Tether (USDT), the USD-pegged cryptocurrency that spent nearly half of October trading below $1.00, finally returned to dollar parity on Monday, though it remains to be seen whether it will stay there amid mounting competition from heavyweight competitors.

Tether [Briefly] Returns to Dollar Parity

The controversial stablecoin, which is supposedly backed by physical USD at a 1:1 ratio, briefly touched the $1.00 mark this morning, putting a temporary end to the USDT/USD discount that originated at the beginning of October.

tether cryptocurrency price USDT
Source: CoinMarketCap

Initially, that discount represented just a fraction of a cent. However, it gradually deepened throughout the first half of the month until Oct. 15, when the USDT/USD peg snapped completely, sending the tether price as low as $0.92 on the global market and careening as far as $0.85 in Kraken’s lightly-traded USDT/USD market.

Nevertheless, the tether price steadily crept back toward dollar parity, bolstered by the redemption of hundreds of millions of dollars worth of USDT tokens, which helped restore confidence in issuer Tether Limited’s claim that it is holding enough funds to cover the outstanding tokens.

As CCN reported, those redemptions caused tether’s market circulating supply and market cap to plummet throughout the month. Two transactions made last Thursday diminished the USDT supply by a further 100 million, reducing the USDT supply to 1.9 billion units, down nearly one-third from the more than 2.8 billion tokens that were circulating just three weeks ago.

tether redemptions
Source: Omni Explorer

Altogether, USDT holders have redeemed $890 million worth of tether tokens during the month of October. Indeed, the number of non-circulating tokens sitting in the Tether Treasury grew so large that the firm permanently destroyed 500 million of them, leaving the remainder in the treasury address to account for new capital inflows.

USD-Backed Cryptocurrency Competition Intensifies

However, whether tether will see many new capital inflows remains an open question, given the flowering of competition that has entered the stablecoin market, long dominated by USDT. TrueUSD (TUSD), which launched earlier this year, currently has a $179 million market cap, though USD Coin (USDC) — issued concurrently by Circle and Coinbase through the CENTRE consortium — is quickly gaining ground with a $126 million valuation. Paxos Standard (PAX) has also emerged as a strong challenger, dwarfing USDC’s trading volume despite a smaller market cap. Gemini Dollar (GUSD) has been slower out of the gate but still boasts strong backing.

Tether remains the most liquid stablecoin (and it’s not even close), with more than $2.2 billion in daily turnover — including $223 million in a single trading pair, BTC/USDT on OKEx. However, paying $1.00 for a cryptocurrency token that is worth less than that amount is not an enticing prospect, so one would expect inflows to slow, at least until USDT demonstrates that it can sustain its USD peg.

By the time of writing, tether had slipped ever-so-slightly below that peg and was priced at a global average $0.995. Notably, it continued to trade somewhat lower, at $0.986, when positioned directly against the dollar on Kraken and other cryptocurrency exchanges with USDT/USD markets.

Credit: CCN

It has been a pain to watch the bitcoin charts these past couple of months, but lucky enough I’ve been busy reading about the latest discussions around technology developments to take my mind out of it.

Why is the market crashing? What’s bringing it down? Who’s responsible for this calamity? When will it recover?

I, too, get haunted by all these questions as some of my personal investments are in cryptocurrency. However, because I understand these ups and downs are not only expected but a delicate part of the never-ending cycle of speculation, I try not to worry too much about price. After all, why bother?

So if you’re looking for an alternative topic to all this price talk, today is your lucky day. As for my goal, during the next couple of minutes, it is to try answering the following question:

What can we do to improve cryptocurrency adoption?

Don’t forget the ultimate goal of cryptocurrency is to increase decentralization and the distribution of power among users. As Jimmy Song so eloquently puts it:

“Centralized entities are by their very nature, fragile. Centralized entities can’t afford a mortal failure without jeopardizing everyone else that depends on it.

