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Church’s Chicken Starts Accepting Dash in Venezuela After KFC Confusion

U.S. fast food chain Church’s Chicken has started accepting Dash payments at its locations in Venezuela.

American fast food chain Church’s Chicken has started accepting payments in cryptocurrency Dash (DASH) at its locations in Venezuela, according to an official Facebook announcement on Dec. 12.

According to Dash News, the cryptocurrency is accepted in all 10 restaurant locations. Dash has also completed ts first transaction in Church’s Chicken and uploaded a video of the event on its official YouTube channel. The restaurant claims to be the first global fast food chain to accept payments in crypto.

The announcement from Church’s chicken follows some confusion regarding the acceptance of Dash at major fast food vendors in Venezuela. On Dec. 7, PR and media director at DashNews Mark Mason posted a tweet stating that KFC Venezuela would start accepting Dash payments the following week.

Later KFC Venezuela denied the news, stating that processing payments with Dash “is not a fact, nor has the publication of any news about it been authorized.”

Shortly after Dash Merchant Venezuela posted a public apology on its Twitter account. It said that the statement was premature and reflected optimism rather than the current stage of discussions with KFC Venezuela. However, both Dash and KFC confirmed that they are in negotiations regarding the possibility of crypto payments.

In January 2018, KFC Canada introduced a PR stunt, in which it offered a “Bitcoin Bucket” of fried chicken, which could only be purchased with Bitcoin (BTC). KFC announced the promotion in a tweet stating:

“Sure, we don’t know exactly what Bitcoins are, or how they work, but that shouldn’t come between you and some finger lickin’ good chicken.”

As Cointelegraph reported in August, CEO of Dash Core Group Ryan Taylor said that Venezuela had become the second largest market for Dash, with almost one hundred merchants accepting the cryptocurrency each week.

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KFC Venezuela Denies Accepting Dash Payments

KFC Venezuela has reportedly denied that it will soon accept Dash payments, but has confirmed negotiations with the company.

The CEO of KFC Venezuela, Antonio Sampayo, has denied a recent announcement that it will start accepting major altcoin Dash (DASH), Spanish language crypto media Criptonoticias reports Monday, Dec. 10.

Sampayo explained that KFC had discussed a crypto-related test with Dash, but the contract has not yet been finalized. He also said that processing payments with Dash “is not a fact, nor has the publication of any news about it been authorized.”

On Friday, Dec. 7, the PR and media director at DashNews Mark Mason posted a tweet stating that KFC Venezuela would start accepting Dash payments the following week.

The video attached to the tweet said that the country’s capital Caracas will be the first city to test a crypto-powered payment system in one of its biggest KFC restaurants with 24 other KFC locations across the country to follow.

According to the announcement, more than 2,400 merchants in Venezuela accept Dash, including other major fast-food chains like Subway and Papa John’s. Per a recent report from Forbes, Alejandro Echeverría, a co-founder of Dash Help, Dash Merchant Venezuela and Dash Text, Venezuelans use Dash because it provides an easy method of completing payments. He also stated that the cryptocurrency was mainly used by small family businesses before spreading to bigger firms.

In August, CEO of Dash Core Group Ryan Taylor revealed that Venezuela had become the second largest market for Dash, with almost one hundred merchants accepting the cryptocurrency each week.

In early 2018, KFC Canada featured a new menu item dubbed “Bitcoin Bucket,” which could be bought exclusively with Bitcoin (BTC).

With additional reporting by Helen Partz

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CEO: Dash (DASH) To Survive Crypto Winter, “Not At Risk of Shutdown”

Dash (DASH) “Not At Risk Of Shutdown” In Crypto Collapse

In 2018’s crypto bear market, Dash Core Group (DCG), the consortium behind the DASH altcoin, has seemingly gone silent on a public stage, with there being little-to-zero propagation of news regarding the once much-hyped project. And as such, some skeptics have deemed the project “dead.” Yet, in a recent Medium post, Ryan Taylor, CEO of DCG, exclaimed that his startup is “sustainable” and will survive the crash in Bitcoin (BTC) prices.

In the post, which can only be deemed a ‘wall of text’, Taylor first gave some context to crypto’s recent collapse, calling out the Bitcoin Cash debacle (he called it “FUD”) as a key catalyst. The DCG chief then noted that there a number of startups likely “shutting down quietly, running on fumes, or burning through distressed ICO funds,” before adding that his firm doesn’t fall into this unfortunate category.

Taylor exclaimed that DCG “is not at risk of shutting down anytime soon,” nor has fears of laying off a substantial amount of staff, due to a “significant [capital/fiat] buffer” it has built up for itself to account for crypto’s enamorment with parabolic swings and killer drawdowns. Through the following paragraphs, which were countless, the DASH proponent accentuated the logistics of DCG’s buffer, along with its operations so far and ambitions for the future. And while the topics covered varied wildly, an underlying theme of perseverance and survival was evidently referenced throughout Taylor’s post.

Even in tweets prior to the aforementioned blog, Taylor outlined why Dash’s ecosystem continues to boom. The industry savant drew attention to a number of developments, including booming DASH wallet download statistics, strong trading volume, and a recent successful network stress test. Keeping this all in mind, the prominent cryptocurrency advocate, concluding his comments on the matter, wrote:

In short, the network keeps growing despite the price declines and the reduced speculation. Proud to see the strategy working on the metrics that determine long-term success. Heads down… we are getting there!

At the time of writing, DASH is up to $77.15 U.S. dollars a piece, with the asset posting a jaw-dropping 11.5% in the past 24 hours.

Not All Crypto Startups Have Survived The Massacre

While DCG seems slated to survive, or even thrive in the ~85% market decline, not all startups and prominent upstarts in this ecosystem have been all too lucky.

As reported by Ethereum World News previously, ETCDEV, an essential player in the Ethereum Classic ecosystem, announced its closure on December 3rd, 2018. Through a tweet, Igor Artamonov, the founder and chief technology officer of the prominent development consortium, wrote:

Although the ETCDEV executive cited a lack of sustainable financing, this message comes just days after Artamonov released a Medium article lambasting one of his peers for being a “Trojan Horse” for another team. Regardless, the fact of the matter is that Ethereum Classic (ETC) remains heavily wounded after this occurrence, as the project lost its primary development team.

