Ripple price recovered recently, but it failed to break the $0.3120 resistance against the US dollar.The price is slowly declining and it is currently trading well below the $0.3100 level.There is a crucial bearish trend line formed with resistance at $0.3065 on the hourly chart of the XRP/USD pair (data source from Kraken).The pair might continue to slide and it could revisit the $0.3020 support level in the near term.Ripple price is currently under pressure against the US Dollar and bitcoin. XRP/USD is facing a strong resistance near $0.3070 and it may extend its decline towards $0.3020.Ripple Price AnalysisAfter testing the $0.3000 support, ripple price started a short term rebound against the US Dollar. The XRP/USD pair traded above the $0.3050 and $0.3080 resistance levels. The price even traded above the $0.3100 level, but it faced a strong resistance near the $0.3120 level. Besides, the price even failed to test the $0.3120 level and the 100 hourly simple moving average. A high was formed at $0.3113 and later the price started a downside move.It traded below the $0.3080 and $0.3060 support levels. A low was formed at $0.3031 and the price is currently correcting higher. It is trading above the 23.6% Fib retracement level of the last decline from the $0.3113 high to $0.3031 low. However, the previous support near the $0.3060 level is acting as a resistance. There is also a crucial bearish trend line formed with resistance at $0.3065 on the hourly chart of the XRP/USD pair.Above the trend line, the next resistance is near the $0.3080 level. It coincides with the 61.8% Fib retracement level of the last decline from the $0.3113 high to $0.3031 low. However, the main resistance is near the $0.3100 level and the 100 hourly SMA. Therefore, even if the price breaks the $0.3065 resistance, it is likely to struggle near $0.3080 or $0.3100. On the downside, an immediate support is near the $0.3030 level, below which the price may revisit the $0.3020 support level.Looking at the chart, ripple price is clearly trading near important resistances near $0.3060 and $0.3070. There may be a short term upside break, but the price remains in a bearish zone as long as it is below $0.3100. On the downside, if there is a break below the $0.3020 support, there could be heavy losses towards $0.3000 or $0.2920.Technical IndicatorsHourly MACD – The MACD for XRP/USD is slightly placed in the bullish zone.Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is currently just above the 40 level.Major Support Levels – $0.3030, $0.3020 and $0.3000.Major Resistance Levels – $0.3065, $0.3080 and $0.3100.
Archives for March 24, 2019
ETH price is forming a decent support near the $134 level against the US Dollar.The price is currently moving higher and testing the key $136 resistance and the 100 hourly SMA.There is a major bearish trend line formed with resistance at $136 on the hourly chart of ETH/USD (data feed via Kraken).The pair could start a solid upward move once it settled above $136 and the 100 hourly SMA.Ethereum price is currently approaching key hurdles against the US Dollar and bitcoin. ETH is likely to climb higher sharply once it breaks the $136 and $138 resistance levels.Ethereum Price AnalysisRecently, there was a slow decrease in ETH price after it failed to clear the $138 resistance against the US Dollar. The ETH/USD pair formed a couple of lower highs and declined below the $136 support level. There was even a close below the $136 support and the 100 hourly simple moving average. The price traded close to the $134 support, where buyers emerged and protected further losses. Later, the price corrected higher above $135 and the 23.6% Fib retracement level of the recent decline from the $138 high to $134 low.However, the previous support near the $136 level is now acting as a resistance. Besides, there is a major bearish trend line formed with resistance at $136 on the hourly chart of ETH/USD. The pair is also facing hurdles near the 100 hourly simple moving average, currently near $136. Finally, the 50% Fib retracement level of the recent decline from the $138 high to $134 low is also near $136. Therefore, the $136 level and the 100 hourly SMA are crucial hurdles.To start a solid upward move, the price must break the $136 and $137 resistance levels. The next key resistance is at $138, above which the price is likely to move into a bullish zone. On the downside, the $134 support could play a major role. If there is a fresh decline and the price breaks $134, there might be a sharp sell-off.Looking at the chart, ETH price is clearly trading near a significant resistance area at $136. Therefore, the price will either break the $136 resistance and climb higher or decline once again. A bearish break below the $134 support may perhaps push the price in a negative zone in the near term.ETH Technical IndicatorsHourly MACD – The MACD for ETH/USD is slowly moving into the bullish zone, with positive signs.Hourly RSI – The RSI for ETH/USD recently moved above the 50 level and it could continue higher towards the 65 level.Major Support Level – $134Major Resistance Level – $136
I’m writing from the Democratic Federation of Northern Syria.
