So Far So Good With Bitcoin In China

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Isokivi || Cretive Commons

To begin with, one could rather poetically suggest that it has been all quiet on the cryptoccurency front since the Bitcoin hysteria we experienced 2-3 weeks ago. Its price has been mostly dormant, stagnating around the value of EUR 850. And yet, the crypto-world kept its ball of development rolling.

Our main concern today will be the aftershock hitting China after the rise and fall of the price of Bitcoin. Besides official governmental threats to currency exchanges, it was also revealed that a common practice in China existed and surfaced with the use of Bitcoin as a bridging currency for the dollar. The stage was perfectly set for such operations as the biggest Chinese exchanges are all cost-free. Consequentially, most turnovers were of phony foundation. However, this has changed since and the four largest exchanges (Huobi, BTCC, OkCoin and Yunbi) had all introduced mandatory fees. Three of them decided to set a fixed leverage of 0.2% for all trading with Bitcoin and Litecoin (currently figuring as No. 4 on the market). The set percentage fee is expected to stabilize both trading and price, as fees can also serve as a deterrent against venturous speculation. No guarantees included.

The European Network and Information Security Agency (ENISA) had announced its intention to provide banks with assistance in their efforts to implement Blockchain, beginning next year. The last couple of years saw nearly USD 1 billion spent on projects targeting the field of Blockchain. The one most widely known to the public is R3, where more than 50 banks have been cooperating with a start-up focused on the development of Blockchain that could be beneficial for financial systems. And it is exactly this area where the opposing forces of the crypto-community find themselves at arms.

The majority views that Blockchain cannot be centralized as banks would like to see and supervise the internal processes of the chain after its initial development. According to popular opinion, not adhering to these principles would come at the expense of security. A supportive element to this argument is provided by the fact that financial institutions so far “merely” stated the initiation of the technology´s testing phase; nothing tangible as such has yet been presented. Nevertheless, the agency´s approach represents a commendable step, but it would be even more positive if the European Commission finally halted its blurry speculations about its future engagement with cryptocurrencies. Accordingly, it should seek a more proactive stance towards virtual currencies and provide them with a more favorable legal environment.

The Blockchain of another currency called Ethereum (the market´s No. 2, with differing aspects of its Blockchain) is being utilized by ChronoBank as a basis for their new app – LaborX, envisaged to function as an exchange. In simple terms, it is going to be the Uber of work. The exchange will represent a meeting point where job offers and demand cross paths while operating on a peer-to-peer basis, meaning that no third parties will be involved in the process. As a result, both offer and demand sides will lose the burden of paying third party fees while at the same time saving valuable time. Similarly to Uber, a rating system will be employed to monitor the reliability of involved job seekers.

Lastly, we are going to take a peek into the cold plains of Russia where Alexej Navalnyj, a famous Putin critic often heard voicing his ravish discontent with his country´s political establishment, has decided to run in next year´s presidential elections. Interestingly, he has been using an app developed by Yandex as a means of supporting his campaign. Yandex is essentially the Russian Google. It is the most popular web search engine in Russia while standing firm at fourth place in the global race. The presidential candidate wanted to use the company´s payment app to process donations from supporters. In an act of official defiance, the central bank withheld more than 12,000 payments intended to reach Navalnyj´s account. A small glimpse of hope was offered by Bitcoin, as payments in this currency cannot be blocked. The candidate was then left with approximately 25 Bitcoins that came into his account after a month of its operation.

Translated by Edward Szekeres

Martin Lindak
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