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Hodler’s Digest, April 8–14: Top Stories, Price Movements, Quotes and FUD of the Week

Bloomberg calls Bitcoin a bubble yet again, and Facebook is seemingly looking for $1 billion from VC firms for its stablecoin.

Top Stories This Week

NYT Reporter: Facebook Seeking $1 Billion in Venture Capital for Crypto Project

According to a tweet by New York Times (NYT) tech reporter Nathaniel Popper, Facebook is reportedly looking to various venture capital firms to develop its digital token that has been previously reported on. Popper, citing unnamed sources familiar with the matter, said that Facebook is seeking $1 billion to develop its cryptocurrency project, which itself has not been publicly confirmed by the company. The Times reporter also noted that the project involves a stablecoin that would be pegged to a basket of foreign currencies held in bank accounts.

Chinese Traders Pay Extra for Bitcoin Through OTC Desks Amid Crypto Market Surge

Local Chinese social media sources said that Bitcoin’s (BTC) price surge last week has led Chinese traders to pay a premium in order to trade the cryptocurrency. According to an analysis of price spreads from cryptocurrency exchanges Huobi and OKEx, cnLedger highlighted how Chinese traders are paying more in order to acquire Bitcoin. Since China formally banned crypto trading in the country in 2017, investors have had to resort to creative methods in order to deal in Bitcoin. In the analysis, cnLedger notes that a principal way to avoid the ban is to buy stablecoins such as Tether (USDT) via over-the-counter (OTC) services and convert them into other cryptocurrencies

Top Stories This Week

Top-Subscribed YouTuber PewDiePie Partners With Blockchain

PewDiePie, the personality behind the most subscribed channel on YouTube, announced this week that he will start streaming on blockchain video platform DLive as of April 14. Dlive is a blockchain-powered broadcasting app with a rewards system for content creators and will become the exclusive platform for livestreaming the famous Swedish YouTuber, Felix Kjellberg — aka PewDiePie. The platform currently has 3 million monthly users and 35,000 active streamers, while PewDiePie on YouTube has over 93 million subscribers and 21 billion video views, as of April 2019. PewDiePie’s move to Dlive comes as the Swede faced backlash over his alleged ties to white supremacism, as his channel was mentioned by the Christchurch gunman prior to his attack on two New Zealand mosques.

Bitcoin at Most Overbought Level Since Record Bull Run: Bloomberg Analyst

Bloomberg Intelligence analyst Mike McGlone claimed this week that Bitcoin is at its most overbought level since its record highs in December 2017, citing BTC’s GTI Global Strength Indicator. Bloomberg writes that similar buy patterns in the past have resulted in multi-week downturns, citing McGlone as referring to Bitcoin as a bubble. McGlone states that the recent market growth came about due to a long-term price compression and low volatility, causing the price to be “released from the cage.” Bloomberg also cites David Tawil, president of crypto hedge fund ProChain Capital, who reportedly expects the market to continue its downward trend.

Top Stories This Week

Coinbase Crypto Exchange Debuts Visa Card for U.K. Customers

Major United States cryptocurrency exchange Coinbase has launched Coinbase Card, which will enable its United Kingdom-based customers to pay both in-store and online with cryptocurrency. The card itself is a Visa debit card that is powered by users’ Coinbase account crypto balances, allowing purchases to be made globally by instantly converting customers’ crypto funds into fiat. The Coinbase Card has also been released for iOS and Android, linking Coinbase accounts with the app and allowing users to select which wallet will fund their card, as well as allowing access for receipts, transaction summaries and spending categories. The card is issued by authorized and regulated electronic money institution Paysafe Financial Services Limited.

Winners and Losers

The crypto markets are holding slightly down by the end of the week, with Bitcoin around $5,099, Ethereum at $165 and XRP about $0.33. Total market cap is around $172 billion.

The top three altcoin gainers of the week are BunnyCoin, WomenCoin and Block-Chain.com. The top three altcoin losers of the week are dietbitcoin, Cryptrust and ContractNet.

