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NY Regulator Licenses Fidelity for Bitcoin Trading and Custody
Fidelity Investment’s digital currency arm has been licensed by the New York Department of Financial Services to operate a platform on which individuals and institutional investors can store, purchase, sell, and transfer bitcoin. The regulator also revealed that it has to date approved 23 charters or licenses for firms engaged in crypto activities.
Also read: US to Strictly Enforce Crypto Rules Similar to FATF Guidelines
Fidelity’s New Crypto License
The New York State Department of Financial Services (DFS) announced Tuesday that it has granted a charter under the state’s banking law to Fidelity Digital Asset Services LLC (FDAS) to operate as a limited liability trust company in the state of New York. The Bitlicense regulator detailed:
DFS has authorized FDAS to provide a virtual currency custody and execution platform, on which institutional investors and individuals can securely store, purchase, sell, and transfer bitcoin.
Following the DFS announcement, FDAS explained, “We look forward to making our custody and trade execution services available to firms based in New York.” The firm added, “We have experienced a high interest level from these firms and anticipate that their increased involvement in this industry would enable more activities and development across the spectrum.”
“The custody and trade execution services that we provide are essential building blocks for institutional investors’ continued adoption of digital assets,” FDAS COO Michael O’Reilly claims. “The designation as a New York trust company under the supervision and examination of the DFS builds on the credibility and trust we’re establishing amongst institutions and other market participants.”
FDAS is a subsidiary of Fidelity Investments, one of the world’s largest financial services providers with more than $7.2 trillion in client assets under administration and over 1.3 million trades processed each day, according to its website. Established in October last year, the digital asset subsidiary aims to create a full-service enterprise-grade platform for storing, trading, and servicing eligible digital assets. Tom Jessop, president of Fidelity Digital Assets, said in March that his company had been adding institutional investor clients such as hedge funds and family offices, but noted that certain aspects were still a work in progress.
23 Approvals so Far
Prior to the charter granted to Fidelity, the DFS had issued 22 others since it began approving crypto businesses in 2015. The regulator revealed:
Including the charter granted to FDAS, to date DFS has approved 23 charters or licenses for companies engaged in virtual currency business activities.
The last company that the DFS approved before Fidelity was Bakkt Trust Company LLC. The company was granted a charter under the state’s banking law in August and proceeded to launch regulated bitcoin futures on the NYSE.
Several other firms have been approved by the DFS this year to operate crypto businesses. In September, the regulator green-lighted the first gold-backed digital currency in the state. Paxos, formerly Itbit, was approved to offer three asset-backed tokens: Paxos Standard (PAX); PAX Gold, an asset-backed token pegged to gold; and BUSD, an asset-backed token pegged to the U.S. dollar.
Furthermore, the DFS also approved Seed Digital Commodities Market, Zero Hash, Bitstamp, and Tagomi Trading this year. One company was denied, however. In April, the regulator rejected Bittrex’s applications to engage in crypto and money transmission activities in the state of New York.
What do you think of Fidelity’s crypto services and all the companies approved by the DFS? Let us know in the comments section below.
Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Images courtesy of Shutterstock.
Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.
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Mega-Utility Token UPT Will Offer Interest and Discounts on Trading
About to make its initial exchange listing, Universal Protocol Token (UPT) will serve as a mega-utility token, offering holders attractive interest rates when lending and borrowing, lower exchange fees, cashback and discounts on trading.
Also Read: Universal Protocol Alliance to List Mega-Utility Token on Bitcoin.com Exchange
Mega-Utility Token to Debut Wednesday
The Universal Protocol Alliance is a group of like-minded cryptocurrency companies and blockchain organizations that want to connect different digital assets in a single network. The group has identified that many users need innovative solutions to move digital assets seamlessly across different wallets, exchanges, and networks. The alliance members include Bittrex, Brave, Certik, Omisego, Blockchain at Berkeley, Uphold, and Cred.