Known to sympathizers simply as Rojava – meaning West – the predominantly Kurdish region revolted against the Syrian regime in 2012 and achieved its de-facto autonomy as a result.
Since then, it has pioneered a new political model named democratic confederalism, which due to its stateless, decentralized nature, has a natural synergy with blockchain technologies – something that has been a point of research by technologists in the region.
That’s partially why I am here.
I’m also here because, in December, U.S. President Donald Trump announced his retreat from the region, cited the impending defeat of ISIS, and denouncing Syria as the land of endless wars – of “sand and death,” he called it.
The withdrawal has now effectively been reversed, but at the time, many believed Turkey, which shares a border with Northern Syria, would attack (the country has engaged a continuous offensive against the region since 2016).
The concern was that if Turkey seized control, Rojava’s political system would crumble to the totalizing power of nation states. There would be no more resistance, a resistance I’ve come to care greatly about.
I had previously written about the potential of blockchain and cryptocurrency in Rojava. I felt that while the region lacks the basic security and resources offered by the West, it has something the West doesn’t have – the opportunity for a new system of governance to be realized.
With this in mind, I spent a little over a month trying to get into the country to volunteer my skills, both in media and crypto, to a new network of technological academies being developed in the region.
On February 25, I arrived at my new home. Here, according to critics, in the process of implementing democratic confederalism, Rojava has succumbed to the pressures of the familiar, whereby the structures of capitalism and its hierarchies are being mimicked in local economies.
Erselan Serdem, the leader of Rojava’s technological development program, would like to redeem this, creating structures that allow ecological, egalitarian economies to thrive – what proponents call “democratic modernity.”
According to Serdem, with the right combination of philosophy and tech, this dream can be realized.
“We are talking about a new form of institution with a high level of technology, that can develop useful tools for society and achieve a good relationship to nature – that’s our aspiration,” Serdem said, adding:
“Decentralized institutions can be supported by parallel, decentralized technologies.”
Electricity cables in Qamishli, Northern Syria
War vets and social engineers
The academies Serdem is building will be used to train hackers in various decentralized technologies.
For instance, participants will research digital governance, cryptocurrency and blockchain solutions to fairly distribute natural resources. Serdem is still recruiting people into the academies, seeking out those with technical skills across Rojava and also training injured war veterans, starting with basic programming skills.
Currently, there are 30 war vet participants in the program.
Not only is Serdem recruiting throughout Northern Syria, but he’s also enlisting what he calls “social engineers” – politically-oriented hackers and philosophers focused on reshaping technology.
Without these folks, Serdem said, “We have seen how history repeats itself. The current system will have the same destiny.”
Hozan Mamo, a software developer and academy member, echoed what Serdem said, telling CoinDesk through a translator that the technological academies could solve problems that have emerged in civil society.
For instance, he continued, decentralized governance tools could help formalize decision making and keep power in check.
On the other hand, cryptocurrency could be useful as well, Mamo said, since there’s no access to electronic transactions in Rojava. Instead, Rojava’s inhabitants are dependant on cash that is issued by the Syria state – meaning that the region is still economically bound to the regime.
As a first step towards that, Mamo is looking into the feasibility of onboarding local merchants to accepting cryptocurrency.
Young men gather outside an internet shop, Qamishli, Northern Syria
The ethos of crypto
Still, there’s a good amount of cynicism surrounding the project.
In Rojava, technology has mostly shown its face through social media, and a sudden proliferation of smartphones – mostly carrying Facebook, YouTube and Whatsapp – has had a tangible impact on the social sphere.
The obsessive use of smartphones has led a certain suspicion of technology to develop, which could have a negative impact on the adoption of blockchain and cryptocurrency technology.
In an effort to combat this, Serdem noted, he intends to use the academies to redefine technology, moving the narrative away from the corporate interest groups that have monopolized social media, network infrastructure and even hardware in the region.
“There are different forms of technology,” he said. “[There is] technology by nation states and the companies, and then there is a resistance movement, that try to discover more ideas against the current system.”
