Sunday, June 30, 2019
Friday, June 28, 2019
Craig Wright Cannot Prove He Created Bitcoin
Whether or not Craig Wright is the original creator of bitcoin would remain a mystery.
The Australian scientist today appeared in a federal court hearing in West Palm Beach, Florida, defending himself against accusations that he stole bitcoins and intellectual property from a deceased business colleague. The case could potentially help determine whether or not Wright is the Satoshi Nakamoto, the pseudonymous creator of the Bitcoin protocol.
Wright, who for years have claimed that he is Satoshi, went out of breath at the very last moment. He told the judge that he could not produce the bitcoins being held in the account that belonged to Satoshi, stating that he handled all his holdings to David Kleiman before he died in 2013.
“I brought in Dave because he was a friend and he knew who I was and he was a forensic expert, and I wanted to wipe everything I had to do with bitcoin from the public record,”
Wright said under oath.
Wright added that it was impossible for him to find the digital wallets that hold billions of dollars worth of bitcoins.
What do you think about the Wright’s version of truth? Tell us in the comment box below. And don’t forget to download CoinStats, the best cryptocurrency portfolio management app out there.
The post Craig Wright Cannot Prove He Created Bitcoin appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/craig-wright-cannot-prove-he-created-bitcoin/?utm_source=rss&utm_medium=rss&utm_campaign=craig-wright-cannot-prove-he-created-bitcoin
Thursday, June 27, 2019
Wednesday, June 26, 2019
Tuesday, June 25, 2019
Monday, June 24, 2019
Friday, June 21, 2019
Thursday, June 20, 2019
Ripple (XRP) Price Will Rise by 100 Times, Predicts Analyst
Price of Ripple’s XRP token can increase by 100 times in its next bull cycle, according to pseudonymous cryptocurrency investor Credible Crypto.
The analyst said last week that XRP would likely mirror the accumulation cycle seen after the bitcoin drop in the 2014-2015 session. The BTC/USD exchange rate back then had rebounded 122 times, achieving its all-time high of $20,000 as it did.
“If XRP follows BTC, its next run could be over 100x its lows of $0.23. With multiple equivalents to what BTC did on its last jump to 20k, this puts XRP at around $28, which is a very reasonable expectation [in my opinion]. Remember – the longer the consolidation, the higher the expansion.”
said Credible Crypto.
XRP to the Moon?
The statement followed a rather slow year for XRP, in which the asset surged by a mere 22 percent. In comparison, its peers in the top 10 cryptocurrency index recorded as much as 350 percent gains on a year-to-date basis.
A lot of investors moved away from XRP as its backer, San Francisco-based RIpple Labs, remained stuck in a court battle over XRP’s legal status as a utility. The firm entered partnerships with major banks and financial institutions, including Western Union and Siam Commerical Bank, but none of them resulted in a mass XRP adoption, as envisioned by the coin’s bulls earlier.
Siam, in particular, received flacks after contradicting with its statement about launching an “XRP system” this June.
THREAD: In 2013 $BTC made a 22x run to new highs of around $1200 before correcting in the 2014-2015 bear market. That was followed by nearly a year of accumulation and then a massive 122x run that took us to 20k. The bottoming pattern formed in 2014-2015 matches up (CONT.) pic.twitter.com/bBVSBIRNoX
— Credible Crypto (@CredibleCrypto) June 15, 2019
Ripple is now looking at a fierce competition from a similar product introduced by the social media behemoth Facebook. Dubbed as Calibra, the service also focuses on facilitating a cheap cross-border transaction using a blockchain-based asset. And unlike Ripple’s XRP, Facebook’s cryptocurrency Libra is stable.
Going by that logic, it would be difficult for XRP to surge 100 times in the future.
