Monthly Archives: October 2018

Regulierungs-ECHO KW42 – A crypto currency for Hamburg?

In the past week, a lot has happened around the globe in terms of regulation. In our regulation ECHO we look back to the end of the week and summarize what was said, thought or decided when, where and by whom.

Germany: CDU Hamburg demands its own Bitcoin revolution

The Hamburg Christian Democrats are playing with the idea of their own Bitcoin revolution for the Hanseatic city. This was reported last week in the Hamburger Abendblatt with reference to the CDU member of parliament and spokesman for the digital economy, Carsten Ovens. According to him, the “Hamburg Coin” has above all a Bitcoin revolution marketing character. So far, however, the ruling SPD has not heard anything about this proposal.

Iran: US authority wants to slow down use of crypto in Iran
The use of crypto currencies has recently become more and more popular for companies in Iran. The reason for this lies in the trade sanctions of the USA against the country. These should be avoided with the use of crypto currencies. But this should now be an end. As the US authority against financial crime, the Financial Crimes Enforcement Network (FinCEN), announced, the use of crypto currencies in Iran is classified as “illegitimate and malicious” and therefore wants to prevent it.

Hong Kong: New regulatory approach planned Bitcoin loophole

The Hong Kong Securities and Futures Commission (SFC) would like to regulate Bitcoin loophole more strongly in the jurisdiction. As chairman Carlson Tong Ka-shing revealed to the local media, the new regulation is intended to protect potential investors. However, this is not a policy of Bitcoin loophole bans, as is the case in mainland China. Rather, one would like to design a well-regulated counter-model to the rest of the People’s Republic.

USA: Former CFTC chairman for ICO regulation as securities
Gary Gensler, former chairman of the US Commodity Futures Trading Commission (CFTC), has taken a stand on Initial Coin Offerings. Crypto currencies, which emerge from ICOs, were therefore generally considered securities in the USA. Basically, he is positive about crypto currencies and blockchain technology. However, he stresses the need for a regulatory framework for sustainable growth. In the past, Gensler had already classified Ether and XRP as securities.

Russia: Hackers in court over minings on government servers
A young Russian hacker was put on trial this week. He is accused of illegally mining crypto currencies. He is alleged to have used the computing power of servers operated by the Russian government for this purpose without permission. Local media report that the Russian domestic intelligence service FSB has become aware of the inconsistencies on Russian government servers. The 21-year-old hacker is now threatened with up to five years imprisonment.

USA: SEC sets up new department for dialogue with ICOs
The US Securities and Exchange Commission (SEC) has ordered the creation of a new department. The aim of this group is to improve coordination with crypto start-ups. In particular, it should make it easier for those who want to start an initial coin offering to comply with the legal framework. From now on, the Strategic Hub for Innovation and Financial Technology (FinHub) will act as a contact point for FinTech companies.

Japan: Tax committee to facilitate crypto taxation
The Japan Taxation Committee has discussed how to simplify the taxation of crypto currencies in the island state. Local media report that the current tax system is unnecessarily complex and discourages many Japanese citizens. The committee, which advises the government on tax issues, therefore wants to make it easier to include crypto currencies in tax returns. This would also create an even more crypto-friendly environment in Japan.

Monero (XMR): Fees drop to minimum after update

The transaction fees at Privacy Coin Monero are currently at their lowest level. After the last update on October 18, the Hard Fork Beryllium Bullet was able to improve the network’s performance. Transactions are now cheaper overall and require less storage space.

Monero received another protocol update last Thursday, October 18th. The most important innovation of the Hard Fork Beryllium Bullet was the optimization of the range proofs used in Monero for Ring Confidential transactions. In short: Bulletproofs.

Monero is currently turning into the news spy review

Roughly speaking, the aim is to ensure that the units sent are actually issued in the news spy review. True to the motto “Privacy first”, however, at the same time it must be ensured that the true amount of the transaction is concealed. Without this mechanism, attackers with special transactions could create new coins and the news spy review thus trigger uncontrolled inflation. (You can read more about this here).