Bitcoin and other decentralized technologies, for instance, qualify as this “resistance tech” – tools developed by oppressed people to take back power throughout history. Within the academies, Serdem would like to see some of this tech, these alternatives, built.
“We can use some of that kind of technology which is created by the resistance movement. Now we are in the beginning, but in the process we will see what forms of technology do we need to have for democratic modernity,” said Serdem.
Mamo believes that by focusing on usability and security, adoption could happen quickly, especially by younger generations. According to him, Rojava’s youth has no shortage of enthusiasm for technology, as well as a strong aptitude for it.
Prior to the revolution, he said, the Syrian regime deliberately held back the development of technology in the region, forbidding its teaching in universities and arresting people that tried to develop their skills.
But the revolution “opened the border” to technology, he said, leading the region to develop rapidly.
Poster of Abdullah Ocalan at International Woman’s Day, Qamishli, Northern Syria
Openness to technology isn’t the only thing Serdem and others are trying to push. His academies also have a strong focus on philosophy, specifically the writings of Abdullah Ocalan, the incarcerated political philosopher whose writings inspired the Rojava revolution.
In his writings, Ocalan seeks to fundamentally restructure society by challenging the roots of hierarchy and domination that underpin it.
It’s a philosophy that resonates strongly with the ideologies that many crypto advocates hold and even display in their interest and use of the open-source movement.
In this way, Serdem told CoinDesk, the academies will encourage much of the same.
”We are creating a commune of the technology, to solve technical problems, and at the same time to create the social engineer or the political person in the moral society,” Serdem said, before concluding:
“In Rojava, we are trying to achieve the philosophy of open source, of how to create a society informed by open source.”
Note: Due to security concerns, “Erselan Serdem” and “Hozan Mamo” are pseudonyms
Photos by Rachel-Rose O’Leary for CoinDesk
Touted as the next big thing in crypto, stablecoins promise investors volatility-proof exposure to decentralized assets, but insiders say that this emerging asset class is vulnerable to the same manipulative practices that have tarnished the broader ecosystem.
According to Nevin Freeman, chief executive officer of Reserve, a Coinbase-backed stablecoin, many of his rivals artificially inflate their market caps and trading volumes, creating misleading data on crypto-tracking sites like CoinMarketCap and The Stablecoin Index.
Freeman identified two dubious tactics used by stablecoin operators to pump their metrics: giving discounts to investors who agree to lock up their funds for a set timeframe; and encouraging “wash trading,” where traders simultaneously buy and sell the same cryptocurrency to inflate the appearance of volume and liquidity.
Paxos & Gemini Ignite Crypto Price War
Recent examples of discounting tactics include Paxos and Gemini, both of which offered select over-the-counter (OTC) trading desks 1% discounts last year to kickstart adoption. These discounts were predicated on OTC partners agreeing to hold their stablecoins for a predetermined “lock-up” period.
Reserve claims these rebate schemes are the reason PAX and GUSD activity surged last December, on both OTC desks and exchanges like Huobi and Binance. For example, GUSD’s market cap soared from roughly $87 million on December 17 to over $103 million the next day, according to CoinMarketCap data.
In the case of Paxos, their discount program coincided with the launch of HUSD, a pool of stablecoins offered by Singapore-based exchange Huobi, which enabled traders to swap stablecoins without actually trading them. This led to an arbitrage frenzy where certain traders tried to mass-withdraw PAX, even going as far as to creating dozens of dummy accounts to circumvent Huobi’s $10,000 withdrawal limit.
As Huobi launched HUSD, PAX’s market cap roughly doubled from $40 million to $80 million in a single day last October. Thus, critics like Freeman say that a lot of this market activity is being “manufactured.”
Tether’s Alleged Washing Machine
Highlighting the second dubious tactic is Tether, the seminal stablecoin. Tether has been dogged by allegations of wash trading, a practice that has been banned in regulated markets because it distorts real supply and demand.
Despite losing nearly 30% of its grip on the stablecoin market last year, Tether still accounts for over two-thirds of the sector’s $3 billion market cap. Regardless, in light of these trends, Freeman believes that market cap and trading volume are “becoming bad metrics.”
The Stablecoin Industry & Goodhart’s Law
Freeman said such schemes are the epitome of Goodhart’s Law, an idea proposed by 20th Century British economist Charles Goodhart, which says that:
“When a measure becomes a target, it ceases to be a good measure.”
