Tag Archives: Cryptocurrency

Everything You Need to Know About Cryptocurrency Airdrops

cryptocurrency_airdrops

Free money can’t just materialize out of nowhere, can it?

Generally speaking, the answer is no. But in the wild and wonderful world of cryptocurrency, the old rules have been thrown out…and sometimes the answer to this question is: “Yes, it can.”  The free money we’re referring to is an “airdrop” of coins. You may have heard this term thrown around in various crypto circles and if you’ve never thoroughly understood it, this article is for you.In the following, we’ll explain the how, what, and why of airdrops.

What is an Airdrop?

In the cryptocurrency space, the word airdrop has taken on a different meaning than the more commonly understood military definition. In crypto, the term airdrop refers to gifts or free money. Essentially, an airdrop is when a development team, company, or community distributes tokens to users free of charge. Airdropping is a technique frequently used by startup businesses that are conducting an ICO to increase brand exposure and drum up excitement about their project. Airdrops are analogous to free samples at the mall (if those samples could appreciate in value). There are some other reasons for airdrops and we’ll discuss those in more detail below.

Some airdrops happen by surprise, and some are carefully orchestrated and well-communicated. Planned airdrops are announced in advance as part of a comprehensive marketing strategy that aims to build buzz. Surprise airdrops can generate a lot of publicity and achieve similar goals, but are a bit more of a gamble and tend to only make a splash if done by an already established cryptocurrency.

Why Do Airdrops Happen?

From creating hype around a new blockchain-based enterprise to rewarding loyal customers, there are a number of reasons why airdrops are carried out. To reward users: Free tokens are sometimes provided as a reward to users of a service, giving them free tokens as a “thanks” for showing loyalty. Binance (a well-known cryptocurrency exchange) is one example of a company that did this.

To serve a practical transfer function: Airdrops can happen when there is a fork in a cryptocurrency or a new network is launched. Examples of this include Bitcoin users getting Bitcoin Cash, and Ethereum users getting Ethereum Classic tokens equal to the value of that held in their original wallets. Further examples include ETC holders being gifted CLO with the advent of the Callisto blockchain or NXT holders receiving IGNIS tokens following the IGNIS token sale. To aid decentralization: Airdrops can help create a higher level of security for a network and its users. OmiseGO did an airdrop for this reason, distributing a sizable chunk of its tokens to Ethereum users.

According to an official blog post:

We believe that introducing to a few hundred thousand account holders the possibility of being PoS validators will ultimately make the network stronger, and we hope it will create interest in OmiseGO and its underlying mechanisms.

To increase marketing efforts: As mentioned above, dev teams or companies decide to airdrop tokens to attract attention during their ICOs in order to encourage investment in their token. They’re also often used at the launch of a new currency to sweeten the deal, get people excited, and bring users in the door. As Facebook recently introduced a new advertising policy explicitly banning ICOs, many have turned to airdrops as an alternative method for PPC advertising.

How to Find Airdrop Information

Information about airdrops can be found pretty much anywhere you follow or discuss crypto.

Places like:

  • Slack, Discord or Telegram channels
  • Reddit or Bitcointalk
  • Facebook groups

There are also quite a few sites that have been built expressly for the purpose of alerting people to the advent of an airdrop. A few notable ones are:

You can also find numerous social accounts dedicated to notifying people. Here is one such example. Sometimes you can also get it right from the source with an airdropping company announcing it on social media or via press release, like this one on Ethereum World News.

How To Claim an Airdrop

Poke around Reddit a bit and it will quickly become clear that there is often mass confusion on how exactly to claim airdropped coins. Let’s try to simplify. In many cases, an airdropped coin is based on the Ethereum ERC-20 protocol and require an ERC-20 compliant, non-exchange wallet to claim.  MetaMask or MyEtherWallet are two of the most popular solutions people use for this, and it’s important to note that the wallet must be active. Most airdrops have checks in place to make ensure that people aren’t just randomly generating a bunch of addresses and signing them all up to unfairly obtain a glut of coins.

In some scenarios, the coins will automatically hit your wallet and all you have do is wait. In other cases, you need to take specific actions or hold a certain token to qualify. Usually what you need to do will be clearly communicated prior to the airdrop (the whole point is to give coins away, after all). You may also be required to follow on Twitter or join a Telegram group. Be sure that you do these things and don’t unfollow or leave before the airdrop, otherwise you may miss out.

A Quick Word on Security

The crypto space is unfortunately rife with scams and bad actors trying to take advantage of people. Remember this, and know that airdrops are no different. With so many free tokens up for grabs, it can be easy to go on a clicking frenzy and get yourself into trouble. Your best defense is keeping your awareness close at hand and to verify everything. That aside, here are a few other reminders:

  1. Protect your private keys. Don’t believe anyone who claims to need them to check your wallet balance. This can easily be accomplished through Etherscan.
  2. Don’t send money to anyone. Remember, in an airdrop, you should be the beneficiary, so don’t send anything to someone else no matter the pretense. If an airdrop is asking you to send something, walk the other way immediately.
  3. Cross-check official sources. If a coin is conducting an airdrop, odds are it will be discussed publicly. Check official accounts to make sure that the airdrop is legit; otherwise, you might be subject to a scam with shady characters trying to collect your data.

Final Thoughts

Airdrops are undoubtedly useful techniques for raising awareness of a new token and to incentivize loyalty among new users. They’re great tools for promoters and developers of a new project to gain some recognition; and as a whole, they’ve benefited the market by getting more people interested in and vested in a wider range of cryptocurrencies.

Airdrops provide people with a proposition that is often too good to pass up—a chance to get a stake in something without any risk. From an investor’s point of view, airdrops are exciting. Just be sure to always confirm the authenticity of an airdrop campaign before participating in it. In the US, airdropping has raised questions about taxes and whether they amount to income or capital gains. There does not appear to be a consensus answer on this yet, but consulting a qualified tax professional should be step one. Bitcoin.tax is a good resource as well.

Article Produced By
Colin Adams

Colin Adams

Colin is a writer, researcher, and content marketer fascinated with the ongoing blockchain revolution and the potential it represents. Originally from Seattle, Washington, he can most often be found doing yoga, wandering around in the woods or traveling.

https://www.investinblockchain.com/cryptocurrency-airdrops/

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Korean Lawmakers Hasten to Regulate Cryptocurrency, Legalize ICOs

Korean Lawmakers Hasten to Regulate Cryptocurrency, Legalize ICOs

Lawmakers in South Korea, one of the world’s biggest cryptocurrency trading markets,
are set to submit draft bills to legislate regulations for burgeoning sector.According to a report by the Korea Times, a number of lawmakers across different political spectrums are seeking to fast-track cryptocurrency regulations that could plausibly lead to lifting the current ICO ban in the country. The drafts will be submitted during ‘an extraordinary session of the National Assembly from July 13 to 16’ to address the legal status of cryptocurrency and regulatory guidelines for crypto exchanges, Notably, the report suggests that the submitted regulatory drafts are expected to play the role of a ‘catalyst’ in triggering discussions toward regulation and the subsequent the legislative process of turning bills into law.

Representative Park Yong-jin, a lawmaker and member of the country’s ruling Democratic Party, is perhaps the most prominent politician pushing for regulations, alongside Rep. Chung Tae-ok of the primary opposition Liberty Party Korea (LPK) and Rep. Choung Byoung-gug of the Bareun Mirae Party, a minor opposition camp.

As reported previously by CCN in July 2017, Park proposed at least three new bills to build a regulatory framework for cryptocurrencies despite previously comparing last year’s surging prices to Europe’s tulip mania in the 17th century. Rep. Hong Eui-rak, also of the political camp in power, is notably pushing for the legalization of ICOs after authorities enforced a ban on the radical new form of fundraising in September last year.

Further, Rep. Song Hee-kyung of the opposition LPK party is set to host a policy debate on the security framework at domestic cryptocurrency exchanges on July 19, in a year of noteworthy major security breaches and thefts at Korean exchanges. Last month, domestic exchange Coinrail was the victim of a hack with a reported 40 billion won ($37 million) in cryptocurrency stolen. A little over a week later, Seoul-based Bithumb – the country’s biggest crypto exchange – suspended Unlinktransactions after losing $30 million in cryptocurrency following another hack.

The proposed draft regulations coincide with a previously-set deadline by G20 nations that aims to enact a uniform regulatory framework for the cryptocurrency sector among member nations.

Article Produced By
CNN

https://www.ccn.com/korean-lawmakers-hasten-to-regulate-cryptocurrency-legalize-icos/

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Already More ICOs in 2018 Than All of 2017: $6.3B

The amount of money raised in initial coin offerings (ICOs)

in the first quarter of 2018 has blown past the amount raised throughout all of 2017, according to data from Coindesk. In the first three months of the year, a total of $6.3 billion raised from digital coin offerings represented 118% more than that of last year's total, suggesting that despite increased scrutiny on the cryptocurrency space, ICOs aren't going anywhere soon.

ICOs have been a major source of controversy in the cryptocurrency space as regulators struggle to combat illegitimate business and protect investors against buying into the frenzy without proper consideration. Since just about anyone can create digital currency: Over 15,000 cryptocurrencies have been launched. Often, the means by which crypto-related startups raise money is by selling virtual coins as an alternative to raising stock. Regulators have tried to crack down on the surge in fraudulent ICOs, which prompt many to buy in due to false advertising and other schemes. Many investors have also fallen victim to "FOMO," or fear of missing out, getting into crypto-investing simply because others have bought in, and not in response to the actual details of the startups that they are funding. 

Digital Token Projects Continue to Gain Popularity 

Of course, not all ICOs are schemes, and many are legitimate. On Wednesday, Basis (formerly Basecoin), landed $133 million in an ICO, with participation from high-profile investors such as Alphabet Inc.'s (GOOGL) GV, Andreessen Horowitz, former Federal Reserve governor Kevin Warsh and billionaire hedge fund manager Stanley Druckermiller. The funding round marked the first time that venture capital firms Bain and Lightspeed had ever bought a digital token.

In 2018, the size and speed of ICO funding rounds have also accelerated, according to the Coindesk report. Q1 saw 59% as many ICOs raise capital as all of 2017. The report noted that without Telegram's record-breaking $1.7 billion token sale, ICOs in the first three months of 2018 would amount to $4.6 billion, or 85% of last year's total. Coindesk notes that given most ICOs in Q1 have garnered less than $100 million, "a number of projects are still eager to sell tokens, despite the regulatory risk." The report pointed to a recent ruling from the Securities and Exchange Commission (SEC), which acknowledged some ICOs as securities offerings and required that they be registered with the agency.

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrency.

Article Produced By
Shoshanna Delventhal

As a digital nomad based out of New York City, Shoshanna enjoys reporting on business and finance, with a focus on consumer products and technology companies. Shoshanna is passionate about enhancing the future of work by harnessing productivity and adopting transparent, flexible work cultures.

After graduating from UNC Chapel Hill with a B.A. in Economics and International Relations, Shoshanna worked in international business advisory at KPMG. When she’s not writing, you can now find Shoshanna leading yoga, mindfulness and creative workshops around the world. Shoshanna’s enthusiastic about forward-driving projects that advance social entrepreneurship, conscious consumerism and sustainability movements.

https://www.investopedia.com/news/already-more-icos-2018-all-2017-63b/

 

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Emergence of New Major Ecosystems: Ethereum & Beyond.

