Bank Indonesia Team Up With Police to Clampdown on Bali Bitcoin Transactions

Indonesia’s Central Bank, Bank Indonesia (BI), have united with the national police service to tackle the illegal use of Bitcoin in Bali. According to them, the tourist hot spot is much more likely to attract people trying to use the cryptocurrency for transactions that are outside the law. The Jakarta Post and local language news source Tempo.co report that on Saturday, January 13, a senior member from BI, Causa Iman Karana, announced the clampdown in Dempasar, the capital of the romantic island getaway location:

“We are looking out for bitcoin transactions in Bali, particularly in tourist spots. We will take measures against non-rupiah transactions.”

Karana also called on the people of Bali to not accept transactions using digital money. For the banker, it is the lack of central authority regulating transactions that is a primary cause for concern. Like most central bankers, the fear of their own pending redundancy was also a likely motivating factor behind his words.

This recent  crackdown in Bali is part of a wider initiative against the use of cryptocurrency in the nation of Indonesia. According to national legislators, making transactions in Bitcoin violates Law No. 7/2011 on currency. This recent reiteration underlines the initiative penned at the bank late last year. In early December, Bank Indonesia issued BI Regulation No. PBI: 19/12/PBI/2017. This expressly banned the use of digital currency in Indonesia and stated that all transactions and payments must be made using the national currency, the rupiah. A spokesperson for the bank, Agusman, at the time spoke of the risks posed to those getting involved in the digital currency space. Like Karana, he too deemed the primary issue with virtual money transactions the lack of centralised control:

“We warned people not to carry out transactions with virtual money because there is no authority that regulates the transactions.”

The bank spokesperson went on to highlight the speculative risk of using Bitcoin and other cryptocurrencies. Also amongst his concerns were the dangerous posed to the state because of money laundering, as well as the ease with which virtual currencies could be used to finance terrorism. Agusman concluded with a straight forward message for the people of his country:

Therefore, [BI] wants all parties not to sell, buy or trade the virtual currency.

Indonesia isn’t the first and it certainly won’t be the last country who attempts to stamp out the use of virtual currencies by force. Across the globe, Bolivia, Algeria, Ecuador, and Nepal are amongst those nations that have issued an outright ban on the use and trading of digital currencies. However, such small economies are incapable of moving the price of BTC or any other currency in any dramatic fashion. If the global popularity of crypto continues to grow, it’s likely that these States will be forced to liberalise their knee-jerk legislation or else get left further behind the planet’s larger economies.

 

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Anything goes in the cryptoland, so much so that an altcoin created as a parody has just reached a billion dollar market capacity. Dogecoin was created in 2013, its mascot is a Japanese Shiba Inu dog made popular by an internet meme dating back eight years.

The dog it seems has broken off its leash after being largely left behind last year as other altcoins too center stage. Defying its creator’s belief, DOGE has risen 900% in the past six weeks from $0.001 to its current high of $0.01. What is more astounding is that it has surpassed the billion dollar market capacity which puts it just behind Russian crypto platform Waves in the market cap charts. Over $120 million has been traded in DOGE in the past 24 hours according to Coinmarketcap.

Jackson Palmer, the founder of the cryptocurrency who left the team in 2015, is concerned;

“The fact that most conversations happening in the media and between peers focus on the investment potential is worrying, as it draws attention away from the underlying technology and goals this movement was based on. I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn’t released a software update in over 2 years has a $1B+ market cap.”

Current Dogecoin developer Patrick Lodder was equally surprised and told Coindesk;

“To me, this proves that we don’t need shiny features or a ton of innovation and even with a conservative – and in my own case completely distracted – development team for a boom,”

The sentiment was shared by another developer on the team, Max Keller;

“It’s a little scary when you work on software that powers a billion dollar network. This is quite the responsibility. And also one of the main reasons why we are so reluctant to just slap any ‘innovative’ tech into the reference client. Still, I am proud of what we achieved and thankful to be part of such a great community.”

Dogecoin does not really have a grand purpose aside from being a simple internet currency. Its appeal could just be its low cost. There is a psychological barrier to overcome when a single digital coin such as Bitcoin is worth $15,000, new traders would be more comfortable owning several thousand smaller altcoins than a fraction of a Bitcoin. Digital assets trading house Octagon Strategy managing director Dave Chapman 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,”

DOGE is currently traded the most on Bittrex and Poloniex which have 23% and 20% of the volume respectively.