The post Ripple (XRP) Price Will Rise by 100 Times, Predicts Analyst appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/ripple-xrp-price-will-rise-by-100-times-predicts-analyst/?utm_source=rss&utm_medium=rss&utm_campaign=ripple-xrp-price-will-rise-by-100-times-predicts-analyst
Wednesday, June 19, 2019
Why is the Crypto Community Skeptical About Facebook’s New Libra Cryptocurrency
Facebook finally unveiled their long-awaited cryptocurrency, Project Libra, to the masses, however, the reception didn’t go exactly how they hoped. According to Facebook’s representatives, Libra is a new type of digital money designed to make it easier for the masses to enter the world of cryptocurrency.
Since the first announcement of Facebook entering the crypto market, people have been very critical due to the recent Cambridge Analytica data scandal. The reveal of illicit harvesting of personal data and the lack of security that people felt afterwards countered the main appeal of cryptocurrencies.
The most successful cryptocurrencies are known for using a decentralized blockchain system in order to ensure the security of their users. One of the main benefits of such systems is its organic nature. The lack of centralized authority makes the system immune to government interference and manipulation.
Although Libra won’t be as centralized as Ripple, it will still be controlled by a collection of large organizations. The consortium of companies backing Facebook’s new project includes financial and tech giants such as Mastercard, Visa, Paypal and reportedly even Uber.
The centralized nature of the system will allow these companies to be the only ones who can mine new coins and destroy existing ones. The unreliability of a centralized system combined with Facebook’s use of public information for political advertising purposes has lead many to raise security concerns regarding Project Libra.
“If you’re concerned with Facebook knowing too much or having too much access to your private data or social graph, the GlobalCoin will give Facebook even more direct access to your financial information,” Phil Chen, the decentralized chief officer at HTC, said in an interview with the Sun magazine.
He described Facebook’s entry into the crypto market as a dangerous power grab that won’t only reveal people’s transactions to the tech giant, but also will give Facebook direct access into people’s wallets and wealth. While Facebook’s last scandal revolved around people’s interests and birthdays being revealed, a security breach this time may result in many innocents losing most of their wealth.
France’s finance minister Bruno Le Maire also voiced criticism in his interview with radio station Europe 1. He claimed that the launch of Project Libra will allow Facebook to collect even more data about its users, however, Facebook representatives denied those claims. According to the representatives, the data collected by Calibra, subsidiary to Libra, won’t be shared with Facebook and won’t be used for targeted advertising.
While in case of a security breach, the Calibra custodial wallet will refund the stolen money, the Libra blockchain itself is rather different. Outside of the custodial wallets, people won’t have the opportunity to return their stolen Libra coins. This combined with a lack of vetting on the end of developers is a ticking time bomb for the inexperienced users.
Project Libra has the chance of becoming an enormous venture within the history of social media. The introduction of billions of users to the world of crypto may lead to revolutionizing changes within the global financial landscape, however, Facebook’s past is hard to forget. While many new users might be eager to partake in Facebook’s project, the experienced cryptocurrency users will keep their distance from Libra at least for the time being.
The post Why is the Crypto Community Skeptical About Facebook’s New Libra Cryptocurrency appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/why-is-the-crypto-community-skeptical-about-facebooks-new-libra-cryptocurrency/?utm_source=rss&utm_medium=rss&utm_campaign=why-is-the-crypto-community-skeptical-about-facebooks-new-libra-cryptocurrency
Tuesday, June 18, 2019
Facebook Releases Whitepaper of Upcoming Payment Service Libra
By Coinstats’ Portfolio Management App: Facebook today released the whitepaper of its upcoming payment service dubbed as Libra.
The social media giant stated that Libra will be a non-volatile, blockchain-based cryptocurrency, whose goal will be to bank all the unbanked people across the world. The project, according to the whitepaper, has received support from global financial giants, including Visa, MasterCard, and PayPal.
Libra is a spin-off of several existing blockchain projects, including Bitcoin and Ethereum, two of the leading protocols by market valuation. The only thing that separates the Facebook coin from its peers is centralization and privacy. Facebook stated that they will back the cryptocurrency by a permissioned blockchain in the early days. However, the firm promised that they would later transit to a permissionless digital ledger.
