Trading Tip `The Wall´ – Drop Tokens That Suffer From Overtokenization

Trading Tip `The Wall´ - Drop Tokens That Suffer From Overtokenization

It’s said that 90% of all startups fail, and that we should expect nothing more from ICOs. 10% success rate is still overly optimistic for ICOs, but perhaps not for the reason you may think. You’re probably aware of examples of ICO “founders” who turned out to be a bunch of made up Linkedin-profiles. You’re probably also aware of the risks that come with sending money to people you never met, in an asset or token impossible to freeze.

Also read: Disappearing Premiums Signal Bearish Mid-Term Outlook

Drop Tokens That Suffer From Overtokenization

You’re probably also aware of industry-specific risks, apart from straight up scams, which include:

  1. ICOs violating securities laws
  2. ICOs using complicated legal structures in order to avoid violating securities laws and having it back-fire
  3. ICO fundraisers using Ethereum smart contracts and imploding (this actually happened to the Ethereum co-founder himself)

In this post, I’m going to discuss a much more daunting problem that very few seem to grasp; overtokenization.

Let’s be clear: ICOs as a concept is not at all a bad way to fund the development of a new cryptocurrency. However, the ICO space today is overwhelmed by projects that are not even cryptocurrencies. ICOs have moved from covering cryptocurrencies, to apps that use an existing cryptocurrency as its platform, to regular companies doing something cryptocurrency related, and to regular companies doing nothing related to cryptocurrency at all. What many ICO investors seem to forget to ask is: why exactly do these projects need to have a “token”? Somewhere along the way, everything suddenly having a token became normal, and no one barely questions it anymore. This is going to cause a huge problem in the future, and I’m going to explain why.

There are very few cryptocurrency projects that legitimately necessitates a coin or a token from a technological perspective. The known examples that do are the following: actual cryptocurrencies (e.g. Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Monero), and certain protocols involving some kind of game-theoretical token usage (i.e. staking).

Trading Tip `The Wall´ - Drop Tokens That Suffer From Overtokenization

Augur Project

One of the few projects from the latter category I can come to think of is Augur. Augur isn’t a cryptocurrency, but a product that uses a cryptocurrency as platform. It’s a decentralized prediction market (currently in beta-stage) which consists of a set of smart contracts on the Ethereum blockchain. In Augur, its REP token (an ERC20) is integral to the process of resolving bets. It provides Augur with a way to financially reward and punish the actions of honest and dishonest actors, and creates incentives for a specific category of users (REP holders) to be proactive on the platform.

Augur is a project with flaws, but what we know is that it’s not practical to try to create Augur without a token. The token is – from the ground up – integral to the functions of the platform. The token itself is also defensible as an investment: as the popularity of the platform increases, the more revenue there will be for REP holders to earn on fees from resolving bets. I would argue that these ingredients are pretty unique to Augur (and perhaps also similar projects like Gnosis). In fact, there is an extremely limited number of cases of non-cryptocurrencies where a token is both technologically necessary and useful as an investment.

But the allure of launching a project like Augur is tantalizing; you don’t have to plan to create a whole cryptocurrency to launch an ICO, you just need a product that somehow utilizes a token that in some manner economically motivates people to hold it. If you figure out that, then you can launch an ICO too.

Because of the insane amounts of money investors poured into ICOs, almost every entrepreneur in the industry has quickly decided that whatever project they’re working on, it should probably incorporate some kind of token. Because not all projects are launching a new cryptocurrency, and they do not involve game-theory or staking that necessitates a token like Augur does, most projects have settled with a model where a specific token is required to utilize its services.

Trading Tip `The Wall´ - Drop The Tokens That Suffer From Overtokenization

Golem plans to build a decentralized market for computing power.

A Token-Critical Perspective

This is where the industry is running into a problem. Instead of an ecosystem of services being built around cryptocurrencies, you will now have to first purchase a specific token in order to utilize those services. Whether its storage space for rent, processing power for rent or something else, you won’t be able to pay for those things directly in your favorite cryptocurrency, you’ll have to use the specific token they’ve restricted their service to accepting, in order to raise money from you in their token sale.