It’s always good to see existing cryptocurrency services support new currencies. In the case of ShapeShift, they have been adding quite a few coins throughout 2017. It seems this trend will carry over into 2018, as the first new currency has been added already. NEO, one of the top 15 cryptocurrencies, is now available for trading on this platform.

Supporting different currencies is the bread and butter of ShapeShift. This service allows users to convert between different currencies without creating an account. Although it can’t be used for major transactions in one go, it has a certain appeal. Especially for users who don’t want to rely on regular exchanges, such a platform can make a big difference. After all, it is convenient, has low fees, and transactions are completed very quickly. Adding NEO to the list of supported currencies makes a lot of sense.

NEO Trading is Live on ShapeShift

As a result of this move, NEO can now be traded against all other supported currencies. This will give the popular altcoin a lot of new trading markets waiting to be explored in the future. Right now, trading NEO is somewhat limited to Bitcoin and Ethereum across most platforms. With ShapeShift, about 30 different combinations are added to this list as we speak. It is always good to have more options at one’s disposal, to say the very least.

As is always the case, it remains to be seen if this will generate more interest in NEO. While it is a popular altcoin, it’s not even close to rivaling Ethereum. That seems a bit odd, considering this altcoin refers to itself as the Ethereum of China. It will be interesting to see how the future plays out for this currency. Its value has gone up steadily throughout 2017 and that trend is still in place during the first week of the new year.

ShapeShift has quickly become one of the most popular cryptocurrency conversion services in the world. Their service is easy to use and a lot of currencies are supported as we speak. The addition of NEO will be beneficial to this company as well, in the long run. For now, it remains to be seen if there is sufficient demand to warrant this addition. Only time will tell if that is effectively the case.

Those Bitcoin investors in the US who think they’re outsmarting the IRS by trading funds to other digital currencies rather than back to dollars could be in for a nasty surprise. Under GOP tax bill that is due to be voted upon next week, law makers will draw a distinction limiting “like-kind” exchanges to real estate.

It’s been argued by some that using Bitcoin or any other digital currency to purchase a different crypto should be treated the same as a 1031 exchange. This allows taxpayers to exchange one type of asset to another without it being deemed a taxable event. Since the IRS considers Bitcoin as property rather than currency, it was thought that digital currencies could be considered as “like” assets.

Evan Fox, the tax manager at New York accounting firm Berdon gave his opinion on the matter to CNBC:

“Some people think, ‘I’m taking my bitcoin, which the IRS has deemed to be property, swapping it for another property and doing it for investment reasons,’ so it sounds like it could be a 1031 exchange… I think it’s a stretch.”

However, under the new bill, any debate will be rendered moot. It explicitly limits 1031 exchanges to real estate. This gives an answer to all those accountancy professionals who have struggled to advise clients invested in Bitcoin and other cryptos because of the law lagging behind technological innovation.

For now, people cashing out or trading digital currencies in the States should beware. Other investments will often trigger the a brokerage to send a Form 1099 automatically which also goes directly to the IRS, alerting them to your trading. These forms are used to record losses and gains. However, it’s important to remember that the absence of such a document does not mean that taxes are not owed. This makes it necessary to self-report.

It’s also worth noting that the IRS have up to three years to conduct an audit. It could be as late as 2020 that your 2017 tax return is brought into question. Fox warned that penalties and interest might face those who do not correctly report their cryptocurrency gains.

He summed up the situation pretty clearly for CNBC’s readers considering risking not reporting crypto trading gains:

If you put money into the cryptocurrency space, and you decide to buy [another digital asset], and you one day monetize it and show up with a $2 million house, the IRS is not stupid.

The taxation expert concluded by suggesting that the number of returns this year will be a matter of great interest to those at the IRS. Previous years have seen suspiciously low numbers of traders reporting their cryptocurrency gains, and this year will no doubt be the same.

 

Image: ShutterStock

As the world woke up to news of the Bitcoin fork cancellation altcoin traders and investors finally had something to smile about. It had been dark days for the majority of altcoins as they had all lost ground in recent weeks to the Bitcoin behemoth.

As with previous Bitcoin forks, traders have been dropping altcoins, many of which can only be purchased with Bitcoin, and ploughing their funds back into the ‘big one’ in order to get some extras when the chain splits. Many exchanges such as Coinbase and Bitfinex promised holders of Bitcoin an equivalent amount of Bitcoin2x after the fork. This also happened with the Bitcoin Gold fork which drove prices to record highs last month.

