Daily Archives: February 28, 2020

Cryptocurrency, Bitcoin, ICO, blockchain, mining... When hearing those words just a couple of years back, people used to say:

You surely were also among those people who did not take Bitcoin and cryptocurrency seriously, but the current events gag even the biggest skeptics.Current Bitcoin price is 6,644$*The price of the most popular cryptocurrency repeatedly breaks all the unthinkable records.Capitalization is about $120 billionWorld recognitionThe world's largest economies - India and Japan - recognized Bitcoin as the official currency. The US authorities recognized cryptocurrency as the asset. And this is just the beginning.

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The entire market cap of cryptocurrencies has decreased by $40 billion in light of the recent sell-off that has seen Bitcoin slide from $10,500 to $8,830.

The dramatic move to the downside, which came to a crescendo on Wednesday evening as BTC crashed below $9,000, has invalidated the theory touting Bitcoin as a safe haven asset amidst a downturn in global markets.

While the slump in the price of cryptocurrencies has been devastating, it pales into insignificance when compared with the decline in stock markets.

Trillions of dollars has been wiped from global equity markets on the back of coronavirus-related fears, with it now spreading throughout mainland Europe.

Several cryptocurrency analysts have been scratching their heads wondering why Bitcoin failed to form a higher high when assets like gold continue to impress.

From a technical perspective the key moving average for Bitcoin to focus on is the daily 200 MA, which is currently at $8,775.

Wednesdays daily candle closed below the moving average to demonstrate confirmation of a breakdown in price, although if it can bounce back this evening and close above the $8,830 region it may provide fuel for a surge back towards the $9,000 region.

It is also worth keeping tabs on the dailly 200 EMA at $8,600 as it provided Bitcoin with a bounce on two occasions yesterday.

For more news, guides and cryptocurrency analysis, click here.

Current live BTC pricing information and interactive charts are available on our site 24 hours a day. The ticker bar at the bottom of every page on our site has the latest Bitcoin price. Pricing is also available in a range of different currency equivalents:

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In August 2008, the domain name bitcoin.orgwas registered. On 31st October 2008, a paper was published called Bitcoin: A Peer-to-Peer Electronic Cash System. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.

The paper outlined a method of using a P2P network for electronic transactions without relying on trust. On January 3 2009, the Bitcoin network came into existence. Nakamoto mined block number 0 (or the genesis block), which had a reward of 50 Bitcoins.

If you want to find out more information about Bitcoin orcryptocurrenciesin general, then use the search box at the top of this page.Heres an article to get you started.

As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.

The post Major sell-off wipes $40 billion from cryptocurrency market appeared first on Coin Rivet.

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Major sell-off wipes $40 billion from cryptocurrency market - Yahoo Finance

The UN may not be the most innovative of institutions, yet it does, with surprising frequency, experiment with new technology and solutions. In recent years, its undertaken initiatives that incorporate artificial intelligence, virtual reality, and blockchain technology.

These projects often remain confined to the realm of experiments. But a recent undertaking by UNICEF, the UN agency tasked with providing aid to children around the world, now offers what could be a glimpse of the future: The Cryptocurrency Fund, which collects contributions in cryptocurrencies, and then doles out those donations in the same currency. No exchange needed.

The crypto fund is nested within another UNICEF venture, the Innovation Fund, which provides seed funding to blockchain-based companies developing products or services that could potentially be of use in social and development settings.

Beginning in October 2019, UNICEF has been outfitted to receive donations in two cryptocurrenciesbitcoin and etherwith the first donation coming from the Ethereum Foundation, the organization that created ether. So far three organizations have received funding through UNICEFs crypto fund.

As it does in other settings, cryptocurrency presents opportunities and challenges for UNICEF and, more broadly, the whole UN system. Cryptocurrencies are volatile and vulnerable to scams and money laundering. But they are also highly traceable and, when it comes to the UN, could some day provide the international organization greater independence from the countries that make up its members.

The Innovation Fund, and the crypto fund thats part of it, is managed by an office at UNICEF that handles projects that incorporate technology like drones, machine learning, blockchain, and other advancements. So far, the Innovation Fundwhich amounts to $25 millionhas supported more than 20 companies with seed money, up to $100,000 per investment.

