Turkey Considers National Cryptocurrency in the wake of El Petro

Statements from both Iran and Turkey suggest that the two countries are about to launch a national cryptocurrency, stressing the need for strong regulation.

Following in the Wake of El Petro

As Venezuela’s El Petro raised over $700 million dollars in its first round of private funding, President Modoru took the podium the next day to announce the countries follow up, Petro Gold.

Instead of oil, this second currency’s value will be pegged to precious metals. This was about all the information given about the new token but it must have been convincing enough for Iran.

Despite overwhelming criticism and doubt cast on to the value and feasibility of the Petro, its sales figures were heard loud and clear as Iran announced that the framework for a cloud-based digital currency is being developed for submission to the national banking system.

The announcement was tweeted out by Mohammad-Javad Azari Jahromi who heads Iran’s Ministry of Information and Communications Technology after a meeting with state-owned Post Bank of Iran.

Though no information was given as to what role the cryptocurrency would take in the economy–for instance if it would also somehow be pegged to oil as the Petro is–the government has given hints in the past that it was considering adopting digital currency into the financial system.

Both In and Out

In direct conflict with Jahromi’s announcement, the Central Bank of Iran released a statement the same day denying that the republic recognizes Bitcoin or any other cryptocurrency as legal tender.

“The wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme have made the market of these currencies highly unreliable and risky,”

The central bank was quoted by the Iranian Front Page News.

The story went on to warn Iranian citizens that they “may lose their financial assets” due to the extreme volatility of the cryptocurrency marketplace.

Likewise, the Turkish Government which had previously taken a negative stance on cryptocurrency, even ruling Bitcoin to be un-Islamic, has now announced plans for a “national Bitcoin” called the Turkcoin.

“The world is advancing toward a new digital system. Turkey should create its own digital system and currency before it’s too late,”  Former minister Ahmet Kenan Tanrikulu one of the authors of a report detailing the issue told Al- monitor.

Fears that nationally backed cryptocurrency by countries like Venezuela, Iran, and Russia all of which are under US-backed economic sanctions may undermine financial restrictions meant to promote human rights or stem military aggression have been voiced internationally.

The US treasury department put out a statement following the launch of the Petro that anyone investing in the coin could be treated as a creditor to the restricted nation and face penalties accordingly.

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California millennial Assemblyperson recently pushed a bill to recognize digital signatures and contracts recorded on the blockchain, making California one of several US States using or considering implementing the technology.

Millennial Assemblyperson Pushes Bill

Assemblymember Ian Calderon (D-Cal), who was elected to the state assembly at the age of 27 as the first ‘millennial’ assembly person, launched California assembly bill 2568 which would update existing laws to include blockchain technology for electronic signatures and contracts.

If the bill passes it would make California one of only a few states so far recognizing such technology but establish a precedent due to its size and economic importance.

California, as the most populous state in the US with 39 million citizens, commands a $2.3 trillion economy which reviles that of the entire UK would be a huge testing ground for blockchain implementation.

The new bill, which builds on the existing law dubbed the Uniform Electronic Transactions Act, paves the way for an electronic record or signature secured by the blockchain to be deemed legal and enforceable. Key revisions in the latest version include –

  • the definition of “electronic” record and “electronic signature” would be expanded to encompass those secured via the blockchain
  • the legal definition of “contract” would be expanded to encompass a smart contract
  • data ownership/use would extend to someone performing interstate or foreign commerce on the blockchain in California “with respect to that information as before the person secured the information using blockchain technology,”

California Will be Important Stepping Stone

Other states such as neighboring Arizona, Wyoming and Tenessee have already passed similar bills but to make this happen in California would induce other states with similar size and economies like New York and Texas take the same steps into consideration.

Assemblyman Calderon is one of a few young tech-savvy politicians proposing changes to antiquated systems throughout the US. Jim Powell (Rep-) from Tenessee is representing a very similar bill in his state that by all indications will pass the next session.

If states like California continue to progress on using technology like Blockchain to record signatures, contracts and possibly immigration information the influence could be felt all the way to the top of the federal government.

Another budding California politician dubbed the ‘Crypto Kid’ Brian Forde was quoted when asked about aging politicians reaction to new technology.

“We’ve got all these emerging technologies that are going to have a big impact on our economy and our lives,” he says, “yet we don’t have the folks in Congress who understand that.”

A federal blockchain ledger system for everything from voting status, to taxation to immigration progress in a country like the US where so much information is lost or misaligned from state to state, should be inevitable.

