Only 3% of Americans Bought Something With Bitcoin Last Month, A 5-Year Bet Reveals

A recent podcast by Planet Money, reflected on a bet made 5 years ago between Bitcoin bull and venture capitalist Ben Horowitz whose firm has made investments worth over USD 50 million into crypto and financial journalist Felix Salmon, paints a peculiar angle on Bitcoin adoption.

The bet which hinged on the adoption state of Bitcoin in 5 years as currency, had Horowitz predicting that it would have revolutionized the face of e-commerce such that 10% of people living in the US would use the currency for frequent online purchases. This happened back in 2014 when Bitcoin’s price wavered around USD 360 to USD 760.

Meanwhile, Salmon was confident about his bet, stating how Bitcoin’s value will indeed increase but not because of its use but rather based on a speculative rise in value. He cited how those who bought Alpaca socks using Bitcoin would regret, noting the price increase, and would have preferred sitting on it rather than spend it.

A sample pool survey was recently conducted to know who had won the bet – gauging how many Americans currently use Bitcoin for everyday online purchases. The bet was concluded recently, having to declare Salmon the winner, as only 3% of 900 Americans had actually bought something with Bitcoin in the past month.

Real Adoption

The mainstream real adoption of Bitcoin can be approached from three angles: One, where people who actually buy the coin become long term holders (store of value), hoping the price will reach astronomical highs and cash in on the ‘patience-profit.’ The second, where cryptocurrency adoption has been heavily facilitated by payment infrastructures such as merchant adoption, and the increased installation of Bitcoin ATM kiosks. The third has to do with the introduction of sophisticated markets such as futures contracts and exchange-traded funds (ETFs) for institutional investors.

Regardless of the adoption route, most of the early sentiments were founded upon hysterical predictions based on the assumptions that Bitcoin and its underlying technology had come to replace legacy financial systems and hence prices would go as high as USD 50,000. However, these sentiments have been counterbalanced by a rather economically bearish one that renders the initial logic as heavily flawed.

The outcome is a juxtapose of a computer science-based backing of the blockchain, Bitcoin, and cryptography, as against economic assessment of currency functions and financial asset manipulation. More so, many now rely on the economic aspects for further adoption at this point. This is the case with the constant lookout for institutional grade investment opportunities like those of the Bakkt; in the hopes of repeating what CME Group and CBOE’s Bitcoin futures contract did in late 2017.

It is clear though, that back in the early days of the industry’s development, very important structures such as scalability, and regulations were of little concern, and may have consequently cost the industry years ahead of a full-blown mainstream adoption of Bitcoin.

Over time, many influencers have taken turns on the prediction wheel; John McAfee had his predictions set to USD 1 million per Bitcoin; Thomas Lee thought at best case scenario, it would reach USD 25,000 in the past year but later on blamed regulatory uncertainty for falling short. So far, none of the near-term predictions have materialized. If anything, Bitcoin as a currency has struggled to maintain upward price projections, and as a store of value, it’s really still too soon to tell – 10 years into its development.

One thing is certain, treating Bitcoin like some gambling chip is a lot riskier than the real deal. While the tech does hold promise and has ushered in prospects of a great financial revolution, the subject of adoption will apparently continue to be an important one many years from now moving forward.

On the tech side, industry adoption has been growing consistently with legacy systems fine-tuning system processes using the distributed ledger.


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Author: Manuel
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Indiana and New Hampshire May Start Accepting Bitcoin For Tax Payments

Indiana and New Hampshire, two States in the U.S. have proposed a bill that will allow cryptocurrencies to be used for tax payments. The documents which were filed on January 24 and January 4 respectively, call for the adoption of virtual currencies in the area of taxation.

Indiana and New Hampshire May Join Ohio in Accepting Bitcoin

Indiana and New Hampshire may likely join Ohio to accept Bitcoin for tax payments. This is because a bill has been filed in either State and it requires the approval of the government for these digital assets to be used. In the case of Indiana, the current tax code will have to be amended in order to meet the proposed change.

