Short Seller Steve Eisman Selling Two U.K Bank Stocks On Brexit Standoff

Brexit continues to cause jitters and concerns in the markets. However, some investors have sensed a window of opportunity that they are slowly taking advantage of. Steve Eisman believes that now is the right time to short two U.K banks as expectations of the U.K leaving Europe without a deal soars.

Eisman Short Stance

According to the Neuberger Berman Group money manager, the U.K is one of the biggest risks. While the high profile short seller expects the U.K government to agree to an exit deal, he remains pessimistic of parliament approving the deal. Eisman has also warned that he could short other stocks should Jeremy Corbyn become the next prime minister.

“I’m shorting two stocks in the U.K., but I’ve got a screen of about 50, and I might short all 50 if I think Jeremy Corbyn is going to be prime minister. Corbyn’s a Trotskyite. Now I know my Trotskyites well, and I know you don’t want to be invested in the U.K. if a Trotskyite is a prime minister,” Eisman said.

Eisman made a name for himself on predicting the collapse of the subprime mortgages as the financial crisis was just but starting. He now believes that the two unnamed banks would pay a hefty price on the U.K exiting the trading block.

While he is yet to give clues of the banks he is shorting, it is becoming increasingly clear that Metro Bank Plc. and CYBG Plc. could be the two unnamed banks. The two banks have continued to attract immense short selling pressure. The total number of shares shorted at Metro currently stands at 7.9% nearly double the ratio at CYBG.

Early in the year, Eisman did recommend shorting Deutsche Bank AG Shares over concerns about profitability issues at the German lender. The short seller has also raised concerns about the bank’s capital levels which he believes are quite low and may force the bank to raise some money next year. Canadian financial companies, as well as Wells Fargo, have also attracted short selling recommendation from the high profile investor.

Brexit Stand-Off

Five months to the deadline, Britain is yet to reach a deal with the European Union on how to go about Brexit. Negotiators are in heated discussions as both refuse to budge from their tough stance. Uncertainty as to whether or when Britain will reach an agreement appears to be fuelling concerns especially in the market.

The pound has come under immense pressure in recent weeks and continue to lose ground against the majors. More than 70 business leaders under the Lastminute.com umbrella have already signed a letter arguing potential ramifications on companies, on the U.K failing to reach an agreement.

Separately Eisman has reiterated he remains short on Tesla stock, despite a recent price surge. Tesla stock has experienced wild price swings in recent weeks in the wake of CEO, Elon Musk failing on his bid to take the company private. The stock did plunge below the $280 a share level. However, it has since bounced back on exceeding expectations with a stellar third quarter financial report.

What Happens if the Yuan Breaks the Magical 7?

China At Risk of Massive Capital Outflows On Yuan Breaching Magical 7 Level

The Chinese Yuan is yet again on the receiving end, amidst growing concerns of potential repercussion on it breaching the magical 7 level against the dollar. The last time the Yuan was at this level was in 2008. With trade tension between the two countries showing no signs of cooling off, the Yuan is at risk of weakening further.

The Yuan has dropped by about 9% over the last six months in response to trade disputes with the U.S. concerns of further easing by the Country ’s central bank has all but exacerbated the situation. Further weakness could see the Chinese currency breaching the psychological 7 level.

The country’s de-facto central bank tried to prevent a further slide by announcing a cut on the reserve requirement. The move did ease some pressure, helping fuel confidence that a breach of 7 may not happen this year. Talk that President Donald Trump and his counterpart Xi Jinping will meet in November also appears to have brought about some form of stability.

Consequences of Yuan Breaching Magical 7

The last thing that regulators want to see now is a weakened Yuan. Any weakness going forward could result in an increase in capital outflows from the country. The result would be a decrease in foreign capital inflows that until now has helped push the bond and equity markets up.

Capital outflows as well as overshooting Yuan weakness would be catastrophic for The Chinese economy. The country’s economy has come under immense pressure on the U.S imposing tariffs on billions of dollar worth of goods.

The last thing that China needs at a time of economic instability is an upsurge in capital outflows. For instance, foreigners would shy away from investing in the country on the Yuan surpassing the magical 7 level.

According to standard Chattered Chief Economist Ding Shang, China won’t be the only country that would feel the effects of the Yuan surpassing the 7 level. The economist expects emerging market currencies to also experience some form of weakness on the Yuan falling past 7.

Head of markets strategy at United Overseas Bank, Hang Koon, also expects emerging currencies to experience some volatility on the Yuan weakening further against the dollar.

A weakened Yuan to some extent is normally a good thing. This is partly because it helps fuel the country’s export market. However, in the wake of recent trade tariffs by the U.S, China is finding it hard to ship more products, especially to the U.S.

Debt Refinancing Headache

The Yuan weakening further could also make it extremely difficult for Chinese companies to service their mountain of foreign debt. The Yuan rising above the magical 7 level would force the companies to incur more to offset their foreign debt obligations, compared to when the Yuan is much stronger in relation to the dollar?

The Chinese government could also struggle in its attempt to move, to a more market-oriented exchange rate system should the Yuan weaken further. China has worked tirelessly in recent years to avert the risk of local financial market volatility by using all the necessary available policies to stabilize the Yuan.

Is It Time To Short Tesla?

Tesla (NASDAQ:TSLA) finds itself in a tough spot as surging short selling pressure continues to evoke comparison to what befell Valeant a few years back. Since the start of August, the stock has lost more than 20% in market value amidst concerns that things are slowly getting out of hand.

Tesla has experienced wild price swings over the last three months. The unexpected swings have come amidst emerging concerns about the company’s long-term prospects. Management squabbles, regulatory pressures, supply chain disruption concerns as well as financial health woes have all but dealt the stock’s sentiments a big blow in the market.

Musk vs. SEC

The recent plunge below the $300 a share mark, stems from growing concerns about Elon Musk leadership at the helm. Ever since the charismatic CEO tweeted that he was planning to take the company private, things have gone south. The fact that the remarks were made on social made rather than using the proper channels did not go well with regulators.

The U.S Securities and Exchange Commission has since hit the executive with a$20 million fine. Musk was also forced to relinquish his role as the chairman of the board. The fact that the company was also hit with a $20 million fine because of the executive’s misdoings did not go well with investors.

This is in part because there was no indication that the board was involved in the privatization push even though Musk is the majority shareholder.

Supply Chain Woes

In addition, Tesla could struggle to meet its car delivery targets on supply chain disruptions. According to Fahmi Quadir, a good number of the electric car company suppliers are on the brink of filing for bankruptcy. According to the high profile short seller, most of the vendors are yet to receive paychecks even on making deliveries.

The fact that most of the components that Tesla uses to manufacture its cars are single sourced ultimately spells trouble should the vendors go bankrupt. The company could struggle to meet its production targets, something that could end up affecting its production capacity.

“We question the ability for Tesla to actually deliver on their promises to their customers when they’re on the brink of potentially a massive supply-chain disruption. We see very little contingency planning, and we also see executives from the supply chain department departing in recent weeks and months.,” said,” Quadir in a Bloomberg television interview

After betting on Valeant Implosion in 2015, Quadir believes the same fate could befall Tesla as it finds itself in a rock and hard place. The 28-year old and founder of SafKhet Capital Lp has already initiated a small short position in the electric car company stock.

Financial health Concern

Tesla according to the short sellers is grappling with weakening underlying fundamentals that don’t justify a premium price in the market. For starters, the company needs to raise money through equity or debt offering given that it is already struggling to pay its bills. According to the short seller, this is the same developments that Valeant struggled with before it imploded.

Quadir concerns about Tesla’s cash problems could have some truth given that the tech giant has continued to burn cash at an alarming rate since it went public. However, the CEO insists that the carmaker is on the verge of earning money and generating cash on the Model 3 production.

Whether it’s true or not is still a point of discussion given that Tesla ended the first half of the year with $2.2 billion in cash. In contrast, it had short-term debts amounting to more than $3 billion. In July, the company found itself in yet another scandal amidst claims it had asked suppliers to refund it some of the payments as it sought to register profit on its books. The state of Nevada is also pursuing the company over unpaid $655,000 in unemployment tax bill.

A Wall Street Journal in August provided a clear glimpse to some of the financial woes that the electric car company continues to grapple with. In the report, it emerged that Original Equipment Suppliers Association believed the automaker posted a significant financial risk to their businesses.