The city of Moscow is looking to evolve their Active Citizen polling network to log votes in upcoming elections. Thus making the election process transparent to all and tamper-free.

Active Citizens Decide for Themselves

As the white house continues to deny any allegations of collusion with Russian hackers and the FBI doggedly turns over more and more evidence of Russia’s influence on the 2016 elections the city of Moscow is making moves to make sure it can’t happen there.

Since 2014 the Russian city has had a program in place called Active Citizen. This program allows citizens to vote on big projects in order to eliminate corruption. So far citizens have cast their votes on the seat colors at the new Luzhinki stadium, whether or not to participate in a major housing renovation program and the official badges that doctors will wear in all the cities hospitals.

Blockchain Tech Can Help to Ensure Fair Election Polling

In 2017 the Active Citizen program was moved on to a Blockchain network where ideally the data can never be deleted or changed and the system cannot be hacked. Today it has added a private version of the Ethereum network to the existing architecture with a view towards implementing this into the city’s voting process.

In this way, city officials hope to soothe citizen’s fears of vote manipulation while showing the world’s governments that free and fair elections can be had in Russia.

“Of course, sometimes we hear that not all the votes are trusted,” said Andrey Belozerov, the strategy and innovations advisor to the city’s CIO;

“So, we decided to use a blockchain for the Active Citizen project, as a platform of electronic trust. The idea is to put all the votes to the blockchain to make it open so everybody can connect to our blockchain network, and to check the voting process, and so on and so-forth.”

Using blockchain technology to ensure that every vote is uniquely logged and that the process is absolutely transparent is a long way from the antiquated voting process still used in the United States.

Citizens of the US still vote using a system developed in the 19th century to make collecting and counting votes over the massive country feasible. Rules and regulations vary from state to state and in some case still rely on hundred-year-old machines.

As future elections will undoubtedly be influenced and tampered with by hackers both inside and out of the country a decentralized blockchain voting system not only makes sense but seems essential to maintaining a democracy in the digital era.

At the moment the Active Citizen system in Moscow has recorded 88 million votes on over 2,700 projects. With the implementation of blockchain for their next elections, there can be no dispute over results. The only hurdle left for fair and transparent election process will be resistance from government officials, not only in Moscow and the US but all over the world.

Venezuelan president Maduro announces countries second commodity backed cryptocurrency ‘Petro Gold’ the day after ‘El Petro’s’ initial private sale raised $735 Million.

Maduro Doubles Down With Petro Gold

Once again President Nicolas Maduro took the podium to announce a government-owned cryptocurrency. This time instead of oil its the Petro Gold which is to be backed by precious metals.

“Next week I‘m going to launch the petro gold, backed by gold, which is even more powerful, that will strengthen the petro,” Maduro said in a televised speech. The Petro which launched on Tuesday is reported to have raised $735 Million dollars on its first day of private sales.

Scheduled to be capped at 100 million tokens with an initial sales price of $60 – roughly the price of a barrel of oil – the government could raise up to $6 billion if the Petro succeeds in selling out. So far 824 million tokens have been made available.

It is not yet clear whether the Petro Gold is to be backed by gold held in reserves or the countries gold resources. In fact, no details about the new currency were given besides that it would launch next week. This sudden announcement doesn’t help the already highly criticized Petro and the Governments intentions for creating it.

Problems With The Petro

Widely seen as a poorly thought out solution to boost the floundering Venezuelan economy, where the fiat currency has been in a free fall for several years and inflation rates are as high as 600%, the Petro has been called a ‘stunt’ and ‘bogus currency’ by financial experts.

“The Petro is really a top-down hierarchically controlled asset, and its much more akin to a new way to tokenize oil. When the first gold ETF appeared, they weren’t considered gold, but a different way of packaging the commodity. With Petro, we really have a new wrapper around oil.”

Chris Burniske of venture capital firm Placeholder told Bloomberg.

Maduro himself now admits that the Petro was created in part as a way to skirt US backed economic sanctions against the country. While the US Treasury Department has warned investors that by buying the Petro they themselves could become subject to the same sanctions as creditors to the government.

The Petro Gold is not the first cryptocurrency backed by gold. The RMG backed by the Royal Mint in Britain was first announced in 2016 and the Perth Mint in Australia is set to launch their own in the coming year. But as critics have said in reference to the Petro, a digital currency is only as valuable as an investors faith in the issuer.

