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Three Fronts in the Global Digital Currency Wars

Three Fronts in the Global Digital Currency Wars


Jeremy Allaire is co-founder, CEO and chairman of Circle, a global financial services company that provides a platform for individuals, institutions and entrepreneurs to build businesses, invest and raise capital with open crypto technologies.

The views expressed here are his own.

The past several months have brought dramatic new technology, market and regulatory developments in the cryptocurrency sector, with major global technology and state actors pushing forward digital currency initiatives. These new initiatives are forcing global leaders everywhere to ask what the role of digital money will be in the next decade, and are ultimately a proxy for shifts in the broader political and economic landscape that are going to re-shape the future of the international monetary system.

Deep, fundamental digitalization of the economic system is now well underway as blockchain infrastructure moves from the fringe and early adopters and into the spotlight of major nation-state actors. Synthetic, crypto-powered central bank money tokens, and the introduction of smart contracts that can represent and tokenize other real-world financial assets and contracts are on the rise around the world. These rapid changes are leading regulators everywhere to grapple with an economic system that is beginning to mirror the open, global and connected internet of information and communications.

At the foundation of these shifts is the rapid development of public blockchain infrastructures, such as ethereum, which allow market participants to issue cryptocurrency tokens representing fiat currencies and other financial assets. This “base layer” of trusted computing, record-keeping and transaction processing can be compared to the base layer of TCP/IP and HTTP, protocols that allowed the vast global internet to come into everyday use. There are now several competing approaches to building a new financial system on this infrastructure.

1. Open finance

The first is represented by crypto-native ecosystem players, including Circle and Coinbase, who are building fiat-backed stablecoins such as USD Coin (USDC) on top of public blockchains. These developments are enabling a broad base of developers and companies to build higher-level financial constructs such as decentralized lending and credit markets, payments services and tools for trade finance. Regulated by existing payments banking rules in the US and EU, these private market-based approaches are growing rapidly and help to form a pillar of the open finance movement.

2. Government-run

The second approach is best represented by China’s forthcoming Digital Currency Electronic Payment (DCEP) infrastructure, which aims to build an entirely controlled, centralized and permissioned infrastructure for a digital currency version of the Chinese RMB. While likely appropriate for the Chinese economic and political model, this approach flies in the face of the open internet ethos and is not likely to receive much of an enthusiastic response from the broader internet development community.

3. Private consortia

The third approach, anchored in the proposed Libra Association and Libra Reserve Currency, attempts to build an “over the top” synthetic global digital currency. Like China’s effort, the Facebook proposal creates a centralized, permissioned infrastructure for this payment system, which will radically limit how open and accessible the infrastructure becomes for developers and companies wanting to build on top of it.

Competing worldviews

In each of these approaches, we can extrapolate a fundamental worldview. With the first, do we want an open financial system built on the public internet that allows value to move freely and easily anywhere in the world with strong privacy protection, one that enables people and companies to build financial arrangements in code, enforced by public blockchain infrastructure and enabling commerce and transaction arrangements between people everywhere? In short, do we want a global financial system built in the image of the internet?

Or, if the world embraces the Chinese approach, do we want a world with tightly controlled access to innovation in the financial system, with extremely tight controls on where capital moves and who can access the system? Such a system may enhance efficiency and global reach for the Chinese RMB. But will it mirror the tightly controlled internet that exists in China today? Will it be offered on equal terms to people and companies globally who seek to transact with China?

The worldview put forward by Facebook and Libra suggests a new global financial system that is controlled and run by the largest private companies in the world. And rather than building on existing sovereign money, the Facebook construct seeks to create a new global currency that stands above the state. Do we want a new global financial system controlled by a few private companies, where permission to participate and innovate is mediated on a closed infrastructure?

The largest governments in the world, especially those responsible for major global trade currencies, must now grapple with the innovation of public cryptocurrencies that have the reach of the global internet. The choices they face, and the decisions that are ultimately made by relevant policymakers, will have a dramatic impact on what our future global economic system looks like. Meanwhile, while governments study and debate these topics, bit by bit and block by block, technical innovators all around the world are using crypto to rebuild the global economic system in front of our eyes in a marvel of human ingenuity.