This restriction severely diminishes the utility of the service they are creating. In the Golem example, its participants will be forced to accept payment in GNT rather than bitcoin for instance. It’s very unlikely that GNT is going to be as liquid as bitcoin, and therefore it is much more likely that the value of GNT will fluctuate spectacularly in comparison, which isn’t very convenient for its users. Furthermore, some sort of micro-economy will have to evolve around the GNT token, that relies on the GNT tokens that are purchased are later resold to the market. That opens up a whole new attack surface, where the entire platform could essentially be hijacked in a coordinated act of market manipulation. This is why absurd constructs such as Bancor have appeared, in order to address this ridiculous problem.

This doesn’t necessarily mean that Golem and the likes of it will be useless; however, there’s a very real chance that something else eventually comes along, providing the same service, but in the currency of its users’ choosing. Such a competing platform, without the friction of being restricted to a specific token, has a very big edge on its ICO-launched competitor.

My trading tip this week is to go through your portfolio and evaluate your investments from a token-critical perspective. Get rid of those tokens that add no benefit to the product or service they are providing, and in many cases are a down-right handicap. In the end, while it may be true that an ICO could be the thing that gets a project off the ground that wouldn’t have otherwise, it may also be the thing that kills it.

What are your thoughts on market manipulation? Let us know in the comment section below!

Images via Shutterstock, Twitter.

Disclaimer: Bitcoin price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”

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PR: Vadim Nareyko, CTO PlayHall – Technical Aspects of the PlayHall Platform

PlayHall Gaming Platform

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. does not endorse nor support this product/service. is not responsible for or liable for any content, accuracy or quality within the press release.

PlayHall is a blockchain platform for holding regular skill-gaming tournaments and matches between users. In skill-games, your success does not depend on luck but on your skills and intelligence. In matches and tournaments held on the platform gamers will be able to win liquid cryptocurrency, which today can be quickly exchanged for fiat money. All this makes it possible to monetize your time and skills.

Because of the financial dimension of the game, the developers have covered the security issues and possible vulnerabilities in a serious way. The PlayHall team uses blockchain technology and smart contracts as well as the effective decentralization principles to ensure security and reliability of the platform.

The team is launching a demo version of the platform with a limited number of games even before the start of the token sale. Everyone will be able to test the convenience, safety and relevance of the platform.

Platform Decentralization Principles

The PlayHall team uses the principles of decentralization and smart contracts for creating an innovative gaming platform. These principles and the decentralized escrow technology will help to avoid any fraud and forgery of the results of tournaments and matches on the platform.

The full transparency of the platform, its consistency and an easily cryptographically verified software, which provides automation of all processes and transactions in the project ecosystem, guarantee the complete safety of the entire system.

The team’s goal is to eliminate the need for a trusted party or administrator. This will significantly reduce the operational costs of maintaining the system, reducing the commission and increasing the level of payments to gamers. This will also help to eliminate any fraud in the stages of payments to the winners.

Token Types and their Functions

Along with the main PHT, which is an ERC-20 token based on Ethereum Blockchain, the platform provides several types of tokens that will be used by the community members to make decisions by voting. This will provide a virtually perfect meritocratic project management system.

The voting, in which token holders can participate, will address key issues related to business processes and the future vector of project development on the platform: changing the terms of cooperation with game developers and attracting new developers, adding new games on the platform, changing the commission, allocating additional grants to developers, changing voting parameters, developing new functionality and addressing other important issues.

There are eight types of tokens for voting: a common PHT token, a weight token, a time multiplier token, a delegate token, a token committee, game score and games count score tokens and a developer token. Each type of token reflects a user’s membership in a particular community. The proportion of tokens is established depending on the type of voting. Dividing tokens into several groups is necessary in order to take into account the first place the opinion of the holders’ category that has the best knowledge of the subject matter and is directly related to the issue discussed at the current voting.

User Accounts

The user account consists of registration data, optionally including a phone number for additional safety, age verification, consent to the conditions of participation, and a safe multicurrency crypto wallet. The wallet is created and assigned to users automatically after registration. The wallet allows you to transfer PHT tokens and all the cryptocurrencies supported by the platform between PlayHall users, make purchases, sell, exchange and withdraw their assets. In addition to its own tokens, the platform will work with popular currencies: ZCash, Litecoin, Dash, Bitcoin and Bitcoin Cash, Ethereum and Ethereum Classic.

