off the deal.

Even though, BitPay has processed an impressive amount over the past two years, when it comes to payment service providers dealing with fiat currencies, such as Visa, their volumes are much bigger. In 2018, Visa dealt with payments totalling $11.2 trln.

As said above, the majority of Bitcoin transactions take place in crypto exchanges, says Chainalysis, about 90 percent.

Despite this, attempts to introduce Bitcoin into everyday payments continue. Recently, a Flexa startup announced that Starbucks, Wholefoods and several other major chain stores will be accepting Bitcoin and other crypto through it.

This is still a tiny amount of the market
compared to traditional fiat payments.

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Big Business The Answer to Bitcoin Price Boom and Adoption: Bitpay CCO

Bitpay CCO Bullish on Bitcoin

The price of Bitcoin may be creeping up to the heights last seen in December of 2017, however, the belief of Bitpay’s chief commercial officer, Sonny Singh, is that the value of the major cryptocurrency will really start to soar when big businesses gets fully involved.

Unlike the speculative rally that was seen in 2017, this latest rebound from a bearish market has a much stronger institutionalized base with adoption from regulators, companies and governments in much more abundance.

Singh is of the opinion that business interest and endorsement of cryptocurrency is what is fuelling the current market-wide bull run.

Real use cases

Bitcoin’s last rally was certainly based on FOMO, speculation, and a lack of understanding. However, in the market retraction, there was time for the base technology, blockchain, as well as cryptocurrencies, to fit into the current system and show off actual use cases.

“You’re starting to see that these currencies have real use cases around the world, and it’s making people really excited now because they can see the light at the end of the tunnel for these use cases,” Singh told Bloomberg.

Some of the most reported on use cases and adoption of cryptocurrencies from major institutions include Facebook with its journey into a premissioned cryptocurrency, as well as Fidelity Investments and their foray into the space.

Moreover moves such as JPMorgan’s JPM Coin and telecoms provider AT&T now accepting Bitcoin for payments by using BitPay.

Profiting from mainstream exposure

With Bitcoin being the pioneer of a wide blockchain and cryptocurrency ecosystem, it is hard to separate the major decentralised coin from institutionalized growth, as much as the likes of Facebook and JP Morgan would like to.

“How’s the regulator going to show that JPMorgan we like, but bitcoin and Ethereum we don’t like?” Singh said.

“It’s going to be hard. They’re going to have to make a classification: ‘digital currencies — these are the rules around all digital currencies.’ And that’s what the industry’s waiting for — to have regulations that we can follow and adhere to to prove that everything is legal in an organized way.”

The year of enterprise use

While it is hard to separate Bitcoin from the entire blockchain and cryptocurrency space, more have tried to exclude blockchain from the cryptocurrency side of things – with varying levels of success.

China is one place that has gone full blockchain but has denied anything to Bitcoin and other decentralised cryptocurrencies, however, there is still evidence of things like Bitcoin benefiting from blockchain advancements.

There are a lot more major companies valued at billions which have started delving into the potential of blockchain and while this sector has had a chance to grow organically and impressively aside from cryptocurrencies, it would still appear that there is enough of a link between them to benefit each other.

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President Trump’s Proposed Remittance Tax is Pushing Bitcoin Adoption

Donald Trump Remittance Tax Bitcoin

President Donald Trump’s proposed remittance tax, which would levy additional fees on money being sent outside of the United States in an effort to curb immigration, could have the end effect of driving cryptocurrency adoption.

While much of the geopolitical focus of cryptocurrency has been on the development of Brexit and the potential impact on the Euro and British Pound, a story developing in the United States could have widespread ramifications for the industry. According to data compiled by analytics firm Coin Dance, which looks at Bitcoin and cryptocurrency use around the world, peer-to-peer exchange platforms geared towards sending money abroad have increased in volume since the announcement of President Trump’s proposed remittance tax.

The initiative is geared towards penalizing immigrants working in the United States and sending money to their home countries. As outlined by Forbes cryptocurrency contributor Billy Bambrough, the policy could make cryptocurrency an attractive alternative to fiat as a way to avoid having to pay additional taxes and fees. Compared to the traditional route of money remittance, cryptocurrencies such as XRP offer increased speed and severely reduced fees. If President Trump moves forward with his proposed tax, the avenue of sending money via digital assets will become an even more alluring method for the growing use case of crypto-based remittance.

