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China May Try to Block All Bitcoin Transactions in the Country

China May Try to Block All Bitcoin Transactions in the Country

Regulation

The Chinese authorities may be moving toward a broad clampdown on Bitcoin, including peer-to-peer (P2P) exchanges and over-the-counter (OTC) trading platforms. Using the Great Firewall to block IP addresses, access to foreign bitcoin exchanges could be blocked and the Bitcoin transaction network could be disrupted within the country. Bitcoin miners are also worried that their operations could be restricted.

Also read: Beijing Sets Deadlines for Bitcoin Exchanges – Customers to Withdraw Funds Quickly

Broad Clampdown Includes P2P & OTC Platforms

Chinese authorities have reportedly informed several industry executives at a closed-door meeting in Beijing on Friday that they are “moving toward a broad clampdown on bitcoin trading,” according to the Wall Street Journal on Monday. Citing people familiar with the matter, the news outlet wrote:

Regulators have decided on a comprehensive ban on channels for the buying or selling of the virtual currency in China that goes beyond plans to shut commercial bitcoin exchanges.

“Until last week, many entrepreneurs in China’s Bitcoin circles had thought authorities might shut down only commercial trading activity while tolerating peer-to-peer, or over-the-counter, bitcoin platforms, which enable buyers and sellers to find each other and trade directly,” the publication further detailed.

China May Try to Block All Bitcoin Transactions in the CountryThis news came after Beijing had ordered bitcoin exchanges to shut down, which many have already complied with, including Btcchina, Huobi and Okcoin. Following the regulatory crackdown, bitcoin’s prices initially fell but have since recovered. China’s trading volume has dropped to the fourth position globally, as traders migrated business to OTC markets and exchanges outside of China. Trading volumes on Localbitcoins subsequently spiked exponentially, news.Bitcoin.com recently reported.

Last week, Bitkan suspended its OTC cryptocurrency trading service. The suspension, which began on September 14, affects the platform’s mobile app and site for BTC and BCC OTC services, the company announced.

Blocking Access to Bitcoin Exchanges Abroad

The Wall Street Journal also noted on Monday that, according to “people familiar with the matter”:

A broader clampdown will likely include blocking mainland access to websites of foreign bitcoin exchanges such as Coinbase in the U.S. and Bitfinex in Hong Kong.

This concurs with a document which surfaced last week detailing how the Chinese government will try to block access to bitcoin exchanges and other important services that reside outside of the country. While the document is unverified, Sina claimed that it is authentic.

China May Try to Block All Bitcoin Transactions in the Country

The bitcoin exchanges specifically named in the document include Coinbase, Okcoin, Bithumb, Bittrex, Coinone, Bitflyer, Bitstamp, Bitfinex, Poloniex, Kraken, Bitmex, and Localbitcoins.

Blocking External Bitcoin Network Nodes

China May Try to Block All Bitcoin Transactions in the CountryAccording to the above document, all DNS and IP addresses of websites, apps, and APIs from foreign bitcoin exchanges will be analyzed, and access to each will then be blocked by the Great Firewall before September 30.

The document also indicated an attempt to disrupt the basic P2P network routing of Bitcoin itself inside the country, which could disrupt the flow of bitcoins across the border. The government will monitor the network communication between domestic nodes and pools to prevent domestic nodes from syncing with nodes abroad. In addition, Bitcoin network communication bridges will be monitored including Tor and Virtual Private Networks (VPNs).

China May Try to Block All Bitcoin Transactions in the CountryTo circumvent China’s Great Firewall, some people have been able to use both the above methods in the past. However, an entrepreneur told the Wall Street Journal that “using VPNs as a workaround will be difficult.” Although the use of VPNs is not yet directly illegal in the country, China has found a way to convict people for selling VPN software. Earlier this month a Chinese man was imprisoned for doing so. The conviction was for “providing software and tools for invading and illegally controlling the computer information system,” according to the South China Morning Post.

Bitcoin Miners Will Be Affected Too

While China’s bitcoin trading volume has fallen, its mining market share remains the largest in the world. The same aforementioned entrepreneur told the Wall Street Journal:

Until now, Chinese miners considered themselves immune from Beijing’s evolving stance on bitcoin trading. One entrepreneur said miners are now worried about authorities moving to limit their operations.

“With the tightening of the monitoring policy of bitcoin, the mining business is also affected,” a 21st Century Economic News reporter wrote on Tuesday. A Shenyang mining equipment dealer told the reporter that mining equipment does not sell well right now because of the current panicked market sentiment. With the domestic bitcoin trading platforms closing down and the prospect of overseas trading channels blocked, “mining business will be hit hard,” he said.