Not so Private
As for privacy, Libra will require users to go through a know-your-customer process for registration. The same requirement does not exist in decentralized blockchain protocols like Bitcoin, which focuses hugely on anonymity.
Libra will not share account information or financial data with Facebook, or with any third party without the client’s consent, clarified the whitepaper. For example, personal information and financial data will not be used to improve Facebook ads.
Although, there will be some exceptions such as fraud and crime prevention, and legal compliance that would prompt Facebook to share customers’ data with third parties.
Calibra Wallet
Calibra will be the digital wallet that would store Libra tokens. Facebook confirmed that it will integrate Calibra into its existing services, including WhatsApp, Messenger, and – nonetheless – its social media platform.
“Libra holds the potential to provide billions of people around the world with access to a more inclusive, more open financial ecosystem,”
said David Marcus, the Facebook executive who is heading Calibra.
Libra will be fully supported by the Libra Reserve, which will back the token issuance with a pooled reserve of fiat assets, including the US dollar and Euro.
What do you think about Facebook’s new project? Would it have a negative impact on the now-bullish bitcoin market? Tell us in the comment box below.
The post Facebook Releases Whitepaper of Upcoming Payment Service Libra appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/facebook-releases-whitepaper-of-upcoming-payment-service-libra/?utm_source=rss&utm_medium=rss&utm_campaign=facebook-releases-whitepaper-of-upcoming-payment-service-libra
HODL
More than 10 years have passed since the introduction of Bitcoin. During these years the segmented cyberpunk and cryptographic movements evolved into the Crypto community. Nowadays, the Crypto community has a prophet – Satoshi Nakamoto – symbols and slang – a specific language generated by crypto supporters.
Words such as mooning, shilling, funding, “pump and dump”, FOMO, and DYOR – the list goes on – are commonly used as the slang of crypto enthusiasts. However, HODL is by far the most common of these terms and one to which almost all crypto traders can relate.
In 2013, on a post in the Bitcoin Talk forum, the term “HODL” appeared for the first time. The inventor of the term, crypto investor GameKyuubi, was drunk when he wrote, “I AM HODLING!”, misspelling the word “hold”. Referring to the fact that despite the drop in Bitcoin price, the drunk investor chose to hold onto his Bitcoins. GameKyuubi was upset, to say the least since some skilled traders had been blaming him for not selling Bitcoin at the right time. With the post, he wanted to get back on day traders and prove his competence.
Since then, the purposely misspelled term “HODL” has become a popular slang term in the crypto industry and it continues to be used whenever someone wants to say that he is holding onto a coin (not only Bitcoins) that he believes will be profitable.
“Hodl – slang in the crypto community for holding the coins rather than selling it.”
Urban Dictionary
It earned a status of a backronym, too, standing for “Hold On for Dear Life” and, of course, the number one meme topic in the industry.
“HODL” is not just a word, it grew into a belief. The community has even developed “The HODLer Manifesto”, which is presented on GitHub. In a satirical form the manifesto presents 8 rules, which every hardcore crypto enthusiast or a hodler must follow.
This four-letter typo embodies the idea that blockchain and crypto will transform society and unlock huge resources for the people who continue to trust in crypto even during the moments of difficulties. The term “HODL” now jumps up whenever the crypto market drains and sends the message to holders not to sell.
The post HODL appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/hodl/?utm_source=rss&utm_medium=rss&utm_campaign=hodl
Monday, June 17, 2019
How Bitcoin Wunderkind Erik Finman Plans to Bring Bitcoin to the Masses
Self-made millionaire and Bitcoin entrepreneur, Erik Finman, plans on bringing bitcoin to the masses with a new platform called CoinBits. The startup focuses on allowing users to passively invest in bitcoin which in turn will make it easier for the average folk to make investments in cryptocurrencies.
Erik Finman is famous for becoming a millionaire at the age of 18 through his investments in bitcoin. He started investing in bitcoin since he was 12 years old and it all paid off by the age of 18. Finman dropped out of high school and never went to college as he found his calling in the crypto market. He currently owns 403 bitcoins, which at the current rate of $9,250 per coin puts his value at $3.7 million. It’s important to consider that he also has made smaller investments in other cryptocurrencies including ethereum.
“A huge factor preventing bitcoin from going into a bull run is its difficulty to buy. It’s not uncommon to hear about someone going to an exchange and never completing the transaction after experiencing just some of the mandatory steps,” Finman told business news website, MarketWatch.
Finman continued that the goal of the application is not only to make it easily accessible but to also make crypto and blockchain technology more tangible and tactile. The idea will democratize the access to cryptocurrencies by allowing everyday people to make small investments through roundups of transactions made with credit and debit cards.
CoinBits will automatically roundup credit and debit card purchases to the nearest dollar and invest the difference in bitcoin. For example, if you purchase french fries at the price of $1.75, the remaining $0.25 will be invested in bitcoin. The users will play a rather passive role in the process, however, they’ll have the chance to match their financial risk profiles.
The users can choose to make one time investments ranging from $10 to $100, depending on their financial standing. 98% of the bitcoins will be kept in cold storage, offline, in order to make them less vulnerable to data breaches. Finman puts the safety and protection of the user base at utmost importance.
Finman also told that his platform will be superior to Coinbase and Robinhood as it will be much more user-friendly. The initial investment into CoinBits is $100,000, with Finman expecting to attract around million users over the coming year.
“I really think a million users within a year is realistic,” Finman continues in his interview. He doesn’t shy away from the similarity between CoinBits and other micro-investment apps, Finman even said he hopes that CoinBits will become the “Acorns of bitcoin.”
The young millionaire admitted that many before him have failed to simplify bitcoin and if he succeeds he will be the first to achieve it. Whether CoinBits will outperform competitors such as Coinbase and Robinhood is still questionable due to the fractional nature of bitcoin investments and fluctuation in value, yet Finman’s optimism and history of success leave investors with high hopes.
The post How Bitcoin Wunderkind Erik Finman Plans to Bring Bitcoin to the Masses appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/how-bitcoin-wunderkind-erik-finman-plans-to-bring-bitcoin-to-the-masses/?utm_source=rss&utm_medium=rss&utm_campaign=how-bitcoin-wunderkind-erik-finman-plans-to-bring-bitcoin-to-the-masses
Tuesday, June 11, 2019
The Lunch Worth $4,567,888: What You Need to Know About Justin Sun’s Lunch with Warren Buffett
The 28-year-old Tron founder, Justin Sun, won the 20th-anniversary charity lunch with Warren Buffett by bidding over 4.5 million dollars. Every year, Warren Buffett, the CEO of Berkshire Hathaway, auctions off a lunch date in benefit for Glide, an organization that fights against homelessness and poverty in San Francisco. This year, Justin Sun set an all-time record bid beating last year’s highest bid worth 3.3 million dollars.
However, the record isn’t the only thing that drives everyone’s attention towards this lunch. Many question Justin Sun’s decision to bid such a high amount of money for a single 3-hour-long lunch, yet the young businessman and cryptocurrency entrepreneur has it all figured out. The lunch is simply a platform for Sun to become a catalyst between the crypto and traditional investment sectors.
Sun’s hope is to introduce Bitcoin to Buffett as an opportunity for early investments that later will pay off similarly to Amazon and Apple. The issue is that Buffett has time after time highlighted his disdain for the concept of cryptocurrency. Less than a month ago he noted that Bitcoin is a “gambling device” and that there are a lot of frauds connected with it. He has called Bitcoins seashells, saying they don’t do anything for him and are not worth investing into.