Coin Dance has highlighted several peer-to-peer platforms such as Localbitcoins, Paxful and Bisq as a popular exchanges for users looking to send remittance via cryptocurrency. According to the data Coin Dance compiled, both Mexico and Venezuela established new all-time highs in trading volume over the last week. Mexican users sent over $500,000 in cryptocurrency through the exchange in the seven days leading up to April 13.

While the Trump administration has yet to give conclusive details on the remittance tax, the assumption is that the plan will follow what has already been proposed by former Kansas secretary of state, Kris Kobach. Kobach explained the remittance tax in an interview with Breitbart last week,

“The threat [to illegal immigrants] I propose is one that actually helps [the U.S.] if we follow through on it. That is the threat of ending remittances from the majority of people in the United States from Mexico who are here illegally. That is a threat that we could carry through on that actually helps our economy because the money is not sent home, it stays in circulation in the U.S. economy and helps rev up our economy. It’s actually a good thing if we follow through.”

White House spokesman Hogan Gidley told the Associated Press that the Trump administration is looking to remittance taxes as a potential method of de-incentivizing immigration, calling it a “top priority,”

“It is a top priority for the administration, as has been for two years, to reduce overstay rates for visas and the visa waiver program — and it’s well known that the administration is working to ensure faithful implementation of immigration welfare rules to protect American taxpayers.”

While the tax is likely to make up a portion of President Trump’s re-election campaign for 2020, the policy could ultimately result in increased discussion and adoption for cryptocurrency as an alternative to fiat and imposed financial policies.

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Report: Bitcoin Wallet Activity Spiked Week Before Bull Run

Bitcoin Wallet Activity Price Rally 2019

Despite analysts scrambling to find the reason behind Bitcoin’s most recent price rally, during which the currency increased 25 percent in the span of days, one firm is pointing to wallet activity as a sign of increased adoption.

According to market intelligence firm Flipside Crypto, digital wallet activity for Bitcoin and other cryptocurrencies saw a spike in activity over the previous two weeks. The wallet activity gives some indication in an uptick of user activity and industry adoption, even before the most recent bullish turn in valuation.

Historically, around 40 to 50 percent of circulating Bitcoin has been held in wallets that are inactive for greater than a month, likely due to the bulk of investors keeping their coins on exchanges. However, Flipside Crypto reports that figure falling to only 10 percent since March 15, showing a significant increase in user activity over the last several weeks.

“If you are a crypto optimist, that’s good news,” Eric Stone, co-founder of Flipside, told Bloomberg. “There are more people warming up to the idea of buying Bitcoin.”

Stone also reports that the wallet activity and price movement for the most recent rally has been less attributable to the activity of whales. Instead, the sharp increase in wallet activity from accounts that have typically been dormant indicates a broad-based “waking up” of many smaller investors. Cryptocurrency investors, likely those who have remained inactive or price-stricken during 2018’s ongoing bear market, are now taking greater interest in market price movement.

While the previous 12 months may be referred to as a “crypto winter” for the marketplace, this week’s exponential price rally and data surrounding wallet activity contributes to a more holistically driven valuation, as opposed to the action of whales. Stone points out that the plummeting price of BTC in November 2018, when Bitcoin fell 40 percent, was the result of a few whale investors shifting positions. More price movement has given a much different indication, with Flipside Chief Executive Officer Dave Balter telling Bloomberg,

“We see this move much more valid than a few whale moves in October. This probably signifies a change in perception or confidence in this asset class.”

Some analysts have pointed to a massive BTC buy spread across several exchanges as being the primary catalyst for Bitcoin’s price movement. Community members have interpreted this as indication of institutional investors at long last entering the market of cryptocurrency, likely ahead of increased mainstream adoption building throughout 2019.

With the possibility of a Facebook Coin looming over the industry’s head, it is clear that cryptocurrency has turned a corner in terms of developing real world interest. While crypto, overall, may still represent a niche digital asset class, the boom that could follow major developments such as Facebook are too enticing for large capital investors to pass up.

Brian Kelly, speaking yesterday with CNBC, called for Bitcoin to continue to $6000 off the most recent price rally, and predicted that the market as a whole had found its bottom as coin prices have continued to rise throughout most of 2019.

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Global Bitcoin ATM Growth Continues – Now More than 4,000

Recent statistics by Coinatmradar reveal that Bitcoin ATMs globally have crossed the much touted 4,000 threshold.

Bitcoin ATMs Surpass the 4,000 Mark

According to Coinatmradar, the current number of Bitcoin ATMs globally is 4,060, a figure surpassing the 4,000 milestone. The number is a testament to the continuous growth of BTC ATMs worldwide, despite the current plunge in cryptocurrency prices. An earlier report stated that Bitcoin ATMs were almost crossing the 4,000 mark, with 3,991 BTC ATMs.