Do you think China will crackdown on all of the above bitcoin trading channels and harm their own mining industry? Let us know in the comments section below.


Images courtesy of Shutterstock, Asian Correspondent, and Sina


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Regulations Push Chinese Bitcoin Volumes to OTC and Neighboring Countries

Regulations Push Chinese Bitcoin Volumes to OTC and Neighboring Countries

Markets and Prices

Following the regulatory crackdown in China, bitcoin’s price has climbed back up 30 percent over the $4K zone since the market’s nosedive last Friday. Now China’s bitcoin trade volume has dropped to the fourth position globally as Japan has taken the reigns over the past two days. Chinese traders have once again taken trading to the ‘streets’ and have also migrated business to Hong Kong and Korean exchanges.

Also read: Five Leading Russian Universities Start Offering Cryptocurrency Courses

Japan Captures the Lead in Global Bitcoin Trade Volume

According to statistics from data sites like Crypto Compare and Coinmarketcap, Japan has taken the lead in global bitcoin trade volume. Currently, ¥ 93B worth of bitcoins are being swapped in the country as Japan is capturing over 47 percent of the global BTC volumes. Since the regulatory fiasco in China, exchanges like Bitflyer, Zaif, Coincheck, and others have jumped forward when it comes to BTC and global fiat swaps. Japan’s leading trade volume is followed by U.S., Korea, China, and Europe.

Regulations Push Chinese Bitcoin Volumes to OTC and Neighboring Countries
Japan captures 47 percent of the global bitcoin trade volume at press time.

China’s Traders Move to OTC Markets and Localbitcoins

After BTCC, Huobi, Yobit, Yunbi, Okcoin, and others announced they were closing shortly, Chinese domestic exchange volumes dropped significantly. However, Over the Counter (OTC) trading has once again taken over in the region as traders are now swapping bitcoins over Telegram and other avenues. Further, Localbitcoins volumes in China has spiked exponentially, just as it did when Chinese exchanges paused deposits and withdrawals this past January. In fact, since governments all around the world have been making things a bit more difficult lately, Localbitcoins volumes have skyrocketed worldwide to the highest point ever with over $71M traded in the first week of September.

Regulations Push Chinese Bitcoin Volumes to OTC and Neighboring Countries
China’s weekly Localbitcoins volumes spike after domestic exchanges announced closing trading operations.

There’s also a relatively unknown OTC player in the Asian region who handles quite a bit of trading called Richfund.pe. Many insiders believe liquidity providers like Richfund are doing far more business since the Chinese exchange closure announcements. The business claims to command a significant portion of China’s large-scale OTC bitcoin trading, alongside other countries in the area.  

“We provide 1000-5000 BTC large OTC services in China, Korea, Cambodia, Hong Kong and Taiwan,” explains the bitcoin liquidity provider and hedge fund management company Richfund.

Regulations Push Chinese Bitcoin Volumes to OTC and Neighboring CountriesHong Kong and South Korean Exchanges Reap the Benefits from China’s Regulatory Crackdown

Not only did Chinese traders move to alternative solutions like OTC trading and Localbitcoins, many of them seemingly migrated to the Hong Kong-based exchange Gatecoin. Since the first wave of announcements, Gatecoin’s volumes have coincidently spiked over 24 percent. Other exchanges like BTCex, and ANX have also seen similar volume lifts since the September 15th exchange announcements. Speculators believe that not only has Chinese trading platforms pushed customers to Japan but traders are migrating to Hong Kong and South Korean exchanges as well. All three countries have seen bitcoin trade volumes increase over the past three days.

It’s safe to say Chinese traders have found other avenues to trade bitcoin and alongside OTC alternatives; many neighboring countries are reaping the benefits.

What do you think about other countries reaping the benefits from China’s recent bitcoin exchange shutdowns? Let us know what you think in the comments below. 


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European Central Bank Criticizes Estonian National Cryptocurrency Plans

European Central Bank Criticizes Estonian National Cryptocurrency Plans

Regulation

The president of the European Central Bank has criticized the Estonian government’s plan to launch a national cryptocurrency. The statements have implied that the European Union (EU) states will not be permitted to launch state-issued cryptocurrencies that compete with the Euro as the major currency within EU jurisdiction.