Emergence of New Major Ecosystems:
The Battle for Two Layer Protocols

Ethereum and Beyond

Ethereum  —  as the current incumbent among general-purpose permissionless blockchains  —  has to date offered the best resources, tooling, and incentives for developers to build on top of its protocol. These “layer-two” projects combine off-chain software with some number of smart contracts (which may include a native ERC20 token) to create markets in which users can trustlessly interact and exchange some digital resource. That resource might be the sMPC of private data, live streamed video, generic loan contracts, a CryptoKitty, or something else. These markets rely on the security guarantees and immutability of the underlying chain; so the success of a project is, to a degree, contingent on the effectiveness of the underlying chain.

For a developer seeking to build a blockchain project in 2016, Ethereum was the natural (or maybe the only) choice. If that same developer were to build a project in 2019, he or she would have significant optionality in choosing an underlying protocol.

One of the most exciting developments of 2019 will be the emergence of new “major ecosystems” and thus the beginning of the battle for layer two.

Major ecosystems are layer-one blockchain protocols that offer very compelling technical and architectural innovations such that they are likely to capture a significant portion of the technical mindshare within the space. As a number of these new ecosystems approach network launch, we can expect to see direct competition between protocols, each evangelizing its tech and incentivizing engineers to build on top of its stack.

How Will Ecosystems Compete?

There are any number of open questions around how this might play out. What factors are developers likely to prioritize in deciding which base layer to build on? Will developers who have already built layer-two projects on Ethereum migrate their tech to new protocols? The prediction is that they will.

Engineers will congregate on the chains that have the best performance (i.e. scalability, security guarantees, privacy), the most accessible and friendly developer environments, the best perceived long-term viability, and (perhaps) the most valuable cryptocurrencies.

Another variable is the degree to which decentralization or censorship resistance are important to a given use case. For example, a gaming application may make more sense on EOS than Ethereum if “platform-grade censorship resistance” is sufficient for its use. Conversely, a decentralized financial market may be better suited for a consensus protocol that allows any participant to validate and verify blocks.

Evidently, the major ecosystems will need to compete on tech as well as on incentives to adopt the tech. Certain new ecosystems incentivize adoption by offering large pools of organized capital mandated specifically to invest in the development of infrastructure, UI/UX and developer tooling on their platforms.

These capital pools will act as growth drivers in their respective ecosystems, much like ConsenSys was a growth driver for the Ethereum ecosystem.

Technical Hurdles

For Ethereum projects seeking to move to a new chain, the process of porting a Solidity smart contract is not a trivial task. Theoretically, with new base-layer protocols using WebAssembly virtual machines, smart contracts scripted in any language that can be compiled down to Wasm (e.g. Haskell, C, Rust) should run correctly. In reality, a developer will need to customize their smart contracts for each chain’s VM, considering the security guarantees, unique native functionality, and idiosyncrasies of each.

This means projects will need to expend technical resources on adapting their codebase, run new security audits on the code for each chain, potentially hire new engineers, etc.

Given these technical and cost barriers, expectations are to see a mixture of layer-two projects that make dedicated bets on the adoption of a single chain (e.g. EOS maximalists) as well as layer-two projects that run implementations across two or three of the top chains.

What About the Tokenholders?

If a tokenized Ethereum layer-two project decides to launch on top of a new protocol, what does this mean for the project’s existing tokenholders?

The answer to this is unclear today and may differ project to project. It also depends on whether the project is “abandoning” its Ethereum implementation or simply launching a concurrent implementation on top of another chain.

Here are a few approaches likely to be seen:

Multiple TDEs. A project may elect to run alternative token distribution events (either airdrops or token sales) separately for each base-layer chain it has an implementation on. The tokenholders of a layer-two project could therefore differ from chain-to-chain.

Airdrops to ERC20 Tokenholders. A project may elect to airdrop its tokens for each new base-layer chain directly to its ERC20 tokenholders (much like BTC holders receive all of the forks of BTC). This could concentrate economic value to, and incentivize the HODling of, the original ERC20s. The downside of this approach is that the project would not raise any additional capital to finance the costs of porting onto new chains.