Bitcoin ATM installation continues to spread across continents with North America still maintaining its number one spot. The continent controls a staggering 71.2% of the market, with a total of 2,888 BTC ATM installed. Europe, at the number two spot but far behind, has 23.7% with a total number of 961 Bitcoin ATMs. Africa is still far behind with 0.2%.

The number of BTC ATMs in different countries has also increased. The United States, still on top of the BTC ATM food chain, boasts of 2,240 Bitcoin ATMs across the country. Canada holds on to second place, with a total number of 619, as against its former figure of 600 BTC ATMs. Other countries like Zimbabwe, Guatemala, Armenia, and Iceland have one BTC ATM each.

The competition among Bitcoin ATM manufacturers continues to grow tough, with new entrants trying to carve a niche in the market. Genesis Coin is still the top manufacturer of BTC ATMs, controlling 31.6% of the market share. General Bytes, however, follows very closely with 30.2%, while Lamassu lags, controlling just 10.8% of the market share.

Increase in Bitcoin Investment Despite Price Drop

The continued rise in BTC ATM numbers despite the year-long bear market is indicative of the confidence of big-money players in the sector. One of the hallmarks of a paradigm-shifting technology is its ability to remain relevant post-mania period.

Across the market, there are examples of investors continuing to keep faith with cryptocurrencies despite the bear market. Recently, Nasdaq declared that it would move ahead with its planned BTC futures launch slated for 2019. According to the company, it has come too far to turn back now.

Even investment firms and Trusts like eToro and Grayscale say their clients are increasing their BTC holdings. Even with the price crash that started in mid-November, Grayscale reports that its clients have an even greater appetite for BTC. Presently, the company owns about one percent of the total BTC in circulation.

Image courtesy of Ethereum World News archives.

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Global Bitcoin ATM Growth Continues – Now More than 4,000

Recent statistics by Coinatmradar reveal that Bitcoin ATMs globally have crossed the much touted 4,000 threshold.

Bitcoin ATMs Surpass the 4,000 Mark

According to Coinatmradar, the current number of Bitcoin ATMs globally is 4,060, a figure surpassing the 4,000 milestone. The number is a testament to the continuous growth of BTC ATMs worldwide, despite the current plunge in cryptocurrency prices. An earlier report stated that Bitcoin ATMs were almost crossing the 4,000 mark, with 3,991 BTC ATMs.

Bitcoin ATM installation continues to spread across continents with North America still maintaining its number one spot. The continent controls a staggering 71.2% of the market, with a total of 2,888 BTC ATM installed. Europe, at the number two spot but far behind, has 23.7% with a total number of 961 Bitcoin ATMs. Africa is still far behind with 0.2%.

The number of BTC ATMs in different countries has also increased. The United States, still on top of the BTC ATM food chain, boasts of 2,240 Bitcoin ATMs across the country. Canada holds on to second place, with a total number of 619, as against its former figure of 600 BTC ATMs. Other countries like Zimbabwe, Guatemala, Armenia, and Iceland have one BTC ATM each.

The competition among Bitcoin ATM manufacturers continues to grow tough, with new entrants trying to carve a niche in the market. Genesis Coin is still the top manufacturer of BTC ATMs, controlling 31.6% of the market share. General Bytes, however, follows very closely with 30.2%, while Lamassu lags, controlling just 10.8% of the market share.

Increase in Bitcoin Investment Despite Price Drop

The continued rise in BTC ATM numbers despite the year-long bear market is indicative of the confidence of big-money players in the sector. One of the hallmarks of a paradigm-shifting technology is its ability to remain relevant post-mania period.

Across the market, there are examples of investors continuing to keep faith with cryptocurrencies despite the bear market. Recently, Nasdaq declared that it would move ahead with its planned BTC futures launch slated for 2019. According to the company, it has come too far to turn back now.

Even investment firms and Trusts like eToro and Grayscale say their clients are increasing their BTC holdings. Even with the price crash that started in mid-November, Grayscale reports that its clients have an even greater appetite for BTC. Presently, the company owns about one percent of the total BTC in circulation.

Image courtesy of Ethereum World News archives.

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Half of American Millennials are Open to Using Cryptocurrency

Bitcoin (BTC), Cryptocurrency–While the majority of the crypto industry and the market continues to feed on news out of Wall Street’s institutional money and the U.S. Securities and Exchange Commission’s ruling on Bitcoin Exchange-Traded Funds, a subset of the American population is ready to welcome cryptocurrency with open arms.