Also Read: European Union Proposes Account Freezes to Protect Failing Banks

Estonia Had Planned to Launch a State-Administered National Cryptocurrency

European Central Bank Criticizes Estonian National Cryptocurrency Plans

The president of the European Central Bank, Mario Draghi, has rejected Estonia’s plans to launch a state-backed national cryptocurrency. Draghi has stated that “no member state can introduce its own currency. The currency of the eurozone is the euro.”

Last month, Estonia unveiled its plan to launch Estcoin, a state-backed national cryptocurrency. Estcoin would be centrally administered by the Republic of Estonia and launched as an ICO. Estonia also planned to make the cryptocurrency available and made available to any investor worldwide through its e-residency program. The Estcoin project has been closely evaluated and praised by Vitalik Buterin, the creator of Ethereum.

Peter Ehrlich of the European Central Bank is reported to have stated that “within the legal framework of the European Union, in all member states that, like Estonia, have introduced the single currency, only the euro is the legal tender and the monetary policy lies exclusively with the European Central Bank.” Daniel Heller of the Peterson Institute for International Economics has echoed this position, adding that EU obligations mandate that governments are unable to raise funds in any currency other than the euro. “If you sign up to the Eurozone, you sign up to the euro. Your financing is in euros”.

Commentators Have Argued That the Project May Still Be Viable Through a Public-Private Partnership

 

European Central Bank Criticizes Estonian National Cryptocurrency PlansDespite the dismissive statements from the European Central Bank’s president, Estonia may still be able to conduct a launch of a national cryptocurrency if it is to do so through a private-public partnership. Heller advances this argument stating that “what would be possible is if it’s issued by some state-owned entity. We have this distinction that, say, debt of the gas company is not public debt because it’s a gas company, even if it’s owned by the government.” This hypothesis appears to have also been evidenced by Ehrlich stating that “the [European Central Bank] will not comment on ideas brought forward by the private sector”.

The head of Estonia’s E-residency scheme’s public relations department, Arnaud Castaignet, has expressed that the republic plans to move forward with the project – however, made no reference to the potential ramifications of EU obligations with regard to the national cryptocurrency. “We are ready to move forward, nevertheless a national conversation is necessary first. If there is support for this proposal, then the next stage before the ICO would be to provide a white paper that outlines the value of estcoins and how the investment will be used to develop our digital nation.”

Do you think that Estonia will successfully launch its proposed national cryptocurrency despite the EU’s monetary guidelines? Share your thoughts in the comments section below!


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September’s Bitcoin Market Madness: When Panic Selling and FOMO Ensues

September’s Bitcoin Market Madness: When Panic Selling and FOMO Ensues

Markets and Prices

On September 15, after a couple of Chinese cryptocurrency exchanges announced they were closing, bitcoin’s price dropped to a low of $2,970. Following this dip, BTC trade volumes began to surge as the price per bitcoin rose over $600 in less than an hour and during the course of the afternoon bounced back to a high of $3,820. Now the price of bitcoin is rocketing upwards again as it surpassed the $4K zone just three days later. 

Also read: Japan’s FSA Approves Coincheck’s Bitcoin Exchange License

Bitcoin’s Monumental September 15 Rebound

September’s Bitcoin Market Madness: When Panic Selling and FOMO EnsuesBitcoin’s price has been wavering between $4,050-4,095 during the past 6-hours. ‘Fear of missing out’ (FOMO) is real, and this may be part of the reason why cryptocurrency markets bounced back after suffering from 30-40 percent losses from the other day. Cryptocurrency enthusiasts called it a ‘flash sale’ and many bitcoiners were pleased to get a chance to ‘buy the dip.’ After bitcoin’s value fell below the $3K range, the ‘sale’ didn’t last long as buyers scurried frantically to get some cheaper BTC and altcoins.

September’s Bitcoin Market Madness: When Panic Selling and FOMO EnsuesAmong all the ‘flash sale madness,’ there are definitely people who sold or had positions that were liquidated. After BTCC first announced closing operations, bitcoin’s price dropped from the $3800 range, stopping at several key territories and then finally dropped below $3K. In these moments, lots of people likely ‘new’ to the trading atmosphere ‘panic sold’ all the way down the line. After September 15, the bitcoin price bottomed out at $2,970, and things suddenly changed gears, when an enormous amount of buying took place. BTC’s value gradually pushed back up to the $3,800 territory during the course of the day.

September’s Bitcoin Market Madness: When Panic Selling and FOMO Ensues
Bitcoin’s monumental price rise back to the $3,800 range on September 15.

Bitcoin Dips This Year Have Followed a Consistent Pattern

Taders who were able to sell at the top and buy back in at the bottom made off with profits like bandits. Even though bitcoin’s price took a hit, lots of money was made that day. The signs of the market shifting down existed after litecoin creator, Charlie Lee, detailed a certain exchange in China would announce its closing. Traders also know that when the trouble began brewing back in January between China’s central bank and bitcoin exchanges, bitcoin’s price dipped 37 percent from a $1166 high to a low of $735. Of course, these individuals also remember BTC rallied to $1,300 following the Chinese fiasco in March and spiked to $2,690 in May. Let’s just say each significant BTC correction is followed by a slower but much larger rally upwards.

September’s Bitcoin Market Madness: When Panic Selling and FOMO Ensues
Throughout 2017 bitcoin’s price dip cycles have consistently been followed by higher gains. Bitcoin’s price on September 18 is already back above the $4K territory.

Now traders also know that the rebound that’s taken place this September could very well be a ‘bull trap’ or a ‘dead cat bounce.’ However, this is also when ‘FOMO’ sets in, and we don’t know if the bearish trend will continue, or if bitcoin’s value will blast off higher from here. Some traders in various forums like the Whale Club Telegram chat say that another drop below sub-$3K territory is coming, while others confidently stated; “you will never see bitcoin below $3K again.”

Just three days later bitcoin has once again pushed the bearish market sentiment aside as it now is coasting above the $4K range. The moral of the story is; “you gotta know when to hold em’ and when to fold em,’” if you are trying to make profits daytrading bitcoin. Otherwise, ‘hodl’ your digital assets and learn to ride out the storm. 🙂

What did you think about the September 15th bitcoin market rebound? Let us know in the comments below.


Images via Shutterstock, Bitcoin Wisdom, and Pixabay.  


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South Africa’s Second Largest Supermarket Chain Pick n Pay Trials Bitcoin Payments

South Africa’s Second Largest Supermarket Chain Pick n Pay Trials Bitcoin Payments

News

A major supermarket chain in South Africa, Pick n Pay, has started a trial to accept bitcoin payments in-store at its head office location. A payment technology company named Electrum provides the payments platform, with bitcoin exchange Luno providing the Bitcoin payment infrastructure.

Also read: Five Leading Russian Universities Start Offering Cryptocurrency Courses

Pick n Pay Trials Bitcoin Payments

Pick n Pay is the second largest supermarket chain in South Africa, behind only Shoprite. The company is trialing bitcoin payments at its head office campus store, its payment solution provider Electrum recently announced:

In what is potentially a world first for a major grocery retailer, Electrum has enabled Pick n Pay to accept bitcoin payments in-store.

South Africa's Second Largest Supermarket Chain Pick n Pay Trials Bitcoin PaymentsElectrum provides the cloud-based enterprise payments platform used for bitcoin transactions. It is the first time for the company to provide a bitcoin payment solution.

Founded in 1967, the Pick n Pay group currently employs more than 80,000 people. The South Africa's Second Largest Supermarket Chain Pick n Pay Trials Bitcoin Paymentscompany sells food, clothing and general merchandise. The group has 1,560 stores in total, located in South Africa, Namibia, Botswana, Zambia, Mozambique, Mauritius, Swaziland and Lesotho. However, the trial is only at the head office campus store in Cape Town where customers can pay for groceries and services using bitcoin.

Pick n Pay executive Jason Peisl noted:

Cryptocurrency and bitcoin are still relatively new payment concepts, yet we have been able to effectively demonstrate how we are able to accept such alternative payments.

The bitcoin checkout process involves scanning a printed QR code using a bitcoin wallet app on the customer’s smartphone. The Bitcoin infrastructure is provided by Luno, a bitcoin exchange with a strong presence in Southeast Asia and Africa and an office in Cape Town.

Bitcoin Adoption Growing in South Africa

“Bitcoin interest and adoption in South Africa is taking off big time,” even though 90% of payments in the country are still cash-based, Luno revealed in April.

The country currently ranks fourth in Google Trends among countries with the most Bitcoin-related searches globally, behind only Nigeria, Bolivia, and Ghana. The most popular search topic is “Bitcoin – Payment System.” Within South Africa, the trend is steadily increasing.

South Africa's Second Largest Supermarket Chain Pick n Pay Trials Bitcoin Payments

In November last year, Luno made a list of stores online and offline where bitcoin payments are accepted in South Africa. The exchange wrote at the time:

We’re happy to say that South Africa has a thriving bitcoin market, with thousands of merchants accepting the virtual currency as payment method…Through our partnership with Payfast, shoppers in South Africa can pay with bitcoin at the thousands of merchants that have the payment method enabled.

What do you think of Pick n Pay accepting bitcoin? Let us know in the comments section below.


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The Bitcoin Cash Network Continues to Grow With an Ambitious Roadmap

The Bitcoin Cash Network Continues to Grow With an Ambitious Roadmap

News

It’s been over forty-eight days since the hard fork, and the Bitcoin Cash (BCH) network is alive and well.

Also Read: Bitcoin Exchange BTCC to Halt Trading as Regulatory Storm Brews in China

Five Different Development Teams Are Working With the Bitcoin Cash Project

Bitcoin Cash Network Continues to Grow With an Ambitious RoadmapAs the blockchain’s days continue, BCH developers have been revealing the upcoming plans to improve the cryptocurrency’s protocol. Discussions revolving around bitcoin cash development shows the protocol’s programmers have a very ambitious roadmap for the digital currency’s future. This includes a deep focus on on-chain scaling, and not fearing hard forks down the road in order to upgrade the BCH software. Currently, there are five development teams who say they are working with the BCH project, which include developers from Bitcoin ABC, Unlimited, Nchain, XT, and Classic.

Bitcoin Cash Developers Don’t Fear Hard Forks

At the moment there are lots of ideas being tossed around like a malleability fix without the  additions Segregated Witness adds, and a different difficulty adjustment algorithm. To push these new ideas forward, some BCH developers are not afraid to hard fork the network occasionally.   

Bitcoin Cash Network Continues to Grow With an Ambitious Roadmap
“If we want to scale big we’ll have to do a hard fork from time to time,” explains developer Amaury Séchet

“If we want to scale big we’ll have to do a hard fork from time to time,” explains Bitcoin ABC developer Amaury Séchet recent developers mailing list post. “Longer term, we may want to use extension point to add new features, but we are not there yet — more on extension points later on.”

Séchet and many other developers have been discussing quite a few different concepts regarding the future of Bitcoin Cash. The lead Bitcoin ABC developer Séchet mentions a new Merkle tree format and improving light client security with UTXO commitments. Other developers would also like to work on non-consensus changes to improve and make the BCH network more reliable. Development discussions have also revolved around how a hard fork should be coordinated and combining multiple changes in a consensus change.

Bitmain’s Jihan Wu: ‘Satoshi Made it Clear That Blocks Would Have to Grow’

Last week the CEO of Bitmain Technologies, Jihan Wu, was interviewed by the Chinese exchange Huobi and discussed the Bitcoin Cash network in great detail. Mr. Wu explains that he believes Satoshi made it clear that blocks would have to grow and hard forks were important to Bitcoin’s upgrade process.

“This was already apparent in Satoshi’s white paper, emails, and his discussions on bitcoin forums where he expressed similar views,” explains Mr. Wu’s translated interview.           

Before Blockstream and their allies strangled opinions on certain important channels and media platforms, the entire bitcoin community was largely aligned with the plan towards Bitcoin’s block size upgrade.          

‘These Events Have Never Occurred Before in Bitcoin’s History’

Bitcoin Cash Network Continues to Grow With an Ambitious Roadmap
Bitmain founder Jihan Wu finds the Bitcoin Cash network very interesting.

Mr. Wu says what left the deepest impression on him regarding the BCH network was how it found its initial price valuation during the first two weeks. “The price fluctuated violently and would triple in a few days then fall, because everyone was in the process of getting to know and accept it — This left the deepest impression on me.” The Bitmain founder also thinks the BCH difficulty adjustment mechanism is intriguing.

“These events are fascinating and have never occurred before in Bitcoin’s history,” Mr. Wu tells Huobi. “When we first saw this phenomenon with our own eyes we felt it was really fascinating.”

It has many implications for the switching over of computing power and how the value of assets are determined, and is worth researching.

It’s been over 8000 blocks since the hard fork and the BCH chain is 1200 blocks ahead of the legacy chain. It is currently 13.5 percent more profitable to mine BTC, but profit parity has been close and consistent for the past two weeks. At the moment, there are five known mining pools processing BCH blocks, and allegedly three unknown pools mining roughly 63 percent of the last 144 blocks. So far the BCH network has continued to grow stronger as the days continue with more supporters and infrastructure built around the protocol.

What do you think about the current state of the Bitcoin Cash network? Let us know in the comments below.


Images via Shutterstock, Bitcoin Cash, Twitter, and Pixabay. 


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Five Leading Russian Universities Start Offering Cryptocurrency Courses

Five Leading Russian Universities Start Offering Cryptocurrency Courses

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Many universities across Russia have added new courses to their existing finance curricula that are focused on cryptocurrencies, Bitcoin, and blockchain technology. They will offer these courses for the first time this academic year due to high demand.

Also read: Russia’s Finance Ministry Drafts Law to Legalize Cryptocurrencies

Cryptocurrency Courses

Five Leading Russian Universities Start Offering Cryptocurrency Courses
Moscow State University.

A number of top universities in Russia will begin offering special courses and master’s degree classes devoted to the topics of cryptocurrency and blockchain technology for the first time this year, the universities told RT. The courses will be incorporated into the schools’ existing programs in the academic year 2017-2018.

The publication interviewed five universities in particular. Moscow State University (MSU) is a reputable, coeducational public research university. Sergey Studnikov, a managing board member of the MSU economical faculty, runs the Financial Analytics master’s program. He told the news outlet about the school’s new cryptocurrency courses:

We will have master classes immediately for several programs – for this we invite industry representatives.

Five Leading Russian Universities Start Offering Cryptocurrency Courses
Higher School of Economics.

At the Higher School of Economics (HSE), which is one of the leading and largest universities in Russia, the topic is included as part of the school’s Financial Technologies course. This course is part of the Financial Technologies and Data Analysis master’s program which was jointly launched this year with the state-owned Russian banking and financial services company, Sberbank.

The Saint Petersburg State University of Economics (Spbgeu) is devoting two sections of its existing program on banking, finance, and financial markets to cryptocurrency and blockchains. According to an associate professor of the school’s Faculty of Economics and Finance, Denis Gorulev, “to introduce a separate course here, we rely on a number of formal things – this needs to be coordinated with the Ministry of Education a lot and for a long time.”

High Demand for Crypto Classes

Five Leading Russian Universities Start Offering Cryptocurrency Courses
Moscow Institute of Physics and Technology.

Moscow Institute of Physics and Technology (MIPT), also known informally as Phystech, describes itself as “a top 5 Russian university that is highly regarded by scientists, students, and engineers alike.” The institute will teach the IT component of blockchain technology.

According to a director of the MIPT’s School of Applied Mathematics and Informatics, Andrey Raigorodsky, this field is in high demand among both students and employers. “This year we have a couple of special courses,” he told RT, adding that:

This topic is extremely popular.

Five Leading Russian Universities Start Offering Cryptocurrency CoursesThere is strong demand from the school’s industrial partners, he detailed. “For example, Sberbank is working with us now – they have opened a new scientific laboratory, where research on this topic is being conducted.”

The National University of Science and Technology (Misis) is Russia’s primary technological university in the field of steel-making and metallurgy. This summer, Misis and government-owned bank Vnesheconombank (VEB) signed an agreement to create a center for new materials and breakthrough technologies with a focus on blockchain technology, the university told RT. Students will study blockchain technology at the new training center, the publication wrote, adding that:

In particular, students of MSU, HSE, Misis, MIPT and Spbgeu will learn about Bitcoin and other aspects of innovative financial technologies.

What do you think about Russian universities offering Bitcoin and blockchain-focused courses? Let us know in the comments section below.


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After the Boss Calls Bitcoin a ‘Fraud’ — JP Morgan Buys the Dip

After the Boss Calls Bitcoin a ‘Fraud’ — JP Morgan Buys the Dip

News

Just recently news.Bitcoin.com reported on JP Morgan executive Jamie Dimon calling bitcoin a “fraud” and claiming he would fire any employee from his firm who traded the digital currency for being “stupid.” Now it seems JP Morgan has been caught red-handed purchasing a bunch of XBT shares, otherwise known as exchange-traded-notes, that track the price of Bitcoin.

Also read: Bitcoin Proponents Respond to JP Morgan Executive’s Statements

After a Few Harsh Statements from Executive Jamie Dimon, JP Morgan Ltd., and Morgan Stanley Purchase Bitcoin ETNs

According to public records of Nordnet trading logs, the two associated firms JP Morgan Securities Ltd., and Morgan Stanley bought roughly 3M euro worth of XBT note shares. Interestingly after the recent regulatory crackdown in China, and the statements from JP Morgan’s senior executive Jamie Dimon talking trash about bitcoin, his firm bought the dip on September 15. In fact, out of all the companies on the list, like Goldman Sachs and Barclays, the JP Morgan team of buyers purchased the most XBT notes.

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip
Image via @IamNomad on Twitter.

Bitcoin exchange-traded-notes (ETNs) are a popular investment vehicle for mainstream investors and financial management firms who want exposure to bitcoin. A few institutions offer ETNs, among them Denmark-based Saxo Bank, which sells notes called the “Bitcoin Tracker.” These bitcoin-based ETNs track bitcoin price movements against the Euro and USD. Bitcoin ETNs have done extremely well over the course of 2017 following suit with bitcoin’s meteoric price spike.

JP Morgan Applies for Blockchain Patent 175 Times

JP Morgan doesn’t just purchase bitcoin notes, but is also heavily involved with the ‘blockchain fever’ that has infected banks across the world. The financial firm has applied for a “bitcoin alternative” patent with the U.S. over 175 times in 2013. The company is also working on an ethereum-based blockchain alongside, according to people familiar with the matter, working with Zcash development as well. With the ethereum project called “Quorum,” JP Morgan has its own Github repo that explains how the permissioned blockchain does not need consensus mechanisms like Proof-of-Work (POW) or Proof-of-Stake (POS).

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip
The financial publication Zerohedge reports that JP Morgan applied for a “Bitcoin Alternative” patent in 2013 and was rejected 175 times.

Former JP Morgan Executives Leave the Firm for Bitcoin and Blockchain Projects

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip
Former JP Morgan derivatives executive, Blythe Masters, is all about the Blockchain hype.

Additionally, former JP Morgan executives are all about blockchain technologies these days and even bitcoin. The veteran commodities trader, Daniel Masters, joined JP Morgan right after graduating college and in 2014 announced he was starting a bitcoin-based hedge fund. Another former JP Morgan mogul, Blythe Masters, started her own blockchain startup Hyperledger which is now run by the Linux Foundation. Masters is still heavily involved with the blockchain project and has a seat on the governance board.

Whether Jamie Dimon wants to admit it or not his firm was trading bitcoin-based notes after his statements. Further, over the past few years, JP Morgan cannot hide the fact that they are infatuated with blockchain technology, just like the hundreds of other financial institutions hoping they won’t be replaced.

What do you think about JP Morgan Securities Ltd. purchasing bitcoin-based exchange-traded-notes? Let us know in the comments below. 


Images via Pixabay, Bloomberg Markets, IamNomad, and Zerohedge. 


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Nebraska Ethics Board Allows Attorneys to Accept Bitcoin

Nebraska Ethics Board Allows Attorneys to Accept Bitcoin

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A Nebraska ethics board just granted attorney’s permission to accept bitcoin, with a few stipulations. The Lawyers Advisory Committee granted approval, and also suggested accepting bitcoin is not at odds with codes of professionalism. 

Also read: Bitcoin Markets Rebound as More Chinese Exchanges Plan to Close Operations

Nebraska Ethics Board Allows Attorneys to Accept Bitcoin

The Advisory committee represents an 8-person organization that makes conduct decisions for attorneys in Nebraska. The State of Nebraska Judicial Branch further clarified their role: “The eight members of the Lawyers’ Advisory Committee are attorneys appointed by the Nebraska Supreme Court. Each Supreme Court Judicial District is represented on the Committee and the chairperson and vice chairperson are selected at large.”

Bitcoin Acceptance Rules for Nebraska Lawyers

On the Nebraska Ethics Advisory Opinion For Lawyers document, 3 different questions were presented before the board. Each question pertained to attorney’s accepting bitcoin for client services:

A. May an attorney receive digital currencies such as bitcoin as payment for legal
services?
B. May an attorney receive digital currencies from third parties as payment for the
benefit of a client’s account?
C. May an attorney hold digital currencies in trust or escrow for clients?

Board Decisions on the Questions

For A, the board agreed that Nebraska attorneys should be able to receive bitcoin as a form of payment. However, they have to immediately turn the bitcoin into fiat currency. The document stated that a rise in price would be an “unconscionable overpayment.”Nebraska Ethics Board Allows Attorneys to Accept Bitcoin

For B, Attorneys can receive funds from third parties so long as the payment prevents possible interference with the attorney’s independent relationship with the client and the attorney implements know-your-client (“KYC”) procedures within the transaction.

For C, the board approved attorneys could hold hold funds in escrow. However, the attorney cannot mix bitcoin with their property. They are supposed to use multi-sig wallets for holding bitcoin for escrow.