The sad collapse of ETCDEV comes just days after Steemit, the company behind the (somewhat) decentralized social media platform that shares its name, revealed it was undergoing a business reorganization, purging 70% of its employees.

Per previous reports from Ethereum World News, Ned Scott, CEO of Steemit, said on the matter:

“While we were building up our team over the last months, we had been relying on projections of basically a higher bottom for the market… Since that’s no longer there we’ve been forced to lay off more than 70% of our organization.”

He explained that as Steemit’s top brass met, amid worsening market conditions, it became logical that a staff restructuring at the private startup was necessary. Interestingly, Scott failed to divulge an exact headcount pre- and post-purge, making it difficult to discern how many were affected.

SpankChain, an adult entertainment platform centered around blockchain, recently saw its CEO take to Reddit to announce that it, as well as Steemit, had downsized drastically. The project head noted that the SpankChain project now hires a mere eight individuals, and has reduced its burn rate from $200,000 to $80,000 per month.

Title Image Courtesy of Ryan Graybill on Unsplash

The post CEO: Dash (DASH) To Survive Crypto Winter, “Not At Risk of Shutdown” appeared first on Ethereum World News.

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Market Mayhem: Bitcoin Sinks Below $3.4K, Ethereum Plummets to Double Digits

Crypto markets have today again taken a major downturn, with virtually all of the major coins by market cap seeing double digit losses — some as high as over 20 percent.

Friday, Dec. 7 — Crypto markets have today again taken a major downturn, with virtually all of the major coins by market cap seeing double digit losses. Some coins are down by over 20 percent, as data from Coin360 shows.

Market visualization

Market visualization by Coin360

Bitcoin (BTC) has taken a steep hit of over 11 percent on its 24-hour chart, and is trading at $3,400 as of press time. Having attempted to reclaim ground above the $4,000 price point in early December — to briefly trade close to $4,300 — the top coin’s recovery has failed to hold, and the asset has seen stepped losses in the days before today’s dizzying tumble.

On the week, Bitcoin is now down by around 20.5 percent; monthly losses are at a severe 47.3 percent.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Cointelegraph’s Bitcoin Price Index.

Second-largest crypto by market cap Ripple (XRP) is down by around 12 percent on the day, trading at almost $0.30 as of press time, according to Cointelegraph’s Ripple Price Index. Ripple’s weekly and monthly charts are also blisteringly red, with losses of around 23.5 and 40 percent respectively.

Ripple 7-day price chart

Ripple 7-day price chart. Source: Cointelegraph’s Ripple Price Index.

Third-ranked crypto by market cap Ethereum (ETH) has fared even worse, with 24-hour losses pushing 16 percent as of press time. The top altcoin is down to double-digit value, currently trading at $84. On the week, Ethereum down by 31.4 percent; monthly losses are close to 60 percent.

Ethereum 7-day price chart

Ethereum 7-day price chart. Source: CoinMarketCap

Virtually all of the remaining top ten coins on CoinMarketCap are seeing deep red; Stellar (XLM) and Bitcoin Cash (BCH) are both down almost 18 percent, at $0.11 and $102.3 respectively; eighth largest ranked crypto Litecoin (LTC) is down close to 15 percent, trading at $25.3, and EOS (EOS) is the hardest hit, down almost 23 percent on the day at $1.68.

Newly-forked “Bitcoin SV” (BSV) is the only exception among the top ten, soaring 20 percent on the day to trade at around $109, sealing the ranking of 5th largest crypto. With a market cap of around $1.94 billion as of press time, BSV is holding a slim margin ahead of BCH; the latter, ranked 7th, currently has a market cap of about $1.77 billion.

Just yesterday, news broke of a new lawsuit from tech development firm UnitedCorp against Bitmain, Bitcoin.com, Roger Ver, and the Kraken Bitcoin Exchange, which alleges the defendants engaged in manipulation and unfair practices during the immediate aftermath of the BCH-BSV hard fork.

The remaining coins in the top twenty by market cap are all seeing losses of between a 8 and 22 percent range.

IOTA (MIOTA) is down over 16 percent to trade at $0.22: Binance Coin (BNB) is down just under 20 percent at $4.56, and privacy-focused alts Monero (XMR) and ZCash (ZEC) are down 14.5 and 20 percent respectively.

Similar losses have hit Dash (DASH) and Neo (NEO): with the former down 21.7 percent at $61.33, the latter 17.4 percent at $5.85.

Dogecoin (DOGE), ranked 20th, is the “strongest” 24-hour performer, down 2.6 percent at $0.0021.

Total market capitalization of all cryptocurrencies is atca around $107.1 billion as of press time, down around 20 percent since the start of its weekly chart, when it was close to $136 billion.

7-day chart of the total market capitalization of all cryptocurrencies

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

With the markets unremittingly bleak, the United States Securities and Exchange Commission (SEC) has meanwhile yet again postponed its decision on the high-profile Bitcoin (BTC) exchange-traded fund (ETF) from investment firm VanEck and blockchain company SolidX.

A new deadline of the end of February 2019 has now been set; SEC commissioner Hester Peirce — who earned the moniker of “Crypto Mom” for her dissent over the SEC’s decision to reject a Bitcoin ETF proposed by the Winklevoss twins — told investors this week; “Don’t hold your breath” awaiting a BTC ETF approval.

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Crypto Assets See Losses Across the Board as BTC Falls Below $4,000

Bitcoin has today again lost the $4,000 price point as all major coins see significant losses of between a 4 and 10 percent range.

Monday, Dec. 3 — Crypto markets have today again taken a major downturn, with all of the major coins by market cap seeing significant losses of within a 4 and 10 percent range, as data from Coin360 shows.

Market visualization by Coin360

Bitcoin (BTC) has dropped below the $4,000 price point, down about 7 percent on the day to trade at $3,868 at press time. Despite rebounding to as high as $4,400 Nov. 29, the top coin has today seen a drop from a 24-hour high of around $4,135 to as low as $3,846 in recent hours.  

