Partnership Could See up to 100,000 Regular ATMs in U.S. Turned into Bitcoin-Vending Machines

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A deal between a traditional ATM manufacturer and a cryptocurrency vending machine firm will make it possible to buy bitcoin at tens of thousands of locations in the United States using a debit card.

Bitcoin ATM firm LibertyX and regular ATM manufacturer Genmega have forged a partnership which will make it possible to purchase bitcoin using a debit card at up to 100,000 locations in the United States.

However, since Genmega caters largely to the independent ATM deployers, adding the bitcoin-buying feature at the ATMs will depend on the willingness of the operators to offer the service. After making an application all that will be required will be a software upgrade in order to allow users to purchase bitcoin from the vending machine and have it sent to their cryptocurrency wallet.

Ease of Use

The development will be a boon to new users especially since the purchasing process of bitcoin from the ATMs is not very different from withdrawing cash from a vending machine. According to LibertyX, making cryptocurrency vending machines user-friendly has been a top priority for the Bitcoin ATM firm since it was founded.

“We have been working tirelessly to make it easier to buy cryptocurrencies for the last five years and now are bringing simplicity, convenience and trust to the cryptocurrency purchasing experience,” said Chris Yim, the co-founder and CEO of LibertyX, in a statement.

Currently, the number of bitcoin ATMs in the United States is nearly 2330, which is the highest in the world, with major urban areas such as Los Angeles, Miami, Atlanta, Chicago, and New York leading in coverage with more than 100 vending machines in each city. The United States is also home to Genesis Coin Inc, the world’s leading bitcoin ATM manufacturer with a market share of more than 32%, according to Coin ATM Radar.

U.S. Dominance to Continue

Various factors have contributed to the United States being the leader with regards to Bitcoin ATM coverage and this includes the high level of cryptocurrency awareness and adoption. A recent market research report has indicated that this will continue to be the case in the foreseeable future.

“The US is expected to continue to dominate the crypto ATM market during the forecast period owing to the presence of a large number of crypto ATM hardware and software providers and favorable investment environment (without any legal barriers),” recently reported by a crypto ATM market research report released in August.

Though it remains to be seen what portion of the 100,000 Genmega ATMs will adopt the bitcoin-purchasing feature, even a small percentage would greatly increase the number of Bitcoin ATMs not just in the United States but globally. At the moment the number of Bitcoin ATMs in the world is a little over 3,800 with an average of 5.58 bitcoin ATMs being added daily.

Ticketmaster, the major global ticket sales distribution company, has recently acquired the blockchain company “Upgraded”. They plan to utilize their DLT and “smart tickets” technology in order to combat the rising fraud issue within the industry as well as claims that they have been scalping their own tickets .

Ticketmaster merged with Live Nation back in 2010 to form Live Nation Entertainment, which is the music behemoth that you see today. The company currently leases, operates, and has equity interest in many of the entertainment venues sold throughout the US. Ticketmaster also promotes 30,000+ concerts as well as sells hundreds of millions of dollars’ worth of tickets annually.

Live Nation Entertainment generates over $10 billion in revenue so the potential for blockchain technology through “Upgraded” will more than validate their results. Live Nation Entertainment has become so dominant within their market sector that their main competitors AEG, accused them of unethical practices which eventually led to the Department of Justice investigating the matter earlier this year.

This acquisition has also come at a pivotal moment due to the fact that Live Nation was recently hit with a class-action lawsuit for allegedly operating their own ticket scalping scam. Only time will tell whether the blockchain company acquisition will help alleviate and reinvent this music giant as a company that prides itself on transparency.

The founder of Upgraded, Sandy Kaund, noted that the partnership between the 2 companies would bring “promise of blockchain to millions of music fans”.

Khaund, who founded Upgraded in 2016, hinted that many more applications for the technology would be released soon, as stated in this Forbes interview. The founder also highlighted that his company was not only useful for preventing fraud but also enabling the tickets to serve as a high-tech marketing tool.

He went on to state that the potential of our blockchain technology allows anyone to set price restrictions and hide their barcode until two hours before the event. The technology also has the ability to reveal the barcode within 1 km of the venue.

Five days since losing its U.S. dollar peg, fiat-backed cryptocurrency tether (USDT) continues to trade at a discount to its supposed $1.00 valuation.

