Home

Bitcoin

Author: Conor Maloney

Conor Maloney is an advocate of decentralized public control of finance, an off-grid and sustainability enthusiast, and as you might imagine, really fun at parties as well. Follow him on Twitter @writtencraft to hear him roar.

Why Millennials and Gen Z Are Attracted to Bitcoin

Posted on by Conor Maloney

It stands to reason that emerging tech like cryptocurrencies appeals to younger generations. Many millennials were just at around job-seeking age when the global recession caused mostly by corrupt banking practices struck in 2008, and fintech in general is a space that has seen success as an alternative to banks among the youth. Banks have long-been portrayed as an institution of trust and infallibility, but that’s a tough sell to anyone who grew up negatively affected by them.

However, it’s one thing to have a broad understanding that crypto and fintech is popular among the youth. Here are some hard facts that show the growing trend among millennials and gen z.

The Distrust of Banks Runs Deep

I wasn’t just spouting rhetoric about banks earlier – surveys show 27% of millennials actually trust Bitcoin more than banks, a pretty incredible figure when we consider the amount of fintech and crypto payment processing solutions developing crypto banking services right now as an alternative to traditional services.

42% of millennials describe themselves as “somewhat familiar” with Bitcoin, meaning that the figure of millennials who know what Bitcoin is and favor it over banks is much higher.

1 in 4 Millennials Prefer Bitcoin to Stocks

27% of those said that they would rather have $1,000 in BTC than stocks due to the greater potential upside, with that number even higher among male millennials. While only 4% of survey respondents actually owned digital assets, the insight into millennial mindsets regarding crypto was interesting – traditional mainstream finance may no longer be in vogue.

Millennials Support Fintech

Millennials grew up with technology, and they’re comfortable with it. As discussed above, they have little loyalty towards banks – 1 in 3 would switch banks if they saw better services being offered, 50% don’t think their bank offers anything that other banks don’t offer, and 70% would be interested in Amazon or Google offering financial services.

Generation Z Use P2P More Than Millennials

Generation Z, the group of people currently between the ages of 18 – 23, is even more interested in fintech services. A survey showed 79% said they use a digital payment service at least once each month, more on average than their millennial or gen x counterparts.

Generation Zers also pay more attention to price than older adults and exhibit less brand loyalty, simply going for the best bang for their buck every time. 80% of survey respondents said price was the most crucial factor when making a purchase while 50% said name brands are more expensive than private label brands.

The Youth Know Crypto Is Coming

The statistics above focus on different areas of the mindset of younger generations in terms of finance, and they all share the common theme that traditional finance has failed to maintain its appeal to the new waves of adults entering the world of finance.

Bitcoin awareness is on the rise, and of the people who hear about it, more and more are interested, painting a very bright future for cryptocurrencies indeed.

What The Hell Is an Initial Exchange Offering (IEO)?

Posted on by Conor Maloney

Let’s face it – the whole ICO thing could have gone a little better.

While there were many stellar ICOs which launched solid projects with real use cases (like Ethereum), a massive amount of ICOs were failures. One in five were outright scams.

Security token offerings were dreamed up as an alternative ensures fll regulatory compliance. A major pain point for ICOs was the fact that any tokens sold could not legally reflect a portion of the success of a project – selling shares in company profits falls under securities regulation. ICOs needed to sell utility tokens instead, a legal loophole that created a big problem when it didn’t fly with regulators.

The other problem was, you know, the scams.

While STOs selling securities may be a natural, positive progression, IEOs are another interesting investment vehicle that one should, as with all such vehicles, research carefully before getting behind the wheel.

The Exchange Is The Counterparty

Instead of the project developer taking on the responsibility of fundraising, a cryptocurrency exchange handles the whole process. Developers can mint tokens and send them directly to the relevant exchange where users can buy them. The funds go through the exchange to fund the project.

Legally, this is a different animal entirely from STOs and ICOs, although they are all crypto fundraising methods in the vein of the IPOs seen in the traditional markets.

Why Go IEO

Exchanges already have the audience, architecture, and regulatory green light in place that allows them to accept funds from the public and invest in projects. By acting as an intermediary, a lot of risk can be removed – depending on the reputation of the exchange, of course.

Exchanges benefit by being featured in the marketing campaigns as well as taking listing fees for the token. Investors can mitigate risk by dealing only with large exchanges unlikely to participate in a blatant, public scam, immediately distinguishing the process from ICOs

Of course, there are many smaller exchanges that would surely sell their users and their own reputation for the right price, as seen with the numerous exit scams in the space  – this risk is left for investors to decide.

