Connect with us

Blogs

Ethereum Co-Founder Says Tether Backed By USD

Published

on

Tether
READ LATER - DOWNLOAD THIS POST AS PDF

Joseph Lubin, one of the co-founders of Ethereum, has thrown his weight behind the controversial stable coin of Tether (USDT). In an interview with Yahoo Finance, Lubin elaborated why he believes that USDT is backed by actual US dollars in a one-to-one ratio. He added that:

“Tether’s an interesting project. Based on our analysis, which involves just talking to a bunch of people in the space, we do believe that tethers are backed 1-to-1 by U.S. dollars in bank accounts… With respect to market manipulations, I’m not sure that market manipulations are related to Tether directly, if they do exist.”

Tether Market Manipulation

The market manipulations Joseph Lubin is referring to, are claims by a research paper by faculty at the University of Texas (Austin) stating that USDT is used to prop the value of Bitcoin (BTC) during times of turmoil. The co-authors of the paper, Professor John M. Griffin and Ph.D. Candidate Amin Shams of the same institution, stated that USDTs are minted whenever the value of BTC is declining significantly. The newly minted Tethers are then used to prop the value of BTC in the markets.

The paper goes on to conclude that:

“Our analysis centers on examining potential manipulation of Bitcoin and other major cryptocurrencies. We examine whether the growth of a pegged cryptocurrency, Tether, is primarily driven by investor demand, or is supplied to investors as a scheme to profit from pushing cryptocurrency prices up. By mapping the blockchains of Bitcoin and Tether, we are able to establish that entities associated with the Bitfinex exchange use Tether to purchase Bitcoin when prices are falling. Such price supporting activities are successful, as Bitcoin prices rise following the periods of intervention. These effects are present only after negative returns and periods following the printing of Tether.”

According to Lubin, the manipulation in the crypto markets might stem from the fact that most trading platforms are relatively unregulated when compared to traditional securities exchanges. He would add:

“Ideally we’ll get a little better regulation of those centralized exchanges, at least, and we’ll see less sloshing around in price.”

Ethereum’s Difficulty Bomb Delayed

In other news, Ethereum’s core developers have decided to delay the network’s ‘Difficulty bomb’ by agreeing to include the code for such a change into the upcoming Constantinople fork.

The ETH difficulty bomb refers to the increasing difficulty level of puzzles in the mining algorithm used to reward miners with Ethereum on its blockchain. As the puzzles become more difficult to solve, there is a lag in the production of blocks on the ETH network. This lag will continue to slow down the network resulting in a scenario that has been referred to as an ‘Ice Age’ where rewards will not be based on Proof-of-Work but on Proof-of-Stake.

Per the agreement by the Ethereum core developers posted on Github, the difficulty bomb will be delayed for about 18 months and there will be a reduction in the block rewards with the Constantinople fork. The summary decision stated that:

“Starting with `CNSTNTNPL_FORK_BLKNUM` the client will calculate the difficulty based on a fake block number suggesting the client that the difficulty bomb is adjusting around 6 million blocks later than previously specified with the Homestead fork. Furthermore, block rewards will be adjusted to a base of 2 ETH, uncle and nephew rewards will be adjusted accordingly.”

This decision and plans for a hard fork, further provide hope that the Ethereum core developers will also come to a discussion with regards to the scalability issues evident on the Ethereum network.

For the latest cryptocurrency news, join our Telegram!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Pexels

Bitcoin

Investors Beware: Another Large Bitcoin Crash Might Be Coming

Published

on

Bitcoin crash
READ LATER - DOWNLOAD THIS POST AS PDF

The crypto prices have surged quite high in the last few months. Of course, their progress is nowhere near the one seen in 2017, but they appear to be getting there, one day at the time. However, things might not be as simple as that, and according to recent performance — it is more than possible that a major Bitcoin crash is incoming.

The fact is that cryptos saw a massive amount of growth in a very short period. Bitcoin itself more than doubled its price in only two months. Now, the rally is starting to crash in on itself, and the coin is already about $1,000 lower than last week. If such development does come to pass, a lot of people will experience quite large losses, although experienced investors might find some opportunities, and leverage in order to enhance their holdings’ long-term value.

For example, Bitcoin dominance is expected to crash very quickly, which will work in favor of quite a lot of altcoins. While this does not seem to be the best time to invest in BTC, altcoins are another story, and diversifying a portfolio now might end up being very profitable in days to come.

Bitcoin behavior mirrors the pre-bear market situation

The crash that analysts are predicting right now comes as a direct consequence of all the hype that has been building up in…

Continue Reading

Altcoins

Top 3 Coins to Buy Before They Go Big

Published

on

coins
READ LATER - DOWNLOAD THIS POST AS PDF

Crypto bulls are back, that much is clear. The long-lasting, harsh crypto winter is gone, and the new era in digital currency sector opens up some rather interesting opportunities. With many more bull runs expected to come in months ahead, a lot of coins are likely to blow up and maybe even hit new all-time highs, although that still remains purely theoretical.

On the other hand, the fact is that numerous coins are seeing prices that were not achieved since early 2018, and the overall momentum remains bullish. With that in mind, even if new records do not come for a very long time — chances are that many of the coins will blow up enough for investors to see some serious gains in months to come. As a result, investing in some of these coins now might be a very profitable decision, for those who have the patience to wait a few months. Here are some of the projects believed to have the greatest potential to go big in the second half of 2019 and beyond.

1. TRON (TRX)

Putting TRON on the list should not really surprise anyone, as the project constantly comes up with new project updates, partnerships, and alike. It also constantly breaks records, as is becoming one of the biggest players in the dApp and smart contract development sector.

In the past few…

Continue Reading

Blogs

Can Crypto Credit Cards Disrupt the Fight Against Financial Crime?

Published

on

crypto credit cards
READ LATER - DOWNLOAD THIS POST AS PDF

It is commonly known that the world of finances has the biggest problem with the crime of all existing industries around the world. It has been so throughout history. While the financial world has evolved, so did the criminal activities, and they continue to be an issue. With the arrival of cryptocurrencies, many were hoping that financial crime might be disrupted. However, for now, at least, it appears that cryptos themselves cannot find a way to resolve issues such as international money laundering.

In fact, when it comes to money laundering, the crypto sector appears to be the weakest link, especially because of the nature of digital currencies. The anonymity that cryptos are being praised for means that anyone can get a payment from an unknown source from anywhere in the world. This method can then be used for financing drug trafficking, cyberattacks, terrorists, and more.

Until recently, it was not easy for bad actors to make use of cryptocurrencies obtained for illegal purposes. The number of merchants willing to accept the coins was low, and criminals were forced to find a way to exchange crypto into fiat currencies. However, this came with a set of issues, such as taking foreign exchange risks and then sending the money through wallets and exchanges to a banking system that would allow withdrawal. The banking account was the biggest obstacle here,…

Continue Reading

Elite