Universal Protocol Token is the native token of the Universal Protocol Platform, and is the underlying utility token for the Universal Protocol ecosystem. Consumers can use it to make transactions with the additional tokens and stablecoins that Universal Protocol has released including UPUSD, UPEUR, and UPBTC. Universal Protocol Token (UPT) will debut Nov. 20, 2019 on Bitcoin.com Exchange as an initial exchange listing, and will be available for trading by non-U.S. persons only.
“The Universal Protocol Token is the solution for businesses, consumers and governments large and small require solutions to digitally maneuver assets anywhere and anytime,” said JP Thieriot, co-founder of the UP Alliance and Uphold. “UPT will unlock tremendous value in the ecosystem and set the stage for even more innovative solutions in the marketplace.”
Alliance Members to Provide Special Offers
Each Alliance member will provide a critical component to the ecosystem, and provide different services and discounts, including:
Cred: Holders of UPT will earn interest on UPT and all UP tokens through Cred Earn. Holders of UPT or any UP token will also be able to collateralize UPT or any UP token to receive fiat loans. Cred is a global lending and borrowing platform serving customers in 183 countries with over $300 million of lending capital.
Uphold: Holders of UPT will receive additional digital currency back with the launch of the Uphold debit card (up to an additional 1%) and will receive discounts on all trades performed on Uphold. Founded in 2014, Uphold has over 2 million users around the world and has traded over $5.4 billion on its digital money platform and reserve ledger.
Blockchain at Berkeley: Holders of UPT and any UP token can purchase goods, services and tickets for blockchain events at reduced prices. Blockchain at Berkeley is an academic organization at the University of California, Berkeley, that provides educational resources, consultancy, and R&D to some of the biggest blockchain projects in the world.
Omisego: Holders of UPT will be able to pay fees using Omisego’s payment settlement technology. Omisego is a leading layer 2 scalability solution for Ethereum supporting any type of tokenized asset including UPT.
Certik: Holders of UPT and any UP token will benefit from reduced code auditing fees when payment is made with UP tokens. Certik is a pioneer in blockchain security and auditing with over $5B in assets secured, founded by Yale Department Chair of Computer Science Zhong Shao and Columbia University Assistant Professor Ronghui Gu.
Bitcoin.com Exchange was launched in September as an easy-to-use trading platform that offers world-class security and a powerful trading engine. The venue has a wide variety of trading pairs like litecoin (LTC), ripple (XRP), tron (TRX), zcash (ZEC) and denominated markets with base currencies such as tether (USDT), bitcoin cash (BCH), and bitcoin core (BTC). The platform employs institutional-grade encryption, two-factor authentication (2FA) and IP whitelisting to keep user accounts secure at all times. It was recently announced that instant cryptocurrency exchange Changelly will use digital asset rates from the trading platform which will ensure better prices for users and help increase the reach of all SLP tokens that are exclusively listed on Bitcoin.com Exchange.
What do you think about the benefits of the mega utility token UPT? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
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Why Tokenized Projects Are Building on Bitcoin
Bitcoin is something you hodl. Ethereum is something you build on. At least that has long been the official narrative, with projects favoring dedicated smart contract networks over Bitcoin for spinning out dapps and second layer solutions. Like all crypto narratives, however, this one has started to shift, as projects reappraise the benefits of crafting censorship-resistant applications anchored to Bitcoin Core and Bitcoin Cash.
Also read: Coinex Chain Launches Tokens Anchored to BTC and BCH
Why Businesses Are Issuing Tokens on SLP
Businesses of all kinds are issuing tokens on the Bitcoin Cash network using Simple Ledger Protocol. It essentially works as a simplified version of Ethereum’s ERC20 token standard, enabling anyone to create and issue a native token in a matter of minutes. Bitcoin Cash – like Bitcoin Core – is not a smart contract blockchain, and thus lacks Ethereum’s Turing completeness, which enables the creation of tokenized systems with complex logic programmed in. Most projects don’t need to issue a token with the sophistication of something like Maker’s dai, however: the ability to mint and issue tokens, anchored to the security of a robust proof-of-work chain, is enough.
