Welcome to the Crypto Weekly Update, where we organize all the latest developments from the previous week for your reading pleasure. The Crypto Weekly Update will be released every Monday afternoon. Think we can improve? Let us know in the comments section below!
Poloniex Sells For $400M
Circle, a mobile payments firm largely supported by Goldman Sachs, purchased Poloniex Inc. which owns the Poloniex exchange. According to Coinhills, Poloniex is the 14th largest cryptocurrency exchange by BTC volume in the world.
Circle has a popular mobile application that allows users to transfer money to other users. This acquisition means the company will be looking to extend cryptocurrency trading to its user base via a mobile platform. Poloniex is available in roughly 100 different countries. Circle will be able to reach a large amount of potential consumers.
This continues a trend of mobile trading and payment applications making moves to enter the cryptocurrency arena. Robinhood was the first large player to break through in this sector and it looks like Circle is bullish on cryptocurrency as well. The fact that established companies are willing to pay $400M for a cryptocurrency exchange signals that they are comfortable that cryptocurrency is here to stay.
Bill Gates Talks Cryptocurrency
In an interview this past week Bill Gates, the founder of the Microsoft Corporation, came out and expressed his opinions concerning cryptocurrencies.
“The main feature of cryptocurrencies is their anonymity. I don’t think this is a good thing. The government’s ability to find money laundering and tax evasion and terrorist funding is a good thing,” Mr. Gates said during an “Ask Me Anything” event hosted by Reddit.
“Right now, cryptocurrencies are used for buying fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and cryptocurrencies is super risky for those who go long.”
It is true that cryptocurrencies can be used to facilitate illegal activities. But so can cash and it has for a very long time period. Cash does a better job compared to crypto of giving users the ability to remain anonymous.
Bill Gates is not correct when he states that “the main feature of cryptocurrencies is their anonymity”. Most cryptocurrencies are only psuedo-anonymous. This means that the ledger displays accounts using an account number (public key). Connecting individuals with public keys is possible.
Law enforcement authorities would have little trouble tracking the movement of value via the public ledger. This is the power of blockchain and crypto – it retains all the ease of cash (and then some) while creating a more transparent environment for all stakeholders.
Using the kind of logic displayed by Gates we can point to a variety of technological advancements and say they have “caused deaths in a fairly direct way”. Cars are an excellent example.
Here at BlockMinded we admit that cryptocurrencies have flaws as well as strengths. However, the statements above grossly exaggerate the flaws without hitting on the strengths. We respectfully disagree with Bill Gates’s comments.
Japanese Exchanges Look to Self-Regulate
Sixteen different exchanges made moves to create a self-regulatory organization after several high profile cryptocurrency exchange hacks over the last few months. Close to $500M of NEM tokens were stolen from Coincheck in late January. This was the largest crypto theft in the history of the industry.
Industry insiders applauded the move and spoke words of encouragement. It is obvious something needs to be done within the industry to prevent these hacks from becoming commonplace. Self-regulation is a major step forward.
Regulation is bound to occur. It is right that the exchanges should be given the right to attempt it themselves before governmental agencies intervene. We will keep tabs on these developments and try to understand if self-regulation is working to stop exchange hacks and create a safer ecosystem for investors.