Having lost its midweek gains, Bitcoin is breaking more or less even on its 7-day chart, up by just a fraction of a percent; monthly losses are at a stark 39.6 percent, according to Cointelegraph’s Bitcoin Price Index.

Bitcoin 7-day price chart. Source: Cointelegraph’s Bitcoin Price Index

Second-largest crypto by market cap Ripple (XRP) is down by around 5 percent on the day, trading at $0.34 as of press time, according to Cointelegraph’s Ripple Price Index. Ripple’s weekly and monthly charts are also in the red, with losses of 7.6 and 23.7 percent respectively.

Ripple is down around 5.6 percent on the XRP/USD 24-hour chart, as CoinMarketCap data shows.

Ripple 7-day price chart. Source: CoinMarketCap

Third-ranked crypto by market cap Ethereum (ETH) has tumbled in recent trading hours, down almost 8 percent to trade at $107 at press time. Having trading as high as almost $119 toward the end of yesterday, the alt took a mild price hit early this morning to trade around $115, before seeing a sharp plummet in the past couple of hours down to current levels.

On the week, Ethereum is 4.6 percent in the red, with monthly losses pushing 46 percent.

Ethereum 7-day price chart. Source: CoinMarketCap

All of the remaining top ten coins on CoinMarketCap are seeing red, with EOS (EOS) the hardest hit, shedding 10.3 percent on the day at $2.64. EOS has this week become mired in renewed controversy over a move from one of the ecosystem’s so-called “block producers”: the furore comes shortly after news that Block.One CTO Daniel Larimer appears to be harboring plans for a separate cryptocurrency project.

Eight largest ranked crypto Litecoin (LTC) is also down 9.25 percent on the day to trade at $30.82.

Newly-forked “Bitcoin SV” (BSV), ranked ninth, is down over 8 percent at $92.39, with Bitcoin Cash (BCH), ranked 5th, down 7.4 percent at $160.60.

The remaining coins in the top twenty by market cap are all seeing losses of between a 5 and 10 percent range. IOTA (MIOTA) is down just shy of 9 percent to trade at $0.27: privacy-focused alt Monero (XMR) is also down 8.8 percent at $54.75. Similar losses have hit Neo (NEO), Dash (DASH) and ZCash (ZEC), down 9, 8.4, and 9.9 percent respectively.

Total market capitalization of all cryptocurrencies is down to around $125.7 billion as of press time, down a steep $10 billion from its 24-hour high at $135.7 billion.

High on the 24-hour chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

China has yet again sent out renewed anti-crypto signals this week, with the director general of the Beijing Municipal Bureau of Financial Work yesterday warning that Security Token Offering (STOs) fundraising is an “illegal” activity in the country (as are Initial Coin Offerings (ICO), as of September 2017).

Despite weak crypto price action market wide, stalwart Bitcoin (BTC) community subreddit “/r/Bitcoin” — which was founded in September 2010, almost two years after the release of the Bitcoin white paper — hit the 1 million subscriber mark yesterday, Dec. 2.

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Scattered Gains Bring Respite after Midweek Crash, But Many Alts Continue to See Losses

Crypto markets have slightly stabilized today, although many major coins continue to shed value.

Friday, September 7: after the midweek bloodbath, crypto markets have slightly stabilized today, although many coins continue to shed value, as Coin360 data shows.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) is trading at around $6,430 at press time, down just under one percent on the day, according to Cointelegraph’s Bitcoin Price Index.

Despite a bullish start to September, Bitcoin’s price decline set in this Wednesday, September 5. Since then, the leading cryptocurrency has spiralled downwards from a high of $7,391 to over $1,000 less at its intraday low today at $6,354.

The coin is now a stark 16 percent down on its weekly chart. On the month, Bitcoin nonetheless remains up by around 7.3 percent.

Bitcoin’s 7-day price chart

Bitcoin’s 7-day price chart. Source: Cointelegraph’s Bitcoin Price Index

Ethereum (ETH) has tumbled to around $216 at press time, losing just over 3 percent on the day. As with Bitcoin, Ethereum started September strong, briefly brushing the $300 price point September 1 before this week’s price plummet.

On its weekly chart, Ethereum is down just over 23 percent, with monthly losses around 46 percent.

Ethereum’s 7-day price chart

Ethereum’s 7-day price chart. Source: Cointelegraph’s Ethereum Price Index

Among the other top ten coins on CoinMarketCap, only three are in the green, though losses are capped below 3 percent. After Ethereum, Bitcoin Cash (BCH) is down the most, seeing 2.77 percent losses on the day to trade at just under $500.  

Stellar (XLM) is the only top ten crypto to see solid growth, up 4 percent on the day to trade at around $0.207. While it still remains shy of its intraweek high at almost $0.24, XLM-BTC has seen a solid bounce back to its trading levels before the mid-week market plunge set in September 5.

Stellar’s 7-day price chart

Stellar’s 7-day price chart from CoinMarketCap

Among the top twenty coins, all assets, except for two exceptions, are seeing mixed reds and greens in the 1 percent range, showing the coins are holding steady over the past 24 hours to press time.  

Dash (DASH), ranked 12th by market cap, has soared almost 6.46 percent on the day to trade around $185.56, although it is still trading almost 16 percent lower than its value ($220.50) during early trading hours September 5.

Dash’s 7-day price chart from CoinMarketCap

The other exception among top twenty coins is Dogecoin (DOGE), ranked 20th, which is up around 6 percent on the day, capping a week of extraordinary price volatility.

Dogecoin’s 7-day price chart from CoinMarketCap

Total market capitalization of all cryptocurrencies is around $203.5 billion at press time, down over $35 billion from its intraweek high of around $240 billion.

7-day chart of the total market capitalization of all cryptocurrencies

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

Even as the markets tumble, fresh data from management and technology consulting firm GreySpark has found that volumes on crypto marketplaces have burgeoned in 2018, with the U.S. dollar the most actively traded fiat against cryptocurrencies.

Responding to this week’s grim market movements, crypto Twitter has actively mulled the possible impact and price correlation surrounding reports that Goldman Sachs was rolling back their plans to open a crypto trading desk. The banking giant’s CFO refuted the rumors in a statement September 6, calling them “fake news” and affirming the company’s plans were on track.