Some of the suppliers alleged that they had gone for months without receiving payments from the car maker. Tesla immediately refuted the claims insisting that it had strong partnerships with suppliers. It went on to suggest that more new supplier had already expressed interest in supplying some of the parts.

Surging Short Selling Pressure

The developments have only gone to attract short sellers to the Tesla stock. Short interest pressure currently hovers at around 26%, an indication of waning investors’ confidence. The stock, although had a strong move higher, is still hovering near 18 months low in what has turned out to be one of the worst performances in recent years.

Musk has already reacted to the soaring short selling pressure by placing part of the blame on the SEC. According to the executive, the SEC is purely a ‘Shortseller Enrichment Commission.’ The executive has also taken a swipe at Billionaire David Einhorn over his remarks comparing the electric company to the failed Lehman Brothers Holdings.

The back and forth backlash have all but continued to pile pressure on Tesla as investors remain wary of the company’s long-term prospects. However, Musk has sought to dispel the concerns and fear about Tesla long-term prospects. In what is seen as an attempt to strengthen investor confidence the executive says he will buy $20 million worth of common stock.

Amidst the $20 million stock purchase push, Tesla remains in a precarious position. The stock’s sentiments in the market have taken a significant hit amidst the ongoing tussle with regulators as well as Musk’s outbursts.

Bottom Line

The stock is already down for the year as short sellers appear to be gaining control. For the stock to bounce back, from the current lows, then the company will have to serve groundbreaking catalysts.  Beating estimates on production as well as car deliveries would go a long way in revitalizing investor’s sentiments. The company also needs to turn in some profit to shrug off cash burn rate concerns.

Demand for Bitcoin Mining Chips Declines

Bitcoin Miners are not buying as many chips as they used to. Taiwan Chip giant Taiwan Semiconductor Manufacturing Co has since slashed its growth target to 6.5%. The world’s largest chip giant had initially predicted a growth rate of between 7% and 9%.

Taiwan Semiconductor Manufacturer Trims Growth Guidance On slowing Bitcoin Mining Chips Demand

Taiwan Semiconductor Manufacturing has since admitted that reducing demand from Bitcoin miners was the reason behind the slash. However, it is slowly emerging that the cut could also have to do with increasing competition in the sector.

Samsung is one of the companies that has also expanded its footprint into the crypto chip business. The South Korean hardware giant is a formidable competitor having started production of crypto mining equipment early in the year.

Concerned with the declining demand as well as competition threat TSMC CEO, Dr. C.C Wei, has warned of continued weakness going forward.

“Moving into the fourth quarter, despite the current market uncertainties, our business will benefit from the continuous steep ramp of 7-nanometer for several high-end smartphones as well as the demand for 16/12-nanometer for the launches of new-generation GPU and AI. However, this growth will be partially offset by continued weakness in cryptocurrency mining demand and inventory management by our customers,” said Mr. Wei.

A decline in demand for mining equipment, in one way, has to do with the high cost of purchase. Bitcoin mining equipment tends to command a fortune something that continues to bar most people from venturing into the business. The fact that no new miners are coming onboard also continues to spell trouble for chip developers.

Cryptocurrency Implosion

The lack of interest in mining equipment also has to do with the implosion at crypto prices. Crypto mining operations are no longer as lucrative as they used to be, at the peak of the crypto booming late last year.

Bitcoin, which is the most mined crypto coin, has lost more than 60% in market value from its record highs at the start of the year. Uncertainties over cryptocurrencies future also appear to have had a negative impact on interest in the crypto mining business.

Revenue Loss Concerns

Taiwan Semiconductor Manufacturing Company finds itself in a tight spot given that crypto mining chips account for a big chunk of its total revenue base. The company generates about 10% of its total revenue from crypto chips. Faced with declining demand the company has had to reduce its revenue guidance from between 10-15% to just 10%.

Lower Bitcoin mining chips demand is not the only headwind TSMC is grappling with. A decline in demand for iPhones is also slowly taking a toll on one of the company’s main revenue stream.

The company is a major supplier of iPhone core processor Chips. Smartphone saturation in recent years has seen Apple struggle to move as many products as it used to, an underperformance that is already having a ripple effect on chip suppliers.

Concerns over TSMC chip business already have a toll on investor sentiments in the stock. The stock fell by about 7% in the second quarter as investors reacted to below-par guidance going forward.

CryptoCompare Study: 85% Of Cryptocurrencies Are Not Decentralized

Decentralized governance and security are some of the key selling points of most cryptocurrencies. Unlike fiat currencies, no single entity is supposed to call the shots when it comes to how cryptocurrencies operate. However, a new study has raised serious doubts as to whether such forms of money are truly decentralized and secure.

Decentralization vs. Centralization

CryptoCompare in its study appears to have detected some form of deficiencies when it comes to how decentralized cryptocurrencies truly are. The fact that most developers can alter crypto platforms goes against the basic principles of decentralization.

In a report published in the tracking resource website, it is emerging, that 85% of crypto assets allow developers to alter platforms. This is in contrast to the fact that such changes should only come into being, on the involvement of the entire community in a project.

The study clearly shows increased levels of centralization in projects that bill themselves as decentralized. The fact that developers can alter the blockchain projects protocol at any time raises serious concerns about the future of decentralization.

CryptoCompare Study Findings

According to CryptoCompare, 55% of projects in the cryptocurrency market are centralized rather than decentralized. Further analysis also showed that 30% of the projects fall into the category of ‘semi-decentralized’ as opposed to being fully decentralized. The fact that only 16% of the existing projects are fully decentralized should come as a shocker to many.

CryptoCompare study findings also show that 41% of the tokens used as a source of payment in the sector were centralized rather than decentralized. On further analysis of the tokens as per the guidelines established by the Swiss Financial Market Supervisory Authority FINMA, the resource firm says it concluded that 55% of current tokens fall under securities classification.

Classification of cryptocurrencies as securities would call for their regulation as other securities traded in the market. In contrast, CryptoCompare says Bitcoin and Ethereum are not securities, given their high level of decentralization and lack of identifiable enterprise.

Cryptocurrencies Securities Debate

According to the report, of the 200 crypto assets, 157 continue to receive a sort of funding from ICO or pre-sales. The funding essentially makes them subject to FINMA ICO security guidelines. The guidelines consider all assets and pre-defined utility securities.

“Following Swiss FINMA regulatory use-case classifications, 65% of the top 100 crypto assets by market cap are considered utilities, 22% are payment tokens, and the remaining 13% are either asset tokens or combination use-cases,” CryptoCompare Study.

According to CryptoCompare CEO, Charles Hayter, the study findings will help industry participants, as well as regulators; gain a better understanding of cryptocurrencies. The data should also help investor’s eyeing opportunities in the sector gain a better understanding of what most cryptocurrencies are all about.

For the longest time people and investors have pursued cryptocurrencies on some of the attributes touted in the sector. Security and decentralization are some of the attributes that have made digital currencies interesting. However, it is still unclear whether CryptoCompare study will have a significant impact on people’s perception having emerged that most cryptocurrencies are not entirely decentralized.

Privacy Coins Use Cases Away From Money Laundering Perception

Privacy-focused cryptocurrencies have come under immense scrutiny amidst concerns criminals are using them to fuel illegal activities. Law enforcement agencies as well regulators around the world have waged crackdowns against such Altcoins amidst claims they fuel money laundering activities.

Japan is one of the countries that has gone the extra mile and consequently banned all privacy-focused coins. The coins continue to elicit strong interest in part because they make it impossible to track transactions as is the case with other cryptocurrencies. Their tight proof nature has seen them become popular in the underworld.

However, privacy coins are not just for fuelling suspicious and illegal activities. The coins are increasingly finding new applications in day to day operations at the backdrop of increased scrutiny and crackdown.

Privacy Coins for Personal Security

Wealthy cryptocurrencies holders are turning to privacy Altcoins to hide their wealth and obfuscate transactions they carry out. They are also using the privacy coins to hide the amounts of currency they have in their digital wallets.

Hackers had initially perfected the art of tracking bitcoin holders depending on the transactions they carried out on public ledgers such as Bitcoin and Ethereum. By leveraging the security and privacy of the likes of Zcash, Monero, and PIVX, the holders are now able to keep hackers at bay.