The projects funded varyfrom digital prescription services, to drug delivery, to mobile networks. To receive funding a project must be based in so-called emerging or developing markets, work in a field with a market cap of $1 billion, and work with open source technology. There are no limitations, however, to the field in which the company operates, nor must it provide an immediate social good. Atix Labs, for instance, an Argentinian blockchain developer and a fund recipient, provides services to high-profile clients like Nestl and Honda.

Since the opening of the crypto fund, a portion of the Innovation Funds investments are now made in cryptocurrency. The donations made into the crypto fund arent converted into fiat currency, but given out in the same cryptocurrency in which they were received, so the recipients need to be familiar with blockchain technology and cryptocurrency.

Digital finance is going to change pretty significantly how we work as an organization, Sunita Grote, who manages the Innovation Fund, told Quartz. There was a need to prepare the organization to be able to leverage the kind of emerging technologies in that field to make us more efficient.

UNICEF is an organization with an annual budget of $7 billion that makes a lot of financial transactions. The sheer volume of the funding that we move means that any gains in efficiency, any increases in transparency, could have quite a significant impact on how we operate as an organization, Grote said.

As a large international organization with many layers of bureaucracy, each donation to and from UNICEF has to go through several steps, and digital currency makes that process much easier to trackand much quicker to complete. According to Grote, transactions that could take months to get through the required levels of authorization, can happen in a matter of minutes with blockchain-based currencies, because the required authentications can happen exponentially faster.

In this sense, the crypto fund is a way to grease the wheels and build up that muscle memory internally, Grote said. We can imagine that, a couple of years down the line, we would be making more transactions in digital currencies at greater volume.

Although it is small, and likely to remain such for the foreseeable future (Grote dismissed the idea that there may be a future in sight where the UN works exclusively in digital currency), the potential seems significant, in particular given the fact that the fund doesnt convert back to other currencies. This means that where today the cryptocurrency donation received is transferred directly to a blockchain technology development company, in a faraway tomorrow the recipient could be an employee receiving a salary.

Story continues

While the program has worked so far, there are several issues that the use of cryptocurrency at the UN raises, beginning with volatility. The value of cryptocurrencies can fluctuate dramatically, and while UNICEF says the fact that there is no conversion and donations are made to and from the fund in the same digital currency, that doesnt necessarily eradicate the issue. For instance, the donation made by the Ethereum Foundation in October was 100 ETH, or about $18,000. It is now worth roughly $22,700.

Companies may be used to dealing with cryptocurrency, but most still need to pay bills in a local fiat currency, Angus Champion de Crespigny, a cryptocurrency expert and managing director of technology at strategic firm C|T Group, told Quartz.

There are other issues to consider, like the risk of hacking and scams related to cryptocurrency accounts, or the fact that volatility can make it hard for a government to track exactly how much money is being donated and received, which raises money laundering concerns.

There is also the value organizations like the Ethereum Foundation derive from having UNICEF use their currencya situation made more complicated by the fact that Ethereum Foundation itself was the first to make a large donation to the crypto fund, and that the organizations persistence was reportedly behind UNICEFs embracing of blockchain and crypto currency. The lobbying seems to have paid off: Ether seems to be the go-to currency for UNICEFs crypto transaction, and is being tested in its Kazakhstan office, where the agency has set up a system to make internal payments in ether.

A recognized public institution such as the UN accepting and distributing bitcoin and ether is of course a vote of confidence in their respective ecosystems,Champion de Crespigny said. While this isnt intrinsically a bad thing, it can have enormous impact at a stage when the value of crypto currency changes so dramatically, and getting the endorsement of a large international organization might help propel the value of the digital currency.

While these potential problems are all of concern, Grote said the UNICEFs crypto fund acts as a sort of test case, allowing managers to learn from the issues that arise and design protocols and best practices to address themultimately helping to potentially introduce the use of cryptocurrency across the whole UN system.

There is also an important political component to cryptocurrencyperhaps best revealed by Facebooks Libra. Although the social networks currency experiment has yet to take off, it revealed the potentially disruptive power of decentralized currency. It is the first instance in which a currency is associated with a community that exists independently of the currency itself. In a way, Facebooks users are to Libra what the citizens of a country are to that countrys currency.

This concept can become particularly powerful in the case of an international organization like the UN. Despite being an institution comprised of numerous member countries, until now its been forced to use national currencies. There have been proposals to introduce an international currency backed by a reserve of state currencies, but no real action has been taken in that direction. Cryptocurrency, which is not associated with any national banks, could be an alternative way to relieve the UN of having to rely on the currencies of individual countries, giving it a new level of independence, and perhaps even more international authority.

