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Paxos Launches PAX Gold, Regulated and Redeemable for Physical Gold

Stablecoin operator Paxos launched PAX Gold (PAXG), a gold-backed Ethereum (ETH) token.

Paxos announced the launch of the product above in a press release published on Sept. 5, claiming that it is “the first crypto-asset redeemable for physical gold.” Furthermore, the New York State Department of Financial Services (NYDFS) put forward their approval of the issuance in an official statement, defining it “first gold-backed virtual currency in New York state.”

Per the report, each PAXG token will be backed by one fine troy ounce of London Good Delivery gold stored in professional vault facilities in London. Users owning the tokens in question reportedly own the gold it represents but the tokens can be moved like any other ERC-20 tokens — which is substantially simpler than shipping gold.

Tokenization’s advantages

Paxos charges fees on on-chain transactions involving the token, as well as PAXG creation and destruction. Paxos CEO and Co-Founder Charles Cascarilla commented on the development by praising the advantages of tokenization:

“In a digital and global financial system, owning physical gold is a cumbersome, outdated investment; it’s not easy to trade, divide, move or leverage against other investments.”

He also admits that trading gold derivatives such as Exchange Traded Funds, futures or unallocated gold is easy, it is not legal ownership of physical gold and its accessibility is limited. Lastly, he notes:

“Gold purchased through unaccredited retail outlets is not only expensive, but also risky as the quality and provenance of the gold are unverified.”

The company claims that on its website users can convert the tokens to and from to and from fiat currency or unallocated gold, or redeem tokens for physical gold bars. Furthermore, token holders can allegedly also look up the serial number, brand code, gross weight, fineness, and fine weight of their gold bars.

Earlier today, Binance announced a partnership with Paxos to launch a stablecoin backed by the United States dollar.

As Cointelegraph reported in March, Cascarilla already promised that the company would launch its precious metal-backed token this year.

Apple Exec Says Cryptocurrency ‘Interesting’ — Has Long-Term Potential

Jennifer Bailey, the vice president of Apple’s payments service, Apple Pay, said that the company sees potential in cryptocurrencies.

CNN reported on Sept. 5 that Bailey told the outlet’s chief business correspondent Christine Romans at a private event in San Francisco:

“We’re watching cryptocurrency. […] We think it’s interesting. We think it has interesting long-term potential.”

A shot in the arm for crypto

Apple’s interest in cryptocurrencies follows a similar widely-covered move announced by the social media giant Facebook, which announced its Libra cryptocurrency in June. CNN quotes Dan Ives, an analyst at Wedbush Securities, commenting:

“This would be a major shot in the arm for crypto if Apple headed down this [the same as Facebook] path. […] Given where Apple strategically is focused, a move into crypto could make sense given its sights on further monetizing its consumers over the coming years.”

While Apple does not release the number of Apple Pay users, the company claims that the service processes nearly one billion transactions per month. Bailey also claimed that since the product’s launch in 2014, store acceptance of contactless payments in the United States grew from 3% to over 70%.

As Cointelegraph reported at the beginning of August, according to the Apple Card Customer agreement, users will not be permitted to buy cryptocurrencies using the company’s upcoming credit card service.

Square, Twitter CEO Jack Dorsey: Bitcoin ‘Not Functional as a Currency’

Square and Twitter CEO Jack Dorsey has said Bitcoin (BTC) will continue to be adopted more widely, but it is still too early to consider it a currency.

Make Bitcoin more usable and accessible as a currency

On Sept. 4, the outspoken Bitcoin advocate told the Australian Financial Review that he is convinced the No. 1 cryptocurrency will continue to be adopted more widely. However, Dorsey added:

“It’s not functional as a currency. The peaks and troughs are like an investment asset and are equivalent to gold. What we need to do is make it more usable and accessible as a currency, but it’s not there yet.”

Dorsey, who endorses the principles that created Bitcoin and the community that formed around it, went on to say that once crypto becomes the currency of the internet, Square would focus more on services that add value rather than those that enable money to be moved around.

Dorsey was visiting Melbourne for the launch of the Square Terminal, an all-in-one credit and debit card machine.