Sidechain Bridges. Instead of creating additional sets of tokens for each new ecosystem, a layer-two project may elect to facilitate token transfers from Ethereum to other ecosystems via sidechain bridges. This would effectively turn an Ethereum layer-two project into a “meta protocol.” The process would be conceptually similar to the DOGE-ETH Bridge launched by the Truebit team earlier this year: A user could lock up their ERC20s in an Ethereum smart contract, provide proof of such a transaction on the alternative chain, and then either mint or otherwise receive new equivalent tokens on the alternative chain. For example, a 0x user on Ethereum can lock up their ZRX tokens in a smart contract and, by providing a proof, receive DFINITY ZRX tokens on the DFINITY chain. These bridges can also be bilateral, allowing tokenholders to move their balances across chains while still maintaining a fixed total supply of tokens irrespective of the number of cross-chain implementations.

The Bet.

To be clear, it is not necessarily perceived that the battle for layer two is that of an adversarial process or a zero-sum game between the major ecosystems. It’s impossible to imagine that there will only be a single winner in the development of permissionless blockchains.

Simply put, it’s a safe bet that the market for developer mindshare is about to get a lot more competitive  —  and that this competition will inspire a great deal of innovation, more efficient capital allocation, and even some consolidation across chains and companies (which we are beginning to see with the recent M&A in the space).
 

CREDIT: Tekin Salimi, a VC at Polychain Capital:
https://venturebeat.com/2018/07/07/beyond-ethereum-the-battle-to-own-blockchains-layer-two

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Problem: Crypto Heists Net $761 Million …

… just in first half of 2018.

About $761 million worth of cryptocurrency was stolen from exchanges in just the first half of 2018, Reuters reports, citing blockchain security firm CipherTrace. Unlike traditional banks, money stored at cryptocurrency exchanges often isn’t insured, and even investors who don’t do business with hacked exchanges can still be impacted, since reports of such heists often bring down cryptocurrency prices at least temporarily. The attackers behind such hacks can be sophisticated: North Korea has been accused of hacking exchanges to get funds in the face of sanctions limiting its role in the global economy. Digital theft isn’t limited to cryptocurrency: In May, Banco de Chile, among the South American country’s largest banks, reportedly saw $10 million siphoned off by hackers who initiated bogus transactions through the international funds transfer system SWIFT amid a malware attack.

For further details: BY STEVEN MELENDEZ
https://www.fastcompany.com/90179857/crypto-exchange-heists-net-761-million-in-first-half-of-2018

Solution:

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Before You Buy Bitcoin, Read This.

Many investors are asking:
Should I buy Bitcoins or other cryptocurrencies? And if not, why?

What Is Bitcoin?

Bitcoin arrived on the scene in 2009. The digital currency is created and held electronically. Its value stems partly from the fact that it's decentralized; no single institution or government controls the network. It was developed based on a proposal from a software developer called Satoshi Nakamoto, according to CoinDesk, which tracks cryptocurrency prices and reports on events in the crypto space. Low transaction costs are another feature along with instantaneous transfers.

Perhaps its biggest attraction is that its supply can't be increased or decreased at the whim of a controlling entity. Similar to gold and other precious metals, Bitcoins can be "mined," but it's done by using computing power in a distributed network. And like gold, Bitcoin supply is limited. And it's headed toward terminal creation.

Bitcoin rules state that only 21 million Bitcoins can ever be created, though the coins can be split into smaller parts. That could make Bitcoin, like gold, an attractive inflation hedge, backers say. There are 16.67 million Bitcoin in circulation now.

On the other hand, the potential creation of new digital currencies creates "the possibility of limitless supply of different cryptocurrencies," undermining the value of existing ones, UBS warned recently.

For further information: 
https://www.investors.com/etfs-and-funds/etfs/before-buy-bitcoin-know-cryptocurrency-investment-risks/

 

 

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What Determines If Cryptocurrency Will Be Regulated.

In mid-June, 2018, a top SEC official said that Bitcoin and Ethereum are not securities, adding that a key point in deciding whether a coin is a security is whether a cryptocurrency network is sufficiently decentralized.