“Conversely, a decentralized network is by nature anti-fragile: individual failures affect a much smaller group, and thus, a decentralized network can afford a lot more mistakes. These mistakes, in turn, help all the other members of the network to learn what not to do. This, in turn, makes the network stronger.”

Chapter 1 — Fighting Power

-Bad is psychologically stronger than good-

When governments align their strategies to promote growth — to take cuts through taxes, increasing revenues — the strategies they employ imply that any measure deployed will have a sole focus ahead: to make companies more profitable.

Profitability means more jobs, more money, and more taxes.

Except macro analysis rarely takes into account how money is created and spent. Much like the velocity of money is a bad indicator to understand real trade — how is money being spent by people, companies, and governments — nearly all macro-trends do not give a clear view on what is causing certain things, hence, they’re not focused in finding solutions to problems.

I obviously agree that having more data is better than having less data. However, would you say a company is doing well or not based solely on cash flow indicators?

Of course not; it is an important metric, only when aligned with fundamentals.

I could then argue the key metric for growth analysis is not the actual delta, but instead, the optimization of growth for the weakest percentiles. This is a fancy way of saying maximizing wealth redistribution and growth opportunities.

The more we focus on micro trends, based on useful data like where money is being spent, by whom, when, and why, the more we’ll be able to optimize money allocation in-between communities and to measure how effective said money allocation is.

Why The Bashing On Capitalism?

It’s important to comprehend that I don’t dislike capitalism; I just think it needs a more libertarian approach.

Let’s take GDP for example. Why is it that our focus seems to be constantly in growing GDP, instead of maximizing its redistribution? How come are we not looking at the discrepancy between how much GDP is going to the top 1 percent and how much is produced by the other 99 percent?

We need to look at statistics that actually matter if we wish to create a more egalitarian society.

The problem with using incorrect metrics to evaluate the state of an economy is that you’ll only get a one-sided view of the picture. In this case, growth does seem to be the catalyst for promoting development, despite not being the main driver for social equality.

How Come Growth Doesn’t Spread?

Resultado de imagem para wealth concentration gif

There are many reasons one can study, which will shed some light on the matter. My approach is to link growth concentration to corruption, as it seems (to me) the main problem of capitalism.

The reason why people who have more money tend to get richer and people who have less money tend to get poorer (the vicious cycle), is because we do not care so much about redistribution of growth as we care about growth itself. Whoever gets to have more money will always find ways to protect said wealth, meaning the “rational economical man” does exist in some form.

However, this greedy behavior aligned with an opaque and nontransparent political system leads to bad policies being implemented, which promote growth but not growth redistribution.

So how can we aim at fixing this concentration of power problem? Is that even doable?

Chapter 2 — Finding Courage

-The only way to make improvements is by breaking stuff-

Currently, I see multiple paths ahead, some of which will bring positive outcomes to wealth redistribution and others that will have the opposite effect.

If our goals do change in time, and we start properly focusing on finding better ways to give people money (the easiest way to empower everyone), I argue we will eventually try to maximize wealth redistribution.

To me, the key driver will be courage, as our current system must break in order for a new system to take over. Understandably, stepping over decades, maybe centuries, of work and accumulated knowledge isn’t that easy to do.

We need to prove ourselves and that our model is a viable solution.

My Two Cents

  1. Technology is a key driver for change so let’s use it wisely. We can create products which focus on giving more to users, or we can create products which focus on getting more from users. We’ve tried the latter a bunch of times and, in the long-term, we always get to a point where power corrupts values (Facebook, Google).
  2. Money is an extension of us so let’s create more of it. What I’m suggesting is not that central banks start frenetically printing money, but that we find alternative ways to give money to people. Debt is just one way of creating value. Time, work, attention, and trust are just a few things we could start valuing more.
  3. Decentralization only has value if people are at the core. In order to rightfully apply tokens to business models, companies will need to focus on giving value to users. However, value can be granted in different formats, such as governance rights, equity rights, and purchasing rights, among others.