To enhance the security of user accounts on the platform, there will be provided a two-factor authentication, which enables creating white and black lists of IP addresses to prevent unauthorized access to the account, as well as a disabling blocking function that prohibits the withdrawal and transfer of cryptocurrency from all IP addresses except for selected ones.

The platform will become a bridge between the stable game industry and the emerging crypto economy, which will give it an opportunity to reach to a huge target audience. PlayHall is going to become the first blockchain platform, on which users will be able to monetize their time and intellect by earning a popular and liquid cryptocurrency for every victory in a regular match or tournament. By the end of 2019, the principles of decentralization will allow 12 million users to earn cryptocurrency using their intelligence and game skills in any of the 200 exciting skill-based games.

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This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Several States Spearhead Bitcoin Adoption in the U.S.

Several States Spearhead Bitcoin Adoption in the U.S.

U.S. states with positive attitudes have advanced towards bitcoin legalization – a process that a growing number of elected officials consider inevitable, if not desirable. Numerous crypto-friendly bills have been introduced, and some of them have received approval in committees and houses of state legislatures. One wouldn’t necessarily think of states like Arizona, Tennessee, and Wyoming as the backbone of a great nation’s economy. How about… pioneers of its future development?

Also read: US Regulator Warns Against Pump-and-Dumps and Advises How to Buy Crypto

Bitcoin Doesn’t Stink – Arizona Will Take It

For some time now legislators in the Grand Canyon State have been thinking how to facilitate residents receiving incomes and profits in cryptocurrency. If bitcoin is good for ordinary citizens and businesses, it should be good enough for the state coffers, local lawmakers have decided. Last week Arizona got closer to accepting cryptos as legal tender for taxation purposes.

Several bills recognizing coins as currencies have been making their way in the State Legislature, as reported. Two of them, SB1091 and SB1145, were aimed at regulating tax payments with digital currency. The SB1091 draft, sponsored by four Republican lawmakers, was endorsed by the Senate on February 8, with a 16 – 13 vote, after passing the Finance Committee in January. If the bill is adopted by the House, Arizona will become the first U.S. state to accept taxes in cryptocurrency in just a couple of years. The new law states:

A taxpayer may pay their income tax liability using a payment gateway, such as bitcoin, litecoin or any other recognized cryptocurrency, using electronic peer-to-peer systems.

It then clarifies that the Department of Revenue “shall convert cryptocurrency payments to United States Dollars at the prevailing rate after receipt and shall credit the taxpayer’s account with the converted dollar amount actually received, less any fees or costs incurred for conversion”. A similar bill was voted down in New Hampshire two years ago with concerns that the state would have to bear responsibility for converting the cryptos on volatile markets. Its sponsor, NH State Representative Eric Schleien (R), explained that there would be no cost and no risk to the state, as conversion would be automatic.

Several States Spearhead Bitcoin Adoption in the U.S.

Another draft law, HB2601, is expected to regulate crowdfunding through initial coin offerings in Arizona. Its first reading in the House of Representatives is scheduled for June 2, 2018, and the second reading should take place on July 2. It is sponsored by Representative Jeff Weninger (R) who is also among the authors of the tax amendments. Recently, he told Fox that state legislators want to “send a signal to everyone in the United States that Arizona is going to be the place to be for digital currency technology”.

Others Have Taken the Same Road

Tennessee is another state that may soon legalize cryptocurrencies and crypto payments. A proposal to do that has come with a bill that would officially recognize cryptocurrency financial transactions and smart contracts in the state. It would also protect ownership rights of information secured on blockchain networks.

We are not just competing with other states in this space, we are competing with the whole world.

That’s what Tennessee House Representative Jason Powell (D) said after a presentation on blockchain technology last month. The Nashville lawmaker also called for adopting a “meaningful legislation” in the Volunteer State, as reported by The Tennessean. “It is really important to say that Tennessee is supportive of this technology and we want to be a leader in this innovation”, Powell added. Local authorities have already indicated that money transmitter licenses will not be required to trade cryptocurrencies in the state.

Wyoming may also become a crypto-friendly jurisdiction and is already taking steps to Several States Spearhead Bitcoin Adoption in the U.S.improve its attractiveness for startups from the sector. Several drafts have been introduced in the state legislature. Respective committees have passed two of them and they are now ready for the House of Representatives.