Everybody loves free stuff so traders have been getting out of the altcoins and moving back into Bitcoin in order to reap the rewards. Bitfinex even allowed traders to buy futures in B2X before the fork, naturally most will be wishing they hadn’t now.

So in what is becoming a somewhat predictable swing of momentum the majority of altcoins were up this morning. Bitcoin itself surged to a record high of $7,800 but rebounded back and seems to have found support at the $7,400 level.

Ethereum has been a flat line for the best part of a month, idling between $290 and $310. It traded towards the top of this channel but has failed to break out of the $310 resistance level at the time of writing reaching a high of just under $313.

Litecoin has fared a lot better breaking out of its own $54 – $58 channel and trending upwards towards last month’s high of $65. The digital currency has had some good news recently when one of the largest exchanges in South Korea opened up trading with LTC. The country is responsible for 25% of the global trade in Litecoin.

NEO has been another winner surging almost 25% in a matter of hours. Previously trading at around $26 the Chinese based crypto formerly known as Antshares shot up to $32 surpassing the $2 billion market capacity in a matter of minutes. Naturally these spikes are unsustainable but NEO is still strong currently trading at around $31 with a $1.5 billion market cap.

OmiseGO is another altcoin that needs a mention as its chart mirrored that of NEO. The undervalued coin rose from a long period of decline of around $6 to a high of $8.5 and is currently trading around $7.8 where it was three weeks ago.

Volatility in crypto markets goes without saying but after a month of doldrums it is finally time for altcoins to get some limelight.

As brilliant as a tool for financial empowerment as it is, Bitcoin isn’t terribly environmentally friendly. It’s been estimated by Alex de Vries at Digiconomist that with BTC priced as it currently is, it would be profitable for miners to consumer 24 terawatt-hours in power every year. Put another way, more electricity than the entire state of Nigeria and its 186 million inhabitants use per annum. The analyst told MotherBoard:

Blockchain is inefficient tech by design, as we create trust by building a system based on distrust. If you only trust yourself and a set of rules (the software), then you have to validate everything that happens against these rules yourself. That is the life of a blockchain node.

The idea of an environmentally friendly cryptocurrency taking over Bitcoin is nothing new. In 2013 PeerCoin was touted by many to be an early solution to the energy demands of the Bitcoin network. They were, of course, much smaller back then too.

The latest effort to reduce the carbon footprint of Bitcoin comes from the creator of BitTorrent, Bram Chohen. For him, the fact that each Bitcoin transaction currently requires as much power as an American home uses in a week is completely unacceptable.

He’s currently developing the Chia Network to try and tackle the issue. He considers two main issues with Bitcoin at present. These are the environmental impact of mining and the centralisation of miners. The two are interlinked as well. Concentration of mining interests occurs because of varying electricity prices and ambient temperatures around the globe. Miners are most efficient where its cheap and cold. He told TechCrunch:

The idea is to make a better bitcoin, to fix the centralization problems

Chia will enforce proofs of space and proofs of time, instead of the resource-intensive proofs of work popularised by Bitcoin. Cohen plans to use spare space on the hard drives of computers comprising the network. This is, of course, abundant and free. He admits that it isn’t the first time that similar has been tried but claims to have incorporated proofs of time to limit Chia’s exposure to potential attack vectors others have encountered.

For now, Cohen has an idea and has completed an early round of funding. He’s currently ramping up his hiring efforts. He seems optimistic despite the demands of setting up an entirely new system:

It’s technically ambitious and there’s a big meaty chunk of work to do. I’ve done enough raising money and recruiting. Now for the real work.

It’ll be some time yet before the network is ready for use. According to the man himself, the goal is to start some sales some time in 2018. He aims to have the project ready for a full launch by 2018. However, Cohen does admit that nothing has been finalised in terms of release.

 

Image: Bit.vn

 

Alternative currencies are becoming a part of everyday life, particularly in countries that become unstable. Take for example 2009, when the currency in Zimbabwe collapsed and its citizens began using talk-time minutes as a way to purchase and barter for goods. But it doesn’t take the collapse of any one currency to understand why alternative currencies can be useful and even in some cases safer than a government currency. The DIMND token has taken the idea of alternative currency and added extra value, by using gem quality diamonds as its backing.