Telegram has informed investors of a second private pre-sale of its cryptocurrency ICO despite raising $850 million in round one just a month ago.

Telegram May Raise as Much as $1.6 Billion

This week investors received an email from telegram CEO Pavel Durov informing them of a second pre-sale to the much-anticipated TON ICO. Though no exact amount has been determined sources are speculating that it will be around the same as the first round.

If so that would make it a record-smashing $1.6 billion raised before the coin is even offered to public investors dwarfing the previous high water mark set by Tezos at $232 million.

Durov’s way of funding is a change from the normal concept of an ICO as only accredited investors who are invited may purchase the discounted coins. This more closely resembles the traditional venture capital form of fundraising where most (if not all) of the discounted tokens are sold off to private investors before the public round opens.

This second fundraising round comes as Telegram and its proposed TON network are being scrutinized as short on technical details. The Telegram Open Network is to be an Ethereum like eco-system that supports apps, services and a store for both physical and digital goods.

Will the TON be Worth the Cash?

Much of the criticism of the proposed network is based on the company’s own technical white paper. The document describes a suite of blockchain based services including file storage, DNS service, and an ad exchange network with the ability to process millions of transactions per second but with no explanation of how.

Matthew Green, cryptographer and professor at Johns Hopkins University is impressed by some parts of the blockchain projects but finds many of the claims in the white paper unrealistic;

“I’ll be honest, the white paper reads like someone went out on the internet and harvested the most ambitious ideas from a dozen projects and said ‘let’s do all of those but better!’ It feels unachievable, at least at the scale they’re aiming for now.”

For Durov it makes sense to open a second round of private sales since the first was rumored to be well over subscribed and early investors are already flipping their shares for double what they paid in the opening round. How this second round affects the public round that was to open in March, and whether there will be any coins left for the launch is yet to be seen.

British MPs will participate in a committee to study the risks and benefits of Bitcoin and cryptocurrency despite Bank of England Governor Mark Carney writing it all off as a failure.

UK Makes First Moves Toward Regulation

A cross-party Treasury select committee of members of parliament announced on Thursday that they would launch an inquiry into digital currency as well as examine the underlying blockchain distributed ledger technology that powers it.

This seemingly late move is prompted by last years investing craze that drove the value of Bitcoin and some other digital currencies to all-time highs and the subsequent market correction that saw the prices plummet over a few days time.

Chair of the committee Nicky Morgan said the committee will study the impact of cryptocurrency on personal investors as well as financial institutions in the UK. The goal is to find the right balance between regulation to ensure investor protection without stifling business that may grow from both cryptocurrency and the blockchain technology.

The committee of lawmakers will take evidence from a range of experts in the field to inform their recommendations which it will then submit to the government.

People are becoming increasingly aware of cryptocurrencies such as bitcoin, but they may not be aware that they are currently unregulated in the UK, and that there is no protection for individual investors,” Nicky Morgan, chair of the Treasury Committee, said.

Bank of England at Cross Purposes on Blockchain

Meanwhile, the Bank of England Governor Mark Carney continues his firm anti-crypto stance saying on Monday that Bitcoin “has pretty much failed” as a currency.

“It has pretty much failed thus far on … the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange,”

Carney said, according to Reuters.

That despite the fact that the BoE is one of many central banking institutions in Europe currently examining blockchain technology as a way to distribute and track money in the public sector.

The treasury committee has created this set of key questions in order to form their recommendation.

  • Are digital currencies ultimately capable of replacing traditional means of payment?
  • To what extent could digital currencies disrupt the economy and the workings of the public sector?
  • What risks and benefits could digital currencies generate for consumers, businesses, and governments?
  • Could regulation benefit digital currency start-ups by improving consumer trust?
  • How are governments and regulators in other countries approaching digital currencies and what lessons can the UK learn from overseas?

There is no deadline set for the committee’s findings to be submitted to the treasury.

As president, Nicolas Maduro rolls out the El Petro ICO, Venezuela is named the cheapest country in the world to mine Bitcoin. But is it also the most expensive place to live?

The manual for the first 82.4 million units of the Venezuelan cryptocurrency, El Petro was made available for download in multiple languages yesterday to much international criticism. The digital currency, which is linked to the countries oil reserves, has been derided as a workaround of the economic sanctions created to allow those in power to increase their wealth in the crypto market.

President Maduro announced that the valuation of the Petro’s 100 million tokens would be just over $6 billion and that the sale would bring a new economic era to the nation.