At the end of the day, the most elusive attribute we should be looking for in our crypto-leaders is courage, as they will face many challenges from those who have power and are afraid to lose it. A strong sense of moral values aligned with a courageous mindset is the right mixture for success in fields haunted by ghosts of the past — such as traditional capitalism.

Chapter 3 — Promoting Wisdom

-The news has been getting darker for the past 70 years-

Two important outcomes that centralization has brought are fake news and social media hype. It’s not surprising that large tech companies, ranging from Facebook and LinkedIn, to Amazon and Google, are now under heat for (a) misappropriating user data and for (b) aligning the wrong goals to data analytics.

Of course, we could also go down the path of complicated privacy policies and unreadable terms and conditions, to protect corporations from paying the piper.

The truth is that we are the ones in charge of our data and responsible for our data; meaning, if we do not look for ways to both protect ourselves and to value our data, those two problems won’t likely go away.

The Solution?

We can either wait for regulation to take a more aggressive stance, which seems to be an ineffective way of creating trust between users and platforms, or we can switch to decentralized alternatives.

At the moment, it’s easier said than done. DApps are still difficult to use, user-interfaces aren’t the best one could have hoped for and, generally speaking, blockchain-enabled technology is still primal and not so user-friendly. Just think the pain it would be each time you wanted to take some action in a given platform, a MetaMask pop-up would appear asking you to confirm some transaction.

Not a good idea.

What we need to do is to fix the issues brought by centralization:

(a) A mesh of different decentralized, open, permissionless and transparent base-layer protocols enabling easy-to-deploy infrastructure for applications. Users would always own their data (through transactions), not giving the underlying application any rights to your data, without due payment.

(b) The development and incorporation of private transactions, so that users can share data with providers without compromising their identities. By allowing for a higher degree of anonymity, it’s possible users can opt-in and out of certain platforms, without compromising any data which might have been shared among providers.

Conclusion

Currently, we lack a healthy system of incentives and rewards, which can definitely be the catalyst we’re looking for to promote a better redistribution of wealth.

Projects in the crypto-space need to be aware that it’s up to them to undertake the difficult assignment of changing economic paradigms, by developing new innovative ways to create and distribute value amongst token holders.

In the long-term, we’ll either walk towards a decentralized future, where users are the rightful owners of their data and are incentivized to make money out of it, or we can choose a different path and accept the institutionalization of technological corporations, as gatekeepers of information and managers of our data.

The clock is ticking.

The die are cast.

Hopeful about the future, are you?

Credit: CCN

Afri Schoedon, an Ethereum developer at Parity Technologies, said that the network cannot rely on Infura to process 10 billion requests per day.

Created by Michael Wuehler, an author at ConsenSys and NYC Ethereum founder, Infura is an infrastructure that allows decentralized applications (dApps) to process information on the Ethereum network without running a full node.

Some of the largest dApps and protocols including Ethereum wallet MetaMask, decentralized exchange protocol 0x, and MyCryptorely on Infura to broadcast transactional data and smart contracts to the Ethereum mainnet.

Ethereum Has to Stop the Dependence on Infura

This week, Schoedon firmly stated that if dApps continue to rely on a third party service provider or infrastructure developer in Infura, the vision of Ethereum will “fail” in the long-term.

“If we don’t stop relying on infura, the vision of ethereum failed. If we don’t stop relying on infura, the vision of ethereum failed. Or build a strong network of thin and light clients. There is no point in having d-apps connecting through metamask to a blockchain hosted by someone else.”

The concern in regards to the influence of Infura in the node ecosystem of the blockchain is that if dApps do not run their own nodes or rely on a network of light clients, it will increase centralization in the protocol, which was structured and designed to operate as a global supercomputer.