Defenders have largely chalked up the markdown to FUD, arguing that supporters of other “stablecoins” are launching a coordinated assault on tether, which has long dominated this market niche. However, billionaire investor and cryptocurrency bull Mike Novogratz says that USDT’s woes are the fault of its issuer’s lack of transparency.

tether price cryptocurrency
USDT/USD | Kraken | Source: TradingView

“I think Tether didn’t do a great job in terms of creating transparency,” said Novogratz on Wednesday at a conference in Frankfurt, according to a Bloomberg report. The former Fortress principal specifically called out Tether Limited, the token’s creator, for operating offshore and remaining cagey about its financial relationships, including with whom it is banking.

Tether is said to be currently banking at the Nassau-based Deltec Bank, where it opened an account after severing ties with the now-floundering Puerto Rican institution Noble Bank. Neither of these relationships has been confirmed publicly.

Concerned about the firm’s opacity, Novogratz said that he prefers some of the newer stablecoin options, particularly the Gemini Dollar (GUSD), which is issued by the cryptocurrency exchange founded by Cameron and Tyler Winklevoss. Unlike Tether, Gemini’s assets are housed in a U.S. correspondent bank, the Boston-based State Street. The stablecoin issuer, which received approval from the New York Department of Financial Services (NYFDS) to release the token, has also contracted with accounting firm BPM LLP to evaluate Gemini’s monthly attestation reports detailing that the token is always fully-backed by USD.

tether cryptocurrency market cap
Tether’s outstanding supply has shrunk by nearly $700 million in October. | Source: CoinMarketCap

“The concept of stablecoins make sense,” Novogratz said, explaining that they are ideal for transactional exchanges, unlike bitcoin, which he has referred to as “digital gold.”

However, competition within the stablecoin market is growing increasingly stiff. GUSD, along with “regulated” stablecoins Paxos Standard (PAX), TrueUSD (TUSD), and USD Coin (USDC), has been listed on a number of major exchanges in recent weeks. All of these tokens have consistently traded at a premium to tether, suggesting that, at least right now, the market trusts them more than USDT. Moreover, two of them — GUSD and USDC — have been added as settlement options on BitPay, which processed more than $1 billion worth of cryptocurrency payments last year.

In follow-up comments posted on Twitter, Novogratz stressed that he believed USDT is fully-backed by physical dollars and did not want to sow rumors about the token.

“Id like to put context to these quotes as the last thing I want to do is spread FUD. I said I thought tether has a dollar for every tether and that we actively traded it. The fact that almost $700mm has been redeemed in an orderly fashion is important.”

Nevertheless, he said that Tether must work harder to earn back lost trust and prove that its token should trade at its full $1.00 valuation.

Bulletproofs Explained

The improved protocol allows for stronger privacy, cheaper and faster transactions, and greater ASIC miner resistance.

Bulletproofs is a unique feature among digital assets, at least among large-cap networks. It gives users more privacy by hiding the number of coins that they send in transactions. The technology implements new logarithmic math in order to verify transactions (if you’re into heavy math, take a look at the academic paper that was the guidepost for the tech).

The upgraded protocol also brings much cheaper transactions fees and quicker transactions. As the team’s blog update states:

“With our current range proofs, the transaction is around 13.2 kB in size. If I used single-output bulletproofs, the transaction reduces in size to only around 2.5 kB! This is, approximately, an 80% reduction in transaction size, which then translates to an 80% reduction in fees as well. The space savings are even better with multiple-output proofs. This represents a significant decrease in transaction sizes. Further, our initial testing shows that the time to verify a bulletproof is lower than for the existing range proofs, meaning speedier blockchain validation.”

Another side-effect is occurring as well: XMR miners are reporting that mining difficulty has dropped steeply since the fork. The blockchain’s ledger will now also require much less hard disk space. Overall, the version is a massive upgrade that helps Monero remain a top privacy coin.

Monero developers strongly recommend that everyone upgrade their wallets and nodes if they haven’t done so already, as running the old version could lose transactions.

ASIC Resistance: The War Continues

The team behind Monero publicly declared war against ASIC mining equipment. This came after Bitmain released specialist equipment that would have crowded out CPU and GPU miners had the cryptocurrency not “bricked” Bitmain’s ASICs by altering its mining algorithm.

Monero’s long-held goal is for all users to mine the coin, not only manufacturers or mining farms that have the resources to throw around immense hashing power, as has happened on the Bitcoin network. This way, average users can stay profitable with GPU and CPU chips. Monero developers agreed on semi-annual network upgrades and tweaks to the Proof-of-Work (PoW) function in order to stay one step ahead of ASIC manufacturers. Today’s fork continues that warfare.