Article Produced By
Jeremy Allaire

Jeremy Allaire is co-founder, CEO and chairman of Circle, a global financial services company that provides a platform for individuals, institutions and entrepreneurs to build businesses, invest and raise capital with open crypto technologies. He has co-founded and led multiple global internet technology firms with thousands of employees, hundreds of millions of consumers served, and multiple successful public offerings on NASDAQ.



Why You Can’t Be Anonymous Using Crypto

Why You Can’t Be Anonymous Using Crypto


Most people associate blockchain and Bitcoin with anonymity and imagine that they can perform transactions online without being detected. But this couldn’t be farther from the truth, as aside from a few altcoins that have privacy features, Bitcoin and most cryptos aren’t actually anonymous.

How Cryptos Can Be Traced

Every crypto transaction has inputs and outputs that are addresses from which the crypto is sent and received, respectively. These addresses are encrypted through a private key, and cryptos such as Bitcoin or Ethereum can only be moved from their wallet using the private key from the address. The outputs are the addresses that receive the crypto, and it is referred to as the public address, which consists of a long string of numbers and letters that do not have any identifiable information to connect you to your address or its associated wallet. The public address acts as your pseudonym on the blockchain and allows other addresses to interact with you.

As these addresses do not give away any personal information, most people believe that they cannot be identified on the blockchain. Even if there is no real name attached to bitcoin transactions, they are pseudo-anonymous at best, as there are many ways of identifying the owner.

In some sense, it is true that bitcoin is more anonymous compared to other payment methods that are run by centralized third-parties, as your bitcoin funds and transactions have no connection to your real name, your email, or your physical address, just random numbers and characters. But actual cash transactions are more anonymous than crypto because all of your transactions are visible to the entire blockchain network. Most blockchains are public ledgers, which means that anyone can look into your transaction history with a certain crypto, and also know how much you hold in your wallet. You would have to create a new wallet after each transaction to keep your anonymity. But, no such measure would be enough to deter someone from finding out your identity.

All Your Activity Is Publicly Available

After you make a transaction with someone, they will have your public address and, using it, they can search your past trading activity, as well as trace all your future transactions. Most cryptocurrencies have publicly-available transactions, and those with the advanced software and necessary tech skills would be able to trace the transactions back to the original source. The availability of blockchain analysis software that is sophisticated enough to track wallets and trace transactions have made it easier for law enforcement agencies to find criminals and drug lords who thought that using Bitcoin’s public ledger would keep their activity anonymous.

Node Connections

Other ways of identification involve finding out your IP address. This can be done by connecting multiple nodes and tracking the source of a transaction. Attackers can intercept your transaction by connecting to all the nodes on the blockchain network. Then, they wait to see which node is the first to transmit a transaction that will be identified as the source of the transaction. Thankfully, there are some methods that you can use to keep your activity private when using cryptos online, such as using mixers. Mixing services jumble up crypto addresses together and send them out randomly, so that no one can link the private and public addresses.

Today, you have a lot of options, as you can choose Bitcoin Mixer to be sure that, when you make a transaction, you can stay calm because no one is spying on you. Also, if you are looking to increase your privacy when using ETH, you can opt for Ethereum Mixer, as it works automatically and without any human assistance.

Article Produced By
Lavinia C.



US Congress Continues to Investigate Cryptocurrencies, Deep Divisions Revealed

US Congress Continues to Investigate Cryptocurrencies, Deep Divisions Revealed



Members of the United States Congress are again openly addressing the cryptocurrency revolution

by holding committee hearings and researching its potential impact on the current financial system. Although there is significant division among them, there is no doubt that America’s legislators are becoming notably concerned about the changes blockchain technology is introducing. There is now little doubt that the country will soon see significant legislative and regulatory action addressing this new asset class.

