April 8 – 14, 2019 | Canadian Central Bank Digital Currency, Litecoin Hashrate & More Crypto News
3iQ Research Group consolidates the top five cryptoasset stories of interest
to investment advisors and our investors.
Should the Bank of Canada Issue a Central Bank Digital Currency?
April 9 – John D. Murray, a former deputy governor for the Bank of Canada, said in a C.D. Howe Institute commentary on April 9 that “policymaking circles and central banks around the world are now giving serious consideration to the pros and cons of making central bank digital currencies (CBDCs) available to the general public”. Murray noted that digital tokens that are issued by central banks could potentially serve as legal tender, and could operate similarly to how debit cards work with bank accounts. “While the consensus view remains that such a move would be premature, opinion appears to be shifting. Indeed, developments in a number of advanced and emerging economies indicate that the CBDC model is receiving more serious consideration than it has in the past.” However, Murray believes that central banks should be aware that the demise of cash could be interpreted by the public as a threat to privacy, as “it could give the government access to vast amounts of personal data and increase the likelihood of slipping into a Big Brother world. The risk of political interference might also be much greater.”
China Plans to Ban Cryptocurrency Mining, and Miners are Moving to Canada
April 9 – The National Development Reform Commission, China’s most powerful economic planner, has listed crypto mining as one of the industries it plans to eliminate due to its wasted resources and negative environmental impacts. The economic planner is currently gauging public opinion on its guidelines and noted that the ban could begin once its consultation is complete. At one point, China was responsible for upwards of 70% of all Bitcoin mining; however, authorities have since clamped-down through a series of campaigns to shrink its crypto industry, citing issues around fraud and wasteful energy consumption. China had “banned” initial coin offerings (ICOs) back in 2017, and had also made efforts to halt cryptocurrency trading altogether. Interestingly, many market-leading mining companies and pools that operate in China, such as Bitmain or BTC.Top, have now established operations in Canada, potentially due to favorable energy costs and clear regulatory landscape.
April 12 – The hashrate of the Litecoin network has now reached a new all-time high. The price of litecoin has increased substantially over the past few months to mark around a 300% gain off its 2018 lows. As with most crypto networks, an increase in hash rate and market capitalization enhance the security and stability of the network, as attempts to attack the network will be more expensive with increasing participation. “The network’s hashrate has historically followed price movements somewhat closely, behaving in a similar fashion to a moving average as it takes time for miners to setup and acquire new machines,” said Franklyn Richards, an early Litecoin team member. “It’s reasonable to assume that there is still greater potential for room to the upside as hashrate has only roughly doubled whilst the Litecoin price has more than quadrupled”.
Initial Exchange Offerings (IEOs) Could be the New (ICOs)
April 10 – While initial coin offerings (ICOs) have been declared “dead” due to regulatory advances and shifting public opinion, new crypto projects are starting to raise money through similar methods, dubbed “initial exchange offerings” (IEOs). This new method of raising money for a crypto project leverage crypto exchange relationships by making them lead underwriters in the projects. The exchanges review the projects and offer the tokens only to select customers, meaning that crypto projects will no longer have to market their coins directly to the public as the exchange itself will find potential investors from their customer base. Some critics argue that this new form of crypto project financing could lead to regulatory intervention. Initial exchange offerings (IEOs) “take everything from an ICO and make it worse,” said Zach Fallon, a securities lawyer experienced in ICO cases with the U.S. Securities and Exchange Commission. Exchanges who have been granted a “BitLicense” through the New York Department of Financial Services (NYDFS), such as Bitstamp, expressed caution and noted that they do not offer IEOs. “We need to walk before we can run,” said Nejc Kofric of Bitstamp. “The industry needs to be better regulated before we step into this market. Of course there are exchanges that still enter this space, and I think that’s short-sighted.”
