Nolan Emmett

 Japan’s finance regulator, the Financial Services Agency (FSA), has granted full permission for cryptocurrency exchange Coincheck to continue operating in the country. Cointelegraph Japan reported on the development on Jan. 11, quoting an official communique.

Coincheck, which was hacked in January 2018, losing altcoin tokens worth $530 million at the time, now joins the slowly increasing number of officially sanctioned exchanges serving the Japanese market.

The step is a milestone for the exchange and for online broker Monex Group, which bought Coincheck for a nominal $33.5 million in April.

According to a Jan. 11 press release from Monex Group, Coincheck has registered specifically with the Kanto Financial Bureau.

Since the interim period, developers have slowly returned functionality to users and organized refunds of stolen coins.

Japan has sought to implement a licensing scheme over the past year in the wake of unease about exchanges’ security setups. Despite heightened legislation, smaller-scale hacks have continued, with fellow platform Zaif losing around $20 million last September.

On Friday, Cointelegraph also reported on a government investigation into crypto exchange security in South Korea, which found satisfactory compliance in less than a third of platforms.

I AM !

Ode to Satoshi

 We all get so caught up in the moment of what we're doing every day, it's hard to hit that reset button and get pulled away from all that and see life from a different perspective.

 January 3 2019 marks ten years since the creation of the very first block on the Bitcoin (BTC) blockchain.

Known in more technical parlance as a “genesis block,” the first block on a blockchain is unique in that it — logically — contains no reference to any previous blocks, and is always hard-coded into the network’s software, establishing all of the necessary variables required to create the ensuing blockchain.

Whereas Bitcoin’s theoretical foundations were laid with the publication of the Bitcoin whitepaper on Oct. 31, 2008, Jan. 3, 2009 heralds the first practical implementation of the world’s first cryptocurrency — the realization of a peer-to-peer and cryptographically secure system for transacting in digital cash.

As data from the Bitcoin Block Explorer tool indicates, block 0 — counted as block 1 in very early versions of the blockchain — was mined on Jan 3, 2009 at 1:15:05 p.m. EST, with a reward of 50 BTC. Today, the reward would be worth about $191,350, but at the time its value was inestimable — Bitcoin’s first ever recorded trading price was noted on Mar. 17, 2010, on the now-defunct trading platform bitcoinmarket.com, at a value of $0.003.

The cryptocurrency’s inventor — the still-mysterious person or collective identified only as Satoshi Nakamoto — embedded the hexadecimal code of the genesis block’s coinbase with an encrypted Times headline from Jan 3, 2009, referencing the bailout of the United Kingdom’s banks. When decoded, this covert nod to the economic and political context that gave the impetus for the coin’s invention reads as follows:

The aftermath of the Lehman Brothers bankruptcy in fall 2008 had been the tipping point for economic turmoil, global recession and, subsequently, the controversial “too big to fail” rationale for state intervention. In the midst of this context, Nakamoto’s innovation proposed a bold alternative — a disintermediated, non-state-controlled digital exchange and store of value — to the ailing incumbent system.

Ten years on, the mystery enshrouding Bitcoin’s inventor remains as impenetrable as ever. Those both within and without the crypto community began attempting to determine Nakamoto’s identity as early as October 2011, just a few months after the mysterious figure first went silent.  

As of press time, Bitcoin is trading at $3,831 — up 127,699,900 percent since its first recorded traded value.

Bitcoin value up 400% from 2017 to 2018

A crypto assets regulatory working group dedicated to crypto and blockchain has been established by the South African (SA) government. English-language local news outlet BusinessLive reported on the development on Jan. 2.

Tito Mboweni — the South African finance minister — declared:

The finance minister further noted that the SA Revenue Service is working to include cryptocurrencies in the tax forms for the next year. The taxation laws amendment bill of 2018 included amendments that, Mboweni explained, would ensure that losses may only be offset against profits from crypto.

Also, he added, these amendments would clarify that cryptocurrencies cannot be classed as personal-use assets for capital gain tax purposes, and would instead treat crypto as a financial service for VAT purposes.

As Cointelegraph reported in June, South Africa’s central bank has successfully piloted an interbank payment system that employs tokenized fiat currency.