𝙰𝚏𝚛𝚒 𝚂𝚌𝚑𝚘𝚎𝚍𝚘𝚗@5chdn

if we don’t stop relying on infura, the vision of ethereum failed

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In ideal blockchain ecosystem, service providers, dApps, and decentralized systems would operate their own nodes to verify information and data in a fully peer-to-peer and distributed manner. However, if node infrastructure operators like Infura are tasked by popular dApps to handle data requests on behalf of them, then the risk of centralizing the Ethereum network could increase.

The merit in the argument of Schoedon is that for dApp operators and even individual users, it is relatively easy to run a pruned node, as opposed to an archival node, for efficiency.

An archival node, often referred to as a full node, includes all of the historical transactional information on the network so that a node operator could check the history of every transaction recorded throughout the entire history of the network.

“People think that in order to have a fully verified Ethereum blockchain (aka full node), you need to run an archival Ethereum node. Running an archival node is thought to be an issue for Ethereum because an archival node currently takes up to 1.4 Terabytes (data point provided by Afri Scheoden, a developer at Parity Tech),” cryptocurrency researcher Julian Martinez wrote.

However, for dApps and the vast majority of users, it is highly unnecessary and inefficient to run an archival node. Rather, users can run a pruned node, which eliminates historical data on the Ethereum network and allow users to run a light node.

“Pruning the state trie saves tons of disk space because it is the historical state data that is creating the blockchain bloat. A pruned blockchain can take up 90 GB compared to the 1.4 Terabytes taken up by an archival node (data point provided by Afri Scheoden, a developer at Parity Tech). Although data from older state tries are deleted, all of the information necessary to recreate that state trie is still saved on your local blockchain.”

Run Individual Nodes

A simple solution to the issue of the reliance of dApps on Infura is for dApps to begin running indepent nodes. But, as Schoedon suggested, a strong network of thin and light clients could also be a possibility to reduce the dependence on centralized infrastructure operators.

Credit: CCN

We all know what BTC, BCC, and ETH are. But new to the reader may be symbol WBTC – short for “wrapped Bitcoin,” which will essentially be a token on the Ethereum blockchain tied directly to the value of Bitcoin. A combined effort of Kyber Network,Republic Protocol and BitGo, the token will have two important effects on cryptocurrency.

First, it will enable Bitcoin to participate in Ethereum smart contracts natively on the Ethereum blockchain. While multiple efforts to initiate smart contracts on Bitcoin’s own chain have historically been undertaken, including QTUM, which runs the Ethereum Virtual Machine on the Bitcoin network, and Rootstock, which mirrors the features of Ethereum for Bitcoin, Ethereum remains the dominant mode in terms of smart contracts. Nevertheless, the prospects of Ethereum decentralized applications have been called into question recently.

Second, it will enable the value of Bitcoin to directly impact a token on the Ethereum blockchain. The tokens will be backed by the reserves of BitGo and the other participants in the project, and transparent inititatives are in progress to ensure that investors are clear about what they are holding. Accordingly, if one holds 1 WBTC, one has the equivalent value of 1 BTC.

Kyber network writes in a blog on the subject:

First off, Kyber will provide initial liquidity for WBTC tokens through our reserve, so that it can be exchanged like any other supported ERC20 token on our protocol. At launch, together with Republic Protocol, we will serve as initial merchants to provide a platform for KYC’d users to atomically swap between BTC and WBTC tokens.

The point of the project seems to be to allow seamless transition between Bitcoin and Ethereum. If one is already holding Bitcoin, he can easily get it onto the Ethereum network as a WBTC token, and then he can further cash out at any time back to Bitcoin. The use of a centralized exchange will not be necessary if one is equipped with Kyber Network or any of its partner, and Kyber envisions a vast expansion of the project as things progress.

The current iteration of WBTC is just the first step of the journey to an ideal decentralized solution, and it is important for the community to work together towards a more innovative, interoperable ecosystem.