Business Transactions Privacy

Businesses that accept cryptocurrencies payments stand a higher risk of losing their completive edge. One of the biggest disadvantages of cryptocurrency transactions is that they occur on a public ledger that everyone has access to.

That said, clients can track payments that a business receives from time to time and get a clear idea of what other clients are paying, say for the same product or service. What this means is that some clients could demand some discounts if they believe they are overpaying.

With the likes of Monero and Zcash, it is impossible to track financial transactions on a ledger thereby allowing businesses to protect the privacy of their operations.

Averting Tainted Coins Dilemma

Tainted coins are becoming a common phenomenon that has left people with huge valueless holdings that they cannot use anywhere. What happens is that whenever a normal cryptocurrency is used for illegal activities, it is blacklisted.

People with blacklisted coins find it hard to use them given the amount of scrutiny that comes as well the fact that people and exchanges turn to don such transactions. However, that is never a problem with privacy-focused coins. With anonymous coins, it is impossible to identify tainted coins.

Freedom of Use

Channeling cryptocurrency payments to counterculture groups, as well as political dissidents and social activities can at times be a big problem. This is especially the case if authorities or the government is against the same.

Making payments using normal cryptocurrencies is never an option as authorities can track the same and know where the payments came from. However, with anonymous coins, one can make payments to their group or organization of choice without having to worry about anything.

Financial Data Protection

Corporations and governments are in constant pursuit of people’s financial data. Such data is used for all sort of activities key among them being gauging individual’s financial behavior. To counter the threat of such entities gaining access to financial data, people are increasingly turning to privacy-focused Altcoins.

Bitcoin might be less traceable than debit credit cards. However, it does not offer the same level of privacy that comes with privacyAltcoins especially in protecting the transaction trail.

Cryptocurrency Startups Send Rental Rates Skyrocketing In Hong Kong

Hong Kong Soaring Rental Rates

South China Morning Post reports that the startups are paying an average of $1.3 million per month in rent. The rent translates to cost per square foot of $307 for office space. Per standards, it is a hefty rate given that the same amount would cost nearly 5 floors in New York. Hong Kong rental rates also top London’s West End rent rates as well as Beijing’s Finance Street.

Some of the companies undeterred by the hefty rent requirements include cryptocurrency exchange BitMEX. Diginex, which is engaged in the cryptocurrency mining business also appears undeterred by the higher rental rates.  The two exchanges have reportedly signed for more than 72,000 square feet of grade A space in the island.

“Blockchain companies show no signs of slowing their expansion in Hong Kong. These firms are leasing space in top-tier office buildings to attract and retain talent,” said Colliers International associate director of office services, Philip Pang.

Ripple Effect

The soaring rent price triggered by cryptocurrency startups demand is already having a ripple effect in the market. Some tenants such as BNP Paribas and Goldman Sachs Group have had to seek for cheaper office space elsewhere. BNP, for instance, has had to move some of its staff to Swire Properties in a bid to trim expenses. JPMorgan Chace & Co is also feeling brunt having already moved some of its operations to pricier locations.

The rate at which most of these startups are renting prime property is a testament to how confident they remain about the sector. The cryptocurrency marketplace has turned bearish since the start of the year. Cryptocurrencies prices are down by a double-digit percentage and continue to arouse concerns.

Mining operations are not as lucrative as they used to be, on the likes of Bitcoin imploding from record highs of $20,000. That has not dampened investment spirit given the rate at which the startups are renting properties.

Increased Job Openings

Hong Kong has emerged as a prime target for cryptocurrency operations in the wake of mainland China banning such operations. Companies are increasingly shifting their headquarter to the island as others plot IPO’s

Demand for office space in Hong Kong has also skyrocketed as more job openings come into being. Recent studies indicate that blockchain and cryptocurrency jobs are up by more than 50% in Asia. The increase is down to the fact that most startups and established enterprises are focusing on the underlying technology.

Developers with python language skills are some of the most sought after given their ability to come up with blockchain innovations. Blockchain technology has become an area of focus as companies, and people expect it to fuel the next industrial revolution. Investments are on the rise, all geared towards exploring the technology’s use cases in enhancing efficiency in various sectors.

Crypto Exchanges Unable to Prevent massive Thefts by Hackers

Biggest thefts in the world’s economic history have occurred in the cryptocurrency industry. Most notably ones have occurred through fraudulent Initial coin offerings; while others have been hacking of cryptocurrency exchanges. Financial agencies across the globe are approaching exchanges to implement effective measures. Safeguarding customer interests is a major goal for the implemented measures.

A number of thefts have raised doubts about the insurability of investor interest while converting their wealth into cryptocurrency.

The agencies have put emphasis on the clarion call on account of a recent cryptocurrency theft. The theft dubbed as Yomiuri Shimbun saw the loss of ¥7 billion worth of virtual currency. More than a half, or ¥4.5 billion was inclusive of customer investments as assets. Tech Bureau Corp Exchange was the victim of the most recent cryptocurrency hacks. The company headquarters are located at Osaka.

Negligence On Part of Crypto Exchanges

Investors blamed the management of tech bureau for failing to safeguard consumer interests. Frequent System failure resulted in a number of directives to correct on the company’s security measures. The theft follows two orders issued by the financial service agency involving improvement business operations

In July 2018, the Financial Services Agency announced changes in its regulatory structure. The changes were meant to facilitate stronger consumer protection. One of the most notable changes included a shift from the Payment Services Act to the financial instrument and exchange act (FIEFA).FIEFA stands out because it calls for companies to manage consumer securities differently from corporate assets.

The FIEFA implementation opened up to Exchange Traded Funds (ETF), which also makes cryptocurrencies to be treated as financial products. The agency believes aligning itself with existing anti-money laundering policies, could open up opportunities for better protection of investor assets. The agency also launched investigations into a pool of unregistered exchanges and was able to derive a number of shortcomings. It is via these shortcomings, that the agency was able to draw a number of voluntary rules to govern exchange operations. The Agency also made it illegal for anonymity based crypto transactions such as Monero and Zcash.

Tech Bureau’s System Failure

Frequent system failures at Tech Bureau resulted in a multi-million dollar theft. Investment experts believe the exchange should be held responsible for the loss. The Japan Financial Agency had insisted on the importance of reinforcing security management measures. The faulty system, therefore, resulted in the hacking of Tech Bureau’s hot wallet. The wallet is connected to the internet for investors to store virtual currency.

The firm’s system was accessed by an outside hacker on 14th September 2018 for three hours. The concern arose after the theft had taken place lies on the grounds that the system was unable to detect any penetration abnormalities. The agency also noted that the company was only able to detect an abnormality a day later after the theft. Financial experts called for the financial agency to tighten registration and supervision guidelines.

Bitcoin Trading Volumes On the Surge Amidst Argentina Inflation Crisis

Inflation in Argentina is pushing for higher adoption of Bitcoin. Argentinians are purchasing huge amounts of the cryptocurrency. The wide usage could, therefore, hedge against the nation’s unstable economy. Argentina and a number of South American States are witnessing huge purchasing volumes for Bitcoins. Argentina’s central bank recently confirmed its position to diversify into Bitcoin trading.

Mismanagement of monetary policies is a major cause of the country’s recession. Hiking the base interest could solve the situation and probably save the moment. The move could help leverage the collapsing monetary policy.

Argentina’s Financial Crisis

Argentina’s economy constantly seems to be on a boom and recession curve. On occasions, the country has faced a financial crisis while other times it’s a stupendous escalation. The economic situation in Argentina almost seems short-lived, making it almost impossible to come up with a lasting financial solution. The perilous deterioration of the Argentinian Peso results from surging interest rates in the USA and severe drought. The peso dropped by a significant 35% below the US dollar. The estimated inflation rate currently sits at 25%.

By the end of 2017, the country’s economy was doing well with a GDP growth of 3.5%. A monetary vacuum due to low-interest rates resulted in the growth of the GDP. Drought and high-interest rates in the United States led to the economic deterioration in 2018. In a bid to counter the crises, Argentina’s president Mauricio Macri introduced few budget cuts, as well as hiking of Bitcoin’s base interest to 60%.