Bolstered by stable trading volume, growing network activity, and increasing validation on Wall Street, the bitcoin price could be on the brink of a major move to the upside.

eToro senior market analyst Mati Greenspan said that the stars continue to align for a potential bitcoin rally, making it increasingly likely that the most prominent cryptocurrency will soon break out of its holding pattern.

“It’s only a matter of time now,” he said of a potential bitcoin breakout. “Of course, the flatline pattern could easily remain for another few months and that wouldn’t be a bad thing, however, there are signs of excitement boiling underneath the cool price action exterior.”

Greenspan, who previously said that he thought bitcoin was heading into a “classic breakout pattern,” identified three catalysts that he said were suggestive of an imminent breakout, namely, a rising transaction rate, steady daily trading volumes, and the continuing growth of cryptocurrency-related activities on Wall Street.

bitcoin transaction rate
Source: Blockchain.com

Citing data from Blockchain, Greenspan notes that the number of bitcoin transactions per second — which plunged during the first quarter — has steadily risen throughout the second half of 2018. Since dropping below 2.0 TPS in mid-April, the transaction rate has climbed to 2.78 as of Thursday morning — a six-month increase of more than 40 percent. While still far below the 4.8 TPS achieved in late December, this present growth has occurred during relatively stable market conditions — not a parabolic rally. This, Greenspan said, is “a classic indication that we’re nearing the end of the flat cycle.”

Cryptocurrency market cap
Source: Mati Greenspan/eToro

Concurrently, daily cryptocurrency trading volumes, which steadily declined throughout most of the year, appear to have flatlined near $10 billion over the past several months, which Greenspan notes is “exponentially higher” than the average daily volumes seen during the last bear market.

But while volumes on cryptocurrency spot exchanges have flatlined, trading activity within the Wall Street futures markets are booming. CME Group — operator of the largest U.S. bitcoin futures market — identified a 41 percent quarter-over-quarter increase in the average daily volume during Q3. On a daily basis, CME is handling approximately as much volume as Upbit, one of the largest spot cryptocurrency exchanges in South Korea.

Taken together, Greenspan argues that these data points bode well for the short and mid-term future of the cryptocurrency market.

Wall Street banking giant Goldman Sachs has put another stake in the ground of the burgeoning cryptocurrency industry, headlining a $58.5 million Series B funding round in digital asset custodian BitGo.

Goldman, Novogratz Invest $15 Million in BitGo

Announced on Thursday, the Series B round raises the Silicon Valley-based bitcoin startup’s total fundraising to approximately $70 million. Also participating in the funding round was Galaxy Digital Ventures, a cryptocurrency fund founded by billionaire bitcoin bull and former Goldman partner Mike Novogratz. The news was first reported by Bloomberg, who said that Goldman Sachs and Galaxy Digital together contributed about $15 million to the funding round.

“If you were investing in any other asset class, you’re probably not worried about the asset just disappearing — but this one, people still have that fear,” Mike Belshe, BitGo’s co-founder and chief executive officer, told Bloomberg in an interview, “we’ve got to conquer that.”

Founded in 2013, BitGo now holds about $2 billion in customer assets, which are denominated across 95 different cryptocurrencies.

Recently, BitGo received regulatory approval from the South Dakota Division of Banking to offer qualified cryptocurrency custody services, making it the only regulated custodian developed exclusively for cryptoassets.

However, it’s one thing to receive the green light from regulators, but it’s quite another for BitGo to persuade cautious institutions to entrust them with their assets. Receiving financial backing from a firm like Goldman Sachs should go a long way toward helping the upstart firm build that trust.

“Greater institutional participation in the digital asset markets requires secure and regulated custody solutions,” said Rana Yared, a managing director of Goldman Sachs’ Principal Strategic Investments group. “We are impressed by BitGo’s product, unique services, and the management team. We view our investment in BitGo as an exciting opportunity to contribute to the evolution of this critical market infrastructure.”

A Growing Market for Crypto Custody

Meanwhile, BitGo must also stave off competition from legacy financial players who are beginning to build out blockchain products for their crypto-curious clients.

Fidelity Investments — the fifth-largest asset manager in the world with 27 million clients and $7.2 trillion in assets under management and administration — just this week announced that it was launching a separate company called Fidelity Digital Asset Services to provide cryptocurrency custody and trade execution services for institutional investors. The firm has already signed up Galaxy Digital as its first custody client.