According to bill 0070, “a person who develops, sells or facilitates the exchange of an open blockchain token is not subject to specified securities laws”, if the token can be exchanged for goods and services. The legislation exempts exchanges from regulations applicable to brokers and dealers. Exemptions for cryptocurrency traders and transactions are also included in a draft to amend the Money Transmitter Act (0019).

Kansas and New Hampshire are two other states that have passed legislation with crypto-related exempts in their money transmitter regulations. In Texas companies are not licensed when offering custodial exchange services to in-state customers, and Montana has no applicable money transmission laws. Authorities in Nevada have promised to create favorable conditions for startups working with blockchain technologies. Most other states have yet to adopt their regulatory frameworks.

Do you think that positive moves towards legalization in individual states will speed up adoption of cryptocurrencies on federal level in the U.S.? Tell us in the comments section below.

Images courtesy of Shutterstock. 

Do you agree with us that Bitcoin is the best invention since sliced bread? Thought so. That’s why we are building this online universe revolving around anything and everything Bitcoin. We have a store. And a forum. And a casino, a pool and real-time price statistics.

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Trader at Chicago Firm Stole Millions in BTC – Faces 20 Year Sentence

Bitcoin Trader Facing 20 Year Prison Sentence in $2 Million Caper

Late 2017 will long be remembered as the time when bitcoin went mainstream. Prices were mooning, and the general atmosphere was one of fear of missing out. That sentiment was especially true in trading circles, and more traditional outlets were experimenting with cryptocurrency divisions in order to take advantage. One such experiment went sour, as a trader attempted to play upon relative company ignorance by shorting bitcoin and covering personal margin calls, with the affair ending in million dollar losses and a first of its kind federal prosecution.

Also read: Citibank India Bans Bitcoin 

Bitcoin Trader Faces 20 Years in Prison

Consolidated Trading, LLC’s Joseph Kim, according to federal authorities, emailed, “Until the end I was perversely trying to fix what I had already done. I can’t believe I did not stop myself when I had the money to give back, and I will live with that for the rest of my life. You have every apology I have to give, I am sorry to betray you all like this.”

John R. Lausch Jr, United States Attorney for the Northern District of Illinois in conjunction with the Federal Bureau of Investigation (FBI), insists Mr. Kim “worked as an assistant trader for…a Chicago trading firm that recently formed a cryptocurrency group to engage in cryptocurrency trading…Over a two-month period in the Fall of last year, Kim misappropriated at least $2 million of the firm’s Bitcoin and Litecoin cryptocurrency for his own personal benefit, and he made false statements and representations to the company’s management in order to conceal the theft.”

Bitcoin Trader Facing 20 Year Prison Sentence in $2 Million Caper
Mr. Kim

According to reports, Mr. Kim had previous experience in cryptocurrency by way of working in South Korea for a time after graduating from the prestigious University of Chicago. He joined Consolidated in the Summer of 2016 as an assistant bond trader. Employees describe him as having gone by the online name “degen,” as in ‘degenerative gambler’.

It’s the first federal criminal prosecution of its kind in Chicago, and Mr. Kim, 24, is being charged with one count of wire fraud punishable by up to 20 years in prison. U.S. v. Kim, 18-cr-107, states “from September through November 2017, Kim transferred more than $2 million of the trading firm’s Bitcoin and Litecoin to personal accounts to cover his own trading losses, which had been incurred while trading cryptocurrency futures on foreign exchanges.”

Attempting to Cover Tracks

By Fall of 2017, Mr. Kim was made part of a cryptocurrency wing of Consolidated, moving from its bond division. That was a heady time for crypto, especially bitcoin, and price action steeped to unheard of highs. Mainstream trading outlets were itching to be part of the market. Shortly after, the complaint alleges, Mr. Kim moved nearly 1,000 litecoin from company coffers to his own, an “intermediary holding space” he reportedly offered as excuse for the unorthodox maneuver due to Bitfinex exchange issues. Something like that, according to prosecutors, was also done with bitcoin, to the tune of 3.2 million USD, as a way to cover personal losses (1.2 million USD was eventually returned).  