Bitcoin Trading Patterns In Argentina

Analyst data shows that cryptocurrency performance in South America is facing massive acceptance. Bitcoin markets in Both Argentina and Venezuela perform around $6,556.89 while the prices in the rest of the markets seem to be below $6,000. Rampant currency difficulties face both countries and it seems Bitcoin could be the savior. Coin dance reported the pesos in trading today exceed a valuation of six million. The people’s high purchasing power and the Central Bank’s move to diversify into Bitcoin currency reserves will push for higher Bitcoin prices. These reserves could counter in part the economic mal activity that stems up from the USA’s reprioritization of the federal system.

The weekly trading volumes have escalated to almost $7 million. Inclusive of two trading platforms, Peer to Peer Exchange (P2P) and Localbitcoins. Crypto companies have also established 8,000 BTC pay stations around convenience stores. Buenos Aires Mall confirmed the operation of its first Bitcoin ATM. The ATM is said to be the first of 12 that will be established at the airline mall.

Closing Remarks

Argentina sees BTC as a more convenient and stable currency than the Peso. Argentina is among South America’s wealthiest nations despite a number of huge economic depressions during the 90s and the recent one in 2018. Investors have expressed great doubt in the country’s peso to the extent of converting their monetary wealth into BTC reserves. The nation has also eased BTC regulations in the country. The eased regulations have facilitated the establishment of Crypto processing ATMs in the country.

Terrorists Stay Clear Of Cryptocurrencies But For How Long?

Contrary to perception, cryptocurrencies might as well not be a force for evil. For the longest time, regulators around the world have raised concerns that digital currencies pose a significant danger in facilitating money laundering activities as well as financing terrorist operations.

However, a Senate hearing in the U.S has provided the clearest indication that the same might not be the case. A prepared testimony by Yaya Fanusie, a director for analysis for the Foundation for Defense of Democracies, presented to the Senate paints a clear picture as to why terrorist are struggling to make good use of cryptocurrencies.

According to Mr. Fanusie, a good number of terrorist especially those involved in jihadi activities operate in environments that are not conducive to cryptocurrency use.

“They usually need to purchase goods with cash (which is the most anonymous funding method), often in areas with unreliable technology infrastructure. In addition, cryptocurrencies are based on distributed ledger (blockchain) technology, where users’ pseudonymous transactions are recorded for public viewing. This leaves a trail that unsophisticated users may find difficult to obfuscate,” said Mr. Fanusie.

While the terrorists appear to be struggling to leverage the power of cryptocurrencies, Mr. Fanusie believes that this is not something to be proud of as the technology continues to evolve. Widespread adoption and usage of cryptocurrencies going forward should see a good number of the barriers drop something that the director believes could work to the terrorist advantage.

Cryptocurrencies for Terrorist Activities

For the longest time, there has been growing concerns that the distributed nature of cryptocurrencies which makes it hard track transactions, was working to the advantage of terrorist. Numerous reports have come out claiming that suspicious characters were using the so-called privacy-focused Altcoins to send money that is in return used to finance terrorist operations.

However, it appears cold hard cash remains the driving fuel behind most terrorist activities even as regulators remain skeptical about cryptocurrencies use cases.

Looking forward, it may only be a matter of time before terrorist groups find their way to cryptocurrencies and start leveraging the power of blockchain technology.

Those illicit actors have always moved with speed over time to adopt new technologies if they believe they have the potential to enhance their operations. For example, when paper checks, credit cards as well as PayPal came into being, criminals exploited them to their own advantage.

Even though they are yet to get a good foothold of cryptocurrencies, it does not mean that regulators have to take a back seat and watch. Now is the time for law enforcement agencies as well as intelligence agencies to gain a head start before the terrorists start exploiting digital tokens because of widespread adoption.

The fact that cryptocurrencies could soon become the way for transaction all but calls for increased scrutiny by authorities to ensure they don’t end up fuelling terrorist activities. The FDD has already documented a number of fundraising campaigns run on social media entities associated with terrorist organizations such as Al-Qaida and the Islamic state. While the groups have had limited success, as time goes on the same could change.

Queensland Turns To Cryptocurrency To Boost Tourism Sector

Queensland Cryptocurrency Adoption

TravelbyBit has already unleashed and helped in the installation of digital currency point-of-sale systems in over 200 merchants across the country. As much as 60% of the systems are installed in Queensland making it a financial hub when it comes to cryptocurrencies.

A clear indication that Queensland maintains the lead when it comes to cryptocurrency adoption is epitomized by the fact that Brisbane Airport became the first in the world to accept digital currency payments.

Throughout the international airport, travelers can make purchases using a wide variety of virtual coins ranging from Ethereum (ETH) to Bitcoin (BTC) and Litecoin (LTC). The airport averages more than 50 cryptocurrency transaction a day and growing at an impressive rate. Agnes Water town in the state, on the other hand, is set to become the country’s first digital currency town, amidst a flurry of activities and conferences that seeks to accelerate cryptocurrency adoption.

Brisbane is not the only city that the local startup is focusing on as part of its push to make it easy for people to carry out cryptocurrency transactions. The firm has also set its eyes on other top tourist destinations, as it looks to enhance travel experience with virtual currencies, in the state.


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Credit Cards vs. Cryptocurrencies

The state’s minister for Innovation and Tourism Kate Jones has already echoed the drive reiterating that cryptocurrencies have the potential to drive more tourists into the state. Cryptocurrencies are becoming increasingly popular with tourists in part because they alleviate the need of having to walk around with huge chunks of money. In addition, they remove the risk that comes with international transaction fees as well as conversion rates.

While credit cards are still popular, an increase in fraud cases has forced many people to switch to other forms of money. Having a credit card stolen or lost can lead to huge losses depending on whose hands it ends up in. However, with cryptocurrencies, the loss of a smartphone does not in any way affect once holdings in a digital wallet.

“Privacy with digital currencies is a security feature; I push a fixed amount of money to the business, and that merchant has no ability to pull any more money from my account. Whereas, with credit cards, whoever has my credit card number can pull money from my account again and again and make as many fraudulent transactions as they want online,” said TravelbyBit CEO Caleb Yeoh.

Merchants in Queensland are increasingly adopting cryptocurrencies to avert the risk of transactions getting reversed as is the case with a customer paying with a stolen credit card Low barrier entry points also means businesses in remote areas where there is no credit card services or ATMs can still be able to transact businesses by relying on smartphones. A lack of merchant fees or point of sale rental costs is some of the other benefits.

North Korea Has Tested Out Cryptocurrency Mining According To A Korea Development Bank Report

According to the KDB report, North Korea has been testing out cryptocurrency mining on a small scale. The report further points out that transactions involving such cryptocurrencies cannot be traced easily, thus making it easy for money laundering. A North Korea technology company known as Chosun Expo is reportedly working on an exchange platform for Bitcoin (BTC).

The report from the South Korean-based bank highlights the concerns about the use of cryptocurrencies to facilitate illegal activities such as money laundering, trading weapons and even funding terrorism. These are just some of the concerns that have plagued the cryptocurrency market as digital currencies struggle to gain traction.

“North Korea seems interested in the defining characteristics of cryptocurrencies, including anonymity, difficulties of tracing money and capability,” the report stated.

North Korea’s involvement with cryptocurrencies is not surprising considering that it has poor relationships with neighboring countries and its economy is not doing well. It has particularly lost ties with other countries because of its nuclear missile programs. Cryptocurrencies can thus be used to acquire vital resources that the country needs. KDB claims in its report that North Korea’s efforts of mining Bitcoin between May and June 2017 were futile.


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Who in North Korea is pursuing cryptocurrencies?

Such efforts were most likely carried out by the country’s government since regular civilians do not have access to proper internet services and expensive mining equipment. Some of the individuals who have defected from North Korea revealed in interviews that people don’t have knowledge about cryptocurrencies in the country.

Kim Jong Un has enforced strict rules that prevent North Koreans from accessing the outside world and so it is highly unlikely that random citizens have been involved in cryptocurrency mining. Such interests are therefore more likely to involve people with ties to the Korean government. It was most likely the North Korean hacker group known as Lazarus which tested out cryptocurrency mining. The hacker group has also been other crypto-related matters including a cryptocurrency exchange attack in Asia using the AppleJeus Mac malware. Lazarus became popular in 2014 after hacking Sony Pictures for a film called The Interview, which had a storyline focused on the assassination of Kim Jong Un.

Lazarus is the most likely firm to be involved in matters regarding cryptocurrencies in North Korea but they most likely abandoned that mission because it is resource-intensive. However, their pursuits with cryptocurrencies will most likely continue given that it presents an alternative way of procuring goods and services especially since the local currency is likely losing its value.

