Crypto Mining Becomes Less Profitable, Shifts Towards ‘Bigger Players,’ Report Shows

Crypto Mining Becomes Less Profitable, Shifts Towards ‘Bigger Players,’ Report Shows

Bitcoin (BTC) miner revenues for the first six months of 2018 have already surpassed results in 2017, but the miners themselves see little profit, weekly crypto outlet Diar reports Monday, October 8. As per the Diar report, the rewards and fees for BTC miners have already reached $4.7 billion in the first three quarters of 2018, around $1.4 billion more than the profits in all of 2017. Miners still gain 54,000 Bitcoin monthly, the outlet continues. However, mining is gradually becoming profitable only for “big guns” as electricity prices are constantly increasing. Diar assessments show that the miners paying retail electricity prices have shifted towards unprofitability for the first time this September. Revenue and profit ratio for miners in 2018. Source: Diar The Diar report notes: “Bitcoin mining has, at least for now, and most likely in the future, moved into the court of bigger players with deep pockets.” However, even major companies might have to adjust their business, according to Diar. For instance, Chinese mining giant Bitmain, which received 95 percent of its revenue in 2018 from the sale of miners, is “acting like a swing producer” and opening pools in U.S. in order to keep the network profitable for miners. As Diar wrote in the same weekly issue, San Francisco-based crypto exchange Coinbase’s U.S. dollar volumes have hit a 1-year low in the third quarter of 2018. However, in comparison to the same period last year, BTC trading volume is now slightly higher ($5.4 billion against $4.6 billion in 2017). In the meantime, exchange Bitstamp’s trading volume of BTC was around $4.4 billion, while it was at around $4.6 billion in the same period last year. As Cointelegraph has previously reported, Bitmain announced a $500 million investment in August in blockchain data center and mining facility in Texas. The construction was estimated to be launched in early 2019, with plans to bring in 400 local jobs in the first two years.

Forbes Partners With Civil to Publish Content on a Blockchain

Forbes Partners With Civil to Publish Content on a Blockchain

Business media giant Forbes is moving to the blockchain. The company, which operates a daily news web portal and prints a bi-weekly magazine, is moving its content to a distributed ledger-based platform provided by Civil, according to a blog post from Civil co-founder Matt Coolidge on Tuesday. As part of the partnership, Forbes will begin archiving aspects of its existing content on the platform, as well as working with the startup to “experiment with new methods of reader engagement.” Forbes senior vice president of product and technology, Salah Zalatimo, said the company is “relentlessly focused on rapid experimentation and implementation” to find how to draw in an audience, as well as how the journalism industry might look going forward. He added: “Forbes and Civil believe passionately in the mission of journalism, and together we can provide audiences with a level of unprecedented transparency around our content. We’ll also be able to expand the reach of our writers and identify new revenue channels over time.” The experiment will begin next year, when Forbes begins publishing some article metadata to a blockchain platform. Should this aspect succeed for both companies, Forbes will move to publish all article metadata to Civil’s platform, according to a press release. Forbes writers and editors will see blockchain publishing tools integrated into its content management system (CMS), which will help streamline the process of adding such metadata – which includes an author’s identity and some information about sources within a piece – to the company’s platform. Axios further reported that Forbes may look to use smart contracts to allow contributors to publish pieces to Forbes, Civil or blogging platform Medium, among other outlets, through its CMS. Forbes image via dennizn/Shutterstock The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