Applying Goodhart’s law to the stablecoin market, market cap and trading volume have become ends onto themselves to the detriment of the broader ecosystem. As the crypto industry evolves, Freeman hopes savvier investors will look to new metrics like the number of wallet addresses associated with a token, organic discussion about a project, and the number of consumer app downloads.
Ultimately, Freeman said that stablecoins with real-world applications beyond market arbitrage are best positioned for long-term success. Reserve, for its part, is targeting economically-challenged markets like Venezuela and Angola where people are vulnerable to hyperinflation and currency devaluation.
Freeman believes that stablecoins can help people in financially distressed countries to insulate their wealth from foreign-exchange shocks. Additionally, he said that stablecoins could facilitate a cheaper and more efficient model for remittance payments.
“Solving real-world problems, not financial engineering through arbitrage coins, is what is going to bring institutional legitimacy to the stablecoin market.”
We’re all still thinking like regular crypto heads when it comes to what Facebook’s Mark Zuckerberg has up his sleeve with his stablecoin.
The Zuck’s not thinking about just creating his own crypto. He wants to replace the U.S. dollar according to Ted Livingston, who’s developed the reputation of being ahead of the industry in making predictions. Livingston is the founder and CEO of messaging platform Kik.
Facebook’s moves aren’t steeped in anything nefarious. Instead, they are in line with Facebook’s usual claims – helping the world. This time, the vision is to help people who are working in foreign regions send their earnings to people in their native countries.
In the works is a multi-step plan which could come as soon as this week. Livingston laid out a compelling argument in a Medium post about Facebook’s crypto plans.
Everyone should read this. @ted_livingston has been ahead of many trends in social media and messaging over the last decade.
Bold thoughts here.https://t.co/RCji3mHaOF
— Pomp 🌪 (@APompliano) March 20, 2019
Replacing The U.S. Dollar?
The prediction is gutsy, to say the least. It’s also frightening given the loose relationship Facebook has with being forthcoming about what it’s doing behind the scenes. However, Livingston studied Facebook’s stablecoin efforts and started connecting the dots.
It starts with WeChat. This is a Chinese messaging social media and mobile payment app. Livingston says Facebook’s upcoming stablecoin project is a “WeChat aspirant.”
Like this app, Facebook was attempting to move the U.S. Dollar into a private online payment system. A WeChat-based system would serve two main purposes for Facebook. It would allegedly make it easier for people to transfer money cheaply, and it would give them reasons to keep their money inside the messenger system.
WeChat allowed people to take their money out at any time, but they also added more and more reasons for people to keep their money inside: paying hydro bills, buying food, booking vacations and more. Soon, no one was taking their money out.
Getting Money Home to Family
People who work outside their home countries often find it difficult, expensive or both to get their earnings back home. The first step in helping them is remittance.
Every year, people working in foreign countries send hundreds of billions of dollars home to family and friends. Today, this process is slow, expensive, and complicated, with an average fee of $14 to send just $200. If Facebook could offer people a way to send money home for free, it would be a game changer for tens of millions of people.
Keeping track of the money will be done through the blockchain, allowing Facebook to permit payments in their apps without needing to become a bank. Livingston claims:
Instead of working with regulators like WeChat did in China, Facebook can roll out a global financial system without needing to go through the time-intensive process of working with banking regulators country by country.
Facebook’s Monetization Strategy Still in Play
The last step in the plan relates to “keeping money inside the system.” The system will be built so Facebook makes money off of its efforts to help people.
Livingston thinks Facebook could add ways for users to spend money directly inside their apps. This includes paying bills:
New ways of spending money through the app will become simpler and more powerful than the previous alternatives. Soon, there will be no reason for anyone to take their money out.