When questioned at the time by company officials, Mr. Kim is reported to have claimed he returned at least the litecoin (his alleged dealings in bitcoin hadn’t been discovered). When Mr. Kim was suspected of mishandling bitcoin, he again offered excuses that the company increasingly worried were not adding up, though Mr. Kim seemed to assure all was well. By late November, 280 bitcoin were suspected missing.

Bitcoin Trader Facing 20 Year Prison Sentence in $2 Million Caper
John R. Lausch, Jr., United States Attorney

What seems to be clear is Mr. Kim used bitcoin for personal trading, and Consolidated and federal authorities believe he stole over 280 bitcoin at one time or another. Though he did manage to transfer some back, inevitably losses began to add up. Mr. Kim reportedly admitted to the company he indeed transferred 55 bitcoin from the company to his personal wallet. He also allegedly came forward to explain he was trying to short bitcoin, at times converting litecoin for that purpose. There are also allegations he used company bitcoin accounts to help cover margin losses.

As it stands, Consolidated was able to recover some 144 bitcoin, but claims to have lost as much as 600,000 USD as a result of Mr. Kim’s doings. Mr. Kim and his attorney have not been made available for comment. He is expected to face a federal judge today, 16 February 2018, in order to enter a plea.

What are your thoughts on this federal case? Let us know in the comments section below.

Images courtesy of Pixabay, LinkedIn, DOJ

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Markets Update: Bitcoin Recovers to Test $10,000 Area

The BTC markets have ramped up to test the $10,000 USD area on leading exchanges following a break above resistance at $9,000. Bitcoin has recovered by more than 60% since testing the $6,000 area on February 6th.

Also Read: Coinbase Develops Bitpay Competitor Supporting BTC, BCH, ETH and LTC

Bitcoin Tests $10,000

Bitcoin has produced bullish action in recent days, forming an inverse head and shoulders pattern on the 4-hourly chart before breaking above resistance at roughly $9,000 area yesterday.

Markets Update: Bitcoin Recovers to Test $10,000 Area

The bearish action of recent weeks saw bitcoin lose approximately 65% of its value – falling from approximately $17,000 at the start of January to the recent low of less than $6,000 on the 6th of February. When compared with the all-time high of approximately $19,700 from December 17th, the drop down to $6,000 comprised a 70% loss in the value of BTC in just seven weeks.

Bullish Recovery Signs for BTC

The recent bullish momentum has seen bitcoin break above the 23.6% retracement area of the crash when measuring from the all-time high area of $19,000 – $20,000. Many traders are anticipating that BTC may soon test the major descending trendline stemming from the all-time high should the markets continue on their bullish trajectory.

Markets Update: Bitcoin Recovers to Test $10,000 Area

When looking at the weekly chart, the stochastic RSI appears poised to retest the 20 threshold after having dropped below such for the first time since mid-2017.

Markets Update: Bitcoin Recovers to Test $10,000 Area

According to Cryptocompare, Japan’s markets are by far the most dominant – with JPY/BTC trade currently comprising over 51% of the total volume of BTC traded globally during the last 24 hours. USD and USDT trade is estimated to represent approximately 37% of global trade combined, followed EUR/BTC trade with just under 5%. The shifting regulatory sands in South Korea have significantly reduced the dominance of the KRW/BTC markets – which presently comprises just 3.5% of BTC traded in the last 24 hours.

Altcoin Markets Correlated to BTC

The dollar-value of most altcoins have shown a strong correlation to BTC in recent months, with nearly every cryptocurrency producing a strong bounce in unison with bitcoin during February.

Among the best performing altcoins boasting a high market capitalization have been Litecoin and Ethereum Classic – both of which appear to have benefited from FOMO leading up to their respective forks, gaining over 100% since early February.

According to Coinmarketcap, bitcoin is currently exerting a market dominance of approximately 35%. Ethereum is second largest cryptocurrency market, boasting a 19.5% market dominance, followed by Ripple with 9.5%, and Bitcoin Cash with almost 5%.

Markets Update: Bitcoin Recovers to Test $10,000 Area

Do you think the bitcoin markets will continue to recover? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, Trading View, Bitcoin Wisdom

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Report Claims Litecoin is the Second Most Adopted Currency on Dark Marketplaces

A recent study has revealed Litecoin to be the second most adopted means of payment among dark marketplaces. The study also indicated a significant increase in adoption of Monero among English-speaking platforms.