A16z, Binance and More Back Oasis Labs’ New Blockchain Startup Program

A16z, Binance and More Back Oasis Labs’ New Blockchain Startup Program

Blockchain startup Oasis Labs has teamed up with some notable venture capital firms and hedge funds to launch a new technology startup program. Announced Tuesday, the Oasis Startup Hub will focus on aiding firms building “privacy-first computing on blockchain” platforms, according to a press release. Accel, a16z crypto, Binance Labs, Pantera Capital and Polychain Capital will all provide support for the program. As structured, the hub will offer developers access to technical support and early access to new technology, as well as assistance and feedback from investors. Program members will further have the opportunity to work directly with investors and Oasis Labs engineers through working sessions, office hours and private events, the release indicates. In a statement, CEO Dawn Song explained that, “we’ve seen strong interest in our private testnet from companies and developers who want to build scalable applications that protect user data and put privacy first – and are constrained by existing platforms.” As such, Song added: “We’re encouraged by the diversity and volume of application developers who share our values and validate our approach. We designed the Oasis Startup Hub to bring experts together for invaluable interactions around how to design, build and deliver exciting new applications.” Oasis Labs already has several launch clients for the hub, which, while it did not name them in the release, are already working on applications that “require strong privacy protections.” At present, these applications include areas like decentralized credit scoring and distributed data marketplaces for artificial intelligence, though other startups can still apply to join the hub. Applications focusing on data protection will continue to gain importance, Accel partner Jake Flomenberg said in the release, noting the recent string of “high-profile privacy failures.” Similarly, Pantera Capital partner Paul Veradittakit commented that the hub “offers a unique opportunity” for funds “to share expertise and relationships to solve key issues around blockchain scalability and privacy, and move toward widespread adoption.” Editor’s note: This article has been updated. Golden egg image via Shutterstock The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

SpankChain Loses $40K in Hack Due to Smart Contract Bug

SpankChain Loses $40K in Hack Due to Smart Contract Bug

SpankChain, a cryptocurrency project focused on the adult industry, has suffered a breach that saw almost $40,000 in ethereum (ETH) stolen. In a blog post published Tuesday, the SpankChain team disclosed the hack, saying 165.38 ETH (worth around $38,000 at the time) had been lost at around 18:00 PST on Saturday. The intrusion, which the post said was made possible by a bug in the network’s payment channel smart contract, also caused $4,000 in SpankChain’s BOOTY token to be frozen. It apparently took over 24 hours for the project to realize the hack had taken place, with the post stating: “Unfortunately, as we were in the middle of investigating other smart contract bugs, we didn’t realize the hack had taken place until 7:00pm PST Sunday, at which point we took Spank.Live offline to prevent any additional funds from being deposited into the payment channels smart contract.” Of the cryptos stolen, $9,300 worth of ETH and BOOTY belonged to users, and the remainder to the project. According to the blog post, full refunds will be “sent directly to users’ SpankPay accounts, and will be available as soon as we reboot Spank.Live.” SpankChain warned of 2–3 days’ delay ahead while its developers patch the issue behind the hack, redeploy a new smart contract and fix the other contract issues that were already being worked on. Limits on the use of BOOTY tokens have also been put in place temporarily. So far, the team says, it seems the attack was due to a “reentrancy” bug, similar to the one that allowed a major hack of The DAO crypto project in 2016. “The attacker created a malicious contract masquerading as an ERC20 token, where the ‘transfer’ function called back into the payment channel contract multiple times, draining some ETH each time,” the team said, adding that it will undertake an “in-depth investigation of the attack” in the coming days. SpankChain further conceded it had decided not to pay for a security audit for the payment channel contract due to the costs involved, However, “taking into account both the perception value and opportunity cost of the time spent reacting to the hack, it would have been worth it,” the post says. The firm concluded by pledging it would improve its security practices, “making…