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Market-Wide Losses Intensify in Second Day of Major Crypto Price Plummet

Thursday, September 6: crypto markets are blisteringly red, with virtually all of the top 100 coins posting hefty losses on the 24-hour charts, as Coin360 data shows.

Coin360

Market visualizat​ion from Coin360

Bitcoin (BTC) is trading at around $6,492 at press time, down almost 6.32 percent on the day, according to Cointelegraph’s Bitcoin Price Index.

Having broken through the $7,000 threshold August 31, Bitcoin saw a solid uptrend until its sudden plummet yesterday, September 5. The top coin is now around 8 percent down on its weekly chart. On the month, however, Bitcoin remains up by around the same figure of 8 percent.

Cointelegraph's Bitcoin Price Index

Bitcoin’s 7-day price chart. Source: Cointelegraph’s Bitcoin Price Index

Ethereum (ETH) is trading around $225 at press time, losing 8 percent on the day. Following upon an intra-week high to scrape $300 September 1, Ethereum traded sideways around $290 until yesterday’s sudden descent.

On its weekly chart, Ethereum is down a hefty 21.8 percent, with monthly losses burgeoning to 44.8 percent.

Cointelegraph's Ethereum Price Index

Ethereum’s 7-day price chart. Source: Cointelegraph’s Ethereum Price Index

Many of the top ten coins listed on CoinMarketCap are seeing significant losses, with Litecoin (LTC) down 7 percent to trade at $55.92, having traded as high as $69 September 4.

Ripple (XRP) is a significant outlier, surviving the day’s dump relatively unscathed, up 2.15 percent on the day to trade around $0.30. Having plummeted in correlation with other major cryptos, the asset has seen a strong bounce upwards in the hours before press time.

CoinMarketCap

Ripples 7-day price chart from CoinMarketCap

Among the top twenty coins, most losses are at five percent or higher, with IOTA (MIOTA), down 6.41 percent on the day to press time. VeChain (VET) has also lost almost 8 percent on the day to trade at $0.015.

Many other smaller market cap alts are seeing double digit losses, showing strong correlation with larger crypto assets.

In an interview with Cointelegraph this week, Brian Kelly, founder and CEO of digital currency investment firm BKCM LLC, who is also a regular contributor to CNBC as a crypto analyst, said he considers that in today’s Initial Coin Offering (ICO) market, “the days of a whitepaper and a dream and $30 million are probably over.”

Crypto industry commentator Joseph Young has today given his perspective on Twitter, tempering the grim market picture with the suggestion that:

“Previous corrections 2014, 2016 were much more brutal than the 2018 crypto correction. On average two-year corrections were suffered, with no positive development for investors to track. In 2018: 1. crypto jobs up 50% in Asia 2. Bakkt 3. Better crypto custody for institutions.”

Total market capitalization of all cryptocurrencies is just under $205 billion at press time, down over $35 billion from its intraweek high of just under $240 billion.

CoinMarketCap

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

Eschewing news-correlated market analyses, eToro’s Mati Greenspan today tweeted a four-word bottom line to one disgruntled crypto community member’s question, “what was the reason behind the dip today?”:

“More sellers than buyers.”

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Bitcoin Seals Further Gains in a Mostly Green Market as Ethereum Fails to Break $300

Tuesday, September 4: crypto markets are largely green today, with Bitcoin (BTC) inching upwards yet further, and several large-market-cap alts seeing solid gains, as Coin360 data shows.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) is trading at around $7,374 at press time, up over 1 percent on the day as it continues boost its newly won gains, according to Cointelegraph’s Bitcoin Price Index.

Having reclaimed the $7,000 price point August 31, Bitcoin has seen a solid upwards trend and is now pushing $7,400. The top coin is trading an impressive $550 higher than its low on its weekly chart, with its 7-day rolling gains at almost 7 percent. On the month, Bitcoin is up a fraction of a percent.

Bitcoin’s 7-day price chart

Bitcoin’s 7-day price chart. Source: CoinMarketCap

Ethereum (ETH) is trading around $288 at press time, seeing seeing virtually no value percentage change on the day. Following upon an intra-week high of about $298, Ethereum has failed to sustain upwards momentum, remaining range bound around $290.

On its weekly chart, Ethereum is more or less even at a fractional 0.1 percent gain, with monthly losses remaining around 31 percent.

Ethereum’s 7-day price chart

Ethereum’s 7-day price chart. Source: CoinMarketCap

The top ten coins listed on CoinMarketCap are mostly seeing modest gains of within a 1-2 percent range. A notable exception is Litecoin (LTC), up around 5.7 percent on the day to trade around $69. Litecoin saw a strong push upwards at the start of September, followed by a couple of days trading sideways before today’s second flush of strong green.

Litecoin’s 7-day price chart

Litecoin’s 7-day price chart. Source: CoinMarketCap

Another strong top ten performer is Monero (XMR), up almost 5 percent to trade around $139 at press time. Monero is now trading at around $40 above its value of $97 on August 30.  

Stellar (XLM) has seemingly not yet absorbed any positive momentum from news that IBM has brought its Blockchain World Wire (BWW) payment network out of beta this week, aiming to ultimately facilitate international settlements between banks in “near real-time.” The asset is up around 2.8 percent on the day to trade around $0.23, a slight push upwards after a couple of days of lackluster momentum.

Stellar’s 7-day price chart

Stellar’s 7-day price chart. Source: CoinMarketCap

Among the top twenty coins, gains are stronger on average: NEM (XEM) and Vechain (VET) are both up almost 8 percent on the day, with IOTA (MIOTA), Zcash (ZEC) and Dash seeing 3-4 percent growth on their 24-hour charts. NEO has today soared 8.8 percent and is trading at $25 at press time, capping a week of strong, if jagged, growth.

Total market capitalization of all cryptocurrencies is around $240 billion at press time, up almost $12 billion on its weekly chart.