There are two main reasons why businesses have been building on Bitcoin Cash with SLP. The first is that they are already ideologically or pragmatically aligned with the network, possibly on account of its ultra-low fees and scalability. The other is that the shortcomings of traditional smart contract networks such as Ethereum and EOS have given them cause to seek sanctuary in BCH. Ethereum’s fees rose significantly this year, exacerbated by Tether’s takeover of the network following USDT’s migration to the ERC20 standard. Fears of creeping centralization on Ethereum, and the baked in centralization on EOS haven’t helped either network either. Projects now using Simple Ledger Protocol include an electric bike company and Sideshift.ai, which has created a BTC-anchored token on BCH.
Why RSK Is Building on Bitcoin
Over on BTC, second layer development work is kicking into gear, with RSK the most prominent company spearheading the Bitcoin building revival. CEO Diego Gutiérrez Zaldívar told news.Bitcoin.com that the company favored creating a smart contract infrastructure on top of Bitcoin due to the security guarantees and developmental certainty that it yields, explaining: “A two-way peg between Smart Bitcoin (RBTC) and BTC means users can access a fully smart contract-enabled environment that’s bolstered by the proof of work from miners that secure the Bitcoin blockchain through merged-mining. Bitcoin has proved it is here to stay, and we believe it will enable an internet of value ecosystem with a very bright future.”
“Recently, IOV Labs, RSK and RIF OS have increased their global reach and have taken crucial steps to introduce Bitcoin and RSK Smart Contract technologies to a wider audience,” noted Zaldívar. “Through these steps, we expect to receive community and user feedback and to make the necessary adjustments for Bitcoin and RSK to reach more people.” While Bitcoin’s security model is unrivaled, convincing businesses to build upon a blockchain that is not synonymous with smart contracts requires education and demonstration of how this works in practice. To achieve this, RSK’s parent company IOV Labs has embarked on a whirlwind global outreach effort, onboarding companies in major territories along the way. This has included partnering with NXTP, a Latin America-based accelerator, investing in three blockchain projects – Vega, Multis, and Pocket Network – and acquiring social network Taringa.
Why Other Blockchains Are Anchoring to Bitcoin
Not every project is looking to issue dapps and middleware upon Bitcoin: some simply want to capitalize on its security and its neatly timestamped blocks, which can be used to anchor an array of other blockchains. Bitcoin serves as the fulcrum around which these chains revolve, effectively forming a Schelling point. Numerous projects have tapped into Bitcoin’s security in this manner over the years, most recently Veriblock.
The project utilizes “proof-of-proof,” a meta-sounding consensus mechanism that encodes proof into BTC’s OP_ Return field. Veriblock promises to deliver Bitcoin-level security for new and established blockchains, reducing the risk of double spends and 51% attacks. As Veriblock explains, Bitcoin is “the golden standard of security” with “more than 40 times the thermos-equivalent computational power to the world’s fastest supercomputer.”
The Ease of Building on Bitcoin
The two Bitcoins – Core and Cash – have a number of advantages for projects seeking to build upon them, over and above security. The deep liquidity that BTC in particular enjoys, coupled with its broad adoption, places it at an advantage over smart contract networks such as Ethereum. Bitcoin Cash, meanwhile, is very developer-friendly, with Bitcoin.com’s developer portal providing a complete toolkit for the purpose of launching BCH-based applications.
Outside of RSK’s ecosystem, most of the development work occurring with BTC currently revolves around Lightning Network (LN). Due to the complexity of LN, however, it is less developer-friendly than Bitcoin Cash as it stands. Once Lightning Network becomes production ready, it may spawn a cottage industry of LN-based apps (‘Lapps’) and BTC-powered financial solutions. Meanwhile, Bitcoin Core and Bitcoin Cash will remain an attractive proposition to projects enticed by the unrivaled security provided by proof-of-work.