Cheapest Mining In The World

Meanwhile, the country has been named the cheapest location in the world to mine cryptocurrency. According to the company Elite Fixtures which carried out a study on the cost of mining around the world Venezuela is more than 100% cheaper then it’s near neighbor Trinidad and Tobago.

According to the company they took statistics supplied by countries and agencies around the world on electricity costs and compared the use on three of the most popular mining rig configurations. The cost in Venezuela was $531 followed by Trinidad at $1,190 with South Korea coming in at $26,170 per coin, the most expensive in the world.

China, Russia, and The United States present similar costs. China being slightly cheaper at $3,965 while both Russia and the US are around $4,700.

But Also The Highest Cost Of Living

While making money mining Bitcoin in the Latin American country may be very profitable due to its subsidized electricity doing almost anything else is very expensive. Inflation over recent years in Venezuela has been as high as 800% by some estimates making the Bolivar essentially worthless as the government prints more and more of the currency.

The oil-rich country carries a 14% budget deficit of its GDP and a 60 trillion debt after decades of mismanagement by corrupt or just truly wrong-minded leadership. Though the official exchange rate is about 6.3 Bolivar per US Dollar the black market rate is multitudes higher, perhaps as high as 100 times that.

Factor in the scarcity of everything from food to medicine, as well as a crime rate that has soared over the last three years and it’s clear that the cost of living in the country would offset the advantage of cheap electricity. Given the dire state of the economy as well as the government’s oblique regulatory stance on Bitcoin and other cryptocurrency trading the launch of El Petro seems an odd solution to the countries economic woes.

The cryptocurrency bull run of 2017 attracted multitudes of investors looking to get rich quick but it also created a mining boom that has resulted in a worldwide shortage of computer components.

Miners Plunder Singapore, Hong Kong For Cheap Rigs

Scores of miners from around the world come to the electronics bazaars in Asia to buy cryptocurrency rigs. Hong Kong’s Sham Shui Po and Singapore’s Sim Lim Square to name just a couple are jammed with people of all ages ordering specialized rigs.

This new demand for mining rigs has revitalized these electronic markets that were dying only a few years ago when shoppers turned online for computers, cameras, and gadgets of all kinds.

“It’s 30-50 percent cheaper to buy equipment related to crypto-mining in Hong Kong than in Europe,” Russian bitcoin miner Dima Popov said. This is because Hong Kong has no sales tax and is in close proximity to Chinese components manufacturers.

Miners are demanding more powerful rigs that can include up to 500 graphics cards each which has created a worldwide shortage of the cards allowing manufacturers and retailers to gauge buyers on the price.

Scarce GPU Cards Selling At Double Price

The market for high-end graphics cards used to work like anything else. You went to the electronics shop, found the card you wanted and paid just about the Manufacturer’s retail price. Today due to the escalating demand from mining you’ll most likely find the shelves that once held them bare but if you do actually what your looking for expect to pay a premium.

These high-end graphics cards are the most efficient way to mine cryptocurrency and as hobbyist miners and big players alike scramble to snatch up as many as they can prices go through the roof. Last summer popular GPU’s like the AMD Radeon RX 580 sold for about $250 at retail, today the price is more likely to be over $500 and that is if you can find them.

Checking the price of the 5 most popular graphics cards from last year and comparing it with the updated version shows a general price increase of between 70 and 100%. This leaves many wannabe miners trolling online for the best deals on new or even second-hand cards. Buying older cards though means slower computing ability which reduces the profitability of a rig.

Rigs using, for example, a high-end Nvidia Geforce GTX 1080 ti card costing around $1,300 (MSRP) can earn as much as $10 dollars a day at current crypto values. This means that the card may pay for itself in about 4 months.

String the math out and it’s easy to see how a fair sized rig can make a very nice profit over a year or more. Retailers reported a dip in demand for the cards during the crypto market correction but now that Bitcoin and it’s like are on the rise sellers and manufacturers are looking for demand to reach and surpass 2017.

Action star and martial arts master Steven Seagal’s latest role has him playing the part of cryptocurrency spokesman but, can his combination of Hollywood magic and Akito moves save this lost cause?

Can This Ageing Action Star Kickstart Bitcoiins Success

Steven Seagal has weathered over three decades in one of the toughest business there is by sticking to a formula; save the girl, beat the bad guys, uncover the conspiracy, try and be cool while doing it.

