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German Bank Boosts Bitcoin — Negative Interest Rates Hit Every Account

Volksbank Raiffeisenbank Fürstenfeldbruck has become the country’s first bank to charge every client 0.5% of their savings — for the privilege of storing fiat.

Bitcoin-cautious Germany has seen its first bank demand that ordinary savers pay it to hold their money — even as little as €1.

According to multiple local press outlets including the Süddeutsche Zeitung on Nov. 19, the Volksbank Raiffeisenbank Fürstenfeldbruck (VRF) in Northern Bavaria is now charging 0.5% negative interest rates on the smallest deposits.

Bank on negative interest rates: “We had to”

“We had to do it,” the publication quoted the bank’s management as saying. 

The reason, they said, was the cost of “parking” money at the European Central Bank (ECB). 

In Germany, negative interest rates previously impacted only deposits above €100,000, which constituted an interest-free allowance. VRF’s move makes it the first lender in the country to target savings below that level.

“Recently, more clients have been coming to us from other banks where they’ve already used up their allowance,” the management continued.

Germany could “open floodgates” for banks

As Cointelegraph reported, negative interest rates are beginning to form part of the ECB’s monetary policy. The phenomenon ultimately means that some portion of savers must pay banks to hold their money.

Critics have warned that such moves would incentivize the public to move into cash, while alternatives such as Bitcoin (BTC) also stand to benefit. 

By contrast, Bitcoin does not suffer from the inflationary meddling in its supply and associated destruction of its value, meaning HODLers would never be forced to pay to own it.

Last month, entrepreneur Cameron Winklevoss noted the cryptocurrency was the ideal method of escaping negative rates on bonds, which account for investments worth $17 trillion. 

Speaking to Süddeutsche Zeitung meanwhile, the CEO of a German consumer portal warned that VRF could “open the floodgates.”

“We’re seeing a lot of movement on the market at present,” Oliver Maier said. He noted that the ECB’s decision to cut its benchmark interest rate for banks to -0.5% from -0.4% was the cause of the upset.

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Binance Solidifies Indian Presence with WazirX Acquisition

Binance Moves into India

Global Bitcoin exchange behemoth, Binance, has set up a fiat on-ramp for Indian crypto by acquiring WazirX — a Mumbai-based cryptocurrency exchange service.


WazirX Now Binance’s Indian Bitcoin Exchange Partner

According to ET, Binance acquired WazirX in a deal worth between $5 million and $10 million. The WazirX acquisition sees the Bitcoin exchange giant establish a significant presence in India.

WazirX will act as Binance’s Indian partner with CEO Nischal Shetty continuing to run the platform in the country. The deal will reportedly see WazirX’s P2P market integrated into the broader Binance Fiat Gateway service before the end of Q1 2020.

According to the terms of the deal, Indian crypto traders will now be able to buy bitcoin straight from the WazirX P2P platform. The move is also part of Binance’s drive to open up crypto trading to more fiat currencies around the world.

Commenting on the move, Binance CEO Changpeng Zhao remarked:

India will be one of our first forays into stimulating financial growth and access in developing nations beyond the country. We will be continuing to work towards furthering crypto adoption, lowering the barrier to entry. One of the main goals is to add more fiat currencies to Binance and work with local partners to add as many fiat-to-crypto pairs as possible.

Speaking to Australian crypto news platform Micky, Zhao revealed that Binance is looking to launch a branch in Australia before the end of 2020. If achieved, the move will see Binance’s Australian operations grow from a limited retail service to a full-fledged crypto exchange platform.

Major Exchanges Eyeing Indian Market

Binance’s Indian move represents a growing trend among major Bitcoin exchanges looking to establish a presence in the country. As previously reported by Bitcoinist, major South Korea Bitcoin exchange, Bithumb is also on the hunt for a local Indian exchange partner.

This expansion into India comes even as authorities in the country remain firmly against crypto adoption. Back in April 2018, the RBI — India’s central bank, banned commercial banks from facilitating crypto-related transactions.

Earlier in the year, an inter-ministerial committee also recommended a blanket ban on crypto trading as well as fines and prison sentences for defaulters of the proposed law. Both Zhao and Shetty have also been vocal critics of the efforts by authorities in the country to stifle crypto commerce.

Will India’s government move ahead with plans to ban crypto trading in the country? Let us know in the comments below.


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The post Binance Solidifies Indian Presence with WazirX Acquisition appeared first on Bitcoinist.com.

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Ethereum Block Rewards Reduced by 1000 ETH as Block Times Rise

ethereum eth block rewards

The Ethereum network is now producing less ETH per day. Block rewards have reduced from around 13,500 coins to 12,500. 


Ethereum is currently facing a situation where the block reward output per day is about 1,000 coins lesser than last week. This is a major drop compared to the situation three years ago when the average number of coins produced per day was at around 30,000. 

Block rewards in 2017 were pegged at 20,000, dropping once more to 14,000 earlier in 2019. Usually, the drop in block rewards is tightly connected to major upgrades in the Ethereum network. This time, however, there were no upgrades that would affect the production of new coins. ETH rewards are simply dropping, while the hash rate seems to be appreciating.

Recent data indicates that Ethereum block times have gone up as well, although only by around 1 second. The only explanation for the current situation is that the difficulty bomb has kicked in.

What is the Ethereum Difficulty Bomb?

As many might be aware, Ethereum’s difficulty bomb is a protocol level algorithm that increases the amount of power required to find and solve blocks. Difficulty bombs have been activated in the past, as well, with one of the most notable spikes occurring in 2017, during the months of March and April. The time needed to solve blocks surged from 14 to 30 seconds. This situation lasted until October 2017.