Not being securities means transactions in Bitcoin and Ethereum aren't subject to SEC rules.

"(When) purchasers no longer have expectation of managerial stewardship from a third party, a coin is not a security," said William Hinman, the head of the SEC's division of corporate finance, at the Yahoo Finance All Markets Summit: Crypto.

However this also means that initial coin offerings, which have in the past been launched by centralized teams, could fall under SEC rules.

This is because initial investors could be buying coins in the belief they can profit when they go public and increase in value. In addition, at such an early stage they are not sufficiently decentralized.

For more, see: https://www.investors.com/news/sec-explains-cryptocurrency-security-asset-ico-regulation/

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Crypto Rising: Bitcoin Rebounding From 2018 Lows.

Bitcoin regained some losses Monday, breaking 2-month downtrend. Other digital currencies including Ethereum, Bitcoin Cash & Ripple were also up. 

The cryptocurrency's price jumped by 12% from Friday, its biggest intraday rise since April. 

The price rise is a boost for fans of the speculative asset class, which is based on blockchain technology. Cryptocurrencies around the world lost about half their market value from May 5 through last Friday. This, after Bitcoin hit an all-time top price of nearly $20,000 in December, 2017.

For more, see article by Michael Larkin, Investor's Business Daily: 
https://www.investors.com/news/bitcoin-rebounds-2018-lows/?src=A00220&yptr=yahoo

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Malta Determined To Become The ‘Blockchain Island’

Regulations, Adoption, Binance Headquarters

Excerpts from an article from Cointelegraph, by Hector Sanchez dated April 9, 2018
Complete article here: http://hive.pe/yJ

Malta has made it obvious that it wants to become the “Blockchain island” and it seems determined to achieve its goal.

A notable confirmation that Malta is moving in the right direction regarding Distributed Ledger Technology (DLT) regulation was the recent announcement by Binance. The largest cryptocurrency exchange in the world by volume chose Malta for their new headquarters after the warnings received from Japan, China and Hong Kong.

Binance CEO Changpeng Zhao, known as “CZ”, welcomed other projects to Malta such as Tron:

Silvio Schembri, Junior Minister for Financial Services, Digital Economy & Innovation within the Office of the Prime Minister of Malta, commented to Cointelegraph on the news:

“Binance’s decision is a vote of confidence in what we’re offering as a country and as a Government in this sector, that is legal certainty in this space. During the meeting with CZ I explained our long-term vision reflected in the policy document that was launched in February, ‘Malta – A leader in DLT Regulation.’ We are not shying away but instead want to unleash the opportunities that holds by regulating the sector without stifling innovation. Ultimately our vision is to make Malta ‘The Blockchain Island’.”

 

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Liechtenstein’s Blockchain Law, Crypto Banking and ICOs, Interview With Prime Minister

Liechtenstein’s Blockchain Law, Crypto Banking and ICOs, Interview With Prime Minister

Adrian Hasler, the Prime Minister of Liechtenstein,

is certain that blockchain technology will have an impact on a variety of areas and is preparing a new blockchain law to provide essential requirements in order to establish a regulatory base for blockchain businesses. The blockchain law — so called Blockchain Act — was announced by Adrian Hasler at this year’s Finance Forum on March 21. According to Adrian Hasler, the new act is about integrating current business models in regulatory terms in order to give companies and their clients a legal base. The planned act is expected to be circulated for consultations this summer. Cointelegraph spoke with the prime minister about blockchain regulation, the politics regarding this technology and cryptocurrencies, ICOs and the business climate in Liechtenstein.

About Lichtenstein’s blockchain law

Cointelegraph: In your greetings at the Finance Forum you announced a new blockchain law. What makes this regulation special?

Adrian Hasler: We see great potential in blockchain technologies that go far beyond what we can observe today. Our law is designed to serve as the legislative basis for such a token economy and thereby provide regulatory certainty for all participants and overall further

positive development [in this space].