Several exchanges have already committed to listing the token. One interesting thing from a trader’s perspective will be whether or not there will be arbitrage between BTC and WBTC, or if WBTC prices will be locked in step with BTC ones.

Credit: CCN

Privacy-focused Zcash, currently worth just over $110 per coin, has completed a network upgrade dubbed “Sapling” that it says will vastly improve transaction speed as well as reduce the actual size of transactions themselves.

Zcash hopes that this will make mobile and other types of transactions more common and feasible on the network, saying it “introduces significant efficiency improvements for shielded transactions that will pave the way for broad mobile, exchange and vendor adoption of Zcash shielded addresses.”

Zcash has two types of addresses. A standard “t”-type (transparent) address works in the same way as most cryptocurrencies: sender and receiver information are publicly available on the network at time of transaction.

Shielded addresses work much more like Monero and other privacy-centric currencies in that it is almost impossible to be privy to transaction information aside from sums transacted without the sender or receiver revealing such information. The Sapling upgrade primarily improves the efficiency of private transactions.

Shielded Transactions Now Up to 100 Times Lighter, 6 Times Faster

The memory requirement for z-type transactions under the Sapling upgrade has been reduced to 40 megabytes and the hardware being used to authorize/create a transaction does not have to be the hardware that creates the “proof.” Both of these updates are important in the implementation of a mobile payment network built on Zcash.

An added bonus of the upgrade is that transaction information can be accessed without exposing a private key – again, important for mobile transactions in that many users might not want to carry such important information on them at all times.

The upgrade is mostly important to developers of mobile applications and exchange software who will see it as a way to offer Zcash products in a much more efficient manner.

Sapling has been anticipated for months, as noted in our report on the previous Overwinter upgrade, but in an immediate sense it does not seem to have led to increased demand for ZEC. While volume is high, the price appears to be struggling – which should not be a surprise to anyone monitoring cryptocurrencies in 2018, as most of them seem to be having similar problems.

All Major Exchanges Supporting Upgrade

Essentially every exchange listing ZEC has supported the upgrade, meaning that private withdrawals will become much more feasible. While the technology behind Zcash still has some distance to go in order to successfully transact privately with the same efficiency as public blockchain tokens, the upgrade is a major step in that direction, and the reduced resource requirements will likely lead to increased adoption of the crypto. Spokesmen and developers of Zcash still maintain that continued upgrades of its protocol will eventually lead to “privacy-by-default” in cryptocurrency transactions, major platforms like Bitcoin have yet to make any notable moves in the same direction.

Thus while the efforts of Zcash can be lauded and the existence of privacy-centric options is especially important in regions where there are dangers associated with monetary transactions, the dream of “privacy-by-default” has yet to be fully realized.

Credit: CCN

While much of the world grapples with the development of crypto-related policy, Ukraine has become a first mover. The eastern European country has unveiled a path for the adoption of cryptocurrencies, with Ukraine’s Ministry of Economic Development and Trade beginning the process for the legalization of virtual assets, an endeavor that is projected to take three years. According to the announcement:

“The Economic Development Ministry initiates the adoption of the concept of state policy in the field of virtual assets, the purpose of which is to create understandable conditions for conducting activities in the field of virtual assets and virtual currencies.”

The government organization will set out to define key terms in the crypto space, including “virtual currency/cryptocurrency, virtual assets, ICO/ITO, mining, smart contracts and token,” according to local Ukrainian publication Ukrinform. In doing so, they will be giving developers and blockchain founders parameters for operating in the space, including the tens of thousands of crypto engineers that are engaged by Silicon Valley startups. It could also bolster the amount of international investment that is directed into Ukrainian blockchain startups. Crypto policy will be crafted over two stages that will unfold between now and 2021.

Fits and Starts

There have been greens shoots of crypto regulation in Ukraine for months, with one member of Parliament, Alexei Mushak,  revealing in the spring that the path to the legalization of cryptocurrencies was in the works and at that time urging feedback from market participants. Mushak, who made the announcement on Facebook, held BTC as of 2016, according to public forums.