Do you think BTC and BCH can compete with smart contract blockchains such as Ethereum? Let us know in the comments section below.
Images courtesy of Shutterstock.
Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.
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‘Lost Coins’ Study Estimates BTC’s True Supply
Many people like the fact that Satoshi Nakamoto introduced a capped supply of 21 million coins when he created the Bitcoin protocol. However, there’s been a lot of speculation aimed at guessing the number of ‘lost coins’ that will never be spent. On November 19, the digital currency data and research site Coin Metrics published an in-depth study that estimates the true number of BTC’s circulating supply.
Also read: Walk Like Nakamoto: 7 Anonymous Personalities in the Crypto Space
Coin Metrics Estimates the Number of Lost Bitcoins
According to various data websites, there’s 18,056,300 BTC in circulation at the time of publication. This number, however, only accounts for the amount of BTC mined into existence and does not account for lost coins. People who love the fact that BTC is scarce are extremely fascinated by the subject of lost coins because in the early days many bitcoins were either lost, burned, stolen, or even forgotten. Even Satoshi explained that lost bitcoins “make everyone else’s coins worth slightly more” and said to “think of it as a donation to everyone.” This week, researchers at Coin Metrics published an analysis of how the public can use different methods to assess BTC’s true supply.
“In this feature, we dive into why Bitcoin’s supply is lower than expected and calculate how many coins are permanently lost,” Coin Metrics’ post states. “Furthermore, we analyze exactly why these coins are lost, and account for what happened to them. We first examine coins that are provably lost, and then analyze coins that are assumed to be lost, but could potentially eventually be found.”
The study discusses provably lost coins like unspent outputs such as the 50 BTC locked in the first block. “The result is that those 50 BTC are not present in Bitcoin’s ledger, even if they are visible in a transaction included in the main chain,” the researchers stress. Further, the research highlights duplicate coinbase transactions, unclaimed rewards, and OP_Return outputs that use more than a value of zero satoshis. “In total, we can compute Bitcoin’s actual supply at block 600,000 working backwards from the expected 18M BTC value and subtracting what is provably lost,” the study details. “This figure of 17,999,817 BTC as of block 600,000 is the ‘technically correct’ view of Bitcoin’s supply.”
Assumed Losses and Stolen Coins
Following the subject of provably lost coins, the paper discusses assumed lost coins like bogus addresses, bugs in script, and ‘zombie coins’ or UTXOs “that haven’t moved in many years.” Lastly, the study looks at stolen coins or large numbers of coins that are “difficult to insert back into circulation.” A good example of this is when 79,956 BTC was taken from Mt. Gox exchange and the funds now rest in the sixth richest BTC address. From the number of lost coins analyzed, the Coin Metrics researchers developed three adjusted views of the BTC protocol’s supply. One view that counts provably lost coins, another perspective that accounts for assumed lost coins, and another that excludes provably, stolen, and assumed lost bitcoins.
The 6th richest bitcoin address holds $650M worth of BTC that were stolen from MTGOX in 2011 but never moved after that. H/T @coinmetrics https://t.co/a6ULlz11pwhttps://t.co/m4e8eW1GvS pic.twitter.com/gqHFcqBiGL
— Jameson Lopp (@lopp) November 19, 2019
Coin Metrics research says there are a variety of other methods that can be used to measure BTC’s true supply. “Another way to estimate Bitcoin’s supply would be to break it down by time of last activity with the expectation that coins untouched for years are probably lost,” the report concludes.
The researchers at Coin Metrics further state that the analysts will continue to monitor the lost bitcoins phenomenon going forward. If you’d like to read Coin Metrics’ “State of the Network: Issue 26” report in its entirety, you can find it here.
What do you think about the number of lost coins in comparison to the number of bitcoins mined into existence? Let us know what you think about this subject in the comments section below.
Image Credits: Coin Metrics, Shutterstock, BBC, Fair Use, and Twitter.
Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.
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