This past week Facebook CEO Mark Zuckerberg testified before the House Financial Services Committee where he was questioned on his company’s plan to create the Libra digital currency. To put it mildly, the mood of the committee was not friendly. Most members expressed grave concerns over Libra’s potential use in illegal activities as well as its threat to the hegemony of the U.S. dollar in global economics. Only a handful of committee members discussed the technology behind Libra, yet there was no doubt that most of them understood the simple fact that emerging digital currencies are designed to operate outside of the traditional financial space. Brad Sherman (D-CA) was perhaps most vocal about this issue. The long-time critic of all things crypto railed against all things crypto, insisting that these assets are most useful for criminals, and do nothing to help the global poor and unbanked. 

Representative Patrick McHenry (R-NC) opposes Sherman’s position on cryptocurrency. In an interview on October 22nd McHenry spoke well of crypto use. Specifically he noted that Bitcoin “has enormous long term value” and that the U.S. government should encourage development in the blockchain space. To that end, he is reintroducing the Financial Services Innovation Act, which will enable fintech startups and development teams to bypass many outdated regulations when experimenting with digital currencies and blockchain assets. He first introduced this bill in 2016. Warren Davidson (R-OH) also supports crypto innovation. He has recommended that Facebook adopt Bitcoin, or another blockchain-based platform, rather than Libra. Davidson supports greater involvement by U.S. lawmakers and regulators in crypto development, and has called for leaders to take greater steps to educate themselves on the technology behind the various platforms. 

After the recent hearings on Libra, moves by the Congress on this issue are all but certain. Simply put, American lawmakers have no choice. Facebook and the Libra Association are firmly determined to launch their currency, and are unlikely to allow a few angry congressmen get in their way. Libra, however, is merely the tip of the iceberg. Many other large American businesses are also moving into the space. For example, Walmart is now using VeChain, Iota is forging partnerships with several U.S. cities, and many banks are embracing Ripple. If Congress has any hope of enacting effective regulation it had better act quickly. 

Although the present mood in Congress is strongly anti-crypto, what will happen once real legislation starts emerging is anyone’s guess. Knowing that this is a movement that cannot be stopped, and that this technology will bring incredible benefits to those that navigate it properly, more supporters are likely to emerge. Nevertheless, blockchain assets are on track to disrupt virtually every sector within the American economy. With so much at stake, the fight over how to adjust to such a revolutionary change could be very contentious. Mark Zuckerberg’s testimony was a clear indicator that, more than ever, America’s lawmakers are recognizing that the age of digital currencies has arrived. Addressing the myriad issues that will come with it will be no easy task. What is without question is that ignoring the changes underway is no longer an option.

Article Produced By
Trevor Smith



Top 3 reasons why governments demand regulation of cryptocurrency

Top 3 reasons why governments demand regulation of cryptocurrency


Whenever we hear about another government drafting a regulation for cryptocurrencies,

we can’t help but smirk a little bit at the hypocrisy of politicians and their approach to these digital assets. The reason why so many people laugh at the sight of new crypto regulation is due to the direct contradiction of such a law with an already established understanding of cryptocurrencies in the political world.

For example, dozens of governments have not recognized cryptocurrencies as money, but treat it as such. Most try to classify it under securities but they can’t find definitive connections between the already established understanding of security and a crypto coin. Therefore, they simply push it into the class of hobbyist assets or something completely harmless, and then regulate that sector to oblivion. This mostly causes collateral damage to industries that were already classified under this specific sector, which is why the negativity towards cryptos tends to grow institutionally as well as on a retail level. But why regulate cryptocurrencies? What are these digital coins which are ultimately nothing but a line of code have so dangerous about them that governments want to keep under control? Well, let’s find that out through this article.

Siphoning tax dollars into the economy

The first reason that causes cryptocurrency regulation is the potential tax that governments can put on the asset. Understanding it is quite easy. You can’t tax something which is not recognized as something of value, and in order to recognize it as something of value, you need to include it somewhere in the law, thus we get cryptocurrency regulations. Almost every draft you can take a look at mentions cryptocurrencies as some kind of asset class, which would then determine the level of taxation. The most common tax is, of course, the capital gain tax, which is calculated through the profit of exchanging these assets. The most common industry we can find this tax is a foreign exchange, which draws quite a lot of parallels on whether or not cryptos are money.