Also Read: South Korean Prosecutor Fights to Confiscate Bitcoins from Criminal Proceeds

Dark Marketplaces Increase Altcoin Adoption

LTC is Second Most Popular Currency Among Dark MarketplacesThe study, conducted by Recorded Future, involved the analysis of 150 leading dark web “message boards, marketplaces, and illicit services” in order to ascertain the scale of alternative cryptocurrency adoption on the part of criminal entities in response to rising bitcoin fees.

Recorded Future states that “The meteoric rise in popularity of bitcoin among household users, speculators, and institutional investors […] since mid-2017” placed “an enormous load on the blockchain network, resulting in larger payment fees.”

Litecoin Is Second Most Dominant Dark Web Currency

LTC is Second Most Popular Currency Among Dark MarketplacesThe study revealed Litecoin to be the second most dominant currency among dark marketplaces – with LTC payment systems being implemented on 30% of the platforms analyzed in the study.

Despite the Recorded Future claiming to have identified an increasing number of “members of the cybercriminal underground” expressing a “growing dissatisfaction with bitcoin as a payment vehicle” as early as “mid-2016”, 100% of the platforms had integrated BTC payment systems.

Popularity of XMR Grows Among English-Speaking Dark Marketplaces

LTC is Second Most Popular Currency Among Dark MarketplacesThe study revealed a significant growth in the popularity of XMR on English-speaking platforms not matched by their Eastern European counterparts.

Among English-speaking platforms, Monero was found to be the second most popular means of payment – with XMR payments being integrated onto 15% of platforms. LTC was identified as the third most adopted payment channel among English-speaking marketplaces with 11%, followed by DASH and ETH with 9% each.

On Eastern European platforms, Litecoin was the second most popular means of payment, with 35% of dark markets implementing LTC payment integration. DASH was the third most adopted, with 24% of platforms integrating DASH payments, followed by BCH with 15%, ETH with 9%, ZEC with 4%, and XMR with 3%.

What is your reaction to Recorded Future’s finding? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, Recorded Future

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Japan’s DMM Launches Large-Scale Cryptocurrency Mining Farm and Showroom

Japan's DMM Launches Large-Scale Domestic Mining Farm and Showroom

Japanese entertainment giant DMM has launched its “large-scale Japan-quality” mining farm, with a plan to deploy more farms overseas. DMM is also launching a showroom, allowing the public to tour its mining farm, as well as a mining pool.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

DMM’s Mining Farm in Japan

DMM Inc, the operator of popular e-commerce site with 27 million members, announced on Friday the launch of its mining farm in Kanazawa City, Ishikawa Prefecture, Japan. The company stated:

DMM operates large-scale ‘Japan-quality’ mining farms that are unparalleled in scale compared to other domestic operators…By establishing a mining farm in the cold district, we realize low price electricity procurement and maximize mining revenue.

Japan's DMM Launches Large-Scale Domestic Mining Farm and Showroom
DMM’s mining farm in Kanazawa City, Ishikawa Prefecture, Japan.

Japan's DMM Launches Large-Scale Domestic Mining Farm and ShowroomIn addition, the company revealed that its mining farm “has also been turned into an open showroom for our customers to access.” The showroom will display 1,000 mining rigs. “We are aiming to open this showroom from the beginning of March,” DMM wrote, adding that “we plan to start acceptance from the middle of March for tours for the general public.”

Following the launch in Japan, the company plans to deploy additional mining farms overseas. “By starting domestically, DMM’s engineering team is directly involved in the operation to secure quality and win the trust of domestic users,” Fuji Television Network described.

DMM’s Mining Rigs

DMM has installed in its mining farm both types of mining rigs, ASIC and GPU, allowing the company to mine many different types of cryptocurrencies. DMM’s “ASIC machines purchased [were] made in China,” the TV station noted. “The ASIC machines are 650 MH/s (mega hash/sec), and the GPU machines are about 300 MH/s or less.”

Japan's DMM Launches Large-Scale Domestic Mining Farm and Showroom
DMM’s ASIC and GPU mining rigs.

The news outlet further noted that “the power consumption is 750W for ASIC and 1900 to 2000W for GPU,” adding that the GPU mining rigs have twelve GPU cards connected to two power supplies.