Winners and Losers

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

Most Memorable Quotations

“This is a stark contrast to the development you see with things like EOS or with Ethereum with Casper, where they kind of adopt this lone samurai viewpoint.”

Charles Hoskinson, the co-founder of Ethereum (ETH) and IOHK, the company behind Cardano (ADA), speaking on the idea of development with open protocols

“I have learned about how blockchain is having a huge impact on supply chain management, and how an app in Britain can help the public report modern slavery at car washes.”

Princess Eugenie, the granddaughter of Queen Elizabeth, who founded the Anti-Slavery Collective in Britain in 2017

Most Memorable Quotations

“Blockchain is like a spreadsheet on steroids that can automate certain tasks, build greater transparency, speed and reliability, and provide a single source of transactional information.”

David R. Jarczyk, innovation principal and tax leader for blockchain at KPMG

“Now it’s a question of duration and I suspect when you have such a massive bubble, you’ll always have an overhang of people who need to sell.”

Mike McGlone, Bloomberg Intelligence analyst

FUD of the Week

Singapore Police Secure First Convictions Against OneCoin MLM Scheme Agents

Authorities in Singapore have charged two men for promoting crypto multi-level marketing (MLM) scheme OneCoin in what is touted as the first case of its kind for the city-state. The two unnamed men reportedly engaged in activities that incorporated a subsidiary in order to promote OneCoin, in addition to signing up new members and accepting investments in return for education courses and OneCoin tokens. Singapore’s central bank had previously added OneCoin to its Investor Alert List, and various governments around the world have also issued warnings against the MLM scam, advising consumers not to interact or invest in OneCoin. While one founder was recently arrested in the U.S., the other remains at large following the indictment.

Canadian Crypto Exchange QuadrigaCX Officially Declared Bankrupt

QuadrigaCX, the embattled Canadian crypto exchange, has officially been declared bankrupt. The exchange’s bankruptcy was reportedly approved by the Nova Scotia Supreme Court following the court monitor’s earlier recommendation to do so. At the time, Ernst & Young’s legal team had put forward the argument that the restructuring process should instead be shifted to bankruptcy proceedings, meaning that the monitor will now have enhanced investigative powers. QuadrigaCX had previously filed for creditor protection when it apparently lost access to its cold wallet funds following the unexpected death of its founder in December 2018.

Electrum Faces Another Fake Wallet Attack, Users Reported to Lose Millions of Dollars

Bitcoin wallet service Electrum faced another Denial-of-Service (DoS) attack on its servers this week. According to media outlets, this most recent attack has resulted in the loss of millions of dollars (the exact sum unconfirmed) with a single user allegedly losing about $140,000. The attack works by referring users to fake versions of Electrum software by employing a malicious botnet of more than 140,000 machines. The company has recommended that its users upgrade their software versions older than 3.3 and not download software from any source besides the official site. Last December, Electrum faced a similar attack that led to a loss of about $937,000 worth of Bitcoin.

Best Cointelegraph Feature

Will China Ban Crypto Mining?

After this week’s relatively unexpected publication by a Chinese government agency about a possible ban on crypto mining, Cointelegraph takes a look into how serious the idea is, and who and what will be affected in what is unarguably the largest crypto mining sector in the world.

Facebook, Twitter and Telegram: A New Crypto Paradigm or a Glorified Voucher Program?

As more unconfirmed news surrounding Facebook’s secretive crypto project surfaced this week, Cointelegraph analyzes what it would mean for one of the biggest, and possibly most untrusted, institutions in the world to issue their own cryptocurrency.

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Coinbase Launches Crypto Visa Debit Card for UK and EU Customers

Cryptocurrency exchange Coinbase has launched a Visa debit card allowing customers in the U.K. and EU to spend their cryptocurrencies directly from their Coinbase accounts.

The San Francisco-based firm announced the news in a blog post on Wednesday, saying that with the “Coinbase Card,” customers will be able to spend their bitcoin (BTC), ether (ETH), litecoin (LTC) and other cryptocurrencies “as effortlessly as the money in their bank.”

The exchange said it will “instantly” convert cryptocurrency to fiat currency, such as the British pound (GBP), when customers complete a transaction using the debit card.