A sub-reason of taxes is to somehow minimize the cases of tax evasion from the population. You see, there are specific cryptocurrencies around the world that are designed to completely hide the identity of their owner, before, during and after the process of purchasing them. This was a very popular method for Australia real money pokie games as they would encourage their customers to deposit fiat currencies, exchange them for local tokens, spend a set amount of them on the platform and then they would be allowed to withdraw these funds as cryptocurrencies. Even if the deposit on these platforms would be recognized by a government authority, they would classify the lack of withdrawals as money lost while playing, thus not follow up on the taxation of the individual.

However, through regulation, governments would pretty much force citizens to use traceable cryptocurrencies on such platforms, or prohibit these platforms from allowing crypto withdrawals. Nobody can truly say they’ve worked like a charm, as the end goal was pretty much the same. The amount of taxes being added to the treasury each month did not increase nor decrease. Why? Because the fact that people avoided taxes on cryptocurrencies does not mean that they avoided taxes overall. The cryptos they’d get would still circulate in the local economy, thus still be funneled into the national treasury.

Security and control

The second argument that most governments put forward when installing a crypto regulation that it’s dangerous for the safety of the nation. Most of the argument revolves around the financing of terrorist groups that would plan on inflicting some damage to the country. However, it has been confirmed multiple times that cryptocurrencies are not being funneled towards criminals and that most of the crimes as well as terror attacks are still being funded through fiat money. Why? Because it’s very easy to smuggle them outside of the country as they’re mostly physical items and can’t truly be controlled by the government 100% of the time.

However, in terms of security and control, most people tend to agree that it’s worth having a regulation for. But that’s the only part about the legislation that they agree with. Everything else that requires the payment of taxes and identification is out of boundaries. But the fact is that security requires some kind of sacrifice. And in this case, that sacrifice is supposed to be privacy, which some people are not ready to give up.

Study and analysis

The next reason is the study and analysis of this new industry. We need to recognize the fact that cryptocurrencies were introduced in the modern financial market very quickly. So quickly in fact that even the developers themselves had not studied the technology completely. Therefore, the only plausible decision from governments was to either ban these new digital assets that people were buying up, or to regulate them to an extent where they buy some time to study them.

Unfortunately, the first time cryptocurrencies became available in the market, most governments decided to go ahead with a permanent ban, thus hindering the development of the assets. But this development was a hindrance to the value rather than the technical side, but then it caused collateral damage in a sense where developers could not fund their new projects anymore. So, in retrospect, the banning or strict regulation of cryptocurrencies as a means to study them hindered those very same studies as actual local applications could not have been taken into account, thus losing priceless data.

Should there even be regulation?

Cryptocurrencies should be regulated and every crypto fan who is truly aware of how they work will agree to this. The ultimate goal of Bitcoin and pretty much every altcoin is to either replace fiat money or become a worthwhile alternative. In order to do so, it needs to be kept in check so that it loses some of its volatility. Otherwise, it’s simply too risky for large-scale transactions and usage as millions if not billions could be lost in just a few hours from a small price movement.

Article Produced By
Bitcoin Warrior



FATF Begins Inspection on Anti-Money Laundering Measures at Japanese Entities on October 28

FATF Begins Inspection on Anti-Money Laundering Measures at Japanese Entities on October 28


The Financial Action Task Force (FATF), an international organization dedicated to anti-money laundering measures,

began undertaking an assessment at the Japanese government and financial institutions in Tokyo on October 28. It was reported that companies that operate cryptocurrency exchanges are also subject to evaluation, with the FATF conducting interviews at the Japanese government and approximately 20 financial institutions over the next three weeks. The results of the assessment will be made public in summer 2020. The FATF will investigate banks, securities companies, and insurance companies to see whether they have sufficient measures in place to confirm customer identity, report transactions that may be money laundering, and prevent fraudulent remittances. Additionally, the organization will investigate cryptocurrency exchange operators as managers of new financial assets to see whether their measures are sufficient to deter exploitation of these assets by criminal organizations. This marks the first time that Japanese cryptocurrency exchange operators will be subject to an evaluation by the FATF.