Recent reports seem to indicate that, believe it or not, Bitcoin (BTC)’s short-term prospects in this market are limited, as crypto analysts await the holy grail of trading sessions — the fabled “altseason.” With this phase of trading, analysts expect for Bitcoin’s hegemony over the broader industry to slip, as stakeholders flee to alternative digital assets in search of hefty profits. But a researcher claims that traders are getting this all wrong.Bitcoin Losing Steam To Other Crypto Assets?In recent weeks, cryptocurrencies, save for BTC, have posted stellar gains in and of themselves. Litecoin has rallied by 160% since its bottom in December, Cardano is up by 24% in the past weeks, and other assets are posting movements that resemble those seen in 2017’s rally.This price action, which has come seemingly straight out of left field, has depressed the Bitcoin market dominance reading, which has struggled ever since the parabolic rally seen over yesteryear. Sure, the reading has recovered from a 32% bottom to 50% where it stands now, but it’s a far cry from the 58% seen in late-2018. And some expect for this to continue, as they see much more value in blockchains not only known for being a store of value, like Bitcoin.Related Reading: Researcher: Bitcoin Will Easily Surpass Market Cap of Gold at $8 TrillionOne trader going by the moniker “Galaxy” remarked that he wouldn’t be surprised Bitcoin’s share of the cryptocurrency space falls to under 30%, citing the weak dominance uptrend to claim that the impending altseason will relatively pummel BTC.No, Maybe NotJP Thor, a leading industry researcher & Bitcoin diehard, argued that no, CoinMarketCap and similar data aggregators are getting their readings all wrong (as normal), along with those commentators quipping that BTC is rapidly losing traction.In an extensive Medium post, titled “Bitcoin’s Market Dominance,” Thor remarked that the classical method of using market capitalization to weigh an asset’s dominance is flawed.I just published Bitcoin’s True Market Dominance https://t.co/Ikts82v19u— JP [ ₿⚡️] (@jpthor__) March 22, 2019Thor remarks that if you take volume (liquidity) into account, which he did through aggregating 12 months of trading activity, Bitcoin is far from dead in the water. The researcher writes that Bitcoin’s dominance in the form of liquidity is actually well above the 50% gauged by market capitalization. In fact, Bitcoin has a consistent dominance reading of over 80%, which has only trended higher in this downturn.Ethereum, on the other hand, has a measly ~7%, while altcoins take up the rest of the proverbial pie. And with that, it was concluded:“In fact, just taking into account the Top 5 coins, Bitcoin (the 20%) captures over 85% of the market… CoinMarketCap’s ‘Market Dominance’ is flawed since it does not factor in liquidity and the reported 55% is significantly understated.”Sentiment-wise, industry leaders seem to think that BTC will keep on this market for the rest of its lifespan. Phil Chen of HTC’s Exodus (crypto) division told NewsBTC that he thinks that Bitcoin is fundamentally the core of this industry, so it would thus be irrational to ignore it or cast it aside.Featured Image from Shutterstock
The Russian Duma has pushed back its planned consideration of a bill to recognize and regulate digital financial assets. Initially scheduled for March 22, the reading will now hold at an unspecified date in April, following the outcome of a vote on the agenda for a plenary session last week.
The draft bill is not without its controversies, as it has been specifically edited to remove the terms “cryptocurrency,” “smart contract,” and “token.”
This is in line with Russia’s surprisingly cautious position on cryptocurrencies,which has seen authorities repeatedly drag their feet on the possibility of creating a regulatory framework for crypto-trading. CCN reported in 2018 that when asked about his government’s position on digital money, Russian President Vladmir Putin said:
In most countries, cryptocurrency is not a means of settlement. The Central Bank of the Russian Federation believes that cryptocurrencies cannot be a means of payment, settlement or store of value. These currencies are not secured by anything.
Russia’s Extended Dovishness on Crypto Regulation
Despite reportedly considering cryptocurrencies as a means of getting around U.S. sanctions alongside countries like Iran and North Korea, Russia as made surprisingly little progress on the crypto regulation front. The country’s central bank has refused to put its weight behind the idea of recognizing cryptocurrencies, despite appearing to hold a contradictory position on ICO fundraising, which bank head Elvira Nabiullina once described as “efficient.”
Russia’s contradictory position has often been interpreted to mean one of two things. The first school of thought has it that the country hosts a deeply conservative power bloc at the heart of its government, which views cryptocurrency with deep suspicion bordering on hostility. As a result of this, it may be politically difficult or impossible to make much headway with any kind of crypto regulation agenda.
The second idea suggests this may all be an elaborate con by the famously technology-obsessed Russians, who are working underground to create their own cryptocurrency they’ll use to upend the global financial order working against them. The Russian government is only pretending to be dovish on crypto to hide its true intention of creating a crypto-based financial framework outside SWIFT control, effectively bypassing U.S. economic sanctions.