Japan's DMM Launches Large-Scale Domestic Mining Farm and Showroom
DMM’s GPU mining rig with 12 GPU cards and 2 power supplies. (Photo\Fuji TV Network)

DMM says it will mine several types of coins, including bitcoin, ether, and litecoin. “We are not particular about bitcoins,” the leader of the DMM mining laboratory Shinichi Takaguchi told Fuji TV, but emphasized that “Of course we are also mining bitcoins” alongside other coins. Depending on the market environment, he reiterated that the lab will mine all the cryptocurrencies that are most profitable at the time, adding that:

In the future, we plan to start managing our own DMM [mining] pool, and plan to develop cloud mining that allows general users to purchase mining rights around summer.

DMM has also recently launched its own cryptocurrency exchange, supporting 7 different cryptocurrencies and 14 trading pairs, as previously reported.

What do you think of DMM’s mining farm? Let us know in the comments section below.

Images courtesy of Shutterstock, Fuji TV Network, and DMM.

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New Crypto Exchanges Launch in South Korea Despite Lack of Fiat Deposits

New Crypto Exchanges Launch in South Korea Despite Lack of Fiat Deposits

A number of new cryptocurrency exchanges are launching in South Korea despite being unable to provide full service due to regulatory challenges. Since the Korean government enforced the real-name system on cryptocurrency accounts, banks have only been providing fiat deposit services to the country’s four largest crypto exchanges.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Exchanges Undeterred by Regulations

New Crypto Exchanges Launch in South Korea Despite Lack of Fiat Deposits
South Korean regulator talking about the real-name system.

A number of new cryptocurrency exchanges are opening in South Korea despite regulatory uncertainty and the inability to accept fiat deposits. The challenge comes from the new system, enforced on January 30, which requires cryptocurrency traders to use real-name accounts to deposit money for trading at crypto exchanges.

While six major banks have the ability to service cryptocurrency accounts, they “have been converting only existing virtual accounts to real-name accounts for four large cryptocurrency exchanges” – Bithumb, Upbit, Coinone, and Korbit. The Investor elaborated:

The banks have also been refusing to issue new real-name accounts for other cryptocurrency exchanges, citing uncertainties and security concerns.


New Crypto Exchanges Launch in South Korea Despite Lack of Fiat Deposit ServiceNew crypto exchange Zeniex announced last week that it will begin service on February 12. The company explained that its launch “has been delayed by a month due to the latest regulations designed by the Korean government to cool the overheated cryptocurrency market,” the news outlet reported. Initially, the exchange will support bitcoin, bitcoin cash, ether, ethereum classic, litecoin, quantum, eos, bytom, and 0x.

Zeniex CEO Choi Kyung-joon was quoted detailing:

It’s currently difficult to provide our complete services due to delays in issuing real-name bank accounts for trading…Despite these circumstances, we have decided to go ahead with the launch to service our customers who have been waiting for our opening.

With the bank account problem, traders “can only buy and sell cryptocurrencies with bitcoins because major banks are putting off confirming and issuing real-name bank accounts,” the publication added.


New Crypto Exchanges Launch in South Korea Despite Lack of Fiat Deposit ServiceAnother crypto exchange named Dexko announced on Friday that it will start accepting pre-registration of users with the aim to launch its cryptocurrency exchange on March 15, the Investor also reported. Initially, the exchange will support 10 cryptocurrencies including bitcoin, ether, bitcoin cash, litecoin, and ripple. Pre-registration runs from February 5 to 25, according to the company’s website.

The firm will exempt trading fees for a month for pre-registered users at launch, the news outlet detailed. Kim Yong-ho, the CEO of Korea Digital Exchange which operates the exchange, commented:

We worked hard to remove defects and minimize customer inconvenience by conducting in-depth analysis on other exchanges…Dexko has completed all the legal and systematic requirements and is preparing to introduce won-based trading soon.

Chinese Exchanges

Two Chinese exchanges are also planning to enter the South Korean market. Earlier this month, Okcoin reportedly reached a final investment agreement with South Korean game company NHN Entertainment Corp, which was previously part of Naver. “Under the agreement, Okcoin will provide its own trading system and NHN Entertainment will operate a domestic server and respond to customers,” Business Korea described. The company plans to trade more than 60 cryptocurrencies against the Korean won.