After all, what distinguishes cryptocurrency is its decentralized nature.

Many would argue that bitcoins sole value proposition is to allow people and entities to be independent of central banks, Champion de Crespigny said, in which case non-sovereign organizations could absolutely use assets such as bitcoin to remain as independent as possible from all parties in a not-too-distant future.

That is, however, at least in theory, and with the usual caveat applicable to cryptocurrency, that its still too early to understand with any degree of confidence whether it is the gateway to a new economicand politicalfuture, or just a fad.

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Can cryptocurrency become the UN money of the future? - Yahoo Finance

On February 18, 2020, Secretary of State Mike Pompeo announced how the U. S. sanctioned Rosneft Trading S. A., a Swiss-incorporated, Russian-owned oil brokerage firm, for operating in Venezuelas oil sector. Since then, headlines in the news showcase the Trump Administration discussing ways it may increase the pressure on the Maduro regime in Venezuela through economic sanctions.

As the world witnesses the U.S. using its traditional role of economic sanctions to affect a regime change in the interest of spreading democracy and freedom, cryptocurrencies have added a curve ball for the U.S. with respect to its application of economic sanctions. As the U.S. is stepping up the pressure on Venezuela and increasing its enforcement of sanctions, citizens in the U.S. should take pause to consider what their everyday buying and selling of cryptocurrencies might mean with respect to the triggering of economic sanctions.

US Special Representative for Venezuela Elliott Abrams during a briefing at the US Department of ... [+] State about new sanctions February 18, 2020, in Washington, DC. - The United States on Tuesday announced sanctions against a subsidiary of Russian state-controlled oil giant Rosneft over its continued trade with Venezuela in defiance of Washington's attempt to break leftist President Nicolas Maduro's grip on power. (Photo by Brendan Smialowski / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

Previous U.S. citizens had little to worry or think about with respect to violating U.S. sanctions against a specific country, this new technology allows individuals to buy and sell crypto such as Bitcoin around the world. Indeed, the Maduro regime introduced its own cryptocurrency - the Petro - with a white paper that argued for a replacement of the U.S. dollar as the global reserve currency.

Anyone who transacts with the sanctioned individuals and entities, such as the former Maduro regime or PdVSA and regardless of currency of the transactions, risks exposure to U.S. sanctions.

A State Department spokesperson for the Western Hemisphere Affairs bureau noted, E.O. 13827, as amended, prohibits U.S. persons from transacting in any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the former Maduro regime on or after January 9, 2018. Anyone who transacts with the sanctioned individuals and entities, such as the former Maduro regime or PdVSA and regardless of currency of the transactions, risks exposure to U.S. sanctions.

Previously in Forbes, it was reported how this Executive Order was also under consideration by Congress in establishing a law and policy on cryptocurrencies held by U.S. citizens with respect to economic sanctions.

As Web 3.0 continues to take hold with cryptocurrencies allowing financial transactions to take place around the world in a way that the world has not seen before, the question of how U.S. policy in sanctions with its own citizens will evolve remains to be seen and is clearly a topic being considered by policymakers in D.C.

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Venezuela Sanctions: What U.S. Citizens With Cryptocurrency Need To Know - Forbes

Berkshire Hathaway CEO and Chairman Warren Buffett on Monday reaffirmed his aversion to cryptocurrencies.

"Cryptocurrencies basically have no value and they don't produce anything," he told CNBC's Becky Quick in a "Squawk Box" interview. "In terms of value: zero."

"I don't have any cryptocurrency and I never will," added Buffett, who was interviewed two days after he released his annual shareholder letter.

Buffett has been a long-time critic of the world's largest digital coin. He called bitcoin "probably rat poison squared," ahead of the 2018 Berkshire Hathaway annual shareholder meeting. A "mirage," "not a currency," and "tulips" are among the descriptors Buffett has used for bitcoin, according to CNBC's Warren Buffett Archive.

Berkshire Vice Chairman Charlie Munger has called it a "turd," and said that trading cryptocurrencies is "just dementia."

Last year, in an attempt to change Buffett's mind, Justin Sun, founder of cryptocurrency TRON and CEO of file-sharing company BitTorrent, bid $4.57 million in a charity auction to have a meal with the bitcoin skeptic.