Russia Plays Hide and Seek with Crypto Bill
Russian news platforms say the reading’s postponement was proposed by the head of the Duma’s Financial Market Committee Anatoly Aksakov. No explanation was given for the postponement. It will be recalled that on March 18, the committee had recommended the bill for adoption in the second reading after editing the document to remove all mentions of terms referencing digital currency or cryptocurrency.
The initial draft bill proposed to create a framework for regulating digital financial assets, which were expressly identified as “cryptocurrencies” and “tokens.” It also provided a legal basis for recognizing the validity of smart contracts. Even more interestingly, it recognized the subtle difference between cryptocurrencies and tokens, and put forward a plan to recognize both digital assets as property under Russian law.
Now, instead of serving as a framework to legalize and regulate crypto assets, the bill is a much broader and non-specific document recognizing the existence of digital financial assets including digital intellectual property rights. Under the bill, such rights can now be included and transferred within the context of equity securities.
Bitcoin has been experiencing a quiet weekend trading session and is currently firmly in the middle of its long-established trading range between $4,000 and $4,100. It is unclear how long this range will persist, but historically BTC has experienced fairly significant price swings after long bouts of sideways trading.Now, analysts seem to concur that Bitcoin is posed to make a large upwards swing towards $5,500 in the near future, but it is important to note that the possibility of further downside still remains.Bitcoin (BTC) Caught in Persisting Trading RangeAt the time of writing, Bitcoin is trading down marginally at its current price of $4,020. Over the past several days, BTC’s volatility has been declining as its trading range grows tighter.Although the upper bound of BTC’s current trading range will most certainly act as a level of resistance in the near-future, the key level that analysts and traders alike are closely watching to see how Bitcoin responds to is $4,200, which is where the crypto faced strong resistance and spiraled downwards from late last month.Crypto Krillin, a cryptocurrency analyst on Twitter, recent discussed where he sees Bitcoin heading next, importantly noting that he believes the crypto will make an upwards swing towards $5,500 next, but further added that a downside target of $3,000 is still a possibility.“The moment of truth for Bitcoin is very near. We fly straight through the cloud to 5500, or we visit 3000. I’m leaning bullish,” he explained in a recent tweet.$BTC“Confluence”The moment of truth for Bitcoin is very near.
We fly straight through the cloud to 5500, or we visit 3000. I’m leaning bullish. pic.twitter.com/15a9QWXpKK— Crypto Krillin ॐ (@LSDinmycoffee) March 23, 2019$5,500 Becoming an Important Level For BitcoinCrypto Krillin is not alone in his belief that Bitcoin’s upside target currently exists around $5,500.Yesterday, Galaxy, another popular cryptocurrency analyst on Twitter, explained to his nearly 50k followers that BTC is currently nearing the end of an ascending triangle formation, which means that the crypto is, statistically speaking, likely to make a large upwards price swing towards $5,500 in the next month or two.“According to Bulkowski’s study, more than 60% of ascending triangles with declining volume end up breaking upwards… with an average price rise of 35%. That gives us a target of $5500 BTC once the breakout is confirmed,” he noted.According to Bulkowski’s study, more than 60% of ascending triangles with declining volume end up breaking upwardswith an average price rise of 35%That gives us a target of $5500 BTC once the breakout is confirmed. $BTC pic.twitter.com/dThMCtNZDX— Galaxy (@galaxyBTC) March 23, 2019As the new week starts and trading volume begins to ramp up, the crypto markets will gain greater insight into just how strong Bitcoin’s current trading range is, and as to where it will head next.Featured image from Shutterstock.
Agustin Carstens, Bank for International Settlements (BIS) general manager and a noted bitcoin critic, has said that the launch of central bank-backed crypto assets could undermine financial stability.
During his speech at the Central Bank of Ireland, the BIS official said:
“There are huge operational consequences for central banks in implementing monetary policy and implications for the stability of the financial system. Central banks do not put a brake on innovations just for the sake of it. But neither should they speed ahead disregarding all traffic conditions.”
Considering the role of central banks in maintaining stability in the global financial market, the integration of decentralized crypto assets or blockchain-based solutions could present a risk.
However, it remains unclear whether permissioned blockchain networks or centralized ledgers present a similar risk given that central banks could arguably have tighter control over the circulation of money.