Different IEOs

Binance leads the way as usual with the launch exchange that appeared in the spotlight during the launch of the  token.

Gifto, an Ethereum dApp, was used to handle $3.4 million of the total $7.2 million raised for the IEO. No website or unique token necessary. Binance’s marketing team helped the raise by reaching out their sizeable audience, and the audience trusted that Binance wouldn’t scam them and lose its reputation over $3 million.

Coinis, a South Korean cryptocurrency exchange, facilitated a $2 million IEO for the REMITT remittances project. OKEx announced a platform for IEOs called OKJumpstart aimed at helping new startups thrive.

KuCoin launched KuCoin Spotlight, and Bittrex and Huobi also announced IEOs, although Bittrex canceled.

Proceed With Caution

It seems like a good investment model, but all investment models are only as good as the people running the show. Investors need to take a good, hard look at exchange teams and histories before trusting an exchange with their money either in an IEO or simply for trading.

The IEO may be a chance at a new start for crypto fundraising – but it’s also an opportunity to learn from our mistakes and proceed with more caution than was seen throughout the ICO craze of 2018 and 2017.

As always, Do Your Own Research before making an investment.

Look on the Bright Side: Crypto Winter Kills Fake Exchange Volume

Posted on by Conor Maloney

Make no mistake, the recent decline known as “Crypto winter” has been devastating for industries in the space. While CEOs put a brave face on when facing the public, there’s only so many ways to put a positive spin on laying off over half your work force.

That’s something we’ve seen recently with Steemit, ConsenSys, ShapeShift, and BitHumb, although the latter seems rather surprising. Surely a company with over $1 billion in daily trading volume can afford to hang on to 150 staff members, right?

Fake Trading Volume

Multipe exchanges have been accused of falsifying trading volumes, with varying degrees of evidence. Doing so makes the exchange look like its doing more business and gets its name out there, thus drumming up more business – here’s how it works.

Traders sell and then immediately re-buy a financial instrument, eating the fees to make it look like an inflated number of traders are taking part in trading and that there is more demand for a particular asset than there really s. The process can also be carried out with bots.

It’s called wash trading, and like many practices that are illegal in the traditional financial sector, it’s unregulated and thus totally legal in crypto. One thing we’ve really seen over the years is an influx of professional, veteran stocks and forex traders with an understanding of these manipulation tactics realize that they can take the skills they’ve honed at personal risk and in secret in the regulated markets and apply them to crypto where there are many inexperienced traders to prey upon as well as no regulations.

Exchanges could arguably be turning a blind eye, encouraging, or even orchestrating this type of activity to generate more fees and, of course, attract more traders.

Why Do Exchanges Participate In Wash Trading?

Competition amongst the exchanges is fierce. They are under pressure to seek high-margin activities outside the scope of traditional financial regulations. These activities rely on high volume which equates to higher listing fees and liquidity. Eventually, traders become drawn to higher-volume exchanges, which then facilitates the listing of more trading pairs, creating a cycle of growth.

An even more underhanded reason for doing this is listing fees. Projects spend an average of $50,000 for exchange listing, and many exchanges are created purely in an effort to convince projects to pay them for listings. Faking trading volume is a huge reason to do that – the more trading activty there is (or appears to be), the higher they can charge projects for listing.

“If you’re faking volume, you’re doing it for one of two reasons. You’re doing it to get listing fees, so the founders can get rich off of the poor sods buying the coin thinking there’s interest. Or because you bought the coin and you want the price to go higher. In both cases, you’re committing fraud.”

Silver Linings

One “good” thing about the bear market is that it makes it much harder to hide this kind of activity within a bustling space. In a more cautious trading atmosphere, bad actors can be weeded out, and doing that will stimulate more growth over time.

In the case of BitHumb, for example. the layoffs have already re-opened old allegations of fake trading volume. While nobody is hoping for the bear market to continue, it may be part of a natural cycle that ends up strengthening the cryptocurrency industry and trading ecosystem over time.

Circle’s Secret Crypto Empire

Posted on by Conor Maloney

In the depths of crypto winter, it can be easy to lose sight of the fact that major moves are still being made. Key players in the industry seizing the opportunity created by a volatile and unforgiving space to snap up entire companies while their valuation is taking a hit from the market crash.

Circle is one such outfit, raising staggering amounts of money and using it to acquire promising companies in the cryptocurrency and blockchain space. As Shaun Shaughnessy of Chain Podcast put it, they’re “building an empire”.

What role will they play in the future?

Circle

Circle is technically another “peer to peer payments company”, but that doesn’t really paint the full picture. Backed by Goldman Sachs, the company raised over a quarter of a billion dollars last year and is looking to do the same again in 2019, and the money isn’t just for internal R&D either.