Sun, in an open letter to Medium, explained that even the most successful investors make the mistake of missing out on the coming wave. Sun also reminded the readers that Buffett has himself admitted his failure to realize the potential of Amazon and Alphabet, the parent company of Google, back in the day.
“The long-term value investment strategy and cryptocurrency, in my eyes, are one and the same. We in the community know we have a long road ahead of us to educate the mainstream on blockchain’s value and proper use cases,” Sun continues in his letter. He claims that their goal is not to get rich quickly, but rather to make investments keeping their vision and execution intact.
In an interview to CNBC, Sun revealed that he will use the help of other crypto giants during his dinner with Buffett. His record-setting bid gave him the opportunity to invite up to 7 guests to the lunch and Sun chose the most well-known names in the crypto world including Ethereum founder Vitalik Buterin, Litecoin founder Charlie Lee, and Binance CEO Changpeng Zhao. Changpeng Zhao had to decline the offer due to distance issues, however, he suggested Anthony Pompliano in his place who is a Bitcoin proponent and investor.
In his statement to the press, Buffett claimed that he’s delighted that Sun has won the auction and is excited to meet him and his friends. His attitude towards the lunch seems to be very positive, yet his main focus remains on the money that will go to charity. He claimed that he’s sure they’ll enjoy their time, yet what matters more is that the money will go towards a good cause.
Whether the 3-hour-long lunch will be enough to change Buffett’s outlook on Bitcoin and the concept of cryptocurrencies is hard to guess, yet Sun’s determination and confidence is difficult to deny. No matter the outcome, the lunch will remain an important page in the history of crypto development.
The post The Lunch Worth $4,567,888: What You Need to Know About Justin Sun’s Lunch with Warren Buffett appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/justin-suns-lunch-with-warren-buffett/?utm_source=rss&utm_medium=rss&utm_campaign=justin-suns-lunch-with-warren-buffett
Saturday, June 8, 2019
Thursday, June 6, 2019
The Reason Behind Crypto-Critical Banks’ Sudden Investments in Bitcoin
The huge popularity of Bitcoin in 2017 jumpstarted a whole new outlook on the crypto market. After Bitcoin’s price reached its all-time high mark of $19,891, cryptocurrencies became highly popular within the general public. However, the positive attention towards the new phenomena led to a spike in the numbers of crypto-skeptics within the banking system.
The negative attitude and skepticism of the banking industry is no surprise as cryptocurrencies are threatening the conservative banking system. One such instance is the struggle between Bits of Gold and Bank Leumi. Bank Leumi, an Israeli traditional banking corporation, closed the account of Bits of Gold in 2015, due to the latter making company deals in bitcoin. Bits of Gold had to appeal to the Israeli Supreme Court in order to be able to continue its activities and return their account. The Supreme Court ruled in favor of Bits of Gold, temporarily prohibiting Bank Leumi from limiting the company’s account.
The attitude towards the blockchain based system and cryptocurrencies varies from country to country, and even from bank to bank. While in the United Kingdom, people who make cryptocurrency transactions are expected to pay additional taxes and in some instances even get their accounts frozen. One of the biggest British banking corporations, Barclays, invested in the blockchain related patents.
Currently, with over 21 million Bitcoins, with an overall value of $180 billion, yet to be mined, it’s no surprise that banks are starting to show interest in the market. Investing in the cryptocurrency exchange sphere can prove to be a great advantage for the traditional banks in the highly competitive crypto market.
In Japan, the first country to accept bitcoin as a legal tender, banks have successfully broken into the crypto market. In 2018 Japan became the first country where a cryptocurrency exchange happened which was completely backed and financed by a bank. SBI Holdings, the bank behind the exchange, has since faced an incredible commercial success with the pretax earnings reaching $3.2 million.