7-day chart of the total market capitalization of all cryptocurrencies
7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

Today has seen bullish news for the blockchain space, with South Korea’s Internet and Security Agency (KISA) — a sub-organization of the country’s Ministry of Science and ICT — announcing plans to more than double its budget for public blockchain pilot projects this coming year.

Germany’s joint stock company Deutsche Boerse has also announced the formation of a dedicated unit for blockchain and crypto assets, aiming to harness the technology’s potential to disrupt the capital markets infrastructure.

And in China, the country’s central bank, the People’s Bank of China (PBoC), has officially launched the testing phase of a major blockchain trade finance platform ahead of schedule.

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How Venezuela Came to Be One of the Biggest Markets for Crypto in the World

Venezuela has been living with hyperinflation since at least 2014. Its national currency — the Venezuelan bolívar — hit an official inflation rate of 57.3 percent in February 2014, while independent currency analysts were reporting that, by that September, the real inflation rate had already topped 100 percent. In other words, the bolívar (VEF) was depreciating rapidly in value, and ordinary Venezuelans needed something to fill the void it had left as a one-time viable means of exchange.

By definition, hyperinflation is a state in which, as described by the International Accounting Standards Board, “the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency.” However, due to capital controls that had been in place since 2003, Venezuelans were restricted in their ability to obtain U.S. dollars or any other foreign currency. They had no freely accessible outlet for their devalued VEF, with the Venezuelan economy expected to contract in 2015 by 1 percent, according to the IMF.

Venezuela Inflation Rate

It was into this economic quagmire that Bitcoin and altcoins (particularly Dash) entered, providing struggling Venezuelans with stores of value and mediums of exchange they could rely upon more than the nosediving bolívar. Ever since 2014 and the onset of hyperinflation, they’ve seen marked increases in ownership and trading, with impressive rises being witnessed in the past few months, as Venezuelan inflation topped an eye-watering 46,000 percent and as the IMF predicted an inflation rate of 1,000,000 percent by the end of 2018.

However, as the following will show, the meteoric rise of crypto in Venezuela doesn’t simply result from the desire to avoid the worst effects of hyperinflation. It also stems from the proactive attempts certain cryptocurrencies have made to establish themselves within Venezuela, as well as from a desire among the population to resist and circumvent an authoritarian government, which has used capital controls as one way of starving likely opponents of funding.

Bitcoin growth

As an indication of the extent to which crypto usage has grown in Venezuela, it’s worth looking at the trading charts provided by the Coin Dance website for the LocalBitcoins exchange, which enables peer-to-peer trades between any two parties anywhere in the world.

In November 2013, around the time Venezuela had an official — i.e., massaged — inflation rate of ‘just’ 43 percent, a grand total of two Bitcoin were traded for VEF on the LocalBitcoins exchange. This modest volume, however, quickly rose almost as soon as the country firmly entered hyperinflation territory, with the peak for 2014 being the 64 Bitcoin traded in December, at a time when the BTC value had sunk to as low as $311 — after having stood at around $932 at the beginning of the year. It was at this time that inflation was at 63 percent, according to the government, and given that the country had been caught in hyperinflation for well over a year, many groups and individuals were beginning to recognize the vital role crypto could play in giving Venezuelans a lifeline.

One Venezuelan Bitcoin trader told Reuters in October of that year:

“Even though Bitcoin is volatile, it’s still safer than the national currency.”

While Gerardo Mogollon, a business professor at the University of Tachira, told the news agency:

“I’m teaching people to use Bitcoin to bypass the exchange controls.”

2015 was an even better year for Bitcoin, despite — or rather because of — it being a worse year for VEF and for Venezuelans. Annual inflation reached as high as 335 percent in June 2015, according to currency economist Steve Hanke, while 319 Bitcoin were traded on LocalBitcoins for VEF in the month of February alone. This figure excludes volumes on Venezuelan exchanges such as Surbitcoin, which in 2015, was reported by Bitcoin Venezuela as being the “second largest in transaction volume in Latin America after Brazil.” It also pales in comparison to the number of Bitcoin traded over the entire year, which — at 2059 — was 983 percent bigger than 2014’s total (190) and was worth around $1,281,223 (based on a crude average annual price for Bitcoin of $622).

Volume of VEF & BTC Market

In 2016, the total number of Bitcoin traded via LocalBitcoins was 8624, a 318.8 percent increase over the previous year that coincided with Venezuela’s annual inflation rate reaching as high as 500 percent. In 2017, the total number of BTC traded on LocalBitcoins rose again, ramping up to 21,556 — a 150 percent increase over 2016’s total. Given that Bitcoin itself became more expensive in 2017 — rising to $19,000 in December — this expansion offers a stark indication of just how sought-after Bitcoin and crypto had become, as inflation surged to yet another peak of 1,369 percent, according to figures released by the opposition-led Venezuelan parliament.

Because of Venezuela’s economic misery, many locals had begun finding it difficult even to secure enough food to eat, as the wages they were paid (in VEF) increasingly dwindled in value. “It’s like an obstacle course. You have to find money to buy food, a place to buy it and then get there in time,” one Venezuelan told the Guardian in August 2017. Meanwhile, the percentage of children suffering from acute malnourishment sneaked from eight percent in the previous October to 12 percent that July. “They are getting younger, and the cases more serious,” explained Susana Raffalli, the leader of a Caritas project aimed at combating youth malnutrition in the country.

With most Venezuelans going to bed on an empty stomach, the need to source alternative currencies was acutely felt by the population, not least because the national poverty rate had climbed from 48 percent in 2014 to 82 percent in 2016, and then 87 percent in 2017. And it’s likely to climb yet again this year, given the quintuple-digit inflation currently in motion — something which has unsurprisingly kept the Bitcoin-buying rate noticeably high.

Poverty in Venezuela

According to Coin Dance, 14,886 Bitcoin have been purchased with VEF on LocalBitcoins between the beginning of 2018 and Aug. 18. This is almost 1,000 fewer than the 15,868 BTC purchased over the same period last year, yet there has been a distinct upswing in trade volumes over the past month — just as the country’s economic crisis has reached a new fever pitch, after the government devalued the bolívar by 95 percent in August. Already, before figures for the final week of August are even available, the total number of Bitcoin traded on LocalBitcoins has reached 2,532, in contrast to the 1,558 traded for all of August in 2017.