Bitcoin Statement of Facts

The original document concluded with some facts about bitcoin. It talked about what bitcoin is and how it works, and mentioned it was a decentralized, peer-2-peer payment network and digital currency. It even went into details about wallets. The document further elaborated:

A person sending bitcoins to another person uses a “public key”, a series of letters and numbers comprising the address to where the funds should be sent. The sender then utilizes a “private key”, a code that authorizes the ledger book to make a change that debits the sender’s wallet and credits the receiver’s wallet.

The Advisory Board document also said a number of law firms and “jurisdictions” have began accepting bitcoin, but they probably have not determined if it is “allowed through their respective Bar Associations’ Codes of Conduct.”

What do you think about Nebraska allowing attorneys to accept bitcoin? Is this a step in the right direction? Let us know in the comments below.


Images via Shutterstock


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

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Beijing Sets Deadlines for Bitcoin Exchanges – Customers to Withdraw Funds Quickly

Beijing Sets Deadlines for Bitcoin Exchanges – Customers to Withdraw Funds Quickly

Regulation

Beijing has ordered all affected bitcoin exchanges to post a notice of their closure by midnight on Friday. Now, the exchanges are urging customers to withdraw their funds as regulators have also set a deadline for them to come up with plans to allow withdrawals “in a risk-free manner.”

Also read: China’s Regulatory Crackdown Forces More Bitcoin Exchange Closures

Exchanges Ordered to Announce Closing Dates

Chinese authorities have ordered Beijing-based cryptocurrency exchanges to stop trading and allowing new registrations as of Friday, according to a government notice, which was verified by Reuters. “The notice was signed by the Beijing city group in charge of overseeing internet finance risks and circulated online.” The notice read:

All trading exchanges must by midnight of Sept. 15 publish a notice to make clear when they will stop all cryptocurrency trading and announce a stop to new user registrations.

China’s top bitcoin exchanges have already complied. Btcchina announced on Thursday that it will close on September 30. “Btcchina will completely shut down its exchange businesses on September 30th,” the company tweeted. However, the only businesses affected are those relating to Btcchina. Other Btcc businesses are unaffected as “Btcc is a separate company from Btcchina,” the company noted, adding that “Btcc Pool, Btcc USD Exchange, Btcc Dax, Btcc Mobi, & Btcc Mint are not affected by this change.”

Beijing Sets Deadlines for Bitcoin Exchanges - Customers to Withdraw Funds Quickly

Huobi and Okcoin made similar announcements on Friday, stating that they are closing on October 31. Huobi announced that new user registration and CNY deposit service have already stopped, stating that:

The actual closing of CNY trading will take place on October 31st. We will close all CNY to cryptocurrencies trading one asset at a time.

Beijing Sets Deadlines for Bitcoin Exchanges - Customers to Withdraw Funds QuicklyOkcoin similarly posted a notice on Friday, outlining its closing policies. The company emphasized that the only service closing is the RMB trading business. The rest of its businesses are not affected. “Because regulators have not announced that bitcoin and digital assets are illegal, Okcoin will actively explore, strive for, expect to continue to provide Chinese users with compliant digital asset services,” the company wrote.

Many others have also announced their closure such as Viabtc and Yobtc. Another exchange C2CX announced that it will close on September 30.

Customers Urged to Withdraw Funds Quickly

Beijing Sets Deadlines for Bitcoin Exchanges - Customers to Withdraw Funds Quickly

The regulators have additionally instructed the exchanges to come up with plans of how customers can withdraw their funds, Reuters reported. “Platforms should also tell the government by Wednesday Sept. 20 how they will allow users to make withdrawals in a risk-free manner and handle funds to make sure investor interests are protected,” the news outlet detailed.

Btcchina has already made announcements regarding the withdrawal of user funds. All withdrawals are processed within 24 hours, the company revealed. In addition, even after September 30 when the exchange has ceased operations, customers can still continue to withdraw funds. Furthermore, its Blockchain+ trading platform will open up bitcoin cash (BCC, BCH) withdrawals before Sunday, September 24. The company assured customers that the exchange and its Blockchain+ trading platform have enough funds to accommodate all customer withdrawals including CNY, BTC, LTC, BCC, and ETH, and tweeted that:

Btcchina encourages customers to withdraw their funds as quickly as possible. Customers can withdraw their funds whenever they want.

Huobi’s notice also gave some details about how it will deal with withdrawals. While CNY deposit service has stopped, digital asset deposits and withdrawals, as well as CNY withdrawals, will remain open. “BCC withdrawal service will be enabled before September 20th,” the exchange wrote.

What do you think of Beijing’s orders? Let us know in the comments section below.


Images courtesy of Shutterstock, Btcc, Twitter


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