More and more corporations are now seeing the potential of cryptocurrencies and slowly incorporating it into their own system. The sudden shift in the views of the banking corporations is understandable as at first, they expected digital currencies to have a short-lived presence in the larger world of finance. The true value of cryptocurrencies was revealed after the big explosion in popularity in 2017 and the gradual growth following it.
While the initial reaction of banks was to suppress the cryptocurrencies and to deem them as unsafe and flawed, the day to day growth in public interest burst the skeptical bubble helping them realize the potential that the market presents. Slowly, the expensive lawsuits are quitting the picture and are being replaced by investments into blockchain technology and cryptocurrencies owned by the banks.
The crypto industry continues to grow taking over the financial world and those who intend on remaining strong players within the field are forced to adapt and grow along with it. The largest financial corporations find it hard to ignore the role of digital currencies in the modern world. Even if the crypto market doesn’t take over the world of finance completely it’s important for banks to be able to provide the alternative payment options so highly demanded by the general public.
The post The Reason Behind Crypto-Critical Banks’ Sudden Investments in Bitcoin appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/the-reason-behind-crypto-critical-banks-sudden-investments-in-bitcoin/?utm_source=rss&utm_medium=rss&utm_campaign=the-reason-behind-crypto-critical-banks-sudden-investments-in-bitcoin
Wednesday, June 5, 2019
Samsung Entering the Cryptocurrency Market: All You Need to Know
South Korean consumer-technology giant Samsung takes further steps towards fortifying its presence within the cryptocurrency market. According to the latest reports, Samsung is currently developing cryptocurrency and blockchain features in the frameworks of the Samsung Pay app.
While the work is still in the internal phase, the plans include enhancing the hardware wallets in Galaxy smartphone models and internal cryptographic exchange ability. Samsung also plans on cooperating with telecommunications companies in order to create a blockchain based digital identification cards and local currencies.
Samsung Pay is one of the most generally used payment-related applications, currently accounting for 80% of the South Korean simple payment market. The company plans on expanding its service target to the United States and Canada as well. While the app was originally designed to support only flat currencies, rivals such as Google Pay pushed Samsung to consider adding cryptocurrency. The introduction of a crypto asset functionality will allow for cheaper and faster payments leading to a growth in user base.
Samsung’s plans will possibly lower transaction fees improving the rate at which money flows within the system. Investors speculate that these changes will help Samsung transform into a global blockchain player and Samsung Pay to become the first total FinTech platform in the world. This, in turn, will have a positive effect on the cryptocurrency exchange ecosystem overall.
Currently only a private blockchain is in development, however, Samsung intends on developing a public blockchain in the future as well. The final product is expected to be a hybrid of both. Back in April, Samsung representatives announced that the company is simultaneously working on an Ethereum-based ERC20 token, which along with the public domain will make it possible to trade Samsung Coin publicly similarly to Bitcoin and Ether.
Samsung’s blockchain task force has been active for over a year, involving itself in a variety of projects. The first big step of the company into the cryptocurrency market came with the release of the Galaxy S10 model. For the first time, Samsung gave its users the ability to store private keys and transfer blockchain based digital signatures.
While the Galaxy S10 phone comes already accompanied by a blockchain wallet, some investors were taken aback at first as the device was primarily focused on Ethereum and didn’t provide support for Bitcoin wallet services. Now, with a blockchain protocol initiative and ERC20 token in development, it makes sense for the company to provide an easy platform for its users in the form of a cryptocurrency wallet.
One of the biggest advantages under Samsung’s belt in the market is the crypto-friendly South Korean government under which the company operates. This will help the company with faster and easier law compliance, speeding the release of the final product.
Samsung’s entry into the market may become a great competition for companies such as REQ that focus on invoicing, transaction requests and accounting with flat and cryptographic currencies. Influenced by one another, big companies such as Samsung, Facebook and Amazon are slowly making their way into the market. Their large client base leads to the popularization of cryptocurrency making a great entryway for more average clients and paves the way for mass adoption.