A previous audit was conducted in Japan in 2008, however the entirety of financial institutions in Japan received a harsh assessment, requesting improvements for 25 out of the 49 audited items for anti-money laundering and counter-terrorism financing (10 items demonstrated insufficient countermeasures and 15 items demonstrated only partial implementation of countermeasures). In the past, only 5 countries out of the 23 that underwent assessment by the FATF assessments required strict monitoring with regular follow-ups: United Kingdom, Spain, Italy, Portugal, and Israel. However, this does not imply that the countermeasures at Japanese institutions are in an exemplary state.

The FATF’s Recommendations carry significant weight and apply to over 190 countries and regions around the world. Should Japan be assessed as a “high-risk” or “uncooperative” country by the FATF, financial institutions in other countries may apply closer scrutiny when working with Japan’s financial institutions, leading to delayed trade or avoiding deals with Japan altogether. The Japanese government may be undertaking this recent assessment to regain trust and dispel concerns in international trade matters.

Cryptocurrency service providers in Japan have already begun introducing a registration system for registering as an operator with the Financial Services Agency (FSA), however it is thought that the regulating agency will further evaluate the initiatives of cryptocurrency exchange operators in Japan and propose measures for improvement. There are 20 companies registered with the FSA as cryptocurrency exchange operators, but companies that are not under the umbrella of major listed corporations and thus do not have abundant capital or human resources are mixed among those registered. Going forward, it can be expected that the fate of these registered companies will be split between those with resources capable of addressing requested operational improvements and those unable to keep up.

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This week in crypto: All the important developments in crypto space

This week in crypto: All the important developments in crypto space

The Bitcoin ecosystem continues to advance at a steady pace

as it becomes more mature and integrated into everyday life. This past week has seen a flurry of activity, just like every week before it, and every step is leading to a time when cryptocurrency is fully accepted as an alternative to fiat. While there is still a lot of controversy, such as that centered on Facebook and Binance, the overall progress looks promising.

Social media platform Kik was on its last breath, having to face a lawsuit by the U.S. Securities and Exchange Commission (SEC). Ready to throw in the towel on the platform so it could fight to save its Kin token, Kik has now found a new home and is going to be relaunched by MediaLab. Coming soon, according to the new owner, is a bigger and better messaging platform that could, eventually, offer some sort of monetizing feature. Satoshi Nakamoto has said it all along and regulators are now reinforcing his assertion. Cryptocurrency must be seen as a solution that operates within the framework of financial regulations. Satoshi designed Bitcoin to work in tandem with fiat and its guidelines, not above or around them, and the U.S. Financial Crimes Enforcement Network (FinCEN) agrees. It has said that all companies in the crypto space are prohibited from allowing complete anonymity and that they must comply with financial laws regarding anti-money-laundering policies. If they don’t, they could be held legally accountable.

New York is considering making changes to its BitLicense program. The state’s Department of Financial Services introduced the program several years ago as a way to ensure crypto companies operating in New York are legitimate and somewhat regulated, but the agency is looking to update its framework. The DFS is calling on crypto companies, as well as others in the industry, to provide input on how the process is working and what needs to be improved. The OKCoin crypto exchange is making strides in Europe. It has announced updates to its platform across the European Union and now includes a new payment channel for the Single Euro Payments Area (SEPA). This allows those in the EU to make more efficient deposits and withdrawals in euros and, to celebrate the move, OKCoin dropped all fees for qualifying transactions for a six-month period. In addition, corporate users have been authorized to make larger deposits and withdrawals through the SEPA channel. For all users, the new service means cheaper transactions.