Dorsey loves Bitcoin

As Cointelegraph has previously reported, Square first announced in November 2017 that it would release a BTC trading option which prompted its stock to soar by $1 billion in five days. In August 2019, Dorsey added:

“We love you, Bitcoin […] we saw 3.5 million customers use Cash Card in June, typically using it to purchase multiple times per week. Our seller and Cash App ecosystems have incredible roadmaps ahead to deliver on our purpose of economic empowerment.”

Bitcoin Network Computing Power Nears 90 Quintillion Hashes per Second

Bitcoin (BTC) has seen yet another sharp increase in its computing power after its network hash rate grew 25% in a week.

Hash rate climbs to all-time high

Data from monitoring resource Blockchain puts Bitcoin’s hash rate at 87 quintillion hashes per second (h/s) as of Sept. 3.

Bitcoin network hash rate

Bitcoin network hash rate. Source: Blockchain

The figure passed 80 quintillion h/s for the first time in early August, and has set new highs on an almost daily basis in recent months. 

Hash rate refers to the overall computing power involved in processing Bitcoin transactions. The greater the metric, the more power available, and hence the more secure the Bitcoin network is. 

Additionally, a rising hash rate means that forward-looking miners are investing vast amounts of resources to expand their operations, i.e. betting on Bitcoin’s value to increase in the future. 

Keiser: “Price follows hash”

Miners have piled into Bitcoin again in 2019 after last year’s hash rate slump, something accompanied by a price bull run beginning April 1. 

Now, commentators believe further gains for hash rate and price are on the horizon. 

“The race to mine the last 3 million Bitcoin will keep hashrate growing rapidly for the next few years,” Blockstream CSO, Samson Mow, wrote on Twitter on Monday.

RT host Max Keiser meanwhile pointed to ongoing political upheaval in the United Kingdom as fuelling the Bitcoin price.

“Bitcoin hash rate continues strong upturn. Price follows hash. Chaos as UK melts down bringing in panic buying from Brits, reportedly,” he theorized just before press time on Wednesday.

BTC/USD made sudden gains at the start of the week, rising almost 10% since the weekend. 

Philippine Boxing Champion Manny Pacquiao Releases Own Cryptocurrency

Philippine boxing champion and celebrity Manny Pacquiao has launched his own cryptocurrency.

On Sept. 1, the South China Morning Post reported that the Filipino boxer turned politician and singer launched his own token with the financial support of private investors such as ex-Liverpool and England soccer star Michael Owen and Sheikh Khaled bin Zayed al-Nahyan, a member of Abu Dhabi’s ruling family.

Listing on Singapore-based Global Crypto Offering Exchange

The Pac token will be listed on Singapore’s Global Crypto Offering Exchange (GCOX), paving the way for his fans to buy merchandise and interact with him via social media.

GCOX Founder and CEO Jeffrey Lin reportedly said that the token is not intended to just raise money but to build a token ecosystem.

Pacquiao, who currently holds the World Boxing Association welterweight title, first assumed office as a senator in the Philippines in June 2016.  

More celebrity plans to launch crypto tokens with GCOX 

As Cointelegraph previously reported, American singer-songwriter Jason Derulo is also planning to launch his own cryptocurrency on the platform.

GCOX’s chief communications officer Evan Ngow said at the time: “We are committed to assembling a diverse, multi-talented array of stars at GCOX, and Jason will certainly not be the last musician to join our ranks.”

In its white paper, GCOX points out that its technology is built on the Acclaim blockchain and is designed to benefit celebrities at different points in their career.

US Air Force Steps Up Blockchain Use: What Else Is the Pentagon Up To?

This week saw twin reports from smart contract startup Simba Chain and blockchain data management firm Constellation, both of whom announced contracts with the United States Air Force. 

New utility in USAF

Judging by these developments, the U.S. Air Force is looking seriously at new tech to shore up supply chains and rearrange data. Simba Chain has reportedly been tasked with prototyping a blockchain approach for the registration and tracking of additive manufacturing — also known as 3D printing — components throughout their lifecycles. Meanwhile, according to the original press release

“Constellation’s technology will help securely unlock traditionally siloed and non-accessible data and data sources. This is commonly referred to as Multi-Domain Command and Control (MDC2) at the U.S. Air Force.” 