This could presage an accelerated rise as Venezuela sees out the rest of the year. Either way, trade volumes are high, and Bitcoin’s reputation as an alternative to the bolívar is firmly cemented in the eyes of many Venezuelans. “Luckily, I’ve always been a fan of Bitcoin and the blockchain technology,” wrote one Venezuelan Bitcoin user in a Reddit AMA from July:

“I spend my spare time teaching people how to change their bolivares to crypto so the inflation doesn’t wreck their money. So far, I’ve helped many [businesses][…] i.e, restaurant owners who try to sell dishes every day and the next when they’re trying to buy some meat there’s no profit (sometimes they can’t even afford it), because inflation hits us so hard. Right now the inflation is 1.000.000 percent++. I’m looking forward to a plan [to] help people get food through crypto […] I’m pretty much focused on training on Bitcoin use and saving [whomever] I can from hyperinflation, I believe Bitcoin is the solution!”

Dash

This linear picture of Bitcoin’s rise is, however, complicated by three simple facts: a) it’s not the only cryptocurrency available to Venezuelans, b) its growth was hindered by a government crackdown on Bitcoin mining between March 2016 and January 2018, and c) it has suffered (particularly in 2017) from relatively high transaction fees and confirmation times. As a result, Venezuelans have increasingly dabbled in other coins as their economic crisis has unfolded, including Ethereum and Zcash.

However, it’s Dash that’s leading the charge as the most popular altcoin — and possibly the most popular cryptocurrency.

In August 2016, Dash was added as a tradable cryptocurrency to the Caracas-based Cryptobuyer exchange, which was reporting “soaring demand” for cryptocurrencies at the time. “Our partnership with Dash is valuable,” explained Cryptobuyer CEO Jorge Farias in a press release, “especially for customers using unstable fiat currencies, and the perfect example can be found in Venezuela right now. Alternatives for accessing money without traditional banks are gaining traction fast, and we are incredibly confident that Dash will flourish in this economy.”

Unfortunately, it’s difficult to find websites that offer specific volume data on the DASH/VEF market, so there’s no objective and publicly available reading of just how quickly Dash usage has expanded since the end of 2016, or of how it compares to Bitcoin volume. Nonetheless, the indications that are available suggest that it has become enviably popular since 2016, with the Dash Core Group announcing on Aug. 22 that Venezuela was the cryptocurrency’s second biggest market, after the United States.

And as Dash Core’s CEO, Ryan Taylor, told Cointelegraph, this success is once again partly a result of Venezuela’s economic and monetary difficulties:

“We’ve found that regions of high inflation rates and industries in which cash handling or credit card chargeback rates are high have been most excited to adopt the technology. For us, we focus on those segments in which cryptocurrency can offer the most benefit, and that’s one of the reasons growth in acceptance is so high.”

In fact, Dash’s superiority over Bitcoin, in terms of transaction fees and confirmation times, is such that the cryptocurrency is now reportedly the most popular in Venezuela among merchants — or at least this is what Dash claimed in a July article, without providing comparative figures. At the very least, Ryan Taylor states that over 800 merchants in Venezuela now accept Dash, and while there isn’t an authoritative source for the number of merchants now accepting Bitcoin, Coinmap currently lists a little over 160 merchants in the country that accept BTC (as reported to the website by users, so the actual number may be slightly larger).

Ryan Taylor explains Dash’s greater popularity in terms of its greater cost-effectiveness in relation to Bitcoin:

“From the perspective of merchants and businesses, Bitcoin has many uses, including as a means of payment [for] online purchases and for transferring money cross-border at low cost. However, Bitcoin transactions are not instant, which means they are not useful for live transactions such as at a register or for online transactions that customers wouldn’t want to wait [for] — such as a digital media purchase. Bitcoin is also too expensive for micro transactions.”

Yet, what’s interesting about Dash’s rise to prominence isn’t simply that it has benefitted from user friendliness and from rampant hyperinflation, but that it has made a concerted effort to drive and encourage its adoption throughout Venezuela. Distinguishing it from other coins, 10 percent of its block rewards go to a treasury fund that allocates finances to projects voted for by Dash master nodes. As a result, the Dash Core Group has been able to invest around $1 million of such funding to promote and raise awareness of Dash in Venezuela, with this funding going toward such things as billboard ads and sales representatives. For example, Dash Caracas — the self-proclaimed first Dash community in Venezuela — began running educational conferences in September 2017, which now accommodate around a thousand attendees. Its leader Eugenia Alcalá Sucre said last September:

“We had a team receiving the attendees and giving them a folder with sheets to take notes, a pen, [instructions] to set up their Dash Wallets and paper wallets with $10 in Dash. Then they got into the hall, where they watched a welcome video, where they also got instructions for their wallets (phone and paper).”

Such evangelism is clearly having an effect on Dash adoption rates, and it’s also something that Bitcoin advocates have been doing in Venezuela, even if Bitcoin’s lack of a “Core Group” and a treasury has resulted in its propagation being less unified or organized.

Clearly, with Bitcoin and Dash advocates providing support to Venezuelans just when there’s a vacuum of hope and help, it’s little wonder that the cryptocurrencies have risen to the heights they’ve witnessed so far in 2018. Not only have these and other cryptocurrencies been in the right place at the right time in Venezuelan history, but they’ve positioned and promoted themselves in a way that maximizes the advantage they’ve reaped from the country’s situation. Put differently, crypto’s rise in Venezuela isn’t just about inflation or capital controls, but also about entrepreneurship and evangelism.

Petro and the government

And funnily enough, cryptocurrencies in Venezuela haven’t been boosted solely by crypto groups, but also by the Venezuelan government itself — despite the hard line it had initially taken on Bitcoin miners. Given the economic meltdown the nation was going through, and given that cryptocurrency had already enjoyed such an impressive ascendancy in the preceding months and years, the government announced in early December 2017 that it would issue its own oil-backed cryptocurrency, the Petro. While the Petro has been dissected and denounced by crypto experts and the Venezuelan opposition alike, it has at least had the inadvertent effect of providing a more favorable environment for non-centralized coins to flourish.

To begin with, its creation resulted in the Venezuelan government declaring in January that crypto mining was “perfectly legal,” despite having prosecuted miners for over a year prior to that. From that point onward, those “people who have been victims of seizures and arrests in previous years will have charges dismissed,” according to the nation’s new cryptocurrency superintendent, Carlos Vargas. And since then, cryptocurrency mining appears to have continued increasing its popularity, with a May Bloomberg article’s headline — perhaps not without some exaggeration — reading, “There’s a Crypto-Mining Machine in Every Home in Caracas.”

And as the government prepared for the Petro’s ICO and eventual release into circulation, it launched free cryptocurrency lessons for the Venezuelan population. Beginning from the end of February, Venezuelans were able to register at the Granja Laboratorio Petro in Caracas for a course that would, according to instructors, cost them between $500 and $800 anywhere else in the world and that would instruct them on how to “buy, sell and mine digital currencies.” One teacher of the course, Carmen Salvador, told a local news outlet that the course was intended to reach the widest possible audience:

“Many of our young people here find it impossible to have this amount of resources, [but] the Venezuelan state is guaranteeing that all can participate through these plans.”

There are no statistics available on the number of enrollments in this course, but in view of how popular cryptocurrency had already become among Venezuelans, it’s reasonable to assume that signup was relatively high. So, even if the government may have continued to put up some resistance toward cryptocurrencies that weren’t the Petro (e.g., closing two crypto exchanges in April, although apparently more for disseminating ‘false information’ about the VEF exchange rate than for permitting trades in crypto), its desire to cultivate a favorable social attitude toward the Petro most likely had the collateral effect of increasing the profile of Bitcoin, Dash, Zcash and Ethereum even further.

And on the subject of inadvertent effects, there’s a direct — though unquantifiable — link between the Venezuelan government’s authoritarian tendencies and the attraction cryptocurrency holds for many locals. For one, the imposition of capital controls in 2003 was in part a move by then-President Hugo Chávez to cut off potential funding from any of his opponents who might be tempted to organize a repeat of the attempted coup d’état of 2002, or a repeat of the anti-government strike that precipitated it. As he declared during a televised address announcing the controls, “Not one dollar for coup-mongers.”

Venezuelan business leaders were quick to denounce the controls, with the then-leader of the Federation of Chambers of Industry & Commerce, Carlos Fernández, telling that the “exchange control is an instrument of repression. When he says that they will not give dollars to businesses that participated in the strike, this signifies that 80 percent of the companies would not receive dollars.”

In the face of such an “instrument of repression,” those Venezuelans wanting to resist or subvert the political order had to find an alternative monetary framework for surviving, and as all of the foregoing implies, they found cryptocurrency. Caracas-based programmer John Villar told Reuters in late 2014:

“Bitcoin is a way of rebelling against the system.”

That said, there’s no indication that cryptocurrency is being used to fund actual opposition groups, while Villar went on to tell Business Insider in December 2017 that cryptocurrency in Venezuela “is not a matter of politics. This is a matter of survival.” However, when Bitcoin is being accepted by Venezuelan businesses (and even being used to pay employees in a few cases), and when business has often been ‘the opposition’ in Venezuela in recent years, there’s undoubtedly an underlying political edge to their use of crypto.

The future

As the situation in Venezuela worsens, with President Maduro’s approval rating continuing its plunge from 55 percent in 2013 to around 20 percent today, it’s only likely that more businesses and individuals will turn to cryptocurrency. Since the beginning of this year, there has already been a 344.6 percent rise in the number of Bitcoin traded for Venezuelan bolívars on the LocalBitcoins exchange, a percentage made even more impressive by the fact that it disregards other exchanges and other cryptocurrencies — such as Dash. Seeing as how the recent devaluation of the bolívar is unlikely to make a positive difference in Venezuela’s economic situation, it’s highly probable that this situation will deteriorate further, leaving people with even fewer options for survival. In turn, cryptocurrencies will be traded even more heavily.

Although it’s likely that much of the Venezuelan trade in cryptocurrencies up until now has come from the country’s middle classes — i.e., the 60 percent of the population with internet access, as well as those who know how to mine and program — the near future may see a wider distribution of people involving themselves in crypto. There’s little question that Dash-, Bitcoin- and other crypto-evangelists will continue doggedly raising awareness among Venezuelans about the benefits of cryptocurrencies. Their efforts have been highly fruitful so far, providing an important model that they and other currencies can follow if — or when — another nation is unfortunate enough to experience something akin to Venezuela’s crisis. And for as long as the Venezuelan government continues to impose capital controls (which have been one of the main factors in hyperinflation, among others), there’s nothing to suggest they won’t continue bearing fruit in the coming months and years.

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The Fight Over Masternodes: The WTF New Way to Earn Money With Crypto

There’s a fight going down on crypto Twitter right now.

But while that fact alone should come as no surprise, this time the bout is a bit more notable given it’s between a number of cryptocurrencies using so-called masternodes. While the term is flexible, generally speaking, masternodes are defined as computers on a network – staked with tokens – that perform additional work besides just helping run the software that governs a given cryptocurrency.

The mechanism, while an older idea, is starting to gain some traction with significant projects such as ZenCash (now Horizen), Gold Poker and Zcoin using the masternodes. Plus, other projects – EOS and Tezos, for instance – could likely refer to the participants that verify transactions as masternodes (though they don’t).

The Twitter battle, though, is all in good fun (mostly).

At its heart, the months-long contest pits pairs of tokens that use masternodes up against each other to test sentiment and name recognition, all using fairly simple, straightforward SurveyMonkey dialogues. Its instigator is Brian Colwell, a blogger and consultant to crypto startups, and he’s amping up the drama around it.

“We’re running it like a martial arts tournament, but it has devolved into eye gouging, brass knuckles,” he messaged CoinDesk over Twitter.

Colwell’s metaphorical “eye gouging” and “brass knuckles” mostly take the form of supporter exhortations over email lists and social media, with the odd fun gif. But it’s true that many of these projects are in it to win it.