The DIMND token is what is known as an Ethereum based token, adhering to the standards of the Ethereum network. The large and considerable difference between other Ethereum tokens and the DIMND token is the fact that each token is backed by a gem quality diamond. You may ask, why use an alternative currency? And the answer can be many; for some, the privacy of an alternative currency is their goal. Unlike traditional currencies where every move is tracked and traced, alternative currencies can be used anonymously. For others, it is a question of profit. For example, BerkShares is a currency that the people of the Berkshires region of Massachusetts have created for their local economy. You may only use these BerkShares in Berkshire County, and you can purchase one full dollar share for only 95 cents. That five cents can add up if you purchase enough shares; buy $475 worth of shares and you have $500 of buying power.

In the case of DIMND tokens, your investment is backed by gem quality diamonds which are forecasted to rise in value by four to six percent annually. You also have the advantage of the diamonds being secured in a Freeport location. For investors, this means they will benefit from being VAT exempted for their initial investment. And while the industries surrounding diamonds may be affected by financial crises, the diamonds themselves often remain stable. This is in large part because the supply of diamonds is heavily dictated by the suppliers themselves; unlike gold which can be recycled and resold.

Once the function becomes available, those who purchase DIMND tokens will be able to use them for daily trading on digital currency exchanges. One may also choose to diversify their investment portfolio with DIMND tokens because, as stated above the expected annual return is between four and six percent.  Because DIMND tokens are backed by physical property (diamonds), potentially it can also be adopted and used as collateral for purchases in the industry. Each DIMND token will represent a fraction of a diamond carat; a carat is a unit of weight, and is equal to 0.2 grams. Each carat can then be subdivided into 100 points. If an investor wishes to redeem their tokens, they may do so for the equal worth of carats in diamonds at any time they wish.

Vietnam has always been an interesting region when it comes to Bitcoin. Although adoption seemed to rise, things are not evolving in the right direction. More specifically, using cryptocurrency in Vietnam will be subject to a fine in early 2018. Outlawing this new form of money is a bad decision by the government, to say the least. Then again, it was to be expected, given similar developments in neighboring countries.

Vietnam doesn’t like Bitcoin and wants nothing to do with it. That is the message conveyed by the state bank of Vietnam right now. Bitcoin and other virtual currencies have been deemed to be illegal. This new monetary law will go into effect during Q1 of 2018, with no exact communicated so far. The only viable payment method in the country is issued or controlled by the central bank. It is not entirely surprising, though. A lot of these countries are legitimately concerned over Bitcoin and its quick rise to the top.

Vietnam Distances Itself from Bitcoin and Altcoins

Although the bank only mentions Bitcoin by name, all cryptocurrencies will be illegal next year. It is evident they only name the coin everyone knows At the same time, one has to wonder how successful this decision can be. No one can prohibit people from using cryptocurrency. Going after centralized companies is the only course of action. Consumers don’t have to declare their Bitcoin involvement whatsoever. People are free to do as they like in this regard, as there is no way to prove people are effectively using it.

At the same time, this ban comes at an interesting point in history.  Bitcoin is setting new all-time highs on a regular basis these days. Moreover, outlawing Bitcoin will give rise to an increased popularity for privacy-centric currencies. Right now, Monero is the only currency that can’t be traced back to the person using it through any known measures. It doesn’t have the traction Bitcoin has right now though. Nor is it confirmed this sudden shift will happen either. It is still worth keeping an eye on, as the possibility remains in place.

This decision by the State Bank of Vietnam is unfortunate. However, the end result will not matter all that much. No one can deny decisions like these are trivial at best. Banning Bitcoin is virtually the same as telling people only to breathe so much air during the day. It is a powerful message in a way. The educated people among us will effectively dismiss this decision. An interesting future lies ahead, that much is evident. With or without Vietnam, Bitcoin will succeed eventually.

Header image courtesy of Shutterstock

According to their Twitter account, Indian wallet and exchange application Zebpay hit an impressive milestone of one million downloads last month. They also estimate an influx of 500,000 new users per month in 2018.

Zebpay was launched in 2015 by trio of entrepreneurs, Mahin Gupta, Sandeep Goenka, and Saurabh Agrawal. They registered their company in Singapore on the recommendation of Nishith Desai Associates. This decision was made to protect against a potential clampdown of the Indian Bitcoin community since the space is still unregulated in the nation.

Whilst the early days were tough for the company, the recent surge in demand for Bitcoin has seen them add 200,000 users per month. Around 2016, they noticed traffic really increasing. Often the heightened interest in the digital currency coincided with global insecurity or crises. Events like the Trump election result, Brexit, and domestic demonetisation last year fuelled demand. They expect the figure of new registrations to increase to half a million in 2018 following their integration