According to Constellation, the Air Force expects the company to facilitate the various fleets — drones, planes, satellites — that the branch is responsible for. 

Simba Chain, meanwhile, is itself an initiative founded in 2017 with a grant from the Defense Advanced Research Projects Agency (DARPA) to the University of Notre Dame, originally to facilitate an unhackable communication platform. 

Cybersecurity

The Air Force is not alone in delving deeper into blockchain technologies. 

The branch’s needs share much in common the U.S. military more broadly. Namely, massive data processing and vast backlogs of contracts facilitating diverse supply chains delivering everything from Tomahawk missiles to tweezers — all of which demand vital security precautions. Consequently, the broader U.S. Department of Defense (DoD) has been looking seriously at a range of blockchain technologies for increased security applications.

Last month, Cointelegraph reported on the DoD’s newly announced four-year plan, in which the department put forward the prospect of a “Block Chain Cybersecurity Shield.” Named uses for the technology included:

“Facilitating communication between units and headquarters, and transmitting information between intelligence officers and the Pentagon. DARPA also has been trying to develop an unhackable code — which blockchain could facilitate — because the technology offers intelligence on hackers who try to break into secure databases.”

Back in March, the White House’s budget request for 2020 mentioned similar concerns while asking for $9.6 billion to fund DoD cybersecurity initiatives, citing:

“DOD’s three primary cyber missions: safeguarding DOD’s networks, information, and systems; supporting military commander objectives; and defending the Nation.”

The DoD’s recent four-year plan did not explicitly mention the breadth of supply chain applications that companies like Simba Chain may be working on for the Air Force, but cybersecurity needs are evolving.

Supply chains

In a report from 2017 on blockchain tech, Washington-based think tank the Foundation for the Defense of Democracies focused on the need to preserve the “National Security Industrial Base,” illustrating the emergence of a:

“National security challenge related to the globalization of manufacturing supply chains is the phenomenon of attacks in which substandard, counterfeit, or maliciously-modified electronic components are introduced into the hardware on which the national security industrial base (the “NSIB”) operates.”

The famous case of the 2019 National Defense Authorization Act and its ban on Huawei’s electronics is an eye-catching example of the need to be certain of a supply chain, invoking as it did the threat of a foreign power using planted hardware to hack U.S. defense agencies. 

But while cybersecurity is an evocative word, likely to attract funding, some of the military’s supply chain needs are as simple as cost. Back in June of this year, Booz Allen Hamilton, one of the largest government contractors in the U.S., reviewed prospects for incorporating blockchain into federal agencies. 

Among Booz Allen’s recommendations for the DoD was distributing 3D printers to deployed units and then putting 3D plans for various hardware and parts onto the blockchain to save on the expense of manufacturing those parts in the U.S. and then shipping them — much like what Simba Chain is proposing to do for the Air Force. 

Or contract certainty?

Contracts may be a more mundane concern and therefore often removed from the military’s PR, but they are obviously critical. According to the U.S. Government Accountability Office, in 2018, the Air Force spent $71.3 billion on contractors within the DoD’s overall $358.3 billion contractor budget. 

The DoD depends on a truly global supply network, spanning borders and languages. At the same time, the Pentagon is prone to levels of bureaucratic waste that are the stuff of legend, constituting $125 billion over five years according to a buried internal report from the beginning of 2015. The report’s primary recommendations for savings? Cutting back on contractors, streamlining IT and encouraging earlier retirement.  

It is conceivable that blockchain in the military — in the form of Simba’s recently launched smart contract-as-a-service platform or something similar — may end up having the greatest ramifications in the least exciting of applications — the office rather than the battlefield. For now, however, that remains speculation.

US Air Force Steps Up Blockchain Use: What Else Is Pentagon Up To?

This week saw twin reports from smart contract startup Simba Chain and blockchain data management firm Constellation, both of whom announced contracts with the United States Air Force. 

New utility in USAF

Judging by these developments, the U.S. Air Force is looking seriously at new tech to shore up supply chains and rearrange data. Simba Chain has reportedly been tasked with prototyping a blockchain approach for the registration and tracking of additive manufacturing — also known as 3D printing — components throughout their lifecycles. Meanwhile, according to the original press release

“Constellation’s technology will help securely unlock traditionally siloed and non-accessible data and data sources. This is commonly referred to as Multi-Domain Command and Control (MDC2) at the U.S. Air Force.” 