The post Samsung Entering the Cryptocurrency Market: All You Need to Know appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/samsung-entering-the-cryptocurrency-market-all-you-need-to-know/?utm_source=rss&utm_medium=rss&utm_campaign=samsung-entering-the-cryptocurrency-market-all-you-need-to-know
Monday, June 3, 2019
What are Security Tokens and STOs?
There is a lot of hype around Security Token Offerings (STO) these days.
Experts have predicted that 2019 is going to be the year of STOs.
The number of Initial Coin Offerings(ICOs) have depreciated dramatically during the first quarter of 2019 – 280 ICOs a significant dip from the 662 ICOs launched during Q4 of 2018. This is approximately 60% decline. In April the tendency extended with a decline of 84%. In contrast, the number of STOs increased by an impressive 130%[1] in the first quarter.
What is so special about this fundraising tool? Another abbreviation from the crypto world with no actual difference or just a hype-driven growth?
Well, in traditional markets a security is a “fungible, negotiable financial instrument that holds some type of monetary value,” in other words, an investment product that is backed by a real-world asset. A security token represents the ownership information of the investment product, recorded on a blockchain rather than on a document or digital certificate.
There is a huge conceptual difference between ICOs and STOs. With the ICO users buy tokens with the prospect that the token will inflate from the starting price. Later on, they will hope to trade the token with a profit. While many ICOs issue “Utility Tokens”, which seem to be not utilizable enough, with security tokens you have something backing the coin. It may be a tangible asset, profit, future profits or just anything tolerable. The CEO of Goldman Sachs-backed crypto company Circle Jeremy Allaire says that everything can be tokenized.[2]
Being backed by fiat currencies, stablecoin is an outstanding example.
If you feel confused and you are not sure which of the coins are securities or utilities, there is a commonly used Howey test (learn more here[3]).
With this in mind, people can invest in anything that they consider reasonable. Now you can have funds backed by something, not just a paper banknote backed by… nothing.
Traditional capital markets usually have a high entry barrier from both sides. All the investments go through specialized market participants. Both the investor and the company raising money face the high transaction costs, including bureaucratic, regulatory and many other issues.
At the same time, ICOs have a lower entry barrier compared to other capital markets. STOs can take micro-investing mainstream allowing more people to participate in various ventures that were previously restricted.
Furthermore, according to an estimate, STOs have a 99% success rate. Whereas ICOs simply sold their fishy whitepapers, STOs are much more likely to have something real to offer.
With cryptocurrencies highly affected by the market price of Bitcoin, investing in crypto seems more like betting on a dark horse rather than a rationally calculated transaction. In this sense, STOs are directly affected by the performance of the company, specifically its cash flows, or the market conditions of the assets backing the security.
Of course, we couldn’t skip SEC’s (The U.S. Securities and Exchange Commission) – the number one newsmaker of the crypto world – approach to this fundraising tool. SEC takes significant steps towards adoption of STOs and regulating the market. With a slight change in the SEC’s paradigm, generally saying, it is more open to changes occurring in the fintech industry.
The dialectical approach proves as the sustainability of the STO concept, it is not a cyberpunk chimaera. Combining the best aspects of traditional investment models and ICOs Security Token Offerings bring legitimacy, thus guarantees, possibly less volatility and simplicity in investment procedures.
Indeed, if nothing significant happens, 2019 can truly be the year of tokenization.
[1] https://www.inwara.com/report/q1-2019-report
[2] https://medium.com/pillar-companies/the-tokenization-of-everything-a-talk-with-circles-jeremy-allaire-sean-neville-5111f8269a3d
[3] https://consumer.findlaw.com/securities-law/what-is-the-howey-test.html
The post What are Security Tokens and STOs? appeared first on CoinStats Blog.
from CoinStats Blog https://blog.coinstats.app/security-tokens-and-stos/?utm_source=rss&utm_medium=rss&utm_campaign=security-tokens-and-stos