Blockchain can serve as an important base for a variety of economic applications, covering not only payment transactions but broader financial solutions, industry use cases and general applications.

CT: Could you specify the implications of such a regulation when put into place for blockchain businesses and the average citizen? How can they profit from it?

AH: We expect many more rights and assets put into blockchain systems in the future. One example: in order to effectively capitalize on the advantages of these efficient transaction systems we need a lawfully secure connection with the physical world, which we aim to achieve with state regulatory oversight. This will create trust, which is important for blockchain businesses and citizens.

CT: Why is blockchain an interesting topic for Liechtenstein?

AH: We have dealt with possibilities and risks associated with blockchain in the past. We view some opportunities here but also certain challenges for all economic sectors, especially the financial sector. It is important for the state of Liechtenstein that the government and authorities deal intensively with the consequences in practices to be able to treat companies fairly and competently. We aim to actively accompany this development.

About the future of cryptocurrencies

CT: Are you optimistic about the future of blockchain and cryptocurrencies?

AH: We observe a remarkable, globally oriented, and well-educated scene that is very much involved in the advancement of blockchain technology, and we believe that we are only at the beginning of an exciting and long-term development. Cryptocurrencies for me represent merely a fraction of possible use cases of blockchain in a tokenized economy. I believe we have to distinguish between payment traffic, stable coins representing legal means of payments and self-sustaining cryptocurrencies. It goes without saying that payments within a token economy are executed via blockchain. In this context, it can be assumed that stable coins, which are linked to legal currencies, will play an

important role.

Cryptocurrencies can play a significant role in the future once they become widely accepted.

CT: Do you see an interest in blockchain projects and demand for cryptocurrencies from the citizens of Liechtenstein?

AH: Liechtenstein accounts for a relatively large blockchain scene with a very big interest in blockchain projects and cryptocurrencies. For a layperson however, it seems relatively hard to accurately assess the risks of such an investment. Partaking in an ICO alone can be quite difficult. For this reason, there are increasingly more financial products entering the market that make investments easier. However, these are currently only approved for qualified investors.

CT: The Liechtenstein family bank Bank Frick allows direct investments in cryptocurrencies. Do you support the idea of crypto-banking as an alternative to

traditional banking?

I really do not see a contradiction between crypto banking and traditional banking.

AH: I rather expect to see an integration of blockchain technology and cryptocurrencies in the financial sector. I do applaud this development because it introduces high standards und legislative security for investors of the traditional finance sector on blockchains. Of course, we need to make sure that the advantages of the crypto world are sustained as best as possible.

CT: Are you yourself dealing with cryptocurrencies or investing in blockchain projects?

AH: No, in my function as head of the government, I keep a low profile here.

About Liechtenstein as a location for ICOs

CT: Liechtenstein has become a favourite location in the world, to start ICOs. What are the reasons?

AH: One important reason is the openness of the authorities and the government for the new technologies and the subsequently acquired knowledge on how to use them. Surely it helps that you have very little response time as a company. It is relatively quickly possible to schedule a meeting with the ministry of the FMA [financial authority of Liechtenstein]. Furthermore we introduced a so-called regulatory laboratory at the FMA, which is a competent contact for innovative companies. Especially Fintech and blockchain companies seem to use this option intensively.

CT: Liechtenstein is subject to certain European Union regulations. Have those furthered the advancement of innovative ICOs or rather hindered it?

AH: Liechtenstein is a member of the European ecosystem und complies with all EU regulations in his financial service area. This is why companies in Liechtenstein also benefit from the so-called ‘EU-Pass’, hence the access to the European market. In our experience, however, it depends heavily on the specific design of an ICO, whether financial market law issues are affected. To my knowledge, many ICOs in Liechtenstein have already been successfully implemented within the framework of the financial market rules.

Article Produced By
Veronika Rinecker

https://cointelegraph.com/news/liechtenstein-s-blockchain-law-crypto-banking-and-icos-interview-with-prime-minister

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