Indiana’s House bill number 1683 was filed on January 24 and it states that one or more digital assets have to be selected to pay taxes. The asset will also be used for penalties, costs, special assessments, interests, among others. The document also says an exchange rate should be determined for the selected virtual asset(s).

New Hampshire’s Proposal for the Use of Virtual Assets for Taxes

New Hampshire’s House bill number 470-FN, on the other hand, was filed on January 4 and it seeks to allow “state agencies to accept cryptocurrencies for payments”. According to the document, the State Treasurer and other authorities involved, need to set up a framework that will allow virtual currencies to be used for tax and fee payments from July 1, 2020.

The bill also notes that the current policy in place is to return payments made in currencies other than the U.S. dollars to the payor. In addition, if the use of cryptocurrencies is approved, then their volatility could pose a problem. The document, therefore, proposes that tax payments received in Bitcoin should be converted to fiat in order to mitigate risk.

Potential for More U.S. States to Adopt Cryptocurrencies for Taxes

BTCNN on November 25 reported that Ohio, Texas is the first state in the U.S. to accept Bitcoin for taxes. The portal used to facilitate these transactions is ohiocrypto.com and Bitpay’s service has been employed. In January, Overstock announced that they will be the first company in Ohio to pay their taxes using the platform.

The approval of Bitcoin for tax payments in Ohio may have encouraged several other states to innovate. Reports also reveal that prior to the digital asset’s acceptance in the region, states like Georgia, Arizona, and Illinois and had made proposals. Unlike Ohio, the use of virtual assets never came to be.


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Author: Grace Joseph
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Four Industries That Will Boost Cryptocurrency Adaptation in 2019

Crypto traders and investors are always seeking different ways to build adaptation in the cryptocurrency community. As crypto lovers agree that the technology is still in its early infancy and will need to evolve well enough to be considered more than just a bubble, which will further ease the process of regulatory, adaptation comes to mind as the only factor that would make this happen.

The ideal world imagined by crypto fans is one where cryptocurrency becomes a universal currency and to achieve that, massive adaptation has to become a milestone that the cryptocurrency space achieves as often as possible. While cryptocurrency can function in any industry, these four have shown themselves to be not just some of the most effective 2018 but has also created a pathway for continuation in 2019.

Art/Entertainment

The entertainment industry has been one of the most flexible industries that shines the spotlight on cryptocurrencies. Most users declared that their knowledge of crypto was birthed from movies and comedic pieces that portrayed the unsteady movement of the cryptocurrency market. From as far back as 2014, the entertainment industry has been pioneering Bitcoin and crypto in general.

Visual art has also been a strong tool that deploys the swift and easy to use the technology of crypto to purchase iconic artworks. Earlier this year, a visual art painting of late Andy Warhol valued at $5.6 million was auctioned for sale via Bitcoin.

Luxury

The art of purchasing luxurious belongings through cryptocurrencies has been in the limelight since 2013 and this tradition is not slowing down anytime soon. Arguably one of the most promising ways to build adaptation in the crypto space revolves around this. It was earlier revealed that the Lamborghini has seen an upsurge in crypto payments, this comes as no surprise seeing that the Lamborghini is an emblem of wealth in the crypto space. Swiss watch brand also made a big move this year after releasing its $25,000 luxurious “P2P” wrist watch which was exclusive to BTC users. This trend will definitely boost user adaptability come 2019. Even CZ of Binance went on to commend Hublot’s marketing strategy, expressing his interest in having a watch for the Binance BnB token sometime later.

Tech

Seeing that 2018 began with leading tech companies boycotting cryptocurrency ads and ended with some of these very same companies going as far as developing their own coin, it is no doubt that tech companies are coming to terms with the usefulness of cryptocurrencies. In 2019, this growth is only certain to increase as more and more tech-related firms have continued to eye crypto. One notable trend of 2018 was the act of purchasing tech products via cryptocurrencies. HTC also fully adopted this pattern when it released its 2018 mobile phone flagship dubbed “Exodus 1”. Not only was it accompanied by the Zion digital wallet, but it was also exclusive to BTC and Ether users only.