Bitcoin is Decentralized But Permissioned Blockchain-Based Crypto Assets Aren’t
Bitcoin is a truly decentralized and a peer-to-peer blockchain network that is sustained by an open-source community of developers, miners, node operators, and users.
As such, unlike cash, it is not possible to manipulate the supply of bitcoin given that it’s fixed at 21 million. In that sense, bitcoin is a deflationary currency.
Central banks, however, take on a key role in adjusting interest rates and controlling the circulation of money in their respective regions. Based on the outlook of the central bank, the rate in which cash or new money is produced can be determined.
Depending on the state of the economy, the central bank decides on its benchmark interest rate, the rate of inflation, and the rate at which cash is distributed to either slow down or fuel the market.
The concern of critics towards central bank-backed crypto assets is that the central bank may not be able to demonstrate or exercise a similar level of control over money when the monetary system moves from a cash-based to a digital currency-based system.
This would be an accurate assessment if decentralized and peer-to-peer currencies like bitcoin are implemented. For a centralized blockchain network and a closed-source cryptocurrency which a central entity has control over, the central bank would be able to have full control over its supply, circulation, and distribution.
As a Bank of Finland research paper on the economics of bitcoin read:
“Bitcoin is a monopoly run by a protocol, not by a managing organization. Familiar monopolies are run by managing organizations with discretion to determine and then change prices, offerings and rules. Monopolies are often regulated to prevent or at least mitigate their abuse of power. Bitcoin is not regulated. It cannot be regulated.”
“There is no need to regulate it because as a system it is committed to the protocol as is and the transaction fees it charges the users are determined by the users independently of the miners’ efforts.”
But, when a permissioned ledger is implemented, then the crypto asset based on the ledger would be run by a managing organization, reducing the risk for central banks and whichever financial entity that controls it.
JPM Coin is a Good Example
Umar Farooq, head of Digital Treasury Services and Blockchain, wrote:
“We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators.”
“Ultimately, we believe that JPM Coin can yield significant benefits for blockchain applications by reducing clients’ counterparty and settlement risk, decreasing capital requirements and enabling instant value transfer.”
JPM Coin could be the first permissioned or centralized cryptocurrency that is actively utilized to transfer value and process transactions with a model that could be considered by central banks in the long run, especially in regions with declining demand for cash.
Ripple prices down three percent from last week’s closePrice surges depend on xRapid adoptionParticipation levels low and almost half that of Feb 24At third with a market cap of $12,861 at the time of press, Ripple (XRP)—like the rest is under pressure. However, this has been compounded by regulatory uncertainty which is likely to be clarified next year. If the SEC has reason to classify XRP as a utility with no central control, prices will surge towards Sep 2018 highs at 80 cents.Ripple Price AnalysisFundamentalsRipple Inc promotes three of their central solutions to financial institutions and payment processors. Of the three, xCurrent is widely used. However, if XRP as an asset is to thrive, then banks must use the xRapid network. While offering the same end to end encryption, the solution uses XRP as a means of exchange.To facilitate transactions, Ripple Inc is working with different exchanges across corridors of their interest. There is Coins.ph and Bittrex between the US and the Philippines. At the same time, there is Bittrex and Bitso between the US and Mexico corridor of which Mercury FX is dominating.Even so, the lack of confirmation from regulators is forcing would be clients to postpone their plans allowing Stellar and IBM to narrow the gap. All the same, it is a good thing that IBM–with their history with banks, is demonstrating that despite blockchain being new; it can be efficient and cost saving.Candlestick ArrangementA month after dropping from 34 cents, Ripple (XRP) sellers are clearly in charge. It is down three percent from last week’s close and pretty stable from yesterday. Regardless, we are net bullish expecting higher highs in the next few days.However, all that is dependent on the reaction at 30 cents and how fast losses of Mar 21 are reversed—or confirmed. If the latter is the case and prices crumble below 30 cents, then bears of Feb 24 would cause a meltdown towards 25 cents canceling our stance. On the other hand, reversal effectively confirms gains of Jan 30.Technical IndicatorsRelative to Feb 24 bear bar—61 million versus 30 million averages, it’s evident that participation is shrinking. Today’s averages stand at 14 million which is less than half that of Feb 24.All the same and as per our previous emphasis, buyers would only be in charge if there is a spike of volumes above 17 million of Mar 21. That will jolt bulls back in track solidifying our stand.Chart courtesy of Trading View–BitFinex