Having built one of the largest cryptocurrency exchanges on the planet, the Winklevoss Twins are turning to mobile with the launch of the Gemini app.
The app will allow users to buy and sell cryptocurrency, view market prices, and set alerts. There’s also a neat “Buy the Cryptoverse” function to purchase a basket of cryptocurrencies all at once, much like buying an index fund.
The design is slick and minimal in a bid to broaden the appeal of cryptocurrency, removing much of the chaos and clutter of competing exchanges. It will also integrate Gemini’s “institutional-grade security.”
The Winklevoss Twins are among the few bitcoin billionaires and are reported to own more than 1% of the total bitcoin supply. They launched the Gemini exchange in 2014 with a view to creating a secure, mainstream outlet for purchasing cryptocurrency.
Gemini made headlines earlier this year when it secured full insurance coverage for its exchange and custody services.
Meanwhile, the Winklevoss Twins have put forth numerous bitcoin exchange-traded fund (ETF) proposals, but have been knocked back repeatedly by the Securities and Exchange Commission (SEC).
“We spent the last three years building the world’s most trusted cryptocurrency platform and today we are excited to extend it into your hands and allow you to engage with cryptocurrency wherever you are and whenever you want.”
A new study by cryptocurrency exchange BitMex reveals that bitcoin mining revenues fell by more than half in November.
At the beginning of the month, daily mining revenues were at $13 million. By the end of the month, that figure had fallen to just $6 million. The news comes after the bitcoin price collapsed by 36% in November.
The fall in prices means a lower incentive for miners, who are rewarded with bitcoin for keeping the system running.
The BitMex study also noted a 13% reduction in hash rate (a measure of computer power dedicated to the bitcoin blockchain). That’s the equivalent of 1.3 million Bitmain S9 miners going offline.
The Good News
With miners switching off their machines, there’s less competition. It should, theoretically, become more profitable to mine bitcoin with fewer miners competing on the network.
We have also just seen two major shifts in bitcoin “difficulty.” The Bitcoin algorithm is designed to readjust itself every two weeks (roughly) to compensate for the volume of miners.
The difficulty fell 7.4% on 16th November and 15.1% on 3rd December. These adjustments make it easier to mine bitcoin, thereby re-incentivizing miners.
Probably not. The fall in revenue is likely to knock out miners in regions where electricity is expensive. However, there are plenty of places around the world where mining is more affordable thanks to low energy prices.
“Miners have a much more long-term perspective, meaning that they have existing investments in equipment and they usually purchase electricity on long-term plans, they don’t pay it by the week. And therefore, if they have to wait to become profitable another three months and they have the equipment in place, they’re not turning it off.”
Eddie Hughes, a UK Member of Parliament (MP) has suggested the UK should accept local taxes in bitcoin.
Inspired by Ohio’s recent decision to allow bitcoin payment for taxes, he said: “you’re either ahead of the curve or you’re behind the curve, and our country is in an interesting position right now — we need to be seen as a progressive country.”
The Conservative MP, who describes himself as a “crypto enthusiast with amateur knowledge,” says the British government has a duty to educate itself about blockchain technology.
“It just feels like it gets talked about a lot, wherever you go in the UK, and as MPs we have a duty to understand it,” he said.
Speaking to The Express, Hughes advocated the payment of local (council) tax with bitcoin, but hinted that other options should be considered.
“What’s to stop us being able to pay council tax and other bills with bitcoin?”
Hughes was also inspired by the Royal National Lifeboat Institution, which accepts donations in cryptocurrency. Adoption and mainstream understanding remains a concern for Hughes: “it needs to appear like an app that people will use so they can become familiar with it in a safe and secure way.”
The MP says he’d love to trial the scheme in his constituency near Birmingham and strikes an optimistic tone for the future: “We are at a crossroads and we’re about to determine our future – one in which taking the lead in this field could prove very beneficial.”
“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change.”
The simple answer is that it can. The SEC may take up to 180 days to deliver an approval or disapproval. If required, they can also extend that period an additional 60 days.
With the VanEck and SolidX proposal submitted in July, the SEC is simply taking as much time as possible to consider all angles.
The SEC has also invited comments on the ETF, suggesting it is taking the review seriously.
The Delay Could be a Good Thing
The SEC is well within its rights to reject the bitcoin ETF proposal. You may remember the Commission rejected nine proposals back in August.
The fact that the SEC is taking the full time period to consider the VanEck proposal is a good sign.
There are pro-bitcoin commissioners involved in the decision, including Hester Peirce who said, “You all know that I am working on trying to convince my colleagues to have a bit more of an open mind when it comes to [crypto].”