Called “#MasternodeMeBro18,” the tournament, which tests which projects can best rally their community, started July 3 and will run through October 28.

Down from an original list of 64 coins that use masternodes, the tournament just finished its third round where 16 tokens paired off against each other. The round brought in a total of 11,416 votes across all the matchups. And looking at the hashtag on Twitter shows that a lot of the projects are working to turn out their followers to support their tokens.

In fact, the fight got so fierce that some of the matchups in this round showed evidence of vote tampering. Colwell’s partner, OmniAnalytics, detected multiple votes from some IP addresses, so they re-ran the impacted battles in a one-day “sudden death” rematch that closed Tuesday.

The fourth round of the contest started on August 28.

So, what’s with all the interest in masternodes all of the sudden?

According to industry observers, including Colwell, the masternodes approach allows participants in the network to earn income that’s above and beyond token appreciation. This passive income is what led Colwell to not only become interested in masternode projects but to organize the tournament.

He told CoinDesk:

“I have always been interested in communities with an interest in yield. You’ve got to find a way to make money all the time.”

Like bitcoin’s old days

This idea originated with Dash (formerly “Darkcoin”), which needed masternodes in order to help run its privacy enhancing features. By staking some tokens and making a computer available to the network, users with a long view of Dash earn an income on their stake, in the form of fresh tokens.

To participate as a masternode then, a user will need to make an upfront investment in coins and in equipment.

“Running a masternode incentivizes people to buy up the supply and lock them up for longer periods of time, thus reducing the coin velocity,” Sid Kalla of the blockchain consultancy Turing Advisory Group told CoinDesk.

Yet, the funds required aren’t insurmountable. In this way, running a masternode is like hobbyist bitcoin mining back in the day, when individuals could mine bitcoin and still turn a profit.

Colwell told CoinDesk that he runs 20 masternodes himself.

He said:

“I feel like it gives me more control on a daily basis to decide what I want to do with my coins.”

By earning tokens from his tokens, he has something to sell when the price swells and a way to stay ahead when the market is down.

Most token-based startups that have a masternode feature rank in the small- to mid-market capitalization ranges (Dash being an obvious outlier, with a $1.3 billion market cap), and in a way they bring back the days when a regular person could participate in running a protocol without much upfront investment.

Pricing what node to master

But it’s not just that easy; there are metrics to keep in mind.

In looking at participating in a given project, Kalla said that buyers should make sure they will earn more than it will cost them to run the computations required. “The rewards should also exceed the inflation rate,” he said.

But the most important variable is how valuable the token itself is.

“There is no point in holding something for 10 percent gains a year in its native token if it is going to fall by 90 percent against bitcoin,” Kalla continued.

Returns on masternodes vary wildly.

Masternodes.Online is a site that makes it easy to see what the upfront costs and returns are for different masternode projects. Usually, masternodes have very high rewards (100 percent per year is not unusual) in their native token, in order to make up for their market volatility.

For example, if a masternode offers 10 percent rewards on a stake of 100 tokens, a user should get 10 new tokens annually.

Here are some examples of basic stats of some different masternode tokens:

Colwell estimated that a reasonable starting price to buy a stake of tokens to run a masternode ranges from $2,500 to $5,000 in tokens.

But “price” might not really be the right word, because the necessary tokens to stake aren’t lost. A masternode just needs to lock them up for as long as the operator wants to receive rewards.

Other kinds of income

On top of the rewards for maintaining the network, Kalla also pointed to token projects that can earn more than one kind of reward. And while many masternode-using projects are a bit more underground, the idea is starting to gain more traction.

For instance, Swarm Fund, the Techstars alum which raised $5.5 million in an ICO, launched a masternode program in August. Already, 9 percent of the token supply has been staked by interested masternodes, according to a recent update from the company. The idea behind the project was to allow people to invest in projects for which the upfront cost is typically too high.

So, in addition to validating transactions, Swarm’s masternodes will decide where to invest part of Swarm’s token reserve (later sharing the returns on those investments). The theory here is that returns on managing consensus will be higher early on and the investments will pay off later, giving participants an incentive to get in early and stick around.

“In contrast to other rewards systems, our masternode system actually increases rewards over a long period of time,” Philip Pieper, Swarm’s CEO, told CoinDesk.

Another startup, Eximchain, an FBG and Kinetic Capital-backed blockchain-based supply chain management push, is expected to launch its own masternodes soon.

For that network, it won’t be enough just to stake to become a masternode. Instead, after completing know-your-customer (KYC) requirements, potential masternodes will have to be voted onto the network by other members of the chain – marking an unusually high bar for the process.

But deciding who else gets to be a masternode on the Eximchain network is one of the most important pieces of work its masternodes will do. Those who participate in voting have to put up funds proportional to their conviction in the vote. Then all those funds get shared among the nodes that voted, creating another form of revenue.

These kinds of extra earnings for participating in a blockchain network are something Kalla said those interested in being masternodes should look for.

Signals and incentives

And just as money makes masternodes an enticing idea, for masternode projects themselves, Colwell’s contest is starting to look more attractive, too.

At first, the prize for coming out ahead in the contest was at most PR and bragging rights, but that’s changed. Real stakes have started to accrue for projects that perform well. Not from Colwell himself, but from a new startup called Kalkulus.

The startup was created to give users a way to run masternodes without actually needing to manage the computing themselves. So if a user holds stake in a particular token, Kalkulus will run the computations.

Yet Kalkulus only provides this service for so many projects. Not only does integration bandwidth get in the way but also they likely want to be choosy with their integrations so they’re seen as only offering the best projects.

As such, the company promised to provide the service to the four projects with the most votes in the third round – which were Solaris, Deviant, Phore and Rupaya.

As a masternode-as-a-service-type offering, many projects will likely want to be listed on the platform since it lowers the barrier to entry for participants in the network.

Like investors looking to buy tokens in a presale, companies like Kalkulus need signals to help them decide which tokens to provide the service for, and that’s what Colwell’s contest has become.

Colwell acknowledged that, saying:

“The ones that have strong social sentiment are likely to be the ones that have the most masternodes.”

Roman coins image by Nikita Andreev on Unsplash (public domain)

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