"When Justin and four friends came, they behaved perfectly and we had a very friendly 3-hour dinner and the whole thing was a very friendly exchange of ideas," Buffett said. He added that neither he nor Sun changed their stance on bitcoin.

Read this article:
Warren Buffett: Cryptocurrency 'has no value' 'I don't own any and never will' - CNBC

One of the VeChain investors cryptoVegeta tweeted: If those billion-dollar partners believe in #Vechain, who are you to doubt it? Keep accumulating as much as you can; keep constructing your future.

Sunny Lu, CEO of VeChain, was impressed for having VeChain highlighted as the leader and frontrunner in the blockchain industry.

Sunny Lu stated Good Job, Master Shifu, in response to a tweet that reported an improvement that read: After months of work, VeChain/Thor v1.3.0 is ready. It brings many dramatic improvements, especially in terms of performance and efficiency.

Sydney Ifergan, the Crypto Expert, tweeted: VeChain recently published the first preprint on PoA 2.0 Surface. Real Items an Enterprise & Consumer applications built on VeChain Blockchain anti-counterfeit & Consumer Loyalty generates NFT.

Vechain Stats recently tweeted about introducing Manager from VeChainStats Stated that it was the Swiss Army Knife for managing #VeChain assets and node tokens. The CEO felt that it was neat.

There is an increase in the community extensions with the coming of the Manager. The major use for the Manager is to facilitate complete solutions for managing the assets on the VeChainThor blockchain. Best practices in the industry are used in private key management. The wallet, however, will not have access to the private key.

The price checker version of Vechain is out.

The VeChain Price Checker v.3.0.3 is available on Chrome and Firefox. More than 1400+ pairs added from #Binance #Oceanex and #Huobi

VeChain has been highly interactive with the community in the past month. The social response has been high. There were more than normal numbers of comments, replies, shares, quotes, retweets, and other social media metrics. A lot of interesting stuff is happening on the blockchain.

Real Items are providing a demo. Users can try their demo. User can use their stock camera to scan. They will need a PIN to unlock and claim the NFT. The sooner 50 likes are hit, the pin will be released, and the first person to register will get the asset to keep! They are also planning a pop-up store.

The Official VeChain101 merchandise comes with true items on the NFT on the VeChain.blockchain. It is about verifiable authenticity, and real items will be available on the VeChain! The transactions are increasing with the coming of new users, and more of real items are getting added on the Vechain. Early Adopters have an advantage in the process.

Read more here:
VeChain (VET) Billion Dollars Partners Believe in the Cryptocurrency - The Cryptocurrency Analytics

If you are a follower of the many popular crypto accounts on Twitter you would be hard-pushed to have not seen posts about Tezos.

While many cryptocurrencies Bitcoin included have been performing well since the start of the year, Tezos is likely to be the one you hear about the most.

Is there a particular reason for the recent bullishness for Tezos or is this part of a wider trend in the cryptocurrency industry? Lets start with the basics

Tezos completed its ICO in the boom of the cycle raising $232 million in the summer of 2017. Created by husband-and-wife team Arthur and Kathleen Breitman.

Tezos shares similarities to smart contract platform Ethereum. The key difference between the two lays in Arthur Breitmans belief that Ethereum was beholding to the core developers an argument that was prescient during the DAO hardfork and therefore Tezos bases itself upon a self amending nature.

Holders of Tezos can vote for changes to the cryptocurrency and, should the community reach a majority decision, the changes are processed.

The launch of Tezos didnt go very smoothly though. Issues surrounding lawsuits between members of the Tezos foundation and the Breitmans created headlines. Tezos also had to deal with the issue of whether the cryptocurrency should be classed as a security. This is a common issue with many including Siacoin and EOS which have both recently settled with the Securities and Exchange Commission in the US. For now, Tezos seems to be safe in this regard.

One of the key selling points for Tezos holders is the passive profits that can be achieved by baking a process similar to staking. In essence, this is equivalent to earning interest in a traditional bank account.

With Tezos being based on a proof of stake protocol it allows for users with more than 8,000 Tezos to bake Tezos and earn more in return. This process can be achieved by setting up your own node.

Alternatively, Tezos holders can delegate their baking rights with big cryptocurrency platforms such as Coinbase and Ledger offering the service. Ledger is offering an approximate 6% annual yield for baking Tezos through its system.