Sport

It is still perplexing to know that even if sports remains one of the most lucrative industries for digital technology to thrive, cryptocurrency and sport is still largely limited to gambling, which is not the best route to gaining more users. However, this industry is likely to boost the crypto scene in 2019 seeing that exchanges and tokens are getting more involved in bridging the gap between crypto and sport. Recently, Tron’s Justin Sun had sparked rumors of merging Tron and Basketball when he revealed his guest appearance for the niTron event. Most recently, the Litecoin network is also partnering with Ultimate Fighting Championship (UFC) for the upcoming 232 matches.

Conclusion: As these industries continue to shape the path for massive adaptation in the cryptocurrency, diversification is becoming more than just a myth. And this goes on to prove that cryptocurrency is here to stay.


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Author:  Adrian Klent
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Portuguese premier league football club FC Sporting plan to launch its own cryptocurrency

Sporting, a Portuguese football team announced it was planning to launch an Initial Coin Offering and its own cryptocurrency as an alternative method to fund the club.

Following Paris Saint Germain and Juventus, it’s now time for one of the most popular Portuguese football teams to hop into the world of cryptocurrencies as noted by Dinheiro Vivo, November 20, 2018.

According to the report, Sporting is mulling launching its own digital currency through an Initial Coin Offering (ICO). This was one of the options the football team set on top of the table as an alternative way of financing and taking advantage of this new world of digital coins. The country’s financial markets regulator already advised the entities involved in the launch of ICOs to ask for legal clarification from the competent authorities before any move.  

Francisco Salgado Zenha, the team’s Vice President told the news agency:

We’re in meetings to discuss this topic. We are looking closely at an ICO. We believe there is a great potential for the Sporting brand if we go ahead with this option. But it is still an option and we have nothing concrete yet.

Sporting Looking for new Funding Options

The team is already negotiating a retail bond offering up to 30 million euros and paying a gross annual interest of 5.25%, which seems fairly reasonable compared to what any other financial institution would offer.

First of all, the team wants to finish the bond offering for retail which amounts to 30 million euros, and whose subscription period began on November 12 and ended, November 22. However, this move will serve to pay back another bond that is maturing on November 26.

The new bond subscription Sporting is offering, gives the investor 5.25% of the gross annual interest rate. The subscription price is five euros per bond, with a corresponding minimum subscription amount of 100 euros, equivalent to 20 bonds.
Banks not Helping in the Funding Round
Even though Sporting is offering the bond subscription with a generous annual interest of 5.25%, it is having some trouble selling the bonds. The club blames banks for not helping in the negotiation. At the end of Thursday, November 22, the demand for the bond subscription stayed way below the minimum set by the team, around 1.5 million euros, below the 15 million euros required to launch the offer. Subscription orders soared on Thursday right after the club president called for more investors to join the bond offering.
Sporting officials noted in a statement:
“The purchase orders collected today (November 19) correspond to 43.8% of the total orders collected so far.”
Sporting Going through a Rough Phase
Last Thursday, in an interview with the country’s national TV RTP, the vice president of Sporting said the club may have to sell players if the bond issue is unsuccessful.
Sporting is going through a bitter phase and an internal crisis which forced the club to postpone the repayment of the bond issue, that is about to expire next week. The crisis ended with the removal of former club president Bruno de Carvalho, who was detained last Sunday, and the leader of Juve Leo, the club cheerleading team for suspicion of involvement in the academy invasion that took place in May and resulted in assaults to players and coaches.
The issuance of virtual currencies, or ICOs, has been successfully used to finance companies and projects. Sporting is probably taking this option as their best way out of the financial crisis.

 

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Ukraine’s New Policy to Legalize Crypto, Considering Full Scale Adoption

In an official statement, the Ukranian government confirmed its plans to establish regulatory frameworks to legalize crypto in the region.

As a part of an initiative to consider and acknowledge cryptocurrency as an emerging technology, the Economic Development and Trade Ministry in Ukraine released a new state policy to oversee various cryptocurrency-related sectors which will be put in full effect by the end of 2021.