The president of Crypto Capital, Ivan Manuel Molina, was arrested Thursday on charges of money laundering. The former banking partner to the Bitfinex exchange has been under fire after it allegedly “lost” around $850 million of the exchange’s money and the arrest could shed light on exactly what has transpired. It also means that Bitfinex, Bittrex, Kraken and BitMEX need to watch their backs. Investors of the Telegram Open Network and the Gram token introduced by Telegram are standing by their investments. When Telegram came under fire by the SEC, they had the ability to try to reclaim their investments, but have decided to let everything play out and see if Telegram can convince the commission that its Gram is not a security. There’s also the issue with Facebook’s Libra stablecoin. However, this saga is so big and changes so often that it needs its own space.

Article Produced By
Noah Bradley



Crypto Capital arrest could be disaster for Bitfinex, Binance, Kraken

Crypto Capital arrest could be disaster for Bitfinex, Binance, Kraken

The dominoes have started to fall for cryptocurrency exchanges choosing to operate in the shadows. Polish news site wPolityce.pl reported Crypto Capital President Ivan Manuel Molina was arrested on October 24 in connection to money laundering charges, causing a huge potential problem for Bitfinex, Binance, Kraken and BitMEX.

Crypto Capital has previously been established as the banking partner for many of the biggest exchanges in the world, having been named as Bitfinex’s banking partner after losing their Wells Fargo accounts, but also being tied to failed exchange QuadrigaCX as well as Binance, Kraken and BitMEX. Although they’ve helped these exchanges with their money, they’ve also been a consistent source of headaches, allegedly being part of why Bitfinex had $850 million go missing.

The charges against Molina now help fill out the story of what those exchanges might have been doing by partnering with Crypto Capital. Another Polish outlet, RMF24, notes Molina is accused of helping them with “money laundering Colombian drug cartels through the cryptocurrency exchange.” The hundreds of millions of dollars entrusted to the banking outfit, some of which Bitfinex probably hoped they would get back, has apparently also been seized by Polish authorities. The message is becoming clear: exchanges and their banking partners that run afoul of the law have everything to lose.

The next question will be, what does this mean for the exchanges? Bitfinex is most notably already under investigation for the $850 million loss, and what they might have done with their sister company Tether to cover it up, allegedly printing hundreds of millions to cover their tracks. They’ve recently tried to force Crypto Capital to reveal the location of their accounts, but with $350 million seized for money laundering, it’s unlikely there’s much left there. Add heightening regulatory scrutiny to the mix, and Bitfinex is sees bad times ahead.

For the other exchanges tied to Crypto Capital, it’s just a matter of time until they have nowhere left to hide. Binance and Kraken are both notable for attempting to evade regulation in the past, but with Columbian drugs now part of the story, they will have a harder time hiding from the truth. What we’re they using Crypto Capital for, and how long until they are defending themselves in a court of law? If Molina starts cooperating with Polish prosecutors, that day could be very soon.

Article Produced By
Larry Baker

Staff Writer

Larry Baker was born and raised in Boston, Massachusetts, and got interested in Bitcoin in 2016, when a college roommate almost burnt down their dorm with an overclocked mining rig. He bet the pumpkin farm on Bitconnect and hasn’t seen a pumpkin he likes since. Larry now writes for CoinGeek, firmly of the belief that the only digital asset of any real value is Bitcoin SV.


BitGo Confirms Tron Will Receive Institutional-grade Support

BitGo Confirms Tron Will Receive Institutional-grade Support

Most active service providers in the cryptocurrency space
– other than wallets and exchanges
– tend to focus on a handful of currencies at all times.

BitGo is one of those companies which primarily supported the top cryptocurrencies at first. In a new update, it seems Tron will be added to this platform. The current goal is to enable TRX support by November 2019. 

BitGo is Expanding

It is good to see a well-established service provider such as BitGo focus on expanding the support for additional cryptocurrencies. The company is best-known for providing cryptocurrency solutions that cater to institutional clients. Primarily those who seek secure storage solutions and multisignature solutions can benefit from what BitGo has to offer. Although it has been quiet on the company’s front lately, it seems their time has been well spent. More specifically, the company has officially confirmed they will add another cryptocurrency to its services in the near future. That currency will come in the form of Tron, or TRX. The choice for this particular currency is rather intriguing, primarily because Tron has not necessarily seen any institutional interest to date. Then again, there are more currencies than just Bitcoin, Ethereum, and XRP.

Custody Services Galore

It is evident BitGo has positioned itself in the world of cryptocurrency custody services. Their clients include exchanges, brokers, and futures contracts providers, among many other business models. They are also the oldest custody provider in the cryptocurrency space today. For Tron, this means they receive a proverbial nod of approval from a well-established company. According to the company, there has been a growing interest among clients who want to see custodial support for TRX. It remains to be seen which kind of use cases this will unlock over time, as there are many different opportunities to explore. The BitGo team had a previous collaboration with Tron’s developers, as they helped build the first institutional-grade mutisig wallet. The move to on-chain multisig is rather logical.

The Impact on TRX

When good news arises for any cryptocurrency, the asset in question will often see an artificial and orchestrated brief uptrend. Whether or not this will happen following the BitGo announcement, is a different matter altogether. While there is seemingly a demand among institutional clients regarding TRX, that would not necessarily result in a price increase across the different exchanges and trading platforms. 

Article Produced By
JP Buntinx



ESports as a Growing Factor for Cryptocurrencies

ESports as a Growing Factor for Cryptocurrencies

After Satoshi Nakamoto mined the genesis block in 2009,

Bitcoin, and cryptocurrencies as a whole, struggled to achieve legitimacy and acceptance. Ten years later, there are over 1,600 unique cryptocurrencies worth billions of dollars. There are about 40 million blockchain wallets scattered throughout cyberspace and that number increases every day. Some purchase virtual cash as an investment. Crypto has made several savvy individuals immensely wealthy. For others, it is a secure and convenient way to pay for goods and services. Of course, Bitcoin is cryptocurrency’s gold standard.

So, who buys these cryptocurrencies? Cryptocurrency owners are typically males between the ages of 18 and 34. Coincidentally, this demographic is also the primary driver behind the growth of eSports and eSports betting. For those who aren’t familiar with the phenomenon, eSports is basically competitive video gaming. With so many crypto-friendly online bookmakers offering odds on eSports, it should come as no surprise that eSports betting with Bitcoin and other digital currencies is on the rise.

More and more of those between 18 and 34 are turning their backs on traditional sports and embracing eSports. In their infinite wisdom, bookies figured out that supporting cryptocurrency and putting eSports on their betting menus is an effective way of attracting this fickle age group. Interestingly, players aren’t the only ones to get a thrill out of League of Legends, Dota 2, and the dozens of other popular eSports. These competitive games also draw millions of spectators. ESports are expected to surpass MLB and NBA viewership by 2021. Again, most of these onlookers are between 18 and 34, and a lot of them own cryptocurrency. There will be over 10,000 eSports events with a total of $189 million worth of cash prizes up for grabs in 2020. That represents hundreds of thousands of betting opportunities. Not including skin betting, there are three main ways to bet on eSports using cryptocurrency.

  • Betting with eSports bookies just as you would bet on traditional sports. Most eSportsbooks present bettors with dozens of wagering options for each individual match.
    Fantasy eSports which is pretty much the same as playing traditional fantasy sports. Pick your dream eSports team and compete against other dream teams.
  • Head-to-Head betting in which eSports players bet against each other.

Americans wagered about $5.5 billion on eSports in 2016. Experts predict that 6.5 million Americans will generate upwards of $13 billion in eSports bets by 2020. A significant portion of those wagers will be made using various cryptocurrencies. And let’s not forget how wildly popular eSports are in many regions of the world where payment options are limited. This doesn’t only affect crypto betting sites; it also has an effect on the bottom lines of game providers that rely on in-game purchases to make their money. Valve is one company that saw crypto as an ideal solution to this problem. They started processing Bitcoin payments for in-game purchases through BitPay in 2016.

