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JPM COIN: While its CEO, Jamie Dimon, is notorious for his critical comments on bitcoin, investment bank JPMorgan is preparing for a future where blockchain is a key part of financial infrastructure with its own cryptocurrency.
Called JPM Coin, the token has been developed by engineers at the bank, according to a report from CNBC on Thursday, and is moving to real world trials in “a few months.”
For the effort, JPM Coin will be used to settle a small portion of its transactions between clients of its wholesale payments business in real time, CNBC says. The bank moves over $6 trillion daily as part of that business, it adds.
Speaking to the news source, Umar Farooq, JPMorgan’s blockchain lead, posited three main use cases for the bank token, including replacing wire transfers for international payments by large corporate clients and cutting settlement times from days to just moments.
It could also be used to provide instant settlement for securities issuances, as well as to replace U.S. dollars at held internationally by subsidiaries of major corporations using JPMorgan’s treasury services.
“Money sloshes back and forth all over the world in a large enterprise,” Farooq said. “Is there a way to ensure that a subsidiary can represent cash on the balance sheet without having to actually wire it to the unit? That way, they can consolidate their money and probably get better rates for it.”
Eventually, JPM Coin could be used for mobile payments, he added. Full Story
NETWORK SLOWDOWN: Ethereum’s so-called “difficulty bomb” – a negative incentive built into its code which slows the blockchain down – is having a noticeable impact on the network after it began to “go off” last December. The program is designed to encourage a shift from the network’s proof-of-work consensus model to proof-of-stake.
Etherscan reports that the ethereum blockchain has seen its lowest level of block reward issuance this past Monday, with only 13,131 ETH being issued. In contrast, more than 20,000 ETH were regularly issued back in November. The number of blocks being produced on the blockchain is likewise dropping.
Left unaddressed, the difficulty bomb might stall the ethereum blockchain altogether in the coming months, says Parity release manager Afri Schoedon. However, Constantinople, an upgrade planned for later this month, should delay the bomb for 12 months and stabilize block rewards. Full Story
BRIEF HOPE: Reality Shares ETF Trust filed for a novel form of exchange-traded fund on Monday, which would have invested in a portfolio of fiat currency instruments and bitcoin futures. The company withdrew this proposal on Tuesday at the request of U.S. Securities and Exchange Commission, according to a letter published by the regulator.
An attorney for Reality Shares verified the move, telling CoinDesk that “it was withdrawn because the staff are still taking the position that it’s not appropriate to file a registered [Investment Company Act of 1940] fund with cryptocurrency exposure at this time.”
Specifically, under the Act, the ETF would have gone live within 75 days of filing regardless of SEC input, which the regulator has effectively forbidden. The agency has preferred the public comment and manual approval process seen with other ETF proposals, such as those filed by Bitwise and VanEck/SolidX. Full Story
5 ADDRESSES: Analysis of the bitcoin blockchain may have led to the discovery of five addresses belonging to the cold wallets of collapsing crypto exchange QuadrigaCX.
Quadriga has previously explained that it cannot access its cold wallets, after its founder and CEO Gerald Cotten died in December of last year. Cotten supposedly had sole control of the exchange's private keys, and Quadriga did not share its wallet addresses in court filings.
However, after EY, which is overseeing Quadriga's fund recovery attempts, announced that the exchange mistakenly sent 103 bitcoin to its cold wallets, internet sleuths discovered a cluster of bitcoin wallets which corresponded to the transactions.
Moreover, one of the addresses discovered had previously received some small amount of bitcoin from an address Quadriga already listed as one of its hot wallet addresses, further supporting this connection. Full Story |
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 CoinDesk Research surfaces the key data, trends and events with its State of Blockchains reports. We will examine individual aspects of cryptocurrencies and fundamental metrics going forward in these reports. We observed the state of Bitcoin (BTC) fees recently. Check out the full article here. Transaction fees make the bitcoin blockchain go round. The miners are compensated for their efforts, not only through inflationary block rewards, but also through fees charged to users for adding their transaction to blocks. While fees on average make up about 4 percent of the total miner revenue per day, with the lion’s share coming from block rewards, sometimes economic shocks cause those fees to rise. Bitcoin now sits below $4,000 and the demand is returning to parity with that of Q4 in 2017. Astonishingly, fees have remained low. This begs the question of how we could have the same increased demand levels but not the commensurate increase in fees. The answer is Segwit Adoption. Segwit is a software upgrade that allows transaction data to be minimized so a user can fit more transactions in a given block. Only 10 percent of transactions were using Segwit during the fee crisis of Q4 2017, while more than 35 percent are now using it. Jimmy Song, blockchain programmer, simplifies it as “Segwit transactions [result] in a block size of around 2MB”. Thus fees and confirmation times were reduced through the solution of an effective block size increase. For an in-depth view of crypto data, you can also check out the CoinDesk Crypto-Economic Explorer here. |
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| BOTTOM IN? Bitcoin remains flatlined below $3,600 for the sixth straight day, disappointing investors betting on a short-term revival. Bulls need a break above $3,735 (neckline resistance) to confirm an inverse head-and-shoulders breakout. The cryptocurrency's weekly MACD – a long-term trend indicator – is reporting bearish exhaustion, indicating that bitcoin may be about to reach, or has already hit, a bottom. Full Story |
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BEST OF THE BEST
According to a CNBC report citing Coin Dance data, bitcoin trading in the South American nation has rocketed by 30 percent to 2,454 BTC in the last week. That's roughly $8.7 million-worth of the cryptocurrency and marks an all-time high as Venezuela reels from both economic and political crises.
The figures suggest that citizens are turning to bitcoin as a safer store of value as soaring inflation renders the Venezuela’s national currency, the sovereign petro, worthless, CNBC says.
THE REST The U.K.’s tax and customs agency, HM Revenue & Customs, held a trial of the distributed ledger technology in 2017 aimed to assess the tech’s potential in coordinating customs activities at borders. While considered a success, a continued effort will have to stay on the back burner for now. Financial secretary to the Treasury Mel Stride, answering a parliamentary question, said: “Any significant implementation of blockchain would require significant further work by HMRC. Further work on the application of blockchain to Authorised Economic Operator status is deferred until after the UK leaves the EU when timescales and cost will be revisited. THE FINTECH TIMES: Reports of bitcoin’s demise as a payment method seem to be premature. According to a report last week from Kaspersky Lab, 13 percent of people have now used the cryptocurrency to make a purchase. Kaspersky goes on to say, though that crypto is also increasingly popular with cybercriminals who are targeting cryptocurrency exchanges and leaving investors at risk, The Fintech Times reports. Despite a fall in cryptocurrency prices, there is still a strong desire for digital transactions amongst consumers,” said Vitaly Mzokov, Head of Verification, Growth Center at Kaspersky Lab. “However, there are also real dangers associated with online exchanges as they are still in their infancy. Kaspersky recommends that crypto holders take precautions to avoid losing their funds, such as always verifying a web wallet’s address, using hardware wallets and always double-checking recipient addresses and amounts before making a transaction. |
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