Cryptocurrency News Now!: BitPay's clench on crypto 😳

Monday, May 27, 2019

BitPay's clench on crypto 😳

May 27, 2019	View in browser

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Today's top reads

BitPay's clench on crypto payments
Security tokens fall short
Subreddits as an indicator
Istanbul and its EIPs
Craig Wright's new copyright

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Market update

COIN	PRICE	7-DAY
BTC	$8,839.66	+ 11.39%
ETH	$271.75	+ 7.54%
XRP	$0.415	+ 3.65%
BCH	$438.80	+ 7.09%
LTC	$116.29	+ 25.95%

1. BitPay's clench on crypto payments

$50 million. That's how much Coinbase Commerce, the payment processing leg of crypto's most popular unicorn, has transacted in its short lifetime.

But while Coinbase's Justin O'Brien prided the achievement to CoinDesk earlier this week, sharing that volumes have "been on an upward trend since [it] launched," it's really not all that impressive.

That's because BitPay's transaction volume dwarfs that number. In 2018, the company cruised past the $1 billion milestone for the second year in a row bringing its total transaction volume to $2.8 billion since its founding in 2011.

It's not just transaction volume either. It's merchants too. Specifically, BitPay's B2B business has grown significantly - more than doubling in 2018 while also boasting an impressive client list that includes industry giants like Microsoft, Shopify, and last week, AT&T.

And although competitor's like Coinbase Commerce and CoinGate, who recently passed more than 4,500 merchants, are celebrating their adoption curves, BitPay passed 10,000 merchants... back in 2013. You get the point.

In short: BitPay controlled more than 60% of the crypto payment processing market back in 2014 and its position doesn't seem to be shrinking very much. And with global payment processors expected to grow with a CAGR of 16.43% over the next five years, BitPay is definitely sitting pretty.

2. Security tokens miss the target

"Crypto will tokenize the world." It's a saying the crypto community shares frequently with its unconvinced, no-coiner friends. But although security tokens are being created to tie traditional assets to their digital twins, it's not happening as fast as supporters would hope.

In a Forbes report, Polymath, a startup that helps companies create these coins, shared that there are well over one-hundred different security tokens already.

But there's just one problem: There's no liquidity. In the United States, only two exchanges trade these kinds of assets with less than $1 million volume per day. Openfinance trades four and Overstock's exchange trades only one, its very own tZERO token.

So what's happening here? Some blame strict regulations from the Securities and Exchange Commission (SEC) for the slow start. Others, however, see a broader problem at play here. That is, turning an illiquid paper security into a digital form just isn't enough to boost investor interest.

Josh Stein, CEO of security token startup Harbor, told Forbes:

"People have realized that yelling the word token is not a substitute for a good investment or distribution channels."

3. Subreddits as an indicator

Bitcoin bulls are back. That also means the investors who hibernated during crypto winter are slowly crawling back into the online community via google searches, Telegram group chats, Twitter, and of course, Reddit.

Back in December 2018, r/Cryptocurrency mod and Monero community organizer Justin Ehrenhofer shared traffic stats for cryptocurrency's largest subreddit. It wasn't pretty. Pageviews had sunk to nearly 1/10 of the size of January's traffic and only seemed to be sinking further from the bear market.

Since that dreary December day, however, r/Cryptocurrency has notched a +50% increase in user activity (comments plus posts) with a yearly high set May 15th when bitcoin's price punched through the $8,000 level for the first time in nine months.

Outside of r/Cryptocurrency, other crypto subreddits are benefitting from the bullish moves as well:

Coin	Subreddit	Activity (30-Day)
Bitcoin	r/Bitcoin	+ 25%
Ethereum	r/ethtrader	+ 6%
XRP	r/Ripple	+ 27%
Bitcoin Cash	r/btc	+ 10%
Litecoin	r/litecoin	+ 8%

The bottom line: Investors like talking about their investments when they are seeing green.

4. Istanbul and its EIPs

Ethereum has some decisions to make. Just over three months after Ethereum successfully hard forked to its Constantinople update, the blockchain is now facing Istanbul - it's next upgrade.

The update has a laundry list of 28 possible EIPs (Ethereum improvement proposals) that affect everything from changing the way data is stored on the blockchain to altering the cryptocurrency's mining algorithm.

So far, however, only one EIP has gotten tentative approval. The approved EIP 1108 proposes to make minor changes to the way gas fees are calculated on the network. Other than that, most EIPs discussed on the biweekly call this Friday were tabled for further discussion.

More popular EIPs include:

EIP 1559: A proposal to change Ethereum's transaction fee model to one based on network demand so users can avoid paying "unnecessarily high fees." This EIP, however, has been dubbed a "pretty complicated change" and might be delayed for an upgrade after Istanbul.
EIP 1057: A proposal to change Ethereum's mining algorithm to prevent ASIC miners from overpowering GPU miners and centralizing the cryptocurrency's mining landscape.

But it's still early. For now, Ethereum is just getting its ducks in order by approving possible EIPs - a process which ultimately relies on the consensus of other stakeholders to implement.

5. Craig Wright's new copyright

Early last week, the controversial Satoshi claimant Craig Wright was awarded U,S. Copyright registrations for the Bitcoin Whitepaper (previously known only to have been written by Satoshi Nakamoto).

As a result, Bitcoin SV (BSV) soared, jumping from around $60 USD to almost $120 in a matter of hours.

Quickly thereafter, Wright haters took to Twitter and Reddit to debunk the hype. Many clarified that being granted copyright doesn't mean the Copyright Office (USCO) is validating Craig's claim to be Satoshi.

After a swarm of public commentary regarding the validity of the copyright, the USCO issued a public statement:

"As a general rule, when the US Copyright Office receives an application for registration, the claimant certifies as to the truth of the statements made in the submitted materials. The Copyright Office does not investigate the truth of any statement made."

Pulling it all together… Craig being granted copyright over the Bitcoin Whitepaper is not proof that he is Satoshi Nakamoto, or that he actually wrote the whitepaper.

It is, however, a steep risk. If he is unable to prove that his statements are true, he could be facing serious consequences.

The question is: Why would somebody put themselves in such jeopardy if they were making false claims?

5. You should also know

ConsenSys launched a "job kit" to help guide developers into the blockchain industry.
More than a quarter of Kraken exchange employees reportedly get paid in Bitcoin with the number growing each month.
Robinhood is allegedly seeking $200 million in its latest raise to put the company at a $7 billion valuation.

6. No trust in media

From last week's poll, 68% of respondents answered that they think crypto media is full of shills.

And it is. Last year, Breaker Mag revealed that more than half of crypto news outlets would take payment to shill projects to their audience.

We've never done that. For those of you that have been with us since the start, you know that we've never taken payment to shill random cryptocurrencies.