A recent published survey has found that nearly half of all American millennials report an interest in cryptocurrency, giving a strong indication for the trend of adoption moving forward. Conducted by the research service YouGov Omnibus, which polled 1200+ respondents through the last days of August, found that there is decidedly more optimism and interest towards cryptocurrency among younger generations and those just now entering early adulthood–a trend that has been confirmed by other surveys in relation to intent to invest in cryptocurrency.

“Of the people who believe that cryptocurrencies will become widely accepted, over one-third (36%) say they would be interested in converting to primarily using a cryptocurrency rather than the U.S. dollar. However, a majority (57%) say they would not be interested in converting away from the U.S. dollar. Millennials are almost equally split between being interested (48%) and not interested (50%).”

As opposed to older investors polled in previous surveys, particularly those with capital and assets equaling greater than $100,000, which rejected Bitcoin and cryptocurrency on a basis of high price volatility and lack of regulation in the market, younger investors and general enthusiasts seem to be drawn to the idea of an alternative form of money. It also shows a subtle preference for avoiding the traditional investment route of stocks and Wall Street, as the millennial generation was one that hit its stride in the U.S. around the time of the global 2008 recession and the widely publicized Occupy Wall Street campaign.

In evidence of further adoption for the industry of cryptocurrency, the vast majority (79 percent)  of respondents were familiar with at least one cryptocurrency, of which Bitcoin was listed as the most popular at 71 percent of those polled, an unsurprising fact given its position in market capitalization and general household name appeal. Ethereum, the second largest currency by market capitalization, made up the next highest currency in terms of familiarity, with 13 percent of those polled saying they knew of the coin.

Unfortunately, 87 percent of respondents who reported being familiar with Bitcoin had never actually interacted with a digital currency, again appealing to the brand-appeal of the coin while wider adoption continues to lag behind. As far as investing, 49 percent of respondents reported being glad they had not purchased Bitcoin prior to the questionairre–an unsurprising feature as the coin hits its ninth month of a bear cycle, down from nearly $20,000 at the end of last year. Some respondents reported having some regret towards the digital asset, with 15 percent stating that they wished they had bought Bitcoin earlier.

Perhaps most telling of all was 44 percent of millenials stating that they believed cryptocurrency would achieve wider adoption in the future, with only 34 percent saying that greater adoption would not occur. As outlined in the finding, the researchers conducting the survey reported believing that most of the skepticism comes from the still entrenched belief that cryptocurrency is primarily for illicit and anonymous activities–an idea carved deeply into society following the Silk Road episode.

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CoinGate’s Lightning Network To Boost Bitcoin Adoption, 4,000 Merchants Already Onboard

The Lightning Network is about to breach the 102 BTC capacity, and that could very well be the nicest thing to happen to Bitcoin of late. The Lightning Network brings to Bitcoin what everyone has been waiting for all along: A faster, secure payment processing system right at the top of the Bitcoin blockchain. That’s exactly what CoinGate sought to achieve when it introduced the Lightning Network.

It’s Like An Off-Shoot Of The Chain

Basically, this network acts as an off-chain layer to the Bitcoin blockchain where a batch of transactions can be processed before the underlying general chain or ledger is updated. This has the good effect of boosting the transaction processing speed since the system doesn’t have to update every transaction instance separately.

Granted, such a positive development would obviously attract players and support from various bases, especially the key stake-holders like merchants. At the moment, CoinGate has decided to add its 4,000-strong merchant base to the Lightning Network, a move that could result in an overall improvement in terms of use of the cryptocurrency. In return, this increased adoption would boost Bitcoin’s trading volumes and impact the coin’s market value positively.

Speed, Low Fees, Sharp Growth, And Zero Errors

Besides processing transactions in milliseconds, the Lightning Network also significantly reduces transaction fees. The Lightning Network facilitates instant transactions and boosts the scalability of the underlying Bitcoin blockchain network. Currently, various versions of Lightning Wallets are used by a number of transaction processing entities that act on behalf of the merchants.  The merchants include Lois Chevrolet, Livejasmine, and Chronoswiss. The network was first introduced by Joseph Poon and Thaddeus Dryja back in 2015 when the Lithuanian-based company, CoinGate, entered the market.

A look at the network’s recent growth rate confirms that its impact on the Bitcoin market will be significant. Over the past month alone, the network’s capacity has shot up by 5%, node count has increased by 10%, and channel count has gone up by 6%. At the moment, the network boasts 3,369 nodes running over 12,000 channels. Within the past 6 months, the network capacity has shot up from 3 BTC to the current 102.64 BTC.

