This week in the news — 21 September 2018
Here are some stories you might find interesting — and the links to find out more about them.
World Economic Forum Outlines Over 65 Blockchain Use Cases for Environmental Protection
Source: Cointelegraph, World Economic Forum
Date: 15 September 2018
A WEF report, released on September 14 and titled “Building Block(chain)s for a Better Planet,” provides 65 use-cases where blockchain could change the way that the world manages environmental resources. The report forms part of its series called the Fourth Industrial Revolution for the Earth.
It views blockchain as a potential mechanism to disrupt traditional economic models. Distributed systems will transfer value from shareholders to stakeholders, create value and drive sustainable growth.
Interestingly, just a day earlier, the WEF released another report predicting that Distributed Ledger Technology (DLT) could add $1 trillion in new trade over the next ten years, most of it for SMEs and emerging markets.
So, it is clear that the WEF is taking blockchain technology seriously. There is a proviso that they believe that there should be a “responsible” and “global” blockchain ecosystem, rather than the current approach of multiple separate projects. They also propose that three questions should be asked in deciding whether or not blockchain would be the appropriate technology to use for a project:
· Can the technology solve the actual problem?
· Can the risks or unintended consequences be managed acceptably?
· Is there a functioning ecosystem of stakeholders — particularly across disciplines?
The report identifies 8 potential “game changers”:
· “See through” or transparent supply chains
· Decentralized resource management
· Raising new sources of finance
· Incentivizing circular economies (where materials and natural resources that are currently often wasted, can be valued and traded)
· Transforming carbon (and other environmental) markets — through the use of crypto tokens
· Sustainability monitoring, reporting and verification
· Automatic disaster preparedness and humanitarian relief — incorporating the sharing of information and rapid response to smart contract conditions
· Earth management platforms
To date, these opportunities remain largely untapped by developers, investors and governments, yet they represent an opportunity to unlock and monetize value that is currently embedded in environmental systems.
France Accepts New ICO Framework to Become Europe’s Leading ICO Hub
Date: 18 September 2018
The French parliament has this week approved an ICO framework that provides some regulatory certainty, and therefore will give legitimate start-ups and founders easier access to banks and accounting services.
What is interesting about the French regulations is that they have created a new legal framework unique to ICOs, rather than attempting to fit ICOs into existing regulations, as other countries (like Switzerland) have done.
The French financial market regulators, the AMF, will review the whitepapers of applicants, looking specifically at
· The project description and roadmap
· The rights conferred by the token
· The legislative authority in cases of dispute
· The purpose for and use of funds collected during the ICO
Successful applicants will be granted an ICO visa to operate in France. Foreign corporations may not apply. This is seen as an attempt to attract companies to incorporate within France.
It seems clear that France is gearing up to be an attractive center for blockchain and ICOs. This latest move follows the establishment of a crypto regulatory task force earlier in the year and a decision in April 2018 to lower the taxation on Bitcoin from a progressive 14 and 45 percent to a fixed rate of 19%
Pierre Noizat, the CEO of a new French cryptocurrency exchange, Blockchain.io, is quoted as saying,
“The French government is not hiding its ambition to make France an ICO capital, as they do not want to miss out on the blockchain revolution. They are regularly speaking with French blockchain and crypto-entrepreneurs in France in order to get a better grasp on the market, to understand its problems, and to regulate the market accordingly.”
Blockchain.io may be the first company to get one of the new visas — just in time for its own proposed ICO in late September.
‘Hodlers be hodling’: 55% of bitcoin sits in multimillion-dollar wallets
Source: Bitcoinist, Diar, Chainalysis
Date: 18 September 2018
In this very bearish market, many headlines are screaming about the great crypto crash of 2018, that Ethereum is dead, and there are questions about whether it is worth investing in cryptocurrencies.
So it is very useful to look at some research undertaken by Chainalysis in June and supported by Diar in September.
The Chainalysis research highlighted different patterns of behavior of holders of Bitcoin and Bitcoin Cash. There is about a 50/50 split for Bitcoin holders between using their Bitcoin for investment vs for speculation or transactions. For Bitcoin Cash, on the other hand, 90% is being held for investment.
Between December 2017 and April 2018, there was a huge sell-off of Bitcoin by long-term investors — $30 billion worth in fact. This is what brought about the 50/50 ratio. In November 2017, 66% of all Bitcoin were held by long-term investors.
The Diar research adds a different perspective. First of all, not all of the big investors were selling! Over 55% of all available Bitcoins are in wallets with balances of 200 coins and more. And 42% of these wallets showed zero selling during the price peak in December 2018, and most have maintained their balances in 2018. Secondly, many of these same investors are continuing to buy — 27% of them have continued to add coins during 2018.
It may be true that there is a heavy concentration in ownership — after the sell-off, a small number of just 1,600 investors (or wallets) held about a third of all Bitcoin. Or, to quote the Diar statistics, about $100 billion or half of the total market capitalization is held by just 0.7% of all Bitcoin addresses. However, these investors are clearly in for the long haul. They were not tempted to sell by the huge rise in price to $20,000 in December 2018. And they’re not being frightened into selling by the drop to $6,000.
So, if you want to be like the big investors, “hodling” your cryptocurrencies might be the strategy for success right now.