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Ukraine Drafts Law to Legalize Cryptocurrencies, Fuels Debate In Crypto Community https://www.ccn.com/ukraine-drafts-law-to-legalize-cryptocurrencies-fuels-debate-in-crypto-community/ 

Ukraine Drafts Law to Legalize Cryptocurrencies, Fuels Community Debate

Ukraine is drafting legislation to legalize cryptocurrencies, and members of the crypto community were asked to participate. Alexei Mushak, a member of the Ukrainian parliament, posted a notice on…

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Mushak said at the time that the country was looking to establish transparency in the market, one in which blockchain development would be nurtured across sectors of the economy while holders of crypto would be protected from “unsubstantiated criminal prosecutions.” Meanwhile, the law will also be designed to fight fraud such as “money laundering and terrorism financing” that tends to be associated with an “underground” crypto market that was common in Ukraine under a different administration.

Regulatory clarity remains elusive in the blockchain space, and Ukraine is ahead of many jurisdictions in its efforts. Separately, there are a couple of crypto-friendly bills being considered, one of which would lift taxes on crypto-related business for at least a decade, incentivizing both businesses and individuals to transact in cryptocurrencies. Ukrainians trade nearly $2 million in cryptocurrencies daily across approximately two-dozen coins, and hundreds of local merchants already accept altcoins as a payment method.

Credit: CCN

Over the past 24 hours, the cryptocurrency market has demonstrated the same trend it has shown throughout the past 12 days, with Bitcoin at $6,400.

The volume of Bitcoin has increased by nearly 20 percent from $3.1 billion to $3.5 billion, hinting a rise in trading activity in the cryptocurrency exchange market across major digital asset trading platforms.

The sudden rise in the volume of Bitcoin, which has been stagnant since mid-October, could lead to a potential short-term positive movement on the upside in the days to come.

Is Bitcoin Ready to Climb?

Various technical indicators of BTC suggest that the dominant cryptocurrency is building momentum to breakout of several minor resistance levels in the high $6,000 region.

Cryptocurrency trader and technical analyst Uzi stated that if BTC can surpass the $6,400 mark with ease, then it is possible for the asset to eye a breakout above the $6,500 mark.

“BTC looks ready to break out of the bull pennant on the 4H, price closed above the 50 & 20 day EMA today and MACD is bullish now, resistance is looking like 6417-6420 here, lets see if we can break it soon.”

The volume of BTC increased subsequent to the closure of a daily candle with lowest recorded volume in the past 10 months. During the weekend, the volume of the cryptocurrency exchange market tends to dip, alongside over-the-counter (OTC) markets that are said to process three times the daily trading volume of major cryptocurrency exchanges.

Hence, the rise in the volume of BTC on a Saturday is a positive indicator for the short-term trend of the asset. If the momentum of BTC above the $6,400 can be sustained throughout Sunday and continues on next week, the positive sentiment around the market will likely allow large market cap cryptocurrencies to rise in value.

Throughout the past week, in a sideways market, small tokens recorded decent gains against Bitcoin in the range of 5 to 10 percent. However, major cryptocurrencies like Bitcoin, Ethereum, Ripple, and Bitcoin Cash have not been able to demonstrate signs of recovery.

Von, another recognized crypto analyst, said that BTC is expected to hold $6,400 comfortably in the next 12 to 24 hours.

“BTC having a calm Sunday while kindly closing that Tether premium for us, currently $80 USD price very stable and Tether prices look likely to meet imminently I would expect $6,400 to hold and provide good territory for bounce, breaking that trés bearish.”

Still Conditional

While the trading activity in the cryptocurrency exchange market increased over the past two days, the majority of traders are still waiting out for the market to demonstrate a major movement.