For many Tezos enthusiasts the ability to bake on some of the largest cryptocurrency platforms is one of the key reasons that they see a positive future for the cryptocurrency.

Tezos has been making waves recently as the cryptocurrency has proven strong in the tumultuous market. Many of the popular traders on Twitter have shown their support for the cryptocurrency and suggested the price is only just beginning to show its true nature.

Since the start of the year Tezos has more than doubled and even got close to the lofty heights of $4 before struggling this week much the same as the rest of the markets. Unlike many ICOs though, Tezos is intriguing because the price hasnt struggled comparatively with the other failed projects.

Members of the community believe the option of baking on sites such as Coinbase could prove to be key if new members arrive into the cryptocurrency market, much like they did in 2017. The offer to make passive income, particularly at a time when banks are increasingly offering low interest rates, is an attractive alternative.

As supporters of Bitcoin, Ethereum and many others continue to bicker with each other online proclaiming their chosen cryptocurrency is going to change the world, Tezos has quietly gone about its own business. Whether it can detach fully from other cryptocurrencies and rise when the market is falling permanently is unlikely though. Bitcoin still plays the leading role as the price signal for the rest of the cryptocurrency market.

Read more:
Why has the Tezos price made significant gains? - Coin Rivet

27 February 2020

Rahman Ravelli Solicitors

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Cryptocurrency exchanges are under pressure from regulators tocreate a secure messaging system to exchange information aboutfinancial transactions and comply with money-laundering rules. Readthe guide: Cryptocurrency Reducing The Risks.

Last year, the money laundering watchdog Financial Action TaskForce (FATF) advised its 37 member jurisdictions around the worldto impose a rule on what it termed "virtual asset serviceproviders". The rule required exchanges to share informationabout the identities of the sender and receiver of transfers over acertain threshold.

This was criticised both because it expected the industry tocreate a new information-sharing infrastructure and becauseexchanges cannot necessarily always tell when a customer is sendingmoney to another exchange. But regardless of the critics, thecrypto industry must devise a system; which could be along similarlines to the SWIFT (Society for Worldwide Interbank FinancialTelecommunication) system used by the world's major financialinstitutions.

At this stage, certain questions still need answers; the mainone being precisely what method should exchanges use to transmitinformation to each other? But there is also the issue ofcompliance with data privacy laws, such as the European Union'sGDPR (General Data Protection Regulation).

This requirement that has been laid on crypto exchanges defeatsthe purpose of why cryptocurrencies were created in the firstinstance. But, despite that, there is a clear and unarguable needfor regulation. Exchanges should have know-your-customer checks inplace for those who use them. The tricky issue that really needs tobe addressed is determining at exactly what point they should theybe allowed to reveal any information about their customers to thirdparties if and when they are required to do so.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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Could this be a sign that the mainstream media is warming up to bitcoin again like they did before the 2017 rally? The Simpsons featured an almost two-minute segment explaining how cryptocurrency and blockchain work with the actor who played Sheldon Cooper on The Big Bang Theory.

Also Read: 12.6M Viewers Will Hear About Bitcoin Watching The Big Bang Theory

The animated family sitcom show that first aired in 1989 has featured an explanation on the nature of cryptocurrency in its latest episode. The Simpsons is now in its 31st season, and for the 13th episode of the season it brought in Jim Parsons, best known for Sheldon Cooper in the The Big Bang Theory, to explain the concept of cryptocurrency.

In the segment, the animated Parsons tries to prove that he is not a nerd and actually super cool by the fact that he is talking about the subject of cryptocurrency. He also fakes jumping over a few buses in a motorcycle and is filmed with piles of cash stacked behind him. The segment also features a singing ledger that seems to really enjoy it when transactions are recorded on him. The sketch is somewhat informative to anyone who havent heard about the topic before and it avoids mentioning anti-crypto tropes like that it is only used by hackers or criminals, which it could have done.

In a graphic shown near the end of the segment, the TV shows creators seem to acknowledge that they know that the presentation makes them look like they have only a novices understanding of crypto but they dispute that and let us now that they even know who the real Satoshi is. That might be true as The Simpsons featured Bitcoin twice before 2016 and crypto was also included in a Simpsons video game in 2018.

This isnt the first time a TV sitcom involving Jim Parsons has tackled the topic of cryptocurrency. The Big Bang Theory aired an entire episode based on a digital assets storyline in November 2017. The episode, called The Bitcoin Entanglement, showed the cast of geeks and nerds learning about the price rally, suddenly remembering they mined some bitcoin a few years before and dreaming about all the stuff they can buy when BTC hits $5,000.