During its initial beta test, the network was involved with 100 stores selected from all across the world, and not a single error was recorded. That’s a huge plus for a payment processing system that’s handling billions of transactions per second. In terms of partnerships, CoinGate is yet to associate with any US entity, but that’s expected to happen in the coming year. All said and done, the Lightning Network seems pretty poised to take Bitcoin adoption to a whole new level.

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Reports: A Bitcoin ETF Could Be Approved In 2019

The talk in town is no longer about if a Bitcoin ETF will be approved, but rather when. That means that the approval is currently deemed imminent. However, the crypto market may have to wait a while longer for this to happen as it is unlikely to come into play in 2018. Predictions from various sources indicate that the approval may come sometime in 2019, terming the year as the more realist period for the expected development.

SEC To Review Verdict

Perhaps one of the more important factors that could affect this perception is the issue surrounding the US SEC’s decision to review its earlier verdict to reject ETF approval proposals by the Winklevoss twins. At the moment, the approval seems imminent, but it’s the timing that has some people concerned.

An ETF includes any kind of fund, be it mutual or hedge fund, that is traded within a listed exchange platform. With an ETF, most assets traded are regulated by CFTC or SEC. Currently, very few crypto assets are recognized by these two regulatory bodies. As such, any trading fund would need to list its shareholders as securities. Because of these regulatory challenges, SEC is still wary of approving their ETF proposals.

There Have Been Attempts

There have been noted attempts to get SEC to approve ETF applications, with the most noticeable being the recent proposals presented by the Winklevoss twins in March 2017 and July 2018. However, the two applications were turned down. More applications have followed, from various other parties, with varied revisions and details.

In August 5 2018, a report from the US Equity Research and written by Scott Suh andMichael Graham opined that the imminent approval of a Bitcoin ETF was at the top of the agenda for the majority of institutions seeking to breaking into the new digital asset class. They mentioned the application by SolidX /VanEck as one of the various applications awaiting verdict. Although some major industry players don’t really take a Bitcoin ETF as very necessary, there’s a general consensus that its approval would likely trigger a short-term event and it could well fuel a bullish run.

As for the proposal presented by VanEck/SolidX, the SEC review date has been set for September, and there’s a possibility that this date may be change. This makes 2019 the more realistic timeline for the review and possible approval of a Bitcoin ETF. However, the ball is now in SEC’s court, and the market can only anticipate.

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The Federal Court Of California Is Now Accepting Bitcoin For Bail Payments

A Federal Court in the United States has received Bitcoin as payment for a defendant’s bail. According to media sources, this is the first time something like is happening. The defendant, Martin Marsich, was facing charges of hacking into a gaming company. The California court allowed him to settle his bail amounting to $750,000 using Bitcoin or any other cryptocurrency.

Court’s Main Objective

Explaining the incident, Abraham Simmons, who is the Assistant District Attorney, said that technically, defendants can settle their bail payments in any credible format or in whatever way ordered by the judge, and this includes a third party’s real estate. He added that the main objective was to ensure that the defendant complies with court orders to appear for proceedings at a later date.

Simmons argued that the use of cryptos to pay bail is not likely to face challenges associated with fluctuating prices and exchange rates. He said that the court doesn’t really care about issues of price appreciation or depreciation since its main goal is to ensure that the defendant is compelled to appear in court and not to maintain the value of the cryptocurrency.

Lawmakers Don’t Want It, Agents Want It

The acceptance of crypto bails by the California court is bound to surprise some people, although it wasn’t entirely unexpected. However, lawmakers continue to view cryptocurrencies suspiciously as they’re linked to illegal activities mainly because of the anonymous nature of most crypto transactions. This is despite the fact that California is one of the US states with the most accommodative laws governing the use of cryptocurrencies.

However, opinions within the US DEA indicate that as law enforcement agencies understand the use of cryptos better, the general acceptance of the digital assets increases. According to agent Lilia Infante, the blockchain technology gives law enforcement agencies many ways to track people’s identities and that actually serves to make the agencies’ jobs easier. In fact, agent Lilia would like people to keep using cryptocurrencies. The agent was speaking to Bloomberg.

This kind of development hasn’t started today. It is likely as a result of continued build up of positive efforts to improve both general public and legal perception of cryptocurrencies. Just last year, a project was started in New York to gather crypto funds aimed at helping pay bail for defendants who can’t manage to meet their bail terms.

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