The card supports all crypto assets available to buy and sell on the Coinbase platform, and customers can use them to pay for everyday purchases, such as a meal or booking tickets, according to the announcement.

With previously available products of this type, customers had to pre-load a specified amount of cryptocurrency onto the card in order to spend, Coinbase said.

The exchange has also launched an app for the card on both Android and iOS platforms, enabling customers to select which cryptocurrency wallet they will use to fund their spending. The app also offers “instant” receipts, transaction summaries and spending categories.

For the first 1,000 customers, Coinbase said it will waive the card issuance fee of £4.95 ($6.48).

PaySafe, a U.K. payment processor, is the issuer of the cards, a Coinbase spokesperson told CoinDesk.

In a similar development last month, banking startup 2gether said it was launching a prepaid Visa debit card that allows users to spend cryptocurrencies. With the 2gether card, customers will be able to pay with either euros or any of the following seven cryptocurrencies: BTC, ETH, XRP, bitcoin cash (BCH), EOS, Stellar (XLM) and litecoin (LTC).

Coinbase Card image courtesy of the company 

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Major US Retailer Ditches Visa – Now Considering Bitcoin’s Lightning Network

US retail giant, Kroger, is no longer accepting Visa credit cards at its chain of Smith’s food and drug stores. So Anthony Pompliano tweeted an offer to hook them up with Bitcoin’s Lightning Network nationwide.


Fees-a Not Accepted Here

It all started on Friday when Kroger announced the move to no longer accept Visa credit cards, citing excessive fees. The Smith’s chain comprises 134 food and drug stores across 7 states, employing 20,000 staff.

Card fees charged by Visa are higher at Smith’s than any other credit card brand, explained Kroger CFO, Mike Schlotman:

Visa has been misusing its position and charging retailers excessive fees for a long time.

Visa is actually due to increase fees for the banks processing card payments on behalf of merchants in April.

Pomp And Circumstance

In the circumstances, it seemed only natural for somebody to suggest a crypto alternative, and Pompliano rose to the occasion. “Who knows someone on the leadership team there?” he tweeted.

The Morgan Creek Digital team will fly to meet them and get them hooked up with the Lightning Network nationwide.

A couple of hours later a product manager from Kroger Digital tweeted a response and set up a conversation.

Obviously, the Ripple army dove right onto this, questioning Lightning Network’s readiness, and suggesting XRP as a better alternative. More interestingly, someone suggested selling Smith’s gift-cards on BitRefill, which would certainly make a zero effort stop-gap solution.

The Tip Of The Iceberg

But this is a very big deal. Smith’s is the second Kroger brand to stop accepting Visa credit cards, after Foods Co. supermarkets in California. Successful implementation of a Lightning Network payment solution at the retailer could lead to a wider roll-out across Kroger brands.

kroger

Kroger is the largest supermarket chain by revenue and the third largest employer in the United States, along with the third largest retailer in the world. As of December 2018, it operated 2,765 supermarkets and multi-department stores, either directly or through subsidiaries.

Ripple army excepted, I’m sure there is a high level of confidence in Pompliano and Morgan Creek Digital to make this work.

And Visa… you only have yourself to blame!

Will major retailers like Kroger accept Bitcoin and Lightning Network payments? Share your thoughts! 


Images courtesy of Shutterstock

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Visa, Mastercard Plan To Increase Transaction Fees; Cryptocurrencies Don’t

Visa and Mastercard are planning to increase transaction fees for US merchants who accept card payments, Reuters reports. The hikes, which come into effect in April 2019, are likely to further damage already the fragile relationship between payment providers and merchants.


Fees-Us Christ

According to sources, the increases will firstly affect interchange fees, which merchants pay their banks when accepting a card transaction. Fees that the banks pay to Visa and Mastercard for processing payments will also increase, says the report.

A spokesperson for Visa confirmed that fees would rise in April, but only for banks, not merchants. However, banks are not known for their benevolence, or for reducing profits by absorbing costs. So they are likely to pass on these fee increases to the merchants.

Similarly, merchants exist to make a profit, so will have to weigh up whether to pass these costs on to the consumer.