Using Bitcoin, Ripple, Ethereum, and other cryptocurrencies to bet on eSports isn’t much different from using cash to wager on traditional sports. However, using virtual currency at online betting sites has some distinct advantages. Transactions are anonymous and fees are minimal if not non-existent. Deposits are nearly instant and withdrawals are often processed within minutes. A lot of eSports betting sites even offer nice bonuses to those who use crypto. It doesn’t matter if you are betting or buying in-game items; cryptocurrency gives users a better payment system.

ESports and cryptocurrency intersect in other areas too. Actually, cryptocurrencies have been fully integrated into several eSports ecosystems. Built on the Ethereum blockchain, FirstBlood is a popular crypto-based eSports platform through which players can bet without using middlemen. DreamTeam also offers blockchain-powered eSports competitions. These and other crypto-based eSports platforms only fuel the use of cryptocurrency. Ripple recently invested $100 million into the development of blockchain-based games. In fact, many game developers are using cryptocurrency to finance their projects. Reality Gaming Group used an initial coin offering to raise $3.5 million, which went into the development of their augmented reality shooter game.

Cryptocurrency and eSports were both once viewed as little more than passing fads. While both still have their share of detractors, they have become huge successes and they aren’t showing any signs of slowing down. They definitely have a symbiotic relationship and an influence on each other’s growth. Expect eSports to continue being a factor in the growth of cryptocurrency moving forward.

Article Produced By
Torsten Hartmann

Torsten Hartmann has been an editor in the CaptainAltcoin team since August 2017. He holds a degree in politics and economics. He gained professional experience as a PR for a local political party before moving to journalism. Since 2017, he has pivoted his career towards blockchain technology, with principal interest in applications of blockchain technology in politics, business and society.



EU Financial Services Chief Hints at Broad Cryptoasset Regulation

EU Financial Services Chief Hints at Broad Cryptoasset Regulation

During a parliamentary confirmation hearing, the European Commissioner for Financial Stability and Financial Services,

Valdis Dombrovskis, said that the E.U. is planning to regulate cryptoassets following the unanticipated wake-up call from Libra. Bloomberg reports that Libra has shocked global regulators into action, and the E.U. is determined not to be left behind, October 8, 2019.

Regulators Finally Open Their Eyes

Regulation is coming to cryptoassets in Europe as it has finally been confirmed that multiple agencies in the region are working on a framework for the treatment of virtual currencies and cryptoassets. While the organization has not said anything particularly negative, Dombrovskis believes that these currencies must be evaluated based on their risk to financial stability, monetary stability, data protection, and the ability to thwart money laundering.

Nearly one week ago, the European Commission sent Facebook a detailed questionnaire regarding their plans for Libra. The Libra Association and Facebook have yet to reply to the request. France and Germany have vehemently opposed Libra, even though the European Commission seems to be fairly open-minded. Germany went as for as vowing to stop Libra from entering the bloc, so this creates a fairly confusing situation. The primary fear with Libra is that regulators believe it will cause “financial instability”. What this really means is that Facebook has the firepower and resources to establish a private currency that can compete with traditional money.

Libra as a Driver of Fear

Regulators only started to care about cryptocurrency when Bitcoin peaked at $19,700 and started to fall. However, they only started to legitimately act once Libra was announced. Libra is now acting as a catalyst for global regulation of cryptoassets as well as an awareness generator. By dominating headlines in mainstream newspapers, the advent of cryptoassets is being projected to the masses. With Libra now at the forefront, people who have in crypto thus far are finally awakening to the real value proposition of Bitcoin. While “number go up” is fun rhetoric to watch, it is becoming abundantly clear that the censorship-resistant nature of Bitcoin is its most valuable trait. No regulator can shut it down or stop people from using Bitcoin.

Article Produced By
Ashwath Balakrishnan

Ashwath is a financial market and technology junkie. He is a cryptocurrency investor, trader, and enthusiast. He has expertise in market psychology and explaining complex technology in a simple way. He aims to battle misinformation in the cryptocurrency space.