Two-Part Plan

Throughout 2018 and 2019, the government of Ukraine will integrate regulatory frameworks to strictly govern the local cryptocurrency exchange market. Crypto trading platforms will be required to implement Know Your Customer (KYC) and Anti-Money Laundering (AML) systems to help local authorities monitor the market.

By 2020, the government plans to delve into the cryptocurrency mining industry, smart contract protocols, and taxation, as the second part of the initiative to recognize cryptocurrencies as an asset class and an established industry.

Researcher Denis Zarytsky stated that the official document released by the government of Ukraine outlined a 5 percent tax payable by entities and individuals with cryptocurrency holdings, a rate that is substantially lower than other regions like France and the UK that have over 10 percent tax on cryptocurrency investments.

Regions that have recognized cryptocurrencies as properties impose higher taxes, as Japan and Australia have done in the past. In early 2018, both Japan and Australia removed double taxation on crypto.

“They aim to determine guidelines for token classification. Additionally, they will be touching upon issues that relate to smart contracts and cryptocurrency mining. Therefore, this work will be ongoing. There will be two separate stages to the implementation of this new state policy. The hope is to have this policy in full effect by 2021. In addition to the new state policy, the government notably has brought in a new taxation bill. This outlines a new 5% tax that is payable by entities and individuals with cryptocurrency holdings.”

In October, Yuriy Derevyanko, a member of the anti-corruption Movement of New Forces and a legislator of Ukraine, called for the complete elimination of taxes on crypto by the end of 2020.

Derevyanko firmly stated that crypto has the potential to become one of the major markets of Ukraine and a driving force of the country’s economy.

“I believe we need to impose a moratorium on taxation of [the crypto] area for the next 10 years. We have to regulate and legalize this segment, which will become an engine for a new economy.”

Currently, both the opposing and the ruling party of Ukraine remain positive on the long-term growth of the cryptocurrency sector and blockchain technology.

The positive sentiment towards the new asset class in the country could lead to a sped-up process of implementing the policy drafted by the government to legalize cryptocurrencies within the next three years.

Falling Back Behind Japan and South Korea

Singapore, South Korea, Japan, Switzerland, the UK, and France as of late have shown significant progress in terms of regulation and infrastructure establishment to facilitate increasing demand towards the asset class.

While local experts remain optimistic regarding the three-year plan of Ukraine, some have expressed concerns in the timeframe of the initiative and that the period of three years could allow other emerging cryptocurrency markets to take first-mover advantage.


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Author: Joseph Young
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How Psychology Affects Consumers’ Use of Cryptocurrency

Despite benefits, early consumer adoption is in gambling and other niche areas.

Along with a steep decline in the value of the most popular cryptocurrencies like Bitcoin, Litecoin, and ether, the hype surrounding them has died down considerably in recent months. Yet cryptocurrency remains the most innovative and potentially transformative form of digital money. It has the potential to move us towards an entirely cashless existence as consumers in the not-too-distant future.

But what about the present? To what extent have consumers adopted cryptocurrency as money, not as a speculative investment?  What is its value to consumers? And how are the early adopters using it?

The blockchain technology behind cryptocurrency has been widely discussed and explained. So have the various risks associated with owning cryptocurrency.  These topics are beyond the scope of this post. Here, I want to specifically consider the influence of cryptocurrency on consumer behavior as of late 2018.

As a form of money, cryptocurrency has notable benefits for consumers

You may have heard news about cryptocurrency theft, like the bitcoins getting stolen from Apple’s founder Steve Wozniak. But there’s another side to the story. When compared with other forms of money, cryptocurrency has significant advantages. Because it is entirely digital, using it for making purchases incurs dramatically lower transaction costs, than, say, using a credit card or cash. If and when enough shoppers use cryptocurrency regularly, sellers may save 2%, 3%, or even more, and pass some of those cost savings on. What’s more, when using cryptocurrency, financial institutions are usually disintermediated or bypassed, increasing the user’s accountability and privacy, and reducing the likelihood of identity theft. Just consider how many customer data breaches have occurred at major retailers like Target and service providers like British Airways within the past five years. The result is a loss of trust, anxiety, and considerable inconvenience for those affected. (However, the anonymity afforded by cryptocurrency does make it susceptible to illicit uses such as money laundering). Cryptocurrency can be readily used anywhere in the world, reducing the costs and inconveniences associated with exchanging one national currency to another.