A potential increase in the price of Bitcoin to the $6,500 to $6,600 range is dependent on the ability of the market to sustain decent volume and momentum in the upcoming days.

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Technology startup accelerator Boost VC has announced that it is accepting applications from crypto startups to join Tribe 12, its latest accelerator program cohort. Since 2012, Boost VC has graduated several cohorts with more than 75 crypto-related projects including prominent blockchain projects like Etherscan, Aragon, and MyCrypto.

According to the announcement, which appeared in a Medium post, the company is seeking to invest in blockchain startups that provide solutions for cross chain functionality, front end blockchain solutions, crypto team building and maintenance, and general blockchain scaling.

‘Missing Puzzle Pieces’

Boost VC describes its investment focus for Tribe 12 as an attempt to fill in missing pieces in the blockchain and crypto adoption puzzle from an infrastructure point of view. While investors like Goldman Sachs continue to grab headlines with eye-catching investments in startups focused on crypto custody and trading solutions, Boost VC is taking its investment from a wider perspective, seeking out startups that can build nuts-and-bolts blockchain solutions such as cross-chain navigation interfaces and management solutions for the peculiar challenge of distributed crypto teams.

Applications are welcomed from startups interested in creating decentralised frameworks for commerce, communication and government similar to ConsenSys, but operating on other non-Ethereum blockchains. According to Boost VC, the goal is to explore studio builder models for quick iterations on bringing crypto mainstream. Boost VC is also looking for projects focused on the creation and management of crypto teams, which come with the unique and unprecedented challenge of being almost entirely remote, contractor-heavy instead of employee-based, and having the near-instant liquidity offered by crypto payments, which creates a different incentive model from traditional startups.

In addition, projects that create cross-chain interfaces outside of custody, exchange and wallet solutions are particularly prized for investment. This is because Boost VC sees such projects as essentially land grabs offering the opportunity to build a blockchain interaction utility that can be recreated across the other top 5 – 10 blockchain networks.

The company also says it is looking for the “Coinbase for other blockchains/dapps” as well as a possible solution for legal gambling that takes advantage of differing regulatory environments across jurisdictions. Country-specific custody solutions and security trading solutions are also mentioned.

An excerpt from the announcement reads:

“Regulatory arbitrage plays. We invest globally. Therefore we will look at teams using certain jurisdictions to their advantage. Areas of legal gambling. Custody designed for specific countries. Trading securities.”

Projects working on such solutions are encouraged to apply to Boost VC’s Tribe 12 accelerator batch.

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The fast-growing blockchain technology sector has created a high demand for talent and this has consequently resulted in blockchain engineers being among the best-remunerated in the tech sector.

According to CNBC, the average pay for blockchain engineers in the United States is between US$150,000 and US$175,000 making it comparable to what developers who specialize in another high-demand field, artificial intelligence, make. The two fields now currently offer the highest-earning specialized engineering roles. Typical software engineers make an average of US$135,000.

Surge in Openings

This comes at a time when the job postings requiring blockchain technology skills have increased dramatically. For instance, Hired, a San Francisco, California-based tech sector recruitment firm which provided CNBC with the salary stats in the tech sector, has seen a 400% increase in the job postings seeking employees with blockchain technology skills since late last year.

“There’s a ton of demand for blockchain. Software engineers are in very short supply, but this is even more acute and that’s why salaries are even higher,” Hired’s CEO, Mehul Patel, told the business news TV channel.

This is similar to a finding by jobs site Glassdoor which saw job listings related to blockchain and cryptocurrencies increase by 300% in August 2018 compared to the same period last year. In the United States, most of the blockchain-related jobs are located in New York City (24%) and San Francisco (21%). Outside the United States the top-five cities with the highest number of blockchain-related job openings were London (16%), Singapore (7%), Toronto (7%), Hong Kong (6%) and Berlin (4%).

