Top Crypto News – 05/01/2018

Zuckerburg to Study Cryptocurrency in Quest to Decentralize Facebook

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Facebook CEO Mark Zuckerberg announced Thursday he plans to study cryptocurrencies and other decentralizing technologies as part of a larger bid to improve the social networking service he co-founded.

Aptly in a Facebook post, Zuckerberg outlined what he called personal challenges for the year ahead, noting that one is to study the “positive and negative aspects” of cryptocurrency and encryption.

Zuckerberg went on to note that his theme for this year is to focus on “fixing important issues” in technology, media and government. “I’m looking forward to bringing groups of experts together to discuss and help work through these topics,” he wrote.

Still, it’s his comments on decentralization that have the blockchain world astir.

Lauded for its ability to create valuable, global peer-to-peer networks, Zuckerberg called cryptocurrencies one of the most interesting questions in technology right now. He added that today, many have lost faith that “technology would be a decentralizing force.”

He said:

“There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands…I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

Mark Zuckerberg image via Shutterstock

 

Coinbase Rejects Ripple Integration Rumors, Currency’s Market Cap Drops $22 Billion

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The popular exchange and wallet platform Coinbase has refuted recent rumors that Ripple (XRP) or other cryptocurrencies will soon be integrated into GDAX, its flagship digital currency exchange.

Quashing rumors

CEO Brian Armstrong firmly stated that neither Coinbase and GDAX have made a decision to integrate any cryptocurrency or digital asset in the short-term. The company said in a blog post:

“A committee of internal experts is responsible for determining whether and when new assets will be added to the platform in accordance with our framework. These individuals — and all employees at Coinbase — are subject to confidentiality and trading restrictions.

As of the date of this statement, we have made no decision to add additional assets to either GDAX or Coinbase. Any statement to the contrary is untrue and not authorized by the company.”

Coinbase’s statement was released following a spate of unverified rumors that claimed GDAX is planning to integrate XRP. The scale of the rumors, which largely circulated on Reddit and Twitter, increased to the point where the company felt the need to refute them, as the price of XRP surged.

Immediately after Coinbase issued its statement, the market valuation of XRP decreased from over $148 billion to $126 billion.

Ripple Charts

Insider trading controversy

Coinbase and GDAX are unlikely to integrate any new assets until they can be certain to prevent any leaks. In early December, when Coinbase added Bitcoin Cash, a Coinbase employee or a contractor reportedly revealed the integration two days prior to the official announcement.

Coinbase received significant backlash and criticism from the cryptocurrency community and as a consequence, Armstrong vowed to launch a full investigation. The CEO stated that Coinbase will pursue legal action against the employee or contractor that released confidential information on the company’s digital asset integration plans.

As such, the recent statement of Armstrong and rumors around Coinbase’s Ripple integration were also criticized by some of the community’s most prominent experts. These include BitGo lead engineer Jameson Lopp, who tweeted:

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No new assets yet

The investigation into the Bitcoin Cash controversy is still ongoing and until that is completed, it is highly unlikely that Coinbase will pursue the implementation of other cryptocurrencies. The company’s CEO admitted that some insider trading-like movement was spotted in the global Bitcoin Cash exchange market prior to the listing of Coinbase.

On December 20, Armstrong wrote:

“Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter. If we find evidence of any employee or contractor violating our policies — directly or indirectly — I will not hesitate to terminate the employee immediately and take appropriate legal action.”

Former Coinbase executive Charlie Lee also stated:

“Coinbase is not adding a new coin anytime soon. There’s no reason why they would lie about this… Especially after the flack they got for surprising everyone by adding BCH.”

Written by CoinTelegraph

A cryptocurrency created as a parody is now worth more than $1 billion

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A cryptocurrency that was created as a parody and named after an internet meme now has a market value of more than $1 billion.

Data from CoinMarketCap showed dogecoin’s current market value is about $1.17 billion — as of Jan. 5, 2:56 p.m. HK/SIN — and traded at $0.010360 per token.

Last month, the virtual coin rose more than 400 percent and briefly topped $0.0107 in late December.

Source: CoinMarketCap

Dogecoin is an example of an altcoin, which are peer-to-peer digital tokens that descended from bitcoin. The more popular ones include ethereum, which topped $1,000 for the first time on Thursday, and ripple, which saw a staggering 35,000 percent jump in its value last year.

Dogecoin, for its part, was created in 2013 and its mascot is a Japanese shiba inu dog popularized by an internet meme that dates back to 2010. The creators of dogecoin positioned the virtual token as “the internet currency” that can allow users to easily send money online.

There are several ways to get dogecoins: Users can buy them at online exchanges, get tipped in the cryptocurrency and even mine them.