It is no surprise that groups such as Lazarus are focusing their efforts on cryptocurrency mining malware because they are highly lucrative. It is therefore likely that North Korea will continue to show interest in cryptocurrencies. It is also not clear whether Lazarus is responsible for some of the cryptocurrency exchange hacks in South Korea.

Invest In Blockchain Study: 60% Of Crypto Projects Have No Working Product

A new study carried out by Invest in a Blockchain, a startup founded in 2017, continues to elicit mixed reactions on suggesting that as many as over 60% of top 100 cryptocurrencies have no working product. According to the study, only 40 of the top 100 cryptocurrencies appear to provide real value to the public.

Invest In Blockchain Study

Some of the cryptocurrencies that met the mark include Bitcoin, Ethereum, Bitcoin Cash, Ripple, Augur, Nano, Monero, and Zcash among others. The biggest casualty of the study was Dash, which missed the mark even on its fork Pivx joining the exclusive list.

The study continues to elicit mixed reactions in part because it is still unclear whether the criteria used to rate the projects is the acceptable standard. However, authors of the study insist certain standards were applied across the board to come up with the final determination.

A working product according to Invest in Blockchain is one that is active and available to the public. It should also have a mainnet that in addition to being active has been upgraded many at times and is well above version 1.0. Businesses, as well as people, should also be using the underlying product be it a DApp, smart contract or digital currency on a daily basis.

According to the Invest in Blockchain, just taking into account the fact that a project is open source and built on top of blockchain does not meet the threshold in affirming a working product. Some cryptocurrencies claim to have a working product just because it is in the public domain yet no one has ever used it.


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Crypto Scam and Fraudulent Projects

The fact that projects with working products have also had to contend with a string of vulnerabilities all but shows it is not easy to have a working product in the sector. The Verge Network is one such project that was forced to fork its network after a hacker exploited’ some loopholes and walked away with tokens valued at about $1.7 million.

Bancor has come under pressure following a hacking incidence that resulted in the loss of Ethereum tokens worth $12.5 million

While the findings come as a shocker, they come at a time of growing concerns about fraudulent projects and scams in the cryptocurrency space. Recent studies have shown that as many as 80% of ICO projects conducted last year have either collapsed or face an uncertain future given that they lack any tangible product to cling on to.

“If you haven’t run into at least a handful of people who are cynical about the state of the blockchain industry and think it’s mostly scams and vaporware, well… you probably haven’t been into crypto for very long,” John Bardinelli and Daniel Frumkin wrote in the study.

Turkish Residents Turn To Cryptocurrency As U.S Triggers ‘Economic War’

Steel & Aluminum Tariff Raise

Turkey finds itself in a ferocious economic meltdown on President Donald Trump approving a 20% tariff increase on the country’s Aluminum export and a 50% tariff increase on Steel. The turmoil has increased the appeal of most cryptocurrencies with Bitcoin (BTC) adoption on the rise.

The standoff between the two countries stems on Turkey refusing to budge to pressure and release evangelical pastor Andrew Brunson on trial for terrorism charges. Turkey opting to purchase Russian defense system also appears to have exacerbated the tensions.

“If the U.S. is turning its back on us…choosing a pastor instead, sorry…we continue our path with decisive steps. This treatment by America of its strategic partner has annoyed us, it has upset us,” said President Tayyip Erdogan.

A 30% plunge of the country’s currency Lira has forced Turkey’s residents to turn to cryptocurrencies for economic relief. The country’s cryptocurrency exchanges have started experiencing a spike in trading volume a trend expected to gain momentum as the citizens lose confidence in fiat currencies. The Lira alone is down by more than 40% for the year.

While trading volume remains low compared to that registered in other countries, the same could change as the Lira continues to lose value against the majors. Turkish Lira made up 0.07% of all Bitcoin trades in response to the tariff standoff; more than double the average volume recorded by local exchanges.


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Increased Crypto Adoption

Cryptocurrencies exchanges are increasingly cropping up to take advantage of increased demand for cryptocurrencies services. One crypto user by the pseudonym Bitmov has been using Bitcoin to buy digital ads abroad and now reports an increase in interest from friends and family looking to purchase digital currencies.

Increased cryptocurrency adoption also comes at a time of waning confidence on the country’s financial system. In recent years, citizens have questioned the country’s economic policies which they fear are not doing much to avert the effects of the severe debt crisis.

Turkish residents appear to be following on the footsteps of other countries that have turned to cryptocurrencies to avoid economic sanctions triggered by a standoff with the U.S. Venezuelans have turned to cryptocurrencies on the country’s currency diving on a standoff with the U.S. Iran is another nation that is considering launching its own cryptocurrency as a way of boosting the economy following economic sanctions from the U.S.

Concerned by the effects of the economic war with the U.S Turkish lawmakers are reportedly considering the creation of a national cryptocurrency.

While a good move, local exchanges remain skeptical about its potential impact is given Bitcoin’s popularity. The exchanges fear the government following Iran footsteps and restricting access to Bitcoin exchanges as a way of raising the nations’ official cryptocurrency profile.

The Difference Between Fiat Money and Cryptocurrencies

The fact that some people, nowadays, transact through electronic money continues to affirm suggestions that cryptocurrencies could be the currencies of the future. However, it will take some time before they find their way into the mainstream sector, given the strong opposition from regulators around the world.

Even as the world moves towards a cashless society, very few people have an idea of how different cryptocurrencies are from fiat currencies.

What Is Fiat Money?

Fiat Money is a kind of currency, issued by the government and regulated by a central authority such as a central bank. Such currencies act like legal tender and are not necessarily backed by a physical commodity. Instead, it is based on the credit of the economy.

Fiat currencies such as the US Dollar, Pound or Euro derive their value from the forces of supply and demand in the market. Such currencies are always at risk of becoming worthless due to hyperinflation as they are not linked to any physical reserves such as commodities.

Fiat currency first came into being at around 1000 AD in China before spreading to other parts of the world. Initially, currencies were based on physical commodities such as gold. It is only in the 20th century that President Richard Nixon stopped the conversion of U.S dollar into gold.

Advantages of Fiat Money

Fiat Money has remained legal tender in most countries in part because they are highly stable and controlled. Unlike other forms of money, such as cryptocurrencies and commodity-based currencies, fiat currencies are relatively stable. The stability allows regulators and governments to navigate the economy against recession and inflation.

Stability also allows fiat money to act as a means of storing value and facilitating exchange. It can also be used to provide a numerical account. Greater control also allows central banks to manage various economic variables such as liquidity, interest rates and credit supply key to ensuring a robust, stable economy.

Disadvantages of Fiat Money

Though Fiat Money is considered a stable currency, yet that is not always the case. Economic recessions over the years have highlighted some of the deficiencies associated with Fiat money. The fact that a central bank’s greater control at times does little to stop inflation or recession has led most people to believe that gold could be a much stable currency given its unlimited supply. The notion of central banks control over the economy and the constant increase in global prices create the need for cryptocurrencies.

What is a cryptocurrency?

A cryptocurrency is a form of digital or virtual currency that can work as a medium of exchange. Being virtual in nature, they use cryptography technology to process, secure and verify transactions.

Unlike Fiat currencies, cryptocurrencies are not controlled by any central authority such as a central bank. Instead, they are limited entries in a database such as a blockchain that no one can change or manipulate, unless certain conditions are met.

Cryptocurrencies came into being as a side product of Satoshi Nakamoto, the brainchild behind Bitcoin cryptocurrency. Nakamoto did not intend to develop a currency but a peer-to-peer electronic cash system for facilitating transactions without any central oversight.

The decentralization aspect of the network means there is no central server where transactions are hosted or controlling authority. In a decentralized network like Bitcoin, every transaction to have ever happened is displayed for everyone to see. Each transaction file also consists of senders and recipients public keys.

Cryptocurrencies Advantages

Cryptocurrencies are available on a click of a button, all over the world. Anyone that can make an online transfer can also acquire and own a digital coin of choice. Although the process is still complicated, in the futures, it will be easier to transact and own cryptocurrencies.

Fast settlement times are another attribute that continues to accelerate widespread adoption of virtual currencies. Unlike other electronic cash settlement systems that take days to process transactions, cryptocurrencies enable instant settlements.