Top Destinations for Blockchain Talent

Per Glassdoor, some of the top-hirers are startups such as Circle, Kraken, Figure, Coinbase and ConsenSys though established firms such as Oracle, IBM, KPMG and Accenture also feature in the top ten.

The findings by Hired and Glassdoor also echo a similar conclusion drawn by leading freelance jobs website Upwork. As CCN reported two months ago, blockchain was the fastest growing freelance skill on the telecommuting platform in the United States for the second consecutive quarter. The 2018 Q2 Upwork Skills Index also showed an increase in demand for individuals proficient in the programming languages and frameworks that are required to fill blockchain developer or engineer positions.

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Upwork: Blockchain the Fastest Growing Skill in US Freelance Job Market https://www.ccn.com/upwork-blockchain-the-fastest-growing-skill-in-us-freelance-job-market/ 

Upwork: Blockchain the Fastest Growing Skill in US Freelance Job Market

The latest quarterly skills index by global freelancing website Upwork shows that the fastest growing skill in the United States during the second quarter was blockchain.

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Some of the programming languages required in the blockchain technology field include Go, Python, JavaScript and Java. The C++ programming language, which is the language employed in coding the most commonly used client of bitcoin, Bitcoin Core, is also considered fundamental. Solidity, a language created by the Ethereum project team specifically for writing smart contracts, is also required in the blockchain sector.

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The Hong Kong Stock Exchange (HKEX) believes that legal frameworks around finance and cryptos should be the same.

The world’s sixth largest stock exchange in its research paper looks at the need for regulators to keep up with the pace of financial technologies. And if they lag behind, the existing laws of finance should be applicable to the companies in the FinTech space, based on their resemblance with the traditional services. Blockchain, for instance, could be brought inside the space of investment, trading, clearing, and settlement. Similarly, issuing digital assets on blockchain could be governed by an existing securities regulatory framework.

“Despite the difference in Fintech regulations among countries,” HKEX added, “the principle of consistency generally applies, i.e. financial services with the same nature are subject to the same regulations under the existing legal framework, so as to maintain fair competition, ensure regulatory effectiveness and prevent regulatory arbitrage.”

Supervisory Sandbox

Crypto innovations can improve a system as much as it can hurt it. The HKEX paper takes instances from other countries and their blockchain testing labs. Known as “supervisory sandbox testing,” the process aims to minimize risks by deploying blockchain and crypto innovation among a privately-governed network of users with minimal adaption requirements and regulatory restrictions. A full-scale deployment ensues only after the crypto product passes on the serviceability, the security, and the regulatory front.

Noting that supervisory sandbox practices are only limited to the banking sectors in its current format, the HKEX report recommends that these testing models should be extended to non-banking sectors such as blockchain and cryptos as well. Excerpts:

“Given that Fintech Supervisory Sandbox (FSS) is timely and flexible in making a regulatory response to market innovations, it can encourage Fintech innovations and minimize the negative impact of regulatory uncertainties with effective risk prevention and control. It is, therefore, the most suitable regulatory tool for Fintech.”

RegTech: When Regulators Innovate Their Own Practices

The HKEX research paper proposes that Hong Kong regulators establish an effective regulatory technology (RegTech) system by incorporating more use cases of AI and big data. The system would include a better, face recognition-enabled KYC process, sentiment monitoring, and identifying corporate relationships.

In the context of crypto and blockchain startups, a working RegTech system would allow them to approach legalities and auditing faster than usual. They would be able to put their business papers, including “registration information, annual reports, notices/announcements and information on its shareholders/legal persons and connected companies,” online to seek approvals in a timely fashion.

“There are now some business search engines (e.g. “Handshakes”) in the market which can help regulators analyze the nexus of commercial transactions and relationships in the financial market,” the HKEX paper added.

“These business search engines can analyze public information of listed issuers faster and in greater depth with the help of technologies, providing the accurate connections between companies and discovering possible insider dealing. This would be the primary application of big data in RegTech.

Credit: CCN