Cryptocurrency is also welcome by the local population, with 38 percent of South Africans reportedly wishing that they had invested in cryptocurrency before, according to a July survey conducted by the pan-African financial services company Old Mutual.

Bitcoin (BTC) has a substantial liberating potential, American mainstream newspaper Time reports on Dec. 28.

The aforementioned article claims that “speculation, fraud, and greed in the cryptocurrency and blockchain industry have overshadowed the real, liberating potential of Satoshi Nakamoto’s invention.”

According to the article’s author, Bitcoin “can be a valuable financial tool as a censorship-resistant medium of exchange.”

Alejandro Machado, a cryptocurrency researcher at the Open Money Initiative, reportedly said that the fee on a wire transfer from the United States to Venezuela can be as high as 56 percent.

To circumvent such conditions, Venezuelans have reportedly turned to cryptocurrency, receiving Bitcoin from their relatives abroad. The main alternative is to wire money to Colombia, withdraw and bring cash to Venezuela, which according to the article, “can take far longer, cost more, and be far more dangerous than the Bitcoin option.”

Times suggests that Bitcoin is a good way to protect oneself from fiat currency inflation. Venezuela is prime example of that, with the inflation of their native currency projected to top 1 million percent. But there are also other similar examples, like Zimbabwe, where former president Robert Mugabe “printed endless amounts of cash.” But the author points out:

Bitcoin is also, according to the article, a tool to evade mass surveillance in places like China. That being said, as Cointelegraph reported in March, according to U.S. whistleblower Edward Snowden, Bitcoin isn’t optimal for avoiding government coercion, and he believes that the world needs a better option.

Times also points out the advantage given by the inability of governments to censor transactions or freeze Bitcoin wallets. In fact, Cointelegraph reported in April that WikiLeaks’ Coinbase account has been suspended due to a term of service violation.

Still, nobody can prevent WikiLeaks from using cryptocurrency wallets where the organization controls the private keys. In fact, WikiLeaks is still accepting cryptocurrency donations and also added support for Snowden’s favorite crypto Zcash in August 2017.

A Wall Street Journal (WSJ) article published today, Dec. 28, suggests that Bitcoin (BTC)’s correlation with traditional assets markets has been high in recent days.

Citing data from research firm Excalibur Pro Inc., the WSJ states that the top cryptocurrency has traded at a 0.84 correlation to gold over the past five days, where -1 indicates complete inversion and +1 perfect correlation. Moreover, Bitcoin has traded at a 0.77 correlation to the Chicago Board of Options Exchange’s Volatility index (VIX), a benchmark index for the United States equity market volatility.

While the WSJ frames the strong correlation between traditional markets and what the article dubs as the rebellious first cryptocurrency, Bitcoin, as something of an unexpected twist of fate, the article also offers several explanations as to why the pattern may have formed.

The first is the reported influx of institutional money into the crypto space, with the WSJ citing the growth of Grayscale Investments’ over-the-counter exchange-traded fund (ETF), the Bitcoin Investment Trust, as a prime example.

As per the article, the trust saw $51 million in assets under management (AUM) during its first year (2013). By the end of 2017, in the midst of the crypto market bull run, AUM had surged to around  $3.5 billion. As of recently — due to the so-called “crypto winter” — the trust reportedly retains about $900 million AUM.

Another factor proffered is venture capital (VC) investment. The WSJ reports that whereas in 2013, VC investment in Bitcoin and the blockchain sector was at around $96 million, this grew to $500 million in 2016 and to over $2 billion in all-time VC crypto investment through the end of 2017. The WSJ gives no fresh data for 2018.

As the article notes, a pull factor for traditional capital into crypto is the building of trading services and infrastructure with high regulatory compliance; the advent of crypto futures trading, and attempts to gain broad acceptance for crypto-based ETFs.

As reported, the crypto space continues to undergo far-ranging transformation; major developments on the horizon include the launch of the Bakkt Bitcoin futures exchange from Intercontinental Exchange, the launch of investment giant Fidelity’s digital assets business, and the continued influx of stalwart investors such as Yale, Harvard and Stanford Universities.