Lower transaction fees have seen cryptocurrencies emerge as a preferred means of sending money across borders. Transferring money using other bank gateways can be quite expensive given the number of fees charged along the way.

Privacy is another aspect that has made cryptocurrency desirable as users don’t have to share their identity to be able to complete transactions. There are altcoins which the main functions are to maintain the privacy of people behind transactions.

Disadvantages of Cryptocurrencies

Cryptocurrencies can be quite difficult to understand – one of the reasons why some countries and regulators continue to shun them. A lack of knowledge on how to use them is another headwind that continues to clobber digital currencies prospects and sentiments.

The fact that it is not possible to reverse a transaction once it is made is another headache that has forced most people to shun cryptocurrencies. If a wrong a transaction is made the only thing one can do is ask for a reversal from the recipient. There is nothing one can do on recipients of a wrong transaction turning down a request for a refund

Volatility is by far the biggest disadvantage that has clobbered cryptocurrencies sentiments. Volatility goes a long way in affecting the value of a coin, which can be difficult to comprehend or contend with.


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Differences Between Fiat Money and Cryptocurrencies

While both fiat money and cryptocurrencies can be used as a means of payment, there are some differences.

Legality

Governments issue fiat currencies, which are in return regulated by the central bank. Fiat money is deemed legal tender in that it is often the official means of finalizing transactions. Governments control fiat money supply and issue policies from time to time that affects their value.

Cryptocurrencies, on the other hand, are merely digital assets that act as a medium of exchange that governments have no control over. The decentralization aspect means no central body can control or influence their value.

Some countries have banned cryptocurrencies on concerns that some of them are being used to fuel illegal activities such as terrorism and money laundering.

Tangibility

It is not possible to have a physical feel of cryptocurrencies as they operate online as virtual coins. Fiat currencies, on the other hand, have a physical aspect as they can exist as coins and notes thus possible to have a physical feel. Fiat money physical aspect at times does present a lot of challenges as it can be a nuisance to move around with vast chunks of money.

Exchange Aspect

Cryptocurrencies exist in digital form as they are created by computers and operate as private pieces of code. The means of exchange is thus purely digital. In contrast, fiat money can exist in both digital and physical form. Electronic payment services allow people to transfer fiat money digitally. In addition, people can transact with one another and exchange money physically.

Supply

A major difference between fiat money and cryptocurrency has to do with supply. Fiat money has an unlimited supply which means central authorities have no cap to the extent in which they can produce money.

Most cryptocurrencies have a cap when it comes to supply, which means there is a set amount of coins that will ever be in supply.  For example, the total number of Bitcoin coins that will ever be in supply is capped at 21 million.

With fiat money, it is impossible to tell the amount of money in circulation at any given time, but with cryptocurrencies, it is possible.

Storage

Cryptocurrencies virtual aspect means they can only exist online thereby stored in digital wallets commonly referred to as cryptocurrency wallets. While most digital wallets claim to offer secure storage, some of them have been hacked resulting in people losing a substantial amount of holdings.

The versatility of fiat money, on the other hand, means it can be stored in various forms. For instance, there are payment providers such as PayPal that allow people to store fiat money in digital form. Banks also do act as custodian of hard currencies.

Bottom Line

Cryptocurrencies and fiat money come with attributes that make them stand out as a means of legal tender regardless of jurisdiction. However, they also come with cons that have seen them continue to divide opinion around the world.

While there are many advantages of cryptocurrencies over fiat money, it seems that cryptocurrencies are not yet mature to replace the current standard payment method. It is a matter of time and not necessarily will be in the form of Bitcoin, Ethereum or any other cryptocurrency. The crypto market will most likely evolve to create a positive product that might change the current money system.

The Turbulent Season For Bitcoin May Be Over According To Google Trends

You may be wondering what this means exactly for the cryptocurrency space. Does it mean that investors should start buying Bitcoin and expect the price to surge again? That might not exactly be the case. An author called Clem Chambers recently revealed in a Forbes post that he collected some interesting data about Bitcoin from Google Trends. The statistics revealed that the cryptocurrency has significantly higher searches than other top-ranking searches such as President Trump and pop star Taylor Swift.

bitcoin

The interest in Bitcoin started surging right around December last year when the price of Bitcoin was experiencing a strong bullish trend that saw its price go beyond $19,000. However, the Bitcoin data from Google Trends also revealed that there were fewer searches on Bitcoin around February and March when the cryptocurrency market suffered a long bearish market.

“This suggests to me that stocks are driven by fear and crypto by greed, a tantalizing idea in its own right,” stated Chambers.

Chambers could be right considering that the Bitcoin price increases in the last four months have also happened at the same time that interest in the cryptocurrency peaks based on search results. This is the opposite of how the stock market behaves where interest in stocks goes down as prices go up and interest increases as prices go down.

He believes that Google statistics might be an indicator that the worst times for Bitcoin are finally over. This suggests that the cryptocurrency might not experience the extreme volatility that was seen in the market over the past one year. This could be good news for Bitcoin traders because it means the market is becoming more stable, thus easier to trade.


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Bitcoin’s Price Might Still Continue to Tank

The claims made by chambers are however not an exact science. There are still a lot of uncertainties in the cryptocurrency market and there is no telling whether another strong bear or bull market will occur. Meanwhile, the price of Bitcoin could still continue to go down and it might even go below $5,000.

As far as the worst being over, that is relative, especially for investors. For example, there are those that bought Bitcoin when the price was already above $10,000 especially with the many prophecies about the cryptocurrency. Things are not looking too good for them because Bitcoin’s price has remained below $10,000 for quite some time. Some of the predictions claimed that the price would go above $40,000 and some even predicting more than $100,000.

Meanwhile, a lot of traders are still interested in the cryptocurrency market and although cryptocurrencies such as Bitcoin have slowed down over the past few months, a lot of people are still hopeful about another massive surge.

This Is How Stellar Lumens Made It Into The List Of Top-Ranked Cryptocurrencies

In order to fully understand how Stellar Lumens came to be, it is important to understand the crypto journey of Jed McCaleb who founded the Stellar Development Foundation. It all started in 2011 when McCaleb sold the Mt. Gox exchange and decided to focus on creating a new cryptocurrency.

McCaleb came up with the “ripple protocol” whose intention was to come up with a cryptocurrency that could be used for transaction purposes on the blockchain network. This led to the formation of Ripple and its digital token also called Ripple (XRP). However, McCaleb’s role at Ripple came to an end in 2013 when he decided to pursue other ventures. He used the knowledge and skills earned during his tenure at Ripple to spearhead the creation of the Stellar Development Foundation which created the XLM and the Stellar Consensus Protocol.

Securing strategic partnerships

Over the years, Stellar has worked on numerous developments that have helped it to secure a lead over other digital currencies such as Tether (USDT), IOTA (IOT) and Litecoin (LTC). Stellar has engaged in some of the key partnerships that as part of its plan to facilitate cross-border payments that can be used by financial institutions. It particularly appeals to the financial sector because it is a solution that can deliver cross-border payments at significantly lower costs and also at a faster rate compared to old methods.

Its unique approach and appeal to cross-border payments is one of the reasons why Stellar Lumens has gained so much popularity and also achieved significant growth. One of Stellar’s latest key partnerships includes the recently announced deal with an international money transfer firm called TransferTo. As per the deal, Stellar will work towards taking international payments to a whole new level through secure, real-time and low-cost transfers.

Both TransferTo and Stellar have strong networks that consist of financial institutions, affiliate partners and digital service providers such as payment gateways. The partnership will work towards making money transfer operations available in more than 70 global locations.

Less than a month ago, Coinbase which is one of the leading cryptocurrency exchanges announced that it plans to include Stellar Lumens to its trading platform. This is great news because it means that the cryptocurrency will become more accessible while also earning more trust in the crypto market and this could encourage more adoption. Another development recently announced development was announced revealing that Stellar’s platform has been chosen as the go-to platform for IBM’s stable coin which is currently in development. This is also expected to boost Stellar’s credibility as an institution.

Sharia compliance

Stellar also announced on July 17 that it secured another first after it became the first decentralized ledger technology platform to achieve Sharia Compliance for asset tokenization and digital currency payments. The review for the certification was carried out by the Central Bank of Bahrain’s licensed Shariyah Review Bureau (SRB).

The Separation of Ripple and XRP: Why it Happened? What Does it Mean and What are the Differences?