New Bitcoin Core Release Will Connect Hardware Wallets to Full Nodes
April 8 – The upcoming release of the new Bitcoin Core code will introduce an important feature that should significantly benefit the interoperability of the Bitcoin network. Bitcoin Core is the free and open-source software that has acted as a “default” wallet and node for Bitcoin users. Its new release will allow users with hardware wallets, such as a Trezor or Ledger wallets, to be able to connect to full nodes. While this may sound technical, it’s a big step forward for the security and interoperability of the Bitcoin network. Bitcoin full nodes around the world verify that transactions actually took place, and hardware wallets (sometimes known as cold wallets) are seen as one of the most secure ways for people to store bitcoin. The new release should also increase privacy for hardware wallet users. “The wallet software that normally comes with hardware wallets reveals your addresses to a third-party server,” said Sjors Provoost, a Bitcoin Core contributor. “The full node would replace this wallet software, giving users privacy again”.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
Due to applicable legal restrictions, you may not access the following content. 'a0 We apologize for any inconvenience this may cause.
WARNING: THIS SECTION OF THE WEBSITE CONTAINS ANNOUNCEMENTS, DOCUMENTS AND INFORMATION (TOGETHER THE “INFORMATION”), ACCESS TO WHICH MAY BE RESTRICTED UNDER THE SECURITIES LAWS OF CERTAIN JURISDICTIONS. IN PARTICULAR THE INFORMATION IS NOT DIRECTED AT, AND IS NOT ACCESSIBLE BY, PERSONS RESIDENT, OR OTHERWISE LOCATED, IN THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
THE INFORMATION IS BEING MADE AVAILABLE BY 3iQ Corp. (“3iQ”) IN GOOD FAITH AND FOR INFORMATION PURPOSES ONLY. THE AVAILABILITY OF THE INFORMATION IS SUBJECT TO THE TERMS AND CONDITIONS SET OUT BELOW.
Please read this notice carefully - it applies to all persons who view this webpage. This notice may be amended or updated by 3iQ from time to time and accordingly it should be read carefully in full each time you wish to view the Information. In addition, the content of the site, and its availability to persons resident in certain jurisdictions, may be amended at any time in whole or in part at the sole discretion of 3iQ.
Basis of access
Please read this notice carefully before clicking “I agree” or “I disagree” below. This notice applies to all persons who view the Information. Access to these materials is being made available on this webpage by 3iQ in good faith and for information purposes only. Any person seeking access to this webpage represents and warrants to 3iQ that they are doing so for information purposes only.
Nothing on, or which can be downloaded from, this webpage constitutes an offer for sale or subscription or any solicitation for any offer to buy of subscribe for any securities in any jurisdiction. Making the Information available does not constitute a recommendation by 3iQ or any other party to sell or buy securities.
Confirmation of representation
Any person seeking access to this webpage certifies that they are not located in the United States of America or any other jurisdiction where the release, publication or distribution of these materials would be unlawful. Any person seeking access to this site confirms that they have read and understood this disclaimer and agree to be bound by its terms.
The information contained on this website does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities in the United States or in any jurisdiction in which such offers or sales are unlawful. The securities referred to herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or under the applicable securities laws of any state or other jurisdiction in the United States. The securities referred to herein may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within, into or in the United States or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration of such securities in, the relevant jurisdiction except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of securities in the United States.
The materials are only addressed to and directed at persons in Canada.
If you are not permitted to view materials on this website or are in any doubt as to whether you are permitted to view these materials, please exit this website. These materials must not be released or otherwise forwarded, distributed or sent in or into the United States or any jurisdiction in which such offers or sales are unlawful. Persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from the United States or any other jurisdiction where to do so would be unlawful.
Acceptance of this notice
To visit the following pages of the site, you must confirm that you have understood the above sentences and agree to comply with the restrictions.
By selecting "I agree" below, you:
confirm that you have read, understood and agree to be bound by the terms of the notice set out above;
warrant and represent that you are not a resident of, or otherwise located in, the United States of America (including its territories and possessions, any state of the United States and the District of Columbia) or any other jurisdiction where accessing the Information would constitute a violation of the relevant laws or regulations of that jurisdiction.
agree that you will not transmit or otherwise send (directly or indirectly) any Information to any person in the United States of America (including its territories and possessions, any state of the United States and the District of Columbia) or any other jurisdiction if to do so would breach any applicable law or regulation; and
confirm that you are not a person to whom the communication of the information contained on the site is restricted and are not acting for the benefit of any such person.