Bottom line – We’re all getting stung.

In The Name of Security

The card companies tend to justify their fees by claiming security measures must be enhanced to prevent fraud and theft. They also point out that merchants receive more sales if they accept card payments.

But in Q4 2018, Visa’s net income rose to $2.85 billion, an increase of 33% on results for Q4 the previous year. Similarly, Mastercards Q4 profits last year climbed to $1.9 billion, also a 33% jump on the $1.43 billion in Q4 2017.

Perhaps the fees need to be raised to cover the $6.2 billion payout the two companies faced after losing a US anti-trust case? Although that money had supposedly already been set aside, the merchants are gearing up for round two.

Or perhaps US fees need to be increased to offset reduced profits (not losses, never losses) in Europe, due to anti-trust investigations there?

Bottom line – Visa and Mastercard are not to be trusted.

The People Are Revolting

Or at least the people should be revolting. We are all being overcharged thanks to the hegemony of the big two payment processors.

But there are alternatives… and they scare the crap out of Visa and Mastercard. That’s why, despite a widespread denial in financial circles that Bitcoin is anything like cash, they both charge cash-advance fees for bitcoin purchases.

And now that Visa and Mastercard are throwing their weight into political arguments, we should be demanding that our favored merchants accept cryptocurrency payments. After all, if accepting card payments increase overall sales then accepting bitcoin opens up a whole new market.

And all efforts are going towards reducing fees for bitcoin and crypto transactions.

Bottom line – We would all be better off using bitcoin.

Can cryptocurrencies capitalize on Visa and Mastercard raising their fees? Share your thoughts below!


Images courtesy of Shutterstock 

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Circle’s Head of Partnerships Joins Blockchain Startup Celo

Chuck Kimble, head of financial institution (FI) partnerships at Circle, has left the company for a similar role at another blockchain startup, Celo.

As Celo’s new head of strategic partnerships, Kimble will be helping the digital payments company “to bring better financial products to emerging markets and under-served populations around the world,” the company said in a press release.

“Chuck brings a ton of business development and digital payments experience to Celo and he’ll play an instrumental role in encouraging the development and scaling of products globally,” Celo founder Rene Reinsberg said. “Chuck is highly respected in the financial tech industry and he understands how digital payment services can help people and families with no access to financial services.”

Kimble joined Circle in June of last year. During his tenure at the crypto trading and payments firm, he led business development and promotion of USDC, a cryptocurrency designed to hold its value with the U.S. dollar, or stablecoin.

Naeem Ishaq, Circle’s Chief Financial Officer, told CoinDesk:

“Chuck joined Circle to lead our FI partnerships efforts and participate in a variety of projects, including work on the adoption of USDC. In his short time with the company, he helped to drive USDC adoption across a diverse cross-section of the crypto industry.”

USDC is now the second-largest stablecoin by market capitalization and the No. 19 cryptocurrency overall, according to CoinMarketCap.

Payments veteran

Before Circle, Kimble spent three years at Dashlane, the maker of a password manager and digital wallet application.

He also worked for three years at Square and oversaw partnerships at Visa, supervising the company’s teams in New York, Miami, Singapore and London, with responsibility for account strategy, business planning, recruiting and coaching, according to his LinkedIn profile.

“I’ve spent the vast majority of my career advancing digital payments and I see tremendous opportunity for Celo to improve the livelihood of billions of people around the world who today are involuntarily detached from the global financial system,” Kimble said in Celo’s press release.

In September, Celo added another top manager to its team when former Ripple general counsel Brynly Llyr joined the startup in the same role.

Celo’s investors include Polychain Capital, Andreessen Horowitz, Coinbase Ventures and Square founder Jack Dorsey.

Chuck Kimble image courtesy of Celo

UPDATE (6, February 20:00 UTC): An earlier version of this article misdescribed Kimble’s work at Circle. He helped “develop” the business around the USDC stablecoin by promoting it to other companies, but he did not build the coin itself. Also, his official title at Circle was head of financial institution partnerships – not all partnerships, as his new employer Celo phrased it in a press release.