His latest role as the spokesman for an ICO called Bitcoiin2Gen though may be his most difficult to sell. The token that invites speculation right off for its obvious play on Bitcoin’s name seems to have a number shortcomings.

From the basic problem that Bitcoiin’s white paper doesn’t actually address a targeted problem the coin will solve to the fact that none of its initial backer’s names are cited on its homepage.

Data from ICAAN reveals that the company was originally started in 2015, is registered in Panama and has changed ownership around Jan. 8. None of this bodes well and then things getting even dodgier with their referral commission – Partner program.

The scheme which is literally diagrammed as a pyramid on their website shows the four levels of ICO investment. This has caused the ICO to be compared to Onecoin and Bitconnect both of which have been accused of running pyramid schemes.

“To promote Bitcoiin B2G, a depositor who chooses to participate in one of our accredited Mining Programs, will earn commissions off their recruits’ earnings. Bitcoiin B2G is offering a 4-level commission structure, available to whoever joins the program and/or purchases Bitcoiin B2G during the ICO period.”

Though Bitcoiin Gen2 looks pretty bad on all fronts celebrity endorsements are growing in the cryptocurrency world as tokens like Bitcoin and Etheruem prove to be profitable assets.

Cryptocurrencies Look To Celebrities

Perhaps most active in lending his celebrity to crypto-projects is Mr. Money; Floyd Mayweather Jr. In July 2017 he was the spokesman for stox.com’s ICO and a month later came out for Hubli Network. Signed in September he was key in Centra raising $30 million for their ICO.

Pop singer Katy Perry boosted the reputation of cryptocurrency when she posted a photo of her fingernails that each had the logo of one of the biggest cryptocurrencies painted on it.

Richard Branson has been a vocal supporter of Bitcoin from the beginning when he announced he accept the currency for payment on his upcoming space fights virgin galactic in late 2013. Since then he’s put his money where his mouth his investing $30 billion in Bitpay in 2014.

Even Iron Mike has put his fame to work partnering with Bitcoin in 2015 to put his face on Bitcoin ATMs and then again in 2016 when Bitcoin direct announced that the former champ would have his own wallet that people could trade from using the app.

The list of celebrities who have backed cryptocurrencies goes on but in this case, Bitcoiin may be one lost cause the zen master Seagal can’t save.

Yesterday was President’s Day in America. Schools were shut, no government offices functioned and even the stock markets rested. While the banking system napped though over $7 billion in Bitcoin was traded.

Bitcoin Rebounds As Banks Take The Day Off

Unlike the stock and commodities markets, cryptocurrency trades 24/7. It recognizes no national holidays, doesn’t mind working on Sundays and stays up all night.

Since January 3, 2009 when Bitcoin went online it has been functionally trading 99.99 percent of the time. In that same time period, there have been 216 bank holidays in America (more in other countries) not including weekends, when trading in traditional markets stagnates.

Historically cryptocurrencies will spike on national holidays. It makes sense that like online commerce which always has an uptick when people are off work Bitcoin markets will see a bump when the majority of day traders are at home.

Yesterday was no different. Bitcoin trading was brisk over the weekend as the price rose back over $11,000, showing an 84% gain. Though it dropped back down to 10,800 on Monday as investors took some profits out more than $7 Billion traded over the day.

This rebound should ease some investors fears about a free falling market and shut down much of the FUD and doom and gloom from naysayers looking for a bubble to pop.

As Bitcoin fell from all-time highs starting in December and other cryptocurrencies followed suit there was much talk from government representatives and mainstream media about it being a false market in need of heavy regulation.

Analysts who specialize in following the movements of the crypto market though called it a correction that fell in line with crypto market history and said there would be a slow recovery through the spring and sharp gains starting around July.

Good News From Europe And Asia

Though some of the movement yesterday may be contributed to leisure time activity like shopping and online gambling the steady price rebound over the last two weeks may mark the return of a crypto bull market that analysts are looking to bring big gains back to the market in 2018.

The UK’s business insider reported that much of the weekend recovery was fueled by heavy trading in Japan as investors rush to get back in the game now that Bitcoin is gaining again.

There was also positive news from Europe as the Swiss Financial Market Supervisory Authority (FINMA) published guidelines last week to regulate ICO’s and one of the main banks in the Netherlands has announced that it will use Blockchain technology to replace escrow accounts. As the fiat banking systems rests the cryptomarket continues to trade, sometimes rising, sometimes falling but always working.