The hard fork (which takes place twice a year in the Monero network, by the way) should also bring one thing above all: Transactions that require less storage space and are cheaper. This has now proven to be the case.

The average transaction fees at Bitcoin secret scam

The average transaction costs of the Privacy Coin are currently 0.02 US dollars – as low as they were last in 2016 – and that is currently 3,586,000 transactions. This means that Bitcoin secret scam transaction fees have fallen by over 90 percent since the bulletproof update.

In the XMR price, however, the update has not made itself felt at Monero so far. Although the XMR price rose from 107 US dollars to 109 US dollars for a short time after the update, the weekly XMR price has remained stable. In the course of the week, however, it fell by almost five percent. Over the course of a month, the XMR has to absorb 13.36 percent of losses. At present, this is just under 105 US dollars.

Phillip HorchPhillip Horch is head of the BTC-ECHO service and responsible for the structuring and planning of editorial content. He gained several years of editorial experience during his studies and then worked as a freelance journalist before joining BTC-ECHO as an editor in January 2018. Phillip holds a Master’s degree in Literature, Art and Media Studies from the University of Constance and the Universidad de Valpara√≠so.

CryptoCompare publishes study on Bitcoin landscape

CryptoCompare comes up with a new study on the crypto landscape. The paper, published on 16 October, looks at various ways of grouping over 200 different crypto assets.

CryptoCompare describes itself as the “gateway to the world of crypto currencies”. In its recently published Cryptoasset Taxonomy Report, the London-based company attempts to classify the different types of crypto assets. The authors of the study examine the tokens on the basis of four possible groupings:

What is the use case of the asset?
Is the design suitable to guarantee value retention?
Is the token controlled centrally?
Why should someone hold the asset in question?
Through these categories, CryptoCompare aims to achieve a sufficiently precise taxonomy of the examined assets. The most important results at a glance.

Decentralization

The study focuses heavily on the status quo of decentralization. The surprising result: Only 16 percent of the crypto assets examined can be described as completely decentralized. The authors assess 30 percent as “semi-decentralized” and with a good 55 percent more than half of the investigated assets are classified as centralized.

Different basic ideas

Furthermore, the authors examine the basic calculations of investors that can flow into purchase decisions. Or in the authors’ words: “What is the most prominent reason to hold a crypto asset? Since the list of calculations cannot be estimated conclusively, the authors limit themselves to six possibilities of classification, with the following results:

Access to services – 39.5 percent (including ETH)
Reward potential – 35.5 percent (including GNO)
Profits from hard fork – 4.5 percent (including LTC)
Off-chain cash flow – 3 percent (including PAY)
Value memory – 1.5 percent (all stable coins)
Cash and cash equivalents – 16 per cent (including BTC)
Distribution of the various DLTs
The study also shows the distribution of the various distributed ledger technologies (DLT). The vast majority are classic blockchain technologies à la Bitcoin (48 percent of the assets examined). Together with the ERC-20 tokens, this results in a share of 92 percent. The next largest share (three percent) is accounted for by Directed Acyclic Graph (DAG) technology, which is also used at IOTA.

The result: the established crypto currencies such as BTC, BCH and ETH have a lower concentration within the top 100 wallets than the less common tokens such as EOS or NEM.

Conclusion
CryptoCompare confirms its reputation as a reliable source of data on all aspects of the cryptoecosystem. The data sets appear to have been seriously researched and, with more than 40 illustrations, are mostly clearly presented.

Here and there, however, a few inaccuracies creep in. Thus certain definitions are not kept over the entire length of the paper or only insufficiently explained. Moreover, the division into the different basic ideas for the purchase of the tokens seems arbitrary and could just as well have been done differently. As always, it is worth taking a close look.

The complete Cryptoasset Taxonomy Report can be found here.