Moreover, Goldman Sachs itself is said to be working on a custody product for cryptocurrency assets, though it’s not clear when that product would launch. Previously, Goldman announced that it was launching a bitcoin trading desk, though it later shelved those plans to focus on cryptocurrency custody.

Galaxy Digital, a crypto merchant bank operated by billionaire investor Mike Novogratz listed on Toronto-based stock exchange TSX-V, has become the first alpha crypto custody client of Fidelity Digital Assets.

This week, Fidelity, the world’s fourth-largest asset manager with $7.2 trillion in assets under administration as of October 2018, launched Fidelity Digital Assets, a subsidiary of Fidelity that will provide crypto custodian solutions to institutional investors and accredited investors.

Through the platform, all 27 million customers and 23,000 businesses of Fidelity will be provided with sufficient infrastructure and services to invest in the cryptocurrency market.

Demand From Hedge Funds and Institutions

In an official press release, Fidelity CEO Abigail Johnson said that the long-term mission of the firm in the sector of cryptocurrency is to increase the accessibility and improve the infrastructure surrounding the asset class.

“Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors. We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.”

The core operations of Fidelity Digital Assets include assisting institutional investors such as hedge funds, pensions, and academic institutions to invest in the cryptocurrency market with appropriate institutional products.

Fidelity Digital Assets founding head Tom Jessop said that the establishment of the company’s digital asset arm can be considered as the recognition by Fidelity of sufficient demand from institutions for cryptocurrencies.

Within less than 24 hours since its launch, Fidelity Digital Assets secured Galaxy Digital as its first custody client, a company that aims to achieve a similar objective as Fidelity to institutionalize the cryptocurrency market.

Jessop stated:

“This is a recognition that there is institutional demand for these assets as a class. Family offices, hedge funds, other sophisticated investors, are starting to think seriously about this space.”

In January of this year, Novogratz contributed $302 million to Galaxy Digital to build a full-service merchant banking business in the crypto and blockchain space. Months later, Galaxy Digital was listed on Canada’s stock market, enabling investors to directly invest in the cryptocurrency market.

Apart from its core business of investing in cryptocurrencies and blockchain projects, Galaxy Digital offers high profile investors and institutional clients consultancy to facilitate large investments into the market.

“The resulting firm will have over 70 employees with deep institutional experience spanning across technology, investing, advisory, and trading. The Firm has also invested significantly in its management, operations, legal, and finance departments,” he added.

The partnership between Fidelity and Galaxy Digital is expected to lead to clients of the Novogratz-led firm to invest in the cryptocurrency market through Fidelity, similar to how prior to the launch of Fidelity Digital Assets, clients of Fidelity purchased cryptocurrencies like Bitcoin and Ethereum through Coinbase, a partner company of Fidelity.

Future Remains Bright

The infrastructure of the cryptocurrency market, specifically pertaining to the institutionalization of the asset class, has improved exponentially in the past nine months.

Increasing efforts to strengthen the infrastructure of the cryptocurrency market suggest that regulated financial institutions are seeing solid demand for crypto from their existing client base, which could fuel the next major movement of the sector.

The research arm of cryptocurrency trading platform BitMEX has announced that it will launch its own Bitcoin software client to compete with reference implementation and industry standard Bitcoin Core.

Unveiled this week in a lengthy post discussing the merits of competing software clients, BitMEX Research said that it chose to release its own BTC client to help correct the misunderstanding that open-source software repository Bitcoin Core is in charge of the cryptocurrency’s development and “has the unique capability to change or prevent changes to Bitcoin’s consensus rules.”

The authors argue that this misunderstanding was amplified during and following the blocksize debate, which they say was often incorrectly characterized as a standoff between Core and mining firms and/or large cryptocurrency businesses.

In the wake of that standoff, there has been much discussion within some cryptocurrency circles about who is in “control” of the Core software repository, which is currently hosted on GitHub, and what happens if that repository is hijacked or deleted.

These discussions, BitMEX Research argues, miss the point, as it is users who should be the ones truly in charge of the cryptocurrency’s protocol rules.

“People tend to look for somebody who is in control of Bitcoin’s protocol rules. Prior to and during the blocksize war, many thought it was miners, large businesses or Gavin Andresen. One of the unexpected negative consequences of that war is that many seem to have switched their opinions to believing Bitcoin Core is in-charge, an equally flawed view. The truth is, as hard as it is to appreciate, end users are ultimately in charge of Bitcoin.”