Crypto Fund Wins License From Swiss Markets Watchdog

Crypto Fund Wins License From Swiss Markets Watchdog

Switzerland’s financial markets regulator has issued a license to a cryptocurrency investment fund in a move that opens the door for wider institutional participation in the country’s crypto activities. Zug-based Crypto Finance AG announced on Tuesday that the Swiss Financial Market Supervisory Authority (FINMA) has given the green light to its subsidiary, Crypto Fund AG, to legally act as an asset manager. A search on the FINMA database shows that Crypto Fund AG – founded by former UBS banker Jan Brzezek in 2017 – is now authorized as a manager of “collective investments” under the country’s Collective Investment Schemes Act. With the license, the firm said Crypto Fund AG is now allowed to manage and distribute both domestic and foreign funds for investing in crypto-related projects. The registration as an asset manager arrives as an extension to another license that Crypto Fund AG received from FINMA in June which limited the firm’s activities to merely distributing funds to qualified investors. Brzezek said in the release: “The importance of crypto assets is growing and our aim is to accelerate maturity in these markets. Regulatory recognition remains highly sought after by participants, as seen in recent press and company statements.” The news comes as Switzerland continues to gain traction as a country offering a relatively welcoming regulatory regime for companies working with cryptocurrencies and blockchain. FINMA notably issued guidelines early this year that clarified when it would class tokens as securities and what crypto projects need to do to carry out ICO activities while remaining compliant. In June, SIX, the primary stock exchange in Switzerland, announced it is developing a blockchain-powered trading platform that is aiming to tokenize traditional financial assets to boost liquidity for institutional investors. Meanwhile, SEBA Crypto AG, another Zug-based crypto startup (also founded by former UBS bankers), is seeking a banking and securities dealer license from FINMA, having raised $104 million in a bid to become a regulated crypto bank, as CoinDesk reported last month. Switzerland image via Shutterstock The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Bitcoin Core Developer Advocates Credit Card Payments Over BTC

Bitcoin Core Developer Advocates Credit Card Payments Over BTC

News Bitcoin Core developer Jimmy Song has caused controversy by suggesting that bitcoin enthusiasts would be better off using credit cards as a means of payment. He described this strategy as being “more rational and convenient” than making multiple onchain transactions. His advice flies in the face of the rationale behind Bitcoin and has provoked a strong response. Also read: Credit Card Cartels Landed With $6.2 Billion Price-Fixing Bill Jimmy Song Sings the Praises of Fiat Currency Bitcoin Core developers are expected to advocate the use of the cryptocurrency protocol they help to maintain. Jimmy Song’s invocation to use credit cards, where possible, has thus been greeted with incredulity in some quarters. “If you want to use bitcoin as a method of payment,” he began his tweet, implying that there was something odd about wanting to make payments with a cryptocurrency whose whitepaper is titled “a peer-to-peer electronic cash system.” Song went on to describe his proposal for using credit cards to fund day-to-day payments and then paying off monthly bills in bitcoin. The justification for doing so was that such a mechanism would entail performing a single onchain transaction, rather than multiple ones for each purchase. Song’s tweet, liked by various Bitcoin Core developers and assorted cheerleaders, is not uncharacteristic. Blockstream CSO Samson Mow has previously opined that bitcoin “isn’t for people that live on less than $2 a day,” and asserted that such individuals may not even be computer literate enough to safely transact with cryptocurrencies. If you want to use Bitcoin as a method of payment, this strategy is more rational and convenient than doing lots of on-chain tx’s: 1. Spend with your credit card with no debt on it.2. When your credit card bill comes, sell just enough bitcoin to pay the bill. — Jimmy Song (송재준) (@jimmysong) October 8, 2018 Core Developers Dissuade Daily Use of Bitcoin A number of Bitcoin Core developers have voiced similar opinions to Song, including urging members of a meetup not to use their BTC to pay for dinner. The notion that the bitcoin ledger is sacrosanct, and that users should avoid sullying it with trifling transactions for everyday purchases, is an odd one to espouse, especially by figures who effectively serve as ambassadors for BTC…

Middle East’s First Central Bank-Backed Crypto Exchange to Launch in 2019

Middle East’s First Central Bank-Backed Crypto Exchange to Launch in 2019

Two blockchain veterans are gearing up to launch what could be the first cryptocurrency exchange in the Persian Gulf to be licensed by a central bank. Revealed exclusively to CoinDesk, Rain Financial has opened its public waiting list after a year in the Central Bank of Bahrain’s fintech sandbox. Co-founded by Saudi blockchain consultant Abdullah Almoaiqel and Egyptian investor-turned-meetup organizer Yehia Badawy, Rain aims to offer both a brokerage for retail crypto investors and an institutional platform along the lines of Coinbase Pro in Silicon Valley. Although at least five other exchanges are also involved with the Bahrain sandbox – a regulatory program where applicants experiment in a closely supervised environment before graduating to full-fledged licensed businesses – Rain was the first to join in September 2017, and expects to launch in early 2019. “What is unique about Rain is they are the most advanced and the closest to graduating,” Khalid Saad, CEO of Bahrain Fintech Bay, a non-profit co-working space for local startups, told CoinDesk. He added: “There’s no cryptocurrency exchange in the region that is officially regulated. Hopefully, Rain will be the first one.” Such an entity could conceivably encourage new capital flows into the crypto ecosystem from a part of the world rich in natural resources like oil and gas. As it stands, few Persian Gulf residents officially participate in the crypto markets, partly for fear of the sector’s shadowy reputation (although Dubai has notably been a pioneer of “smart city” applications of blockchain technology). Crypto-curious investors “are waiting for the right regulations to be in place and the right partners,” Rain co-founder Badawy said. “We are here to fill this demand, with institutional-grade infrastructure.” Intrigued by the potential of this largely untapped market, crypto veterans such as Cumberland Mining founder Mike Komaransky, Bitcoin Core developer Jimmy Song and the crypto wallet startup Breadwallet, have all invested in the Bahrain-based startup. (Rain would not disclose how much it has raised.) Further, Rain has tapped Joseph Dallago, an alumnus of the crypto wallet startup Abra, to be its CEO. Uphill battle To be sure, the Dubai-based incumbent BitOasis has been facilitating bitcoin purchases since 2015, and is also a participant in the Bahrain sandbox. But while BitOasis (which did not respond to several…

Cautiously Bullish: Bitcoin Price Clears Key Trendline to Pass $6.6K

Cautiously Bullish: Bitcoin Price Clears Key Trendline to Pass $6.6K

Bitcoin saw a low-volume bullish breakout Monday, but the long-awaited move is sending mixed signals to investors The leading cryptocurrency cleared the trendline sloping downwards from the July 25 high and Sept. 5 high around midday yesterday, adding credence to the argument put forward by many, including billionaire investor Novogratz, that the market has carved out a long-term bottom around $6,000. However, so far, the bullish trend change hasn’t significantly revved up investor interest. This is evident from the fact that the total trading volume rose by a meager 15 percent yesterday, according to CoinMarketCap. More importantly, 24-hour trading volume is holding below $4 billion (near the yearly low so far). Further, the follow-through has not been impressive either. By now, one would have expected BTC to be trading above last week’s high of $6,741. After all, the breakout occurred after a prolonged period of low volatility action. Instead, it is trading at $6,650 at press time and is holding just above the trendline support (former resistance) of $6,630 Hence, there is merit in being cautious, despite BTC’s move above the falling trendline. Daily chart As seen in the daily chart, BTC closed above the 2.5-month long falling trendline yesterday, signaling a bullish reversal. However, the lackluster response to the upside break likely indicates that investors need a more credible evidence of a bullish breakout. Hence, we remain cautiously bullish on the cryptocurrency and would adopt a strong bullish bias once it has crossed the next key hurdle of $6,775 (upper Bollinger band) on the back of strong volumes. Weekly chart As can be seen, BTC is struggling to find acceptance above the 10-day exponential moving average (EMA) since mid-September. Therefore, BTC’s upside break of the trendline, as seen in the daily chart, would look more convincing once the 10-day EMA is scaled. View BTC took a bullish turn Monday, opening doors for a rally to $7,000, but low volumes are forcing us to adopt a cautious stance. The bullish move would look more legitimate if the 24-hour trading volume crosses $5 billion in the next few hours. The outlook would change from cautiously bullish to strongly bullish once BTC rises above the 10-week EMA of $6,712. As per the daily chart, a move above…

The Daily: Crypto Funds Team up With New Startup Hub, FX Broker Adds BCH/BTC

The Daily: Crypto Funds Team up With New Startup Hub, FX Broker Adds BCH/BTC

The Daily In today’s edition of The Daily, we look at a group of major cryptocurrency venture funds teaming up with a new startup hub, some good news for Israeli investors, a new platform launched in open beta and an FX broker that is adding bitcoin cash (BCH)/bitcoin core (BTC) to its platform, as well as 15 other trading instruments. Also Read: Binance Exchange to Replace Token Listing Fees With Donations New Startup Hub to SupportPrivacy-Focused Projects Oasis Labs has announced a new partnership with a16zcrypto, Accel, Binance Labs, Pantera Capital and Polychain Capital to launch a program to accelerate the development of privacy-focused projects. The Oasis Startup Hub will provide developers with guidance from top venture capital investors, dedicated technical support from its engineers and other additional benefits. The team said that several companies have already joined the program at launch, developing applications that range from decentralized credit scoring to distributed data marketplaces for artificial intelligence. “Oasis has impressed us with technical acumen and business leadership, and working closely with their team on this project reflects the depth of our commitment,” said Paul Veradittakit, partner at Pantera Capital. “The Oasis Startup Hub offers a unique opportunity to share expertise and relationships to solve key issues around blockchain scalability and privacy, and move toward widespread adoption.” Israel May Lighten Tax Burden on Crypto Traders Speaking at an event in Tel Aviv, the deputy director general of the Israel Tax Authority said that the agency will not insist on calculating the taxation of crypto by FIFO (first-in, first-out), which can simplify reporting for investors and may result in lower tax assessments. CPA Roland Am-Shalem, the deputy director general of the agency, clarified that the exact tax calculation, which relates to profits explicitly accrued for each cryptocurrency, would be acceptable to the Israeli authorities. Asked whether the tax could be reported by a non-FIFO method, he replied: “Yes, we will not insist on FIFO, subject to the fact that you can identify the currencies and be consistent with yourself.” Jeremy Dahan, co-founder of Hello Group Software, which offers a diamonds-backed stablecoin, commented: “The significance of the announcement is that the assessments are much lower than in the FIFO method, so even those who submitted reports according to…

PwC Partners With Decentralized Lending Platform to Provide Expertise in Stablecoin Launch

PwC Partners With Decentralized Lending Platform to Provide Expertise in Stablecoin Launch

“Big four” audit giant PricewaterhouseCoopers (PwC) has partnered with decentralized lending platform Cred to provide tech expertise in the launch of their USD-backed stablecoin, the company announced on Monday, October 8. In the announcement, the professional services firm claimed that the new partnership is designed in order to boost the current market of U.S. dollar-pegged cryptocurrencies by bringing more trust to investors. PwC is touting their service as a solution to major existing problems associated with the stablecoin market, such as transparency and “substantiation,” which keep a number of investors away from the field. With the partnership, the audit firm notes it plans to ensure a “valuable perspective on how standards can be enhanced,” in order to provide “more transparent set of reserve functions.” The statement adds: “Many investors are looking for crypto assets that can be pegged to a stable fiat currency such as the US dollar, but these assets require a reserve ledger built for decentralized assets, that can provide 100% transparency and value substantiation.” The company also stated that it will provide clients with useful insights on governance, security, and risk management. PwC’s U.S. blockchain and cryptocurrency leader Grainne McNamara commented that the new stablecoin is an attempt to give another push to the development of a “quickly developing asset class” at an “increased level of comfort.” In late September, U.S. venture capital fund Andreessen Horowitz invested $15 million in blockchain startup MakerDAO (MKR), the firm that backs USD-pegged stablecoin Dai (DAI). And earlier in September, the Winklevoss twins, founders of crypto trading platform Gemini, acquired permission from New York regulators to launch their own USD-backed stablecoin. Subsequently, security researchers pointed out a feature of the recently launched Gemini dollar (GUSD) that allows custodian to completely change any transaction within GUSD network every 48 hours. Earlier today, Cointelegraph reported on four professional services giants including PwC having set up a solid long-term blockchain roadmaps in order to keep the leadership in crypto and blockchain industry.