Contrary to perception, Ripple and XRP are two different and totally independent entities. However, most people, for the longest time have used ‘Ripple’ to refer to the underlying cryptocurrency XRP. While it has been okay, things could soon change as the Securities and Exchange Commission pushes for a clear distinction between the two.

A separation between XRP and Ripple is set to come into effect, a move that will allow both retail and institutional investors to have a clear idea of what the two are and what they stand for.

What Is Ripple?

Ripple is a San Francisco startup company, and the majority holder of cryptocurrency XRP. The company develops software that banks use to facilitate fast, global financial transactions powered by the network’s underlying cryptocurrency XRP. Its platform is one of the most successive, having been used by large financial institutions to enable cross-border payments.

Founded in 2012, the American technology company was originally named OpenCoin before being renamed Ripple Labs in 2015. The company’s main objective is to provide a frictionless experience for sending money using the power of the blockchain.

Financial institutions are increasingly joining the company’s growing global network also called RippleNet to process customer payments reliably, instantaneously and cost-effectively from anywhere in the world.

Ripple has offices in San Francisco, New York, London, Sydney, India, Singapore, and Luxemburg. The company’s value comes from being the creator and majority holder of digital currency XRP. Ripple owns about 60 billion of the 100 billion XRP tokens that will ever be in circulation.

The company placed about 55 billion of the XRP coins it owns in a secured escrow account from which it can only release 1 billion every month. Ripple has never come close to releasing 1 billion tokens to the market as part of an effort that seeks to prevent over flooding of the market that would significantly affect the value of the altcoin

Ripple core product away from its XRP holdings is xCurrent, a network used by banks as a messaging solution for settling cross-border payments in real time.  The company also owns xRapid, a solution that allows financial institutions to convert fiat currencies to XRP quickly and cheaply.

What is XRP?

XRP is an independent digital currency that is used to facilitate transactions on the Ripple Network. The technology behind the cryptocurrency is called XRP Ledger and acts as the blockchain in which the XRP token reside. The ledger is community-based which means only users can decide whether it succeeds or fails.

The virtual currency acts like a bridge between different fiat currencies as well as a source of liquidity. The first version of the cryptocurrency dates back to 2004 as work of web developer Ryan Fugger. However, the protocol in its current form began in 2012, immediately after OpenCoin now Ripple Labs came into being.

Developed as a currency for powering the Ripple Network, XRP allows people to send money digitally. The cryptocurrency came into being as an upgrade of Bitcoin with the aim of solving issues of high transaction costs and slow transaction speeds associated with the popular digital coin. XRP can process transactions in as little as 4 seconds compared to Bitcoin which can take minutes. It can also handle up to 1,500 transactions per second.

Ripple Labs helped develop XRP, resulting in the creation of 100 billion XRP tokens that are used to run and power the Ripple Network concept. While the people behind XRP and Ripple are the same, the two operate independently. The fact that the network is open source and XRP can be bought, ensures the independence of the two form each other.

Ripple Labs owns 60 billion XRP coins of the 100 Billion produced at inception. The remaining coins are traded freely in the market. Despite being the majority holder, Ripple only utilizes the XRP tokens in one of its product, xRapid. The product was developed with the aim of providing a form of liquidity to XRP tokens while acting as a bridge currency for cross-border payments

The success of Ripple, the company, is not in any way tied to the value of XRP the currencies.

Differences between Ripple and XRP

Ripple  Vs. XRP  Differences
RIPPLE XRP
What is It
Ripple is a privately owned company  based in San Francisco in the U.S with Offices in New York London, Sydney, India Singapore  and Luxembourg XRP is an independent virtual currency that acts as an underlying currency powering for powering Ripple’s network
AIM
Ripple seeks to develop and provide solutions for sending money with ease, and at low costs all over the world XRP seeks to act as a bridge currency  for facilitating cross-border payments  between different fiat currencies
Relationship
Ripple uses XRP in its xRapid products to provide banks and other financial institutions with access to on-demand liquidity.

Ripple does not in any way own or control the technology behind the digital currency XRP

XRP being an open source cryptocurrency can be used by anyone including Ripple. That said, it is neither owned or controlled by any entity or person as it operates independently
Control
Ripple Labs are owned by the board,  founders and employers who helped start the company in 2012 Being a decentralized cryptocurrency XRP is owned by anyone who uses XRP and the XRP Ledger.
Usage
Ripple develops and offers products that are used in the financial industry, mostly banks Anyone can use XRP for a variety of purposes, i.e. for making payments. Developers can also build on the XRP Ledger

Ripple-XRP Separation

Ripple control of a good chunk of XRP, while not a bad thing, has been the subject of increased scrutiny and criticism in the recent past. The fact that most people are attracted to cryptocurrencies because of the promise of decentralization has not gone well with some. With Ripple Labs controlling a good chunk of XRP coins, there is fear that the firm wields too much power making it a central authority in a project that is supposed to be decentralized in all aspects.

Ripple, the company, has in the recent past gone on a rebranding drive, trying to emphasize its relationship with the digital asset XRP. The clarification comes at a time of mounting regulatory pressure as regulators call for more clarity on how the two are related.

The unveiling of a new logo for XRP token marks the first step in Ripple moving to distinguish itself from the token. The new logo emphasizes the need for XRP operating independently.  However, the two will still maintain close ties.


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Ripple-XRP Separation Consequences

Separation is a good thing in that it will lead to a clear distinction between the two entities, something that regulators have been calling for. Ripple is currently entangled in three legal cases all of which have been thrown into disarray on regulators and authorities struggling to understand how the two are different and independent from each other.

Ripple and its products led by xCurrent and xRapid won’t be affected in any way by the separation. xCurrent does not use XRP. xRapid on the other hand only uses the cryptocurrency as an exchange mechanism and not for storage of value.

Separating XRP from Ripple should also help alleviate the centralization concerns that many people have come to question. Ripple has already made it clear that even if it holds a majority of XRP coins, it does not mean that it controls it or have an impact on its market cap. Talk of separation should thus help alleviate the concerns allowing market participants to treat XRP just like any other decentralized cryptocurrency.

While there have been concerns that separation could see Ripple dumping a lot of the XRP coins, it currently owns in the market, that won’t be the case. The people at Ripple Labs are smart enough to understand that the success of XRP as a cryptocurrency would be to their benefit thus won’t do anything that would hurt its market value.

There are a number of institutional investors who have been’ skeptical about investments in XRP, on concerns of its association with Ripple Labs. Separation should clear the wave of uncertainty, especially on the three legal cases in court, allowing investors to be in a position to value the token for investment purposes.

XRP has seen its value disintegrate in the recent past on its sentiments in the market taking a hit as a result of regulators alleging that it was issued as an unlicensed security Offering. Breakaway from Ripple could see the matter put to rest on regulators having a clear understanding of what the altcoin is all about.  The coin price should thus receive a boost on the regulatory pressures easing off.

Bottom Line

Ripple is one of the most successful payments and exchange platform that will have a big impact on financial transactions in the future. XRP on the other hand, the underlying digital currency powering the network, should see its value continue to tick higher as more financial institutions use the Ripple network to facilitate cross-border transactions.

Cryptocurrencies Ponzi Schemes On The Rise In Russia

The country’s central bank has already highlighted dozens of fraudulent schemes that masqueraded as legit investment projects in the first half of the year and in the process defrauded people millions of money.

Cryptocurrency Ponzi Schemes

Most of the fraudsters operate online, whereby they appear to have found a way to draw people’s attention with enticing offers that are hard to resist. The operations mostly target people in central regions and large cities where cryptocurrencies buzz is on another level.

The fraudsters are also paying close attention to people with high incomes and looking for quick returns on investments. While the average investment in regular Ponzi schemes averages between 30,000 RUB and 50,000 RUB, it is emerging that crypto Ponzi schemes are attracting investments of between 80,000 RUB and 100,000 RUB.

Even though potential investors are becoming increasingly cautious and careful when choosing their next investments, the same has not prevented the fraudsters from finding their way and corning people.

Since the start of the year, legal entities and individuals have lost more than $4.3 million in illegal and fraudulent cryptocurrency related investments. Concerned with the rate at which such projects are sprouting up, the Russian Association of Cryptocurrencies and Blockchain RACIB has started listing unfair and potential ICO scam projects

The association believes the list will help potential investors find trustworthy investment opportunities in the burgeoning sector.