According to Constellation, the Air Force expects the company to facilitate the various fleets — drones, planes, satellites — that the branch is responsible for. 

Simba Chain, meanwhile, is itself an initiative founded in 2017 with a grant from the Defense Advanced Research Projects Agency (DARPA) to the University of Notre Dame, originally to facilitate an unhackable communication platform. 

Cybersecurity

The Air Force is not alone in delving deeper into blockchain technologies. 

The branch’s needs share much in common the U.S. military more broadly. Namely, massive data processing and vast backlogs of contracts facilitating diverse supply chains delivering everything from Tomahawk missiles to tweezers — all of which demand vital security precautions. Consequently, the broader U.S. Department of Defense (DoD) has been looking seriously at a range of blockchain technologies for increased security applications.

Last month, Cointelegraph reported on the DoD’s newly announced four-year plan, in which the department put forward the prospect of a “Block Chain Cybersecurity Shield.” Named uses for the technology included:

“Facilitating communication between units and headquarters, and transmitting information between intelligence officers and the Pentagon. DARPA also has been trying to develop an unhackable code — which blockchain could facilitate — because the technology offers intelligence on hackers who try to break into secure databases.”

Back in March, the White House’s budget request for 2020 mentioned similar concerns while asking for $9.6 billion to fund DoD cybersecurity initiatives, citing:

“DOD’s three primary cyber missions: safeguarding DOD’s networks, information, and systems; supporting military commander objectives; and defending the Nation.”

The DoD’s recent four-year plan did not explicitly mention the breadth of supply chain applications that companies like Simba Chain may be working on for the Air Force, but cybersecurity needs are evolving.

Supply chains

In a report from 2017 on blockchain tech, Washington-based think tank the Foundation for the Defense of Democracies focused on the need to preserve the “National Security Industrial Base,” illustrating the emergence of a:

“National security challenge related to the globalization of manufacturing supply chains is the phenomenon of attacks in which substandard, counterfeit, or maliciously-modified electronic components are introduced into the hardware on which the national security industrial base (the “NSIB”) operates.”

The famous case of the 2019 National Defense Authorization Act and its ban on Huawei’s electronics is an eye-catching example of the need to be certain of a supply chain, invoking as it did the threat of a foreign power using planted hardware to hack U.S. defense agencies. 

But while cybersecurity is an evocative word, likely to attract funding, some of the military’s supply chain needs are as simple as cost. Back in June of this year, Booz Allen Hamilton, one of the largest government contractors in the U.S., reviewed prospects for incorporating blockchain into federal agencies. 

Among Booz Allen’s recommendations for the DoD was distributing 3D printers to deployed units and then putting 3D plans for various hardware and parts onto the blockchain to save on the expense of manufacturing those parts in the U.S. and then shipping them — much like what Simba Chain is proposing to do for the Air Force. 

Or contract certainty?

Contracts may be a more mundane concern and therefore often removed from the military’s PR, but they are obviously critical. According to the U.S. Government Accountability Office, in 2018, the Air Force spent $71.3 billion on contractors within the DoD’s overall $358.3 billion contractor budget. 

The DoD depends on a truly global supply network, spanning borders and languages. At the same time, the Pentagon is prone to levels of bureaucratic waste that are the stuff of legend, constituting $125 billion over five years according to a buried internal report from the beginning of 2015. The report’s primary recommendations for savings? Cutting back on contractors, streamlining IT and encouraging earlier retirement.  

It is conceivable that blockchain in the military — in the form of Simba’s recently launched smart contract-as-a-service platform or something similar — may end up having the greatest ramifications in the least exciting of applications — the office rather than the battlefield. For now, however, that remains speculation.

Report: Telegram to Launch TON Blockchain Public Testing on Sept. 1

Telegram Open Network’s (TON) blockchain public testing will launch on Sept. 1, according to one of the investors.

On Aug. 28, Russian news outlet Vedomosti quoted an anonymous TON investor claiming to have learned this information from the development team, and the head of one of the companies that participated in the testing so far.