 

The bomb also went off almost a year ago, in December 2018, but block times only climbed only to 20 seconds. This time, the bomb remained active for around two months.

Now, one year later, the difficulty problem seems to have kicked in again, although it only brought the time needed to solve a block down to 13 seconds. The effect is slow at first, but soon enough, finding a block becomes extremely difficult. It will likely become more and more strenuous to solve blocks as time goes by, meaning rewards will probably decrease further in the near future.

ETH price might grow due to the incoming shortage. For now, the recommended course of action is to let the bomb do its job, while Ethereum inches closer to its transition to PoS. 

Some dApp users might see slight delays in transactions, but ultimately, this should not pose a major problem for the project.

What do you think about the latest drop in Ethereum block rewards? Do you expect the ETH’s price to grow? Let us know in the comments below.


Images via Shutterstock, Twitter: @VitalikButerin

The post Ethereum Block Rewards Reduced by 1000 ETH as Block Times Rise appeared first on Bitcoinist.com.

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Ripple Affiliated Foundation is a ‘Corporate Tax Shelter’, Says Messari

Ripple Affliate Foundation is a Tax Shelter

About $400 million worth of XRP tokens can be associated with illegal transactions, according to London-based blockchain analysis firm Elliptic.


Ripple is using its affiliated charity foundation as a corporate and executive tax shelter, according to crypto research firm Messari. The accusation was voiced after London-based blockchain analysis firm Elliptic found that about $400 million worth of XRP tokens can be associated with illegal transactions.

Messari Cites Several Issues with Ripple

Besides using the foundation as a tax shelter, Ripple’s charity non-profit is not allocating any grants to charities and is hiding the fact that 2.2 billion XRP tokens counted as circulating supply is now locked in long-term restricted selling agreements. The findings were shared by Messari author Ryan Selkis.

As per the Foundation’s Form 990 for the fiscal year 2018 that ended April last year, the Ripple Foundation for Financial Innovation, which is affiliated with the company and its co-founder Chris Larsen, granted $0 to charities, while it had $1.2 billion in assets under management.

Meanwhile, the Ripple Foundations paid $665,000 in salary to its CEO and invested $30 million in digital asset management firm, Arrington XRP Capital, which is run by Ripple CEO Brad Garlinghouse’s friend Michael Arrington.

$400M of XRP Connected to Illicit Activity

Yesterday, Elliptic launched a transactions monitoring system for XRP, the token run by Ripple and used for its global payment network. So far, the system has managed to identify about $400 million of XRP tied to illegal transactions. Nevertheless, the illicit transfers account for less than 0.2% of all XRP transactions that took place.

For comparison, the UN Office on Drugs and Crime estimated that over $2 trillion is generated in annual proceeds from illicit activities. Ripple came out in 2014, so we can determine that about $10 trillion was made from illicit activities since then. That’s a huge amount, considering that the total USD supply based on the broader M2 measure is just above $15 trillion.

Ripple XRP Fed USD

Ripple XRP Fed USD

Elliptic co-founder Tom Robinson, who is chief scientist at the firm, said that a previous study showed that Bitcoin purchases on dark web account for about 0.5% of all BTC transactions. He told Reuters:

We have a team in London that scout the dark web for any use of cryptocurrency. They began doing this for XRP as well. The type of activities they found were primarily scams, like Ponzi scams, thefts. A smaller category is the sale of credit card details.

XRP is the third largest cryptocurrency by market cap after Bitcoin and Ethereum. Its capitalization is almost $11 billion, according to Coinmarketcap data.

In total, crypto scams, thefts and fraud might reach $4.3 billion by the end of the year, blockchain forensics firm CipherTrace said in a report three months ago.

Do you think the $400 million figure related to illicit activities is still high for Ripple? Share your thoughts in the comments section! 


Images via Shutterstock, Fred.stlouisfed.org

The post Ripple Affiliated Foundation is a ‘Corporate Tax Shelter’, Says Messari appeared first on Bitcoinist.com.

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Bitcoin Price Loses $8,000 Support as Bears Drive Market to 4-Week Low

Several days of selling pressure finally took their toll on Bitcoin on Thursday, with BTC/USD returning to the $7,000 range after a four-week absence.

Bitcoin (BTC) fell below $8,000 on Nov. 21 after several days of downward price pressure finally cost the cryptocurrency a major support level.

Data from Coin360 showed BTC/USD finally reentering the $7,000 range on Thursday, marking its lowest since the last week of October. $7,880 was met by an immediate bounce to $7,940. 

Bitcoin daily price chart

Bitcoin daily price chart. Source: Coin360

Analysts eye $7,500 and $6,500 floors for BTC

Analysts had widely predicted the bearish move, with regular Cointelegraph contributor Michaël van de Poppe recently eyeing $7,400 as a realistic new support zone for Bitcoin.

Continuing the forecast, fellow contributor filbfilb highlighted even lower levels — $6,500 or the pivotal profitability price for miners — as the ultimate floor if bearish sentiment continued. Before that, the 100-week moving average (WMA) at $7,520 could provide further support.

As Cointelegraph reported, $6,500 is considered by many commentators as the lowest possible Bitcoin price under current conditions. 

“Still think the 100 WMA will hold up at this stage, but if it doesn’t, I’m all in at $6,500,” filbfilb said in private comments.

On Monday, statistician Willy Woo forecast that current Bitcoin price behavior would remain “unique” compared to previous cycles in its history. Specifically, BTC/USD would approach its 2020 block reward halving on bearish sentiment. In 2012 and 2016, halvings followed at least six months of bullish progress.

Woo additionally predicted that volatility would remain a feature for Bitcoin in the coming months.

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