Yet the usefulness of cryptocurrency to the average consumer today is minimal

In the mainstream consumer domain, so far cryptocurrency has almost entirely been used for speculative investment purposes, not as currency. A 2016 study found that less than 1 percent of Americans owned or used any cryptocurrency. More recent estimates put the number of adopters at 5-8 percent. However, almost all of these individuals are trading cryptocurrency, not using it as money.

Why is the adoption of cryptocurrency as digital money so low and so slow?

The first reason is the lack of standards. At present, there are dozens of different cryptocurrencies, each with its own protocols and potential market. These currencies compete with each other, and new currencies continue to be launched every month. Furthermore, because of the possibility of “hard forks” or divergent development, there is always the risk that new variants of even established cryptocurrencies may be formed. No one knows which currency will dominate or if all the currencies that exist currently will survive. Consumer psychology research shows that when a market lacks one standard, consumers are slow to adopt the innovation because of the uncertainty.

Just as problematic for consumer adoption is the dramatic fluctuation in its value. In the past one year alone, bitcoin has ranged in value from $5,857 to $18,343. Just imagine, if you used bitcoin as money and wanted to spend one BTC to buy a car, you’d have been able to purchase anything from a Honda hatchback to a BMW sports utility vehicle (both used) depending on when you purchased the vehicle. This degree of variability is not desirable for any form of money that serves as a medium of exchange. It is supposed to maintain its value.

The third significant limitation for consumers is that almost no retailers or service providers accept cryptocurrency at present. Among major retailers, Overstock.com is the only one that has consistently accepted bitcoin. And even in its case, things haven’t always gone smoothly. Earlier this year, it confused bitcoin with bitcoin cash, a much cheaper currency, and ended up selling products to some shoppers for steeply discounted prices.

The classic chicken and egg problem is at play here. Until enough shoppers clamor to spend cryptocurrency, companies won’t accept them. And because few companies accept cryptocurrency, consumers won’t really bother with it. For shoppers, cash, credit cards, and mobile payment services like Paypal and Venmo fueled by dollars are good enough for now.

How are consumers using cryptocurrency?

Despite the fact that cryptocurrency hasn’t yet caught on as digital money, there are some niche consumer areas where it has made some headway within the past year. Not surprisingly, one application is sports gambling. Introduced at this past summer’s (2018) FIFA World Cup tournament, Cryptocup is a way of betting on particular sports outcomes using ether. It has since expanded to NFL football.

Cryptocurrency has also been used in a handful of real-estate transactions in Florida and California, either to generate social media buzz because of the novelty, to target the property to successful cryptocurrency traders looking to diversify their wealth or to attract wealthy foreign buyers. A third interesting application is in art where consumers can buy shares in iconic artworks using cryptocurrency or digital tokens from a blockchain themselves become art (in the artist’s blood, no less).

These exceptions underscore the rule. As consumers, we’re still a ways away from using cryptocurrency to pay for an oil change or buy a gallon of milk.


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Author: Utpal Dholakia
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An exclusive insight into the exciting future of Loom Network

In an exclusive interview, Coininsider spoke to James Duffy from Loom Network. The interview is proudly brought to you by the Alchemist Blockchain Techstars Accelerator. Applications for the programme are open until the 28th of October, for more information visit Techstars.com.

According to Duffy, “Loom is a scaling solution for Ethereum through side-chains and the focus is on large-scale applications, primarily games and social apps.”