According to the outlet’s sources, TON’s node software and all relevant documentation would be released to the public on Sept. 1. This first version of the blockchain is already expected to feature sharding and various functional consensus mechanisms, the source added.

A blockchain that was popular from the start

TON project is a decentralized application and messaging platform developed by open source messenger Telegram’s team. The blockchain is planned to be integrated into the messaging app used by over 200 million people.

The firm is planning to launch its native TON token — Gram — by the end of Q3 2019. In July, Cointelegraph reported that South Korean Gram Asia began to sell Grams at $4 per token — triple the initial coin offering price.

As Cointelegraph also reported in May, encrypted instant messaging service Telegram released a test client for TON, according to an email sent to investors.

Bitcoin Miners Made $14 Billion to Date Securing the Network

All-time revenue for Bitcoin (BTC) miners has topped $14 billion, according to fresh data from Coin Metrics.

As Yahoo! Finance reported on Aug. 30, despite the massive increase in the network’s hash rate — a factor that depresses the profitability of mining — there’s still more money in the game for miners than ever before. 

Bitcoin miner revenue growing exponentially

The report notes that as of the Bitcoin network’s inception, it took eight years for miners’ total revenue to break past the $5 billion mark; the next $5 billion were exponentially faster, taking only a further eight months for revenue to break $10 billion.

If current mining profitability remains on track, the $20 billion revenue mark will be broken sometime in early 2020.

Bitcoin total mining revenue (USD)

Bitcoin total mining revenue (USD). Source: Coin Metrics via Yahoo! Finance

Solid revenue despite soaring hashrate

The $14 billion figure is all the more impressive given that the network’s hash rate has been on a tear for several months now: continuing to break previous records throughout summer — with a new all-time-high posted just today, at 83.5 TH/s by press time.

A higher hash rate indicates that miners are expending record levels of computational processing power to solve and validate blocks — and pocket their rewards.

Higher compute intensivity translates into higher operational costs for miners — yet the robust revenue increase indicates this factor has not critically dented profitability. 

Looking ahead, Bitcoin is under a year away from its next halving — a pre-coded 50% reduction of block rewards for miners — which is slated for May 2020

While the halving can have bullish implications for a cryptocurrency’s price (by increasing scarcity), its impact on miners is keenly watched, with some concerned that lower block rewards will deter network participants and thus adversely impact the network’s hashing power.

Billionaire Alan Howard Eyes $1 Billion Crypto Fund Management Venture

Elwood Asset Management — owned by British billionaire and Brevan Howard founder Alan Howard — is planning a $1 billion venture into the crypto hedge fund space.

The Financial Times (FT) reported on Aug. 30 that the asset manager is developing a platform that would tailor portfolios of cryptocurrency funds for institutional investors.

Weeding out the crypto hedge fund space

Elwood Asset Management CEO Bin Ren told the FT that the venture will aim to steer investors towards a selection of vetted crypto funds that have passed robust due diligence so that market participants can avoid the risks associated with the emerging sector.

Ren — who formerly served as chief investment officer at Brevan Howard’s Systematic Investment Group — said that screening of the sector had resulted in Elwood identifying up to 50 crypto hedge funds as “probably satisfy our due diligence.”

While details of the product remain to be finalized, the new fund could enable investors to determine input factors such as the level of risk they are willing to court, their expectations of returns, as well as liquidity terms. It will also measure the potential correlation of the tailored crypto hedge fund portfolio with the rest of their existing assets. 

As the FT notes, Elwood’s bid to navigate institutional clients through the new investment landscape is informed by a recognition that many crypto investment vehicles still lack the traditional features of the traditional hedge fund industry.

Product could eventually have $1bn AUM

The report cites research jointly conducted by Elwood and Big Four auditor PwC this year that revealed that crypto hedge funds charge an average management fee of 1.72% plus a performance fee of 23.5% — well above the 1.41% 16.6% respective averages for the traditional hedge fund industry. 

For its services, Elwood will apply its own fee on top of the fees that investors pay to access the underlying funds. 

“I see this as a very big growth opportunity,” he told the FT, noting he expects the product could eventually manage over $1 billion in assets.

This March, Elwood had indicated it was planning to increase its cryptocurrency offerings as it announced the launch of a blockchain exchange-traded fund in partnership with Invesco.