While dedicating a whole episode to bitcoin was exceptional for a fictional show, the topic of cryptocurrency has appeared on other series before, such as Mr. Robot, Startup, CSI Cyber, The Good Wife, Jeopardy, Almost Human, Person Of Interest, House Of Cards, Parks and Recreation, HBOs Silicon Valley, Supernatural, and Marry Me. Recently even MTV aired an episode of a new show called True Life Crime with a crypto expert (Rachel Siegel) that talked about SIM swap hacks.

What do you think about cryptocurrency appearing on the latest episode of The Simpsons? Share your thoughts in the comments section below.

Images courtesy of Shutterstock.

Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Bitcoin.com Markets, another original and free service from Bitcoin.com.

Avi Mizrahi is an economist and entrepreneur who has been covering Bitcoin as a journalist since 2013. He has spoken about the promise of cryptocurrency and blockchain technology at numerous financial conferences around the world, from London to Hong-Kong.

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Cryptocurrency Explained on the Latest Episode of The Simpsons - Bitcoin News

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The evolution of Bitcoin, and subsequently blockchain technology, since the major cryptocurrency topped out at $20,000 has been fascinating to watch. The price may not even be halfway back to that mark some two-and-a-bit years on, but the growth of the entire industry has been exponential.

The 2017 price boom was purely off the back of individual speculative investors who flocked to Bitcoin, not even sure what it was, with the hopes of making money quick. However, the 2020 market, and its place in the greater industry, paints a picture of strong enterprise and institutional interest and adoption. It could be said that we are sitting on the precipice of another massive move for Bitcoin if we can achieve similar interest and adoption from enterprises and institutions as we saw in December 2017.

So, what do we need to get right to ensure that enterprises and institutions will flood enough money and interest into the entire industry - not just Bitcoin - for there to be critical mass adoption? Again, using Bitcoins market price as a metric of the health and interest in crypto and blockchain, we have seen thatindividual interest aloneis not enough anymore.

I spoke with Iqbal Gandham, the managing Director at crypto-friendly trading platform eToro, about what is needed for the cryptocurrency industry to take off in 2020.

There are four components that we need to make crypto work, he said. First is regulation, and that is happening. We are not running scared of regulation any more, we are embracing it.

Second, we need custody solutions. The likes of Fidelity are looking at custody, and third-party custody solutions are being developed. In Germany, thebanks can sell crypto, so the regulation is there and the custody.

Gandham goes on to mention two more components structured products, such as a Bitcoin ETF and utilization which he feels is wallet adoption. However, it feels as if these other aspects will only be realized if custody is dealt with sufficiently first.

The first aspect of getting this adoption right is well underway. Regulation is coming, but it is just a matter of time. However, the second aspect sits on the edge. Custody services are around, and available, but they are still niche and the same level of importance has not been put on this aspect in the crypto space, even though it is vital in the institutional space.

More so, custody is a vast aspect as it also extends to the security of coins kept in cryptocurrency exchanges which are hotbeds of reputation-damaging hacks and scams. Thus, this aspect appears to be the next one that needs to be addressed. The cryptocurrency industry needs to prove it can safeguard these assets for institutions and enterprises, as well as for individuals who are using exchanges.

Understanding the importance of secure and trustworthy custody is the beginning of understanding why institutions have not jumped into the industry entirely. We have seen individuals flock to crypto weighing up not only the risks of a volatile market, but also one prone to hacks and scams.

Recently, a Chinese cryptocurrency exchange called FCoin shut its doorsowing $125 millionto its users which it is promising to payback, but without much qualification as to how.. This exchange was labelled as a little suspicious from the outset, when its business model appeared to be producingfalsified trading volume numbers.

Risks like this are still high in the cryptocurrency space, especially for individual investors, who are willing to take them on. However, for institutional and enterprise investors, they are far more risk-averse and are looking for the secure custody of cryptocurrency before making a move.

The work and protections that come with trust-worthy custody ticks a lot of boxes for enterprises and institutions who are eyeing out this nascent market, as Rebecca Aspler, Director of Blockchain at Unbound Tech, explains:

Custodians safeguard assets, minimizing for the investor, the risk of theft or loss. As such should-be-trustworthy vendors, institutional investors alongside with the regulator require crypto custodians to follow up on fiat related regulations and guidelines, whether these are KYC and compliance checkups, periodic account status reports, approval of withdrawals according to the segregation of authorities guideline and at best, insurance of assets by the custodian vendor.