Loom was a company that underwent the Alchemist Blockchain Techstars Accelerator Programme. Duffy spoke about his experience with the programme:

“Techstars is really great, primarily because of their network. We’re close with Alex, one of the managing directors of Techstars New York, and he was immensely helpful in giving the project what it needed and finding intros to the most obscure people.”

Although Loom Network did not finish the entire programme, Duffy advocates that the team at Techstars added an exceptional value to helping the company. Having been through the programme, he thinks that engaging with accelerators such as Techstars is useful because it automatically lends a project credibility and legitimacy which is vital to stand out. He said that it also offers opportunities to meet high-profile funds if fundraising is one of the factors on which a company or project is focused.

Decentralized applications (DApps) are one of the fundamental focuses that Loom Network has, owing to their goal to get cryptocurrency users to adopt DApps into the mainstream. Duffy thinks that this will be key to over-all cryptocurrency adoption:

“Everyone is focusing on scalability, which is definitely a problem, but we think user adoption is an even bigger problem.”

Duffy explained the ‘Loom Vault’ which is a feature which offers users the opportunity for users to opt for Loom to manage the side-chain private keys. This feature is a side-service which allows users to sign in and not have to authenticate every single transaction. The platform would do it automatically which aids in a user-friendly approach.

Unlike other projects, Loom Network has not been slowed down by the bear market and the project’s roadmap has not shifted. Duffy expressed his personal view on the industry:

“I’m not really an anxious person, so if anything keeps me up at night, it’s the excitement of what we’re building. I think the future of blockchain gaming is really exciting because you can build things which weren’t possible before. For example, real ownership of digital assets is possible on the blockchain.”


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Author: REBECCA LEIGHTON
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Bitcoin and Crypto Adoption Spreading in China Despite Crackdown

Support of Bitcoin in China is heating up despite the government’s crypto crackdown in September 2017.

In addition to prohibiting commercial banks from servicing crypto-related businesses, local authorities enacted even more anti-crypto measures last month when they banned crypto companies from social media giant WeChat. Regulators also barred organizers of token sales and cryptocurrencies from promoting their offerings in public spaces, hotels and offices.

China also blocked 120 cryptocurrency exchanges that offer services to mainland residents.

Despite the efforts, China has been unable to curb crypto interest or stop adoption. Investors are still using over-the-counter trading platforms to buy ICO tokens as well as peer-to-peer crypto exchanges to make trades, buys and sells.

The first of its kind in China, “Ethereum Hotel” is accepting ETH as payment.

 

Adoption is playing out as Ethereum’s classification is challenged. Shanghai Hongkou District People’s Court ruled on September 27 that Ethereum is property. The ruling involved a “defendant Chen” who was ordered to return 20 ETH.

According to the judgment,

“The plaintiff now asks the defendant to return 20 ETH. The reason is justified and the court should support it according to law.

Regarding the opinion that the defendant stated that the country banned the circulation of the Ethereum and returned the lack of legal basis, the Court considered that the current state did not recognize the monetary property of the so-called “virtual currency” such as the currency, and prohibited its financial activities such as circulation for use, but It is not denied that the Ethereum can be equally protected by law as a property in the general legal sense. Therefore, the above opinions of the defendant will not be accepted by law.

Meanwhile, Beijing Science and Technology Report (BSTR) will now accept payment in Bitcoin (BTC) for its 2019 subscription to Technology Life, making it the first Chinese publication that allows subscribers to pay in BTC.

According to a local news report by Guangming Net, BSTR, the oldest tech mag in China, aims to promote blockchain and the adoption of cryptocurrencies.

Subscribers will be able to pay 0.01 BTC, roughly 450 yuan, by sending Bitcoin directly to the newspaper’s wallet address. They’ll also receive some BTC if Bitcoin increases in price by the end of the subscription period, as the publication pledges to forward gains to its subscribers as compensation for risking payment with the volatile asset.

According to a report by South China Morning Post, industry insiders say that technically “it would be a huge challenge for the regulators to completely block access” and stop crypto activities “as long as a trading platform’s servers remain outside China, and transactions are conducted peer-to-peer and remain decentralised.”


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Author: Daily Hodl Staff
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