Circle CEO Jeremy Allaire has expressed a wish to bring about the “tokenization of everything“, stating that there was a lot more to the cryptocurrency space than Bitcoin. Privacy coins, commodities, securities, and stablecoins are all of interest to Circle, and the company is researching solutions into industry-wide technologies for a vast host of purposes.

And that’s just within Circle itself.

Poloniex

As previously reported by CryptoIsComing, the Boston-headquartered firm acquired Poloniex last year, a struggling cryptocurrency exchange currently ranked at #69 by volume on Coinmarketcap with a relatively modest daily turnover of around $12 million.

Interestingly, Circle shelled out a whopping $40 million for the firm, obviously seeing something in it that many others in the space do not.

A juggernaut of the crypto space, Circle presumably has something of a crack team of business analysts and advisors at its disposal, and the space is awaiting the success or failure of whatever Circle has planned in terms of turning things around for Poloniex.

Seed Invest

Circle has also acquired Seed Invest, a crowdfunding platform and broker-dealer. Circle finally closed the acquisition this month, SeedInvest carried out 220 fundraising campaigns totaling at $110 million, with an average sum of $500,000 raised overall.

Circle will be able to integrate cryptocurrency fundraising capabilities to the platform, totally changing the business model and allowing it to straddle the worlds of traditional finance and cryptocurrency as a fundraising giant.

Allaire commented on the acquisition.

This was a company who had been at the forefront of collaborating with government to figure out how to make it possible to innovate in the way people raise capital. Crypto securities are going to become a major new category of securities that ultimately every business is going to adopt, just like every business has a website.

Circle Pay

As the first recipient of the New York BitLicense,  the company has been a trailblazer in many ways, perhaps benefiting from its traditional banking connections when beating competitors to regulation.

With Circle Pay, a mobile payment platform, as well as a major crowdfunding platform and a well-established cryptocurrency exchange, it all begs the question – what exactly is Circle working on, and where do the limits of its crypto empire lie?

WazirX Review – India’s New Exchange

Posted on by Conor Maloney

WazirX is India’s latest addition to cryptocurrency trading solutions platforms. The exchange has been garnering more attention over the last few weeks – but does the service live up to the hype?

In this article, we’ll be taking a look at the different features of the exchange so users can decide for themselves whether to try their hand at WazirX trading.

Features

WazirX offers a toned-down interface that’s simple and easy to follow. Users can monitor order books in real time as well as chart data and trading history.

Asset Pairs

WazirX currently supports Bitcoin, Ethereum, Litecoin, and Ripple as well as other lesser-known cryptocurrencies. Fiat-to-crypto is not available, as with most exchanges.

CrowdFire

WazirX is launching with CrowdFire Company, a social media platform which has 19 million users.

WRX Coin

The exchange has its own token which offers users a discount on trading fees, much like BNB token on Binance. BNB recently soared into the top ten cryptocurrencies on coinmarketcao even as other coins were performing badly, simply for the fact that trading was incentivized even during the bear market.

WazirX is giving new users 250 WRX tokens to reward user loyalty and help stimulate the in-exchange trading economy. Users also receive 100 WRX for each referral they send to the site.

In total, 150 million coins will be distributed, with the first 30,000 traders to sign up receiving the bonus.

Signup Process

Signup is relatively straightforward and involves KYC (know your customer) identity verification.

Users must visit the sign-up page and follow the instructions to enter email and set a password. Once terms and conditions have been checked, users receive an email link. They must also enter a mobile phone number at this time to activate the account.

AT this time they upload KYC documents as well as following a number of other on-screen instructions and taking a photo of themselves with ID.

The signup is not as streamlined as some exchanges, but is thorough and reportedly legally compliant – the KYC process only takes a few hours once submitted, which is faster than many exchanges currently operating in the space.

The Team

Nishcal Shetty heads the team.

Shetty is the founder of Crowdfire and a prominent blockchain influencer on Twitter – he was also featured on Forbes’ 30 under 30 list.

Shameer Matre is thre co-founder and chief technical officer. The CTO is full-stack and designer.

Head of product is Siddharth Menon, another Crowdfire co-founder. Menon is an early adopter of cryptocurrency and an advocate of open, transparent economics.

All in all, the exchange looks promising. Headed by a Forbes 30 under 30 awardee and modelling its tokenomics from the world’s most successful exchange while focusing on the massive Indian market seems like a solid head start in a space brimming with exchagnes of varying calibres.

WazirX is launching their sign-up initiative this month, and may be one to keep an eye on.