We have already started seeing companies either picking up the mantle to provide secure custody services to enterprise and institutional customers, such as Fidelity andAnchorage, who are part of the Libra Association.

Evidence of the need for strong custody solutions has already been demonstrated by companies like Anchorage and Fidelity with the former picked up by Facebook for its Libra Association simply for the need of such a service in the enterprise cryptocurrency game.

For Anchorage and Libra, it is about creating a framework that allows the cryptocurrency to work without any hiccups, and for that to happen, there needs to be trusted custody which is comparable to the likes of Visa and Mastercard.

We are creating the financial plumbing, same as Visa,saidDiogo Monica, Co-founder, and President of Anchorage. They created the financial plumbing for card networks to be able to process payments, so merchant adoption and card acceptance became worldwide.

Libra is going to be built on top of this new financial plumbing. Libra requires custody services, every single member of the association will require custody services to store Libra and so will any other company that will want to interact with this new digital currency.

But, in the greater scheme of things, the importance of custody is paramount for the next step in cryptocurrency adoption, as Aspler adds:

As risk-averse institutions, and certainly as custodians of institutional money, leading banks must invest in software solutions that include advanced security and platform management capabilities, integra-table within institutions service infrastructure and systems, flexible to tailor to the institutions needs. They also need to deploy on any infrastructure and offer maximum control over security and key management.

The demand is indeed there for trusted custody as many enterprises and institutions are not prepared to risk it on cryptocurrency exchanges and are rather looking to the likes of Fidelity and others, even the German banks who have been imbued with digital currency asset powers. On the other side of things, the offering of such a service from banks and financial institutions also positions them in a good place for the evolution of this new asset.

It would be safe to assume that banks are looking at the growing market of digital assets and wanting to take a portion of it on one hand, while wanting to not lose market share to the Fintech new players that are becoming regulated experts of digital asset custody, Aspler said.

Of course, custody is one thing, but secure custody is another thing and the fact that a company like Fidelity, or Anchorage, offer custody solutions does not immediately ensure they are entirely secure. There is a lot of complicated technology that comes in securing cryptocurrency funds, and as one might expect, it comes down to cryptography.

This is why for Aspler, at Unbound Tech, they have been working on what's been dubbed a virtual Hardware Security Module (HSM), called Crypto Asset Security Platform (CASP,) using secure Multiparty Computation (MPC) in order to better what is already being used as current institutional security measure.

Considering the popular alternatives to institutional security measures, which would usually be multi-sig, HSM, and a Trusted Execution Environment (TEE), or a combination of these, one would want to consider the following security concerns, explained the Blockchain Director.

With multi-sig, the confidentiality of the key is as strong as the ability of the signers to keep their key confidential which is very hard. Additionally, multi-sig solutions are usually ledger dependent (on-chain). Thus, multi-sig capabilities require custom coding per each type of currency/token. Any other ledger requires the development of custom code.

With TEE, for example, SGX (Software Guard Extensions) and TEEs run together with other software on general-purpose processors and are therefore vulnerable to key extraction via software side-channel attacks on shared resources in the hardware platform.

With HSMs, one may want to consider that they were mainly designed to protect key confidentiality, not key usage. An attacker who can compromise the client connecting to the HSM, would be able to perform usage with the key without ever attempting to attack the HSM itself.

Aspler hopes that the use of MPC would lead to higher custody security as this technology distributes private keys and transaction approval, validation, and signing, among multiple approvers - including offline participation and bots. This allows custodians and exchanges to predefine transaction approval policies, and to improve their operational efficiency.

If the growth of secure cryptocurrency custody can grow and expand to a place where enterprises and institutions have a myriad of security options that they can rely upon without having to be hesitant, the next few steps as expressed by Gandham can come to fruition.

Suddenly, if there is an influx of enterprises in the cryptocurrency space, the push for structured products will skyrocket as these businesses will know that their funds are safe and secure. More so, it will also lead to the additional retail interest which can push for an increase in wallets and the betterment of that side of things.

Link:
How Big Is The Role Of Digital Asset Custodians In Enterprise Adoption? - Forbes