Huobi is also planning to enter the Korean market in the first quarter of this year, the publication noted. Before the Chinese government closed down all cryptocurrency trading last year, the two exchanges were among the very largest in the world as measured by volume.

What do you think of these new crypto exchanges launching in Korea? Let us know in the comments section below.

Images courtesy of Shutterstock, IHS, Zeniex, and Dexko.

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The post New Crypto Exchanges Launch in South Korea Despite Lack of Fiat Deposits appeared first on Bitcoin News.

Hong Kong Cracks Down on Securities Tokens – 7 Crypto Exchanges Targeted

Hong Kong Cracks Down on Securities Tokens - 7 Exchanges Targeted

The Hong Kong Securities and Futures Commission has sent letters to seven cryptocurrency exchanges regarding their listings of securities tokens without a license. Most of the exchanges took immediate rectification measures, including removing problematic cryptocurrencies from their platforms.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Hong Kong Takes Action

Hong Kong Cracks Down on Securities Tokens - 7 Crypto Exchanges TargetedThe Hong Kong Securities and Futures Commission (SFC) announced on Friday that it “has taken regulatory action against a number of cryptocurrency exchanges and issuers of ICOs.”

The agency sent letters to seven cryptocurrency exchanges in Hong Kong or in connection with Hong Kong, warning “them that they should not trade cryptocurrencies which are ‘securities’ as defined in the Securities and Futures Ordinance (SFO) without a licence.”

This regulatory action follows the FSC’s warning last September that digital tokens may be considered securities as defined by the SFO, “and subject to the securities laws of Hong Kong.”

The Commission revealed that after receiving its letters:

Most of these cryptocurrency exchanges either confirmed that they did not provide trading services for such cryptocurrencies or took immediate rectification measures, including removing relevant cryptocurrencies from their platforms.

Hong Kong Cracks Down on Securities Tokens - 7 Crypto Exchanges TargetedIn addition, the FSC stated that it has also written to seven initial coin offering (ICO) issuers. “Most of them confirmed compliance with the SFC’s regulatory regime or immediately ceased to offer tokens to Hong Kong investors,” the agency confirmed, adding that it will “continue to closely monitor ICOs, and will not tolerate any violations of the securities laws of Hong Kong.”

Furthermore, the Commission said it “may take further action where appropriate,” against any crypto exchanges which disregard the SFO provisions as well as repeat offenders.

Warnings and Complaints

The SFC has warned investors of the risks associated with cryptocurrency and ICO investing several times. Following a warning in September, the agency issued a circular in December cautioning investors of the risks associated with bitcoin futures contracts and other crypto investments.

Hong Kong Cracks Down on Securities Tokens - 7 Crypto Exchanges TargetedIn Friday’s announcement, the Commission noted that it has received complaints from investors about not being able to withdraw fiat currencies or cryptocurrencies from their accounts at crypto exchanges. “Some complainants claimed that cryptocurrency exchanges had misappropriated their assets or manipulated the market, or that technical breakdowns of the exchanges’ platforms caused them significant losses,” the agency detailed. “Several complaints against ICO issuers alleged unlicensed or fraudulent activities.”

The CEO of the FSC, Ashley Alder, commented:

We will continue to police the market and enforce when necessary…But we are also urging market professionals to do proper gatekeeping to prevent fraud or dubious fundraising and to assist us in ensuring compliance with the law.

Earlier this week, the Chinese authorities decided to ban foreign cryptocurrency exchanges. “Unlike the mainland, Hong Kong allows unregulated trading of digital tokens as long as the products changing hands are not in a format that would fall under the SFC’s jurisdiction,” South China Morning Post describes.

The FSC’s action also coincides with the Hong Kong-based crypto exchange Binance suspending trading on Thursday. The company denied that it has been hacked and its CEO subsequently tweeted explaining that the downtime is due to a “server issue on our replica database cluster, causing some data to be out of sync.”

What do you think of the Hong Kong SFC’s action? Let us know in the comments section below.

Images courtesy of Shutterstock and the Hong Kong SFC.

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The post Hong Kong Cracks Down on Securities Tokens – 7 Crypto Exchanges Targeted appeared first on Bitcoin News.