Howard himself has a host of crypto investments under his belt, including in EOS developer Block.one and the ICE-owned digital assets platform Bakkt.

Portugal Tax Authority: Bitcoin Trading and Payments Are Tax-Free

Portugal’s Tax Authority has clarified that both cryptocurrency trading and payments in crypto will not be taxed in the country, Cointelegraph en Español reported on Aug. 27.

According to a report published on Aug. 26 by Portuguese business newspaper Jornal de Negócios, the Portuguese Tax and Customs Authority have confirmed that crypto transactions or payments are exempt from Value Added Tax (VAT).

The agency reportedly provided the clarification to a local crypto mining company, publishing an official ruling document. In the document, the authority states that the exchange of crypto for fiat money is free of VAT, adding that crypto users do not have to pay any income tax.

Portugal cites a 2015 ruling for crypto tax exempt

In the official statement, the Portuguese tax authority cited a 2015 ruling by the European Court of Justice regarding the case involving major Swedish Bitcoin (BTC) portal Bitcoin.se and its moderator David Hedqvist.

As reported at the time, the court ordered that Bitcoin is a means of payment and that the exchange should therefore be exempted VAT obligations. However, the Swedish Tax Agency subsequently argued against the ruling, claiming that the court did not fully understand the matter.

Earlier stance on crypto

The confirmation follows a previous tax ruling by the Portuguese tax authority that cryptocurrencies are not taxed in the country. A document published by the agency in 2016 states that income from the sale of crypto in Portugal is not subject to income tax.

Earlier in 2013, the central bank of Portugal, the Banco de Portugal issued a statement citing a 2012 crypto-related paper by the European Central Bank. 

The Portuguese bank raised concerns over the ECB’s Bitcoin recognition as a “phenomenon of innovation in virtual currency models,” claiming that Bitcoin cannot be considered a safe currency as it its issued by unregulated entities.

Bitcoin ‘Failed Safe Haven Test’ After 7% Drop, Peter Schiff Gloats

Bitcoin (BTC) has shown it is not a safe haven asset, gold bug Peter Schiff has said after the largest cryptocurrency dropped 7% in daily trading.

In a tweet on Aug. 28, Schiff, who has become increasingly known as a Bitcoin naysayer, claimed BTC/USD dipping below $10,000 once again on Thursday put pay to theories it functioned as a hedge against fiat volatility.

Schiff: Bitcoin “failed safe haven test”

“Bitcoin has again failed the safe haven test. On Friday, as escalating trade tensions sent global stock markets plunging, investors sought refuge in monetary safe havens. The Japanese yen, Swiss franc, and especially gold all moved higher. Yet Bitcoin plunged by more than stocks!” he wrote.

Schiff was referencing a popular theory about Bitcoin investment habits which has surfaced over the past two months. 

Against the background of the United States-China trade war, tensions in Venezuela and unrest in Hong Kong, commentators declared Bitcoin offered an option to preserve wealth for those in affected regions.

As Cointelegraph noted, overall Bitcoin network volatility hit new two-month lows last week. 

Now, however, the fresh move down spurred critics such as Schiff, who continued:

“Since last Thursday Bitcoin has lost more value than any of the major stock market indexes, while gold and silver have gone up.”

Already REKT?

His argument, however, was lost on Bitcoin proponents. Responding, the Twitter account known as Parabolic Trav rebutted Schiff on Bitcoin’s intrinsic value.

“Why on earth would Bitcoin be a safe haven? Bonds are the safe haven in the current paradigm. Nor is gold a safe haven,” he wrote.

The bonds comments came as the U.S. Treasury Secretary, Steven Mnuchin, revealed the government was considering ultra-long bonds of 50 or 100 years. 

In an event which could have contributed to Bitcoin’s fall, issuance of such bonds would decrease borrowing costs for Washington and limit taxpayer exposure to the U.S.’s almost trillion-dollar annual budget deficit.

“Bitcoin is simply, over time, ‘number go up,’” Trav meanwhile continued in an attempt to deflate Schiff. He concluded: 

“If you try to fit it into the legacy financial analysis box, you’ll be rekt Which is what you are Pete!”