The virtual currency’s meteoric rise in recent months has the project’s creator expressing concern about market excess. Jackson Palmer, the founder of dogecoin who left the team in 2015, told cryptocurrency news site CoinDesk that it was telling that the token saw such a sharp jump in price even when the project hadn’t released a software update in over 2 years.

The total value of cryptocurrencies is over $750 billion, according to CoinMarketCap, and bitcoin dominates nearly 40 percent of that market.

“The most significant contributing cause for altcoins to rise so parabolically is owing to the perception of ‘cheap’ coins,” Dave Chapman, managing director at Hong Kong-based commodities and digital assets trading house Octagon Strategy, told CNBC.

“The two most well known cryptocurrencies (i.e. bitcoin and ethereum) are considered too expensive for most new entrants. Despite being able to purchase a fraction of each, there is a real psychological barrier around owning something in its entirety,” Chapman added.

A buyer, he explained, would feel better knowing they own 2,000 ripple tokens, which would cost a little over $6,000, rather than owning less than half of a bitcoin at the same price.

Chapman also said there is a mindset among new investors than they have missed the “upside opportunity with cryptocurrencies that have already demonstrated incredible returns.”

Written by CNBC

Bitcoin Exchanges seeking clarity over levy of GST

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MUMBAI: Are Bitcoin exchanges required to pay goods and services tax? If they are, what would the rate be? And, will GST be levied on the revenues or operating margins of these exchanges?

India’s top seven Bitcoin exchanges, which include Zebpay, Unocoin, CoinSecure and BtcxIndia, plan to approach the Advance Authority of Ruling (AAR) for clear answers to these questions, two people with direct knowledge of the matter told ET. AAR is a quasi-judicial body that can decide the applicability of tax rates.

“At least one Bitcoin exchange has already filed an application with the Maharashtra AAR for future tax liability,” said one of the persons cited above. “The tax department is currently researching the concept as Bitcoins are a very complex subject.” Zebpay, Unocoin, CoinSecure and BtcxIndia didn’t respond to queries.

The development follows the income-tax department conducting searches at top Bitcoin exchanges in December. The indirect tax department is already looking at ways is already looking at ways in which Bitcoins can be brought under GST. ET reported in December that the indirect tax department had launched an investigation into Bitcoin exchanges operating in India to ascertain the GST rate that can be levied on them. The sales tax department and VAT authorities launched an investigation on the taxability of Bitcoins in the last financial year.

For the exchanges, the rate could depend on what the authorities deem Bitcoins to be — goods, services or currency. If Bitcoin is held to be a currency, there will be no GST. If it’s a good, then tax of 18% could be levied, and 12% if deemed to be a service.

“The question for many Bitcoin players is whether GST is applicable on the total revenue or on the margins they earn,” said Abhishek A Rastogi, partner at law firm Khaitan & Co. “This is mainly because the tax authority must give clarity on whether Bitcoin exchanges are selling goods and services, or are mere trading platforms that earn margins.”

AAR DECISION TO DEFINE BIZ MODEL FOR BITCOIN EXCHANGES
According to another government official, who has reviewed the balance sheets of Bitcoin players, their size is quite substantial. “The combined revenue of top seven players would be around Rs 40,000 crore and they operate at about 20% margins,” the official said. “In most cases, whenever there is a ‘buy’ or a ‘sell’ order on their platforms, these exchanges charge huge differences, in the range of about Rs 1lakh.”

If that’s the case, the indirect tax department could be looking at potential revenue of up to Rs 7,200 crore (if GST is levied at 18%). AAR’s decision will also help establish the business model for Bitcoin exchanges in India, defining the category for cryptocurrencies — goods, services or currency.

“The option of proceeding with advance rulings under GST should be exercised to enable clarity on future tax treatment, more so in cases where existing tax positions are untested,” said MS Mani, partner, Deloitte India. Industry insiders said Bitcoin players, including Indian exchanges, earn their revenue through commissions, transaction fees, or price-arbitrage opportunities. Most of the exchanges allow trading of various cryptocurrencies besides Bitcoins.

Experts said some Bitcoin exchanges have not been forthcoming with their data and have not paid any sales tax or VAT until now. One of the persons cited above said some exchanges had submitted different revenue figures to the sales tax and VAT authorities. “When we compared the annual results and explanations submitted to the sales tax and VAT authorities, they were diametrically opposite,” he said.

Bitcoin is the most popular cryptocurrency that allows online payments between individuals without the involvement of middlemen or financial institutions. Bitcoin prices lost about 4% Thursday evening, and were trading at $14,546 a unit, Coindesk data showed.

Written by Economic Times

 

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