The group’s new client, dubbed Bitcoin BitMEX Research, aims to reduce the network’s reliance on a single major software repository without introducing new risks to the ecosystem. To that end, it will neither implement consensus changes that would force a hard fork nor attempt to re-implement the protocol by rewriting the codebase. Instead, it will launch its client as a fork from Core.

“Since it is a software fork of Bitcoin Core, it carries none of the risks of not being bug for bug compatible, like Satoshi was concerned about,” the authors wrote. “The BitMEX Research client also doesn’t change Bitcoin’s consensus rules, so the concerns about contentious chainsplits do not apply. Therefore, if the Bitcoin Core repository gets hijacked or deleted, the codebase can still improve using the Bitcoin BitMEX Research repository.”

Huobi set to list 4 new stable coins later this week on October 19. Gemini Dollar (GUSD), TrueUSD (TUSD), and USDCoin (USDC), and Paxos Standard (PAX) will be the new assets listed.

Huobi’s New StableCoin Selection

The newest digital asset to be launched on the Huobi platform is issued by Paxos Trust, labeled PAX . It’s regulated by the New York State Department of Financial Services. Investors will be able to trade the USD-endorsed and currently under the supervision of NYSDFS.

GUSD, who claims to be the first world regulated stablecoin was recently issued by the Winklevoss twins (owners of the Gemini exchange). This stable coin will also be regulated under the supervision of NYDFS and is backed by $1 in hard currency.

TUSD is another dollar backed stablecoin listed on the exchange and entrusted by multiple banking partners.

Lastly, Circles USDC token allows financial institutions to join their platform through open membership and offers financial solutions to those who seek to resolve current cryptocurrency market issues.

Tether Facing Some Real Competition

Huobi Global, the fourth largest crypto trading platform in the world, currently hosts Tether which is the most popular US dollar peg stable coin to date. Tethers fully backed by the currencies reserve although it was trading at .5% lower than its real value as of yesterday ($0.965). At one point it failed to $.93 during the day but is now trading at.

Tether Limited, the company behind stablecoin has been accused of not holding enough USD reserves to back the Tether tokens in circulation. The stablecoin recently lost their USD peg in a recent flurry of market activity amidst continued negative market sentiment. Although it still dominates a reported 98% of daily stablecoin trading volume, a series of new competitors entering the stablecoin arena over the next week, will certainly place pressure on the current reigning champ.

Earlier in the week, OKEx, another major cryptocurrency exchange, announced that they will also be listing the same four stablecoins (USDC, GUSD, TUSD, and PAX ) within their exchange.

Fidelity, one of the largest brokerages and asset managers in the world, with over $7.2 trillion in assets, launched their first cryptocurrency initiative in late 2017.

They initially partnered with Coinbase, the largest crypto to fiat exchange in the world, and enabled their clients to track investments in major cryptocurrencies through their Fidelity Portfolio Summary View.

At that time, Fidelity didn’t directly integrate into the cryptocurrency infrastructure. This only allowed investors who were registered with Coinbase to view market demand from other cryptocurrency Coinbase investors.

Within this one year period, Fidelity has now fully integrated the digital assets into their own platform.

The Fidelity Commitment

Fidelity has always maintained an open mind towards cryptocurrency and blockchain technology. Hadley Stern, senior VP of Fidelity Labs, told national publication “The Street” back in August 2017 that the firm does not underestimate the disruptive nature of blockchain, even though they still require a significant amount of work in infrastructure and adoption in order to grow.

Fidelity also mined and cryptocurrencies for brief period of time in order to better understand and analyze the digital currency. Stern explained that the initiative was driven by Fidelity Labs as an experiment on how to learn about various difficulty levels regarding how the Bitcoin network operates.

Since the partnership with Coinbase, implementation of cryptocurrency within Fidelity Portfolio View has observed a significant increase in both demand and interest from their clients.

Similar to other investment firms like Goldman Sachs, Citigroup, TD Ameritrade, and many others, the firms are very interested in investing in cryptocurrency through a regulated and transparent marketplace.

Like the rally experienced in 2017, which saw a dominant price of $20,000, which was mostly driven by retail traders and individual investors, hedge funds and institutional investors are expected to deliver an influx of capital into the cryptocurrency marketplace in the months to come.

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