“The list of trusted companies will allow Russian and foreign market participants to base their work on trusted organizations and minimize the risk of fraud in the creation and development of Russian or foreign business in the field of mining, trading with cryptocurrency, blockchain technology, and ICO.” RACIB in a statement.

Call For More Awareness

The association has also created a whitelist that includes all the firms involved in the field of crypto mining as well as investment, marketing, and Initial Coin offerings. The whitelist consists of all organizations that have undergone verification to ensure what they are offering is legit.

Amidst the frenzy of activities in trying to curb fraudulent crypto and ICO projects, it is emerging that what the country needs is a well spelled out legal framework. President Vladimir Putin is on record ordering the regulation of cryptocurrencies and ICOs. Amidst the call, the legislation process appears to be dragging, a move that has left scammers to operate with ease to the disadvantage of most investors.

According to Plasma Pay payments system founder, Ilia Maximenko, people need to carry out deep pre-investment due diligence in order to stay clear of fraudulent schemes in the cryptocurrency space. When it comes to investing in ICO projects, Maximenko advice on investing in projects that already have a working product and only need additional funds to improve or accelerate development.

“If an ICO team have one developer per nine marketing managers, then it is clear that they want to sell it in the first place,” Maximenko said.

What To Expect Ahead of A Busy Earnings Week?

Major U.S Benchmark indices finished the week on the red as investors reacted to mixed earnings reports. Alphabet Inc. (NASDAQ: GOOGL) and Amazon.com, Inc. (NASDAQ: AMZN) led the foray in beating earnings estimates as Facebook, Inc. (NASDAQ: FB) Imploded on missing estimates and providing guidance that fell short of expectations.

It yet again promises to be a busy week as a string of high profile companies is expected to post their quarterly earnings results.

Earnings Report expectations

Apple Inc. (NASDAQ: AAPL)

In the wake of Google and Amazon beating estimates, focus this week shifts towards Apple Inc. (NASDAQ: AAPL) given the amount of market cap it commands. The iPhone maker is to post its second earnings report after market close on July 31, 2018.  Analysts expect the company to post revenue of $61.14 billion representing a 15% year-over-year increase. Earnings per share, on the other hand, are projected at $2.16 a share.

Wall Street will also pay close attention to the number of iPhones the company sold in the second quarter, after a disappointing first quarter whereby unit sales rose by only 1.5 million. In the March quarter, service revenue rose 31% to $9.19 billion thereby helping the company beat sales and EPS expectations.

For the June quarter, Wall Street expects service revenue to come in at $9.21 billion representing a 21% increase. Investors will also pay close attention to other products sales made up of headphones, Apple TV Set-tops, as well as Apple Watch. Expectations are that the company will report a 34% increase in revenues in this segment at $3.68 billion.

Tesla Inc. (NASDAQ: TSLA)

Tesla Inc. (NASDAQ: TSLA) needs to post stellar second-quarter earnings report to avert a further implosion of the stock. After initially rising to highs of $373 a share, the stock has come down tumbling to below the $300 share mark.

Tesla reports on August 1, 2018, having achieved a significant milestone in the production of 5,000 Model 3s, a week. However, the company is expected to report a net loss of $3.49 a share. Investors will focus their attention on the number of Model 3 units the company delivered in the quarter.

The expectation is high that the company did deliver 10,000 more units in Q2 compared to Q1. Revenue, on the other hand, is expected at $4 billion on the sale of the additional cars. Attention will also be on the company’s expenditure, a headwind that has clobbered the company for years preventing it from turning in a profit.

Q3 Guidance will also have to come overboard to prevent further slide of the stock. Given that the company has hit 5,000 a week production milestone investors expect the company to provide a pathway to profitability in Q3.

Caterpillar Inc. (NYSE: CAT)

Caterpillar Inc. (NYSE: CAT) will report its earnings report on July 30, 2018, before the earnings bell. After delivering a 120% year-over-year improvement in earnings in Q1, expectations are high that the trajectory continued in Q2.  Investors expect the company to report a 22% increase in total sales, projected at $13.8 billion.

Earnings per share, on the other hand, should tickle in at $2.66 a share, representing a 79% year-over-year increase. The earnings beat is what Caterpillar needs if the stock is to bounce back after underperforming the market in the first half of the year.

Loews Corporation (NYSE: L)

Just like Caterpillar, Loews Corporation (NYSE: L) is scheduled to report on July 30, 2018, before the market opens. In Q1, the company reported a 14% surprise earnings beat. Expectations are high that the company beat estimates in Q2 on the strong performance of its CAN financials and Loews Hotels units Consensus estimates indicate the company could post earnings of 0.73 cents a share representing 3.9% year-over-year decrease.

AK Steel Holding Corporation (NYSE: AKS)

AK Steel Holding Corporation (NYSE: AKS) will report earnings on July 30, 2018, with expectations high that the company will beat estimates. The stock has already broken out of a critical resistance level in the wake of other steel companies reporting stellar quarterly financial results.

The consensus forecast for the quarter is that the company will report earnings of 23 cents a share, an increase from 19 cents a share reported a year earlier. Steel stocks are expected to continue powering high, the sector has emerged as a bright spot in the economy.

Procter & Gamble Co (NYSE: PG)

The owner of blockbuster brands like Gillett Razors and Pampers Diapers, Procter & Gamble Co (NYSE: PG) is to report its fourth-quarter and full year financial results on July 31, 2018. At the start of the year, the company forecasted organic sales gains of 2.5% up from an initial estimate of 2%.

For the current quarter, Wall Street expects the company to report revenues of $16.55 billion. Full-year sales, on the other hand, are expected at $66.87 billion. Investors will also want to hear what the company is doing as part of its cost-cutting drive. Cost cuts are expected to allow the company to venture into other growth areas.

Pfizer Inc. (NYSE: PFE)

Pharmaceutical giant Pfizer Inc. (NYSE: PFE) is to report its second-quarter earnings report before market open on July 31, 2018. The focus will be on whether the company maintained the positive earning streak in the quarter, after a positive earnings surprise of 4.05% in Q1.

Consensus estimates indicate the company could report EPS of $0.74 a share on revenues of $13.31 billion.

DowDuPont Inc. (NYSE: DWDP)

DowDuPont Inc. (NYSE: DWDP) is to report its recent quarterly earnings on August 2, 2018, before market open. Last year same quarter, the company reported earnings per share of $1.12, beating analyst’s expectations of $1.1 share. For the current quarter, investors expect the company to post EPS of $1.3 a share. Revenues, on the other hand, should come in at $23.6 billion.

Baidu Inc. (ADR) (NASDAQ: BIDU)

Investor’s sentiments are high on Chinese internet giant Baidu Inc. (ADR) (NASDAQ: BIDU) posting impressive quarterly results after the market close on July 31, 2018. Consensus estimates indicate the company could post a 30.2% year over year increase in sales that could come in at $4.01 billion. For the full year, the search giant is expected to post sales of $16.09 billion. Analysts expect the company to issue a sales guidance of $19.46 billion for next year.

Sprint Corp (NYSE: S)

Sprint Corp (NYSE: S) is to report its Q1 financial results on July 30, 2018. Wall Street expects the company to report earnings per share of $0.01 a share compared to $0.05 reported last year. Total revenue is poised to decline 0.7% year over year to $8.1 billion.

Teva Pharmaceutical Industries Ltd (ADR) ADR (NYSE: TEVA)

Teva Pharmaceutical Industries Ltd (ADR) ADR (NYSE: TEVA) is to report on its recent quarterly earnings report before the market opens on August 2nd, 2018. The expectation is high that the company will post sales of $4.75 billion down from $5.69 billion reported last year. Earnings per share, on the other hand, should come in at $0.67 a share.

Shake Shack Inc. (NYSE: SHAK)

Shake Shack Inc. (NYSE: SHAK) is expected to post sales of $110.20 million for the recent quarter after market close on August 2, 2018. Earnings per share are expected at $0.17 a share. The company is also expected to maintain full-year sales estimates of $451.32 million.

Kraft Heinz Co (NASDAQ: KHC)

Kraft Heinz Co (NASDAQ: KHC) will report earnings before markets open on August 3, 2018. Investors expect the company to post EPS of $0.92 a share up from $0.89 a share reported in the previous quarter. Revenue, on the other hand, is expected at $6.59 billion.