SEC Concerns Remain
Having said that, the SEC still has major concerns over bitcoin ETFs. As the chairman of the SEC recently revealed, there are issues related to theft, market manipulation, custody, and money laundering that need to be addressed before we see an approval.
There is also concern over how ETFs track the price of bitcoin.
The three options include basing the price on crypto exchanges, bitcoin futures, and the bitcoin OTC market.
The SEC is nervous that exchanges are subject to manipulation. They think bitcoin futures are not yet mature enough, and OTC markets are difficult to track.
So there are big hurdles to overcome before the SEC approves any Bitcoin ETF proposal.
It Could Take Years
Speaking after the decision, Hester Peirce warned the crypto community not to place too much weight on the ETF approval.
“Don’t hold your breath. I do caution people to not live or die on when a crypto or bitcoin ETF gets approved.”
Binance just revealed a sneak peek of its new decentralized exchange (DEX). It’s slick, powerful, and will look familiar to current Binance users.
But why use a decentralized exchange instead of a normal cryptocurrency exchange like Coinbase or Kraken? Why is DEX the next generation?
In this article, we’ll run down some of the most important benefits. First, what exactly is a DEX?
What’s a DEX?
A decentralized exchange is a crypto exchange with no central authority.
Think about Coinbase for a minute. It is perhaps the most well-known exchange in crypto, but it’s highly centralized.
There is one company at the heart of it. Coinbase handles the exchange of money directly and stores all information on its servers. Most importantly, they control all funds on the platform. In other words, they technically own your crypto.
Centralized exchanges also require full identification, so your data is stored on their central servers.
A decentralized exchange aims to remove each of those elements. It’s a truly peer-to-peer exchange with no central authority and you keep full control and ownership of your funds.
Why Should I use a DEX?
1. Control your own funds
One thing you might not realize when you trade on Coinbase or Binance is that you don’t technically own your funds. The crypto is stored in wallets that belong to Coinbase or Binance. You are trusting them to look after it for you.
While that’s convenient, it’s not safe. It also goes against the grain of cryptocurrencies, which are designed to exist outside a third-party or banking system. With a DEX, you are in full control of your own private key and your own crypto funds.
Because a centralized exchange like Coinbase holds your crypto in their wallets, it’s much more vulnerable to hacking. All data and funds are stored on the company’s server, so there’s one point-of-failure.
Crypto exchanges are regularly targeted by hackers because they hold vast sums of crypto in one place. Nearly $1 billion has been stolen from exchanges this year alone, and you probably remember the infamous $450 million hack at the Mt. Gox exchange.
A DEX removes that vulnerability by operating on a decentralized blockchain. Instead of one point of failure, the exchange operates on many servers all at once. That makes it extremely difficult to hack.
3. No government can shut it down
Since there is no central authority governing the DEX, it can’t be shut down.
For example, the Chinese government has a blanket ban on crypto exchanges. Binance was forced to move to Malta to get around the restrictions. In the US, exchanges like Coinbase must stick to strict regulations in order to operate.
You can’t close down or govern a DEX if there’s no central point of authority.
A founding tenet of cryptocurrencies is that they are “permissionless.” In other words, you don’t need someone’s permission (like a bank or a government) to use them.
When you use a central exchange like Coinbase, Coinbase is giving you permission to trade cryptocurrencies by asking for certain data and assigning you an account.
A DEX should be truly permissionless. Anyone can use it, with no restrictions.
If you’ve used a mainstream exchange, then you’ve probably been asked to verify your identity. Coinbase, for instance, asks for ID verification to satisfy Know Your Customer (KYC) and Anti Money Laundering (AML) laws.
Your data is then stored on a central database. With a DEX, there should be no personal data stored on any central exchange. However, it remains to be seen whether the Binance DEX will require identification.
6. Faster and cheaper
By cutting out a central middleman, decentralized exchanges should operate with lower fees and faster transaction times.
The Downsides of DEX
Of course, decentralized exchanges are not perfect. They are still in their early stages and suffer from a number of problems:
Low liquidity – Not a lot of people use DEX platforms yet, so liquidity and trading volume is significantly lower than mainstream exchanges. That means it could be difficult to buy or sell certain assets.
Poor user experience – The benefit of using a mainstream exchange like Coinbase is that it’s slick and easy to use. DEXs are more primitive. They can seem overwhelming to beginners.
Lack of functionality – Again, because they’re in their infancy, DEXs have pretty basic functionality. If you’re looking for margin trading or stop-loss functionality, you may be disappointed.
No fiat conversions – You can’t load up your DEX account with dollars or euros because that would require KYC and AML procedures (ID verification). So you’ll have to make transfers in cryptocurrency only. Not a problem for intermediate users, but a big problem for beginners.
First Look at Binance DEX
If you’re excited by the concept of DEX trading, take a look at the new Binance platform: