Tag : Economic

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Cryptocurrency Mining Operation has Been Halted in Chinese Region

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Keeping in compliance with the Chinese government’s plan to eradicate Bitcoin mining operations in the country by the end of this month, a small Chinese province has shut down an illegal cryptocurrency mining operation in the region.
Crackdown
The regional news, Jinse, reported that Xinjiang Uyghur in the northwestern part of China has identified what is an illegal mining operation taking place in the region. The small province is an ideal location to carry out the mining operation due to the naturally cold climate in the region, which significantly reduces the need for cooling systems for the heavy mining computers they had set up within their mining operation.
The region has been subject to the agriculture industry’s attention mainly, until the point that cryptocurrency mining operations began in the country. Since then, there have been a number of ventures in the region looking to utilize the cryptocurrency mining friendly environment to carry out operations. While the government has been pushing the larger metropolitan cities like Shanghai and Beijing to help boost the economy of the Xinjiang region, it is obvious that they are not going to allow that to happen through the prospect of cryptocurrency mining.
According to a notice issued by the Economic and Information Commission of Xinjiang, any entity which is not formally registered with the Chinese government and is utilizing electricity without the necessary permits is considered to be an operator of illegal mining. The government notice also demanded the shutting down of any such companies by the local utility suppliers.
Utility Firms Delegated With Crackdown
The EIC has essentially tasked the local utility suppliers to crackdown on all the illegal mining operations according to their discretion. The departments have not been given a very long time to follow through on the directives of the government. Their deadline to shut down all the illegal mining operations within their respective regions has to be done and dealt with by the August of 2018.
In the case that one of the local suppliers of utilities is not able to shut down the illegal mining operations in the given time, they will be held accountable and face the consequences of incompetency.
This decision follows the efforts which began at the start of 2018 with the authorities in the Xinjiang province calling for regular reporting being done on Bitcoin mining operations within the different areas of the province. Initially, they wanted to create the sort of regulatory framework to phase these illegal Bitcoin mining operations out in a diplomatic manner but the latest turn of events clearly shows that diplomacy has gone out the window.

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Binance CEO Rebukes Buterin’s Centralized Exchange Comment

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Just a few days ago, Vitalik Buterin, the co-founder of Ethereum had quite the curt statement to make about the concept of centralized cryptocurrency exchanges. Needless to say, his statement caught a lot of people off guard and one of them was the CEO of one of the centralized cryptocurrency exchanges he was talking about – Changpen Zhao of Binance.

Vitalik Buterin is one of the main proponents of decentralization and he took on that role with fervor as he spearheaded the development of Ethereum, the world’s second largest cryptocurrency platform. He is a prominent programmer of Russian Canadian origins and he is very well known for all the work he has been doing in the cryptocurrency landscape.

In an interview that he was giving with TechCrunch, the cofounder of Ethereum expressed quite a bit of explicable hate towards the concept of centralized cryptocurrency exchanges by saying

“I definitely hope centralized exchanges go burn in hell as much as possible.”

As you can expect, the moment he made the statement, it blew up on the internet like all controversial things do. Social media went abuzz with the statement by Vitalik being debated here and there. It seemed like literally everybody had an opinion about Vitalik had to say for centralized cryptocurrency exchanges. This includes the likes of Changpen Zhao, the CEO of one of the world’s most well known centralized cryptocurrency exchanges.

A Bigger Heart

Changpen Zhao, or as his Twitter handle, ‘CZ’ said that he wouldn’t wish for anyone to burn in hell and that it is not a very nice thing to say even if Vitalik was saying it.

According to Zhao, everybody who has a stake in cryptocurrencies are a part of the whole cryptocurrency community. That includes the likes of centralized cryptocurrency exchanges. He believes that it is in the best interest for everybody to work together as a wholesome community rather than encouraging some form of infighting within the cryptoverse through such controversial statements.

He had a bit more to say about the matter. Zhao has a stern belief that the cryptocurrency world would not be on the same level it is right now if it was not for the advent of centralized cryptocurrency exchanges. He said:

“if it was not for fiat (and centralized) exchanges, the industry would be smaller and the industry would develop slower.”

While it is true, the growth and development of this nascent alternative economic system will lessen the need for centralized cryptocurrency exchanges as we move forward. For now, however, there definitely needs to be a more proactive approach towards moving forward as a wholesome global community.

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Lack of Proper Cryptocurrency Custody Barrier to Institutional Investment

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One of the biggest challenges that is facing the main stream adoption of the cryptocurrency in the larger economic picture is the lack of custody services being provided by major players in the financial industry. The absence of it is hindering a lot of major institutional investors to partake in the investment of cryptocurrencies which is leading to slower adoption in a significant context.
The virtual currency sector is still in its nascent stages but it has been almost 10 years since it came forth. 2017 saw the cryptocurrency universe grow in massive proportions but the widespread institutional investment adoption still remains one aspect still being left for want. In light of the current situation, investment in cryptocurrency is only a risky option for chief investment officers to consider. It would take a massive leap of faith on behalf of chief investment officers at the major institutional investment industry to place their trust in such a risky prospect. If we know one thing for a fact, they do not operate on a whim and are the most cautious when it comes to investment opportunities.
Cryptoverse Still Too Infantile for Institutional Custodians
There is a lot of debate around the matter as many analysts argue that the world of cryptocurrencies is still not developed enough for the consideration of institutional custodians to step into the frame. The primary focus for the custodians is more towards the prospects of blockchain and distributed ledger technology which came about with the advent of cryptocurrencies – not cryptocurrencies themselves.
Instead of taking time out for cryptocurrency custody, institutional custodians are more inclined to partner with the fintech industry to utilize blockchain technology and improve on the likes of cross border payments, settlements and clearing. They want to leverage the power of blockchain technology and as things stand, they’re still at a preliminary stage of exploring the waters.
Cryptocurrency Custodianship is a Conundrum
There are those attributing a lack of institutional custodianship in the cryptoverse to a bit of a conundrum in the sector. Investors want the infrastructure from the custodians to be put into place while the custodians want investors on board before they work on the infrastructure.
That being said, we might very well be seeing institutional custodianship in the cryptocurrency world in the near future. The increasing adoption of cryptocurrencies on a global scale and the increasing security risks might just convince the lot of them to work out their differences and take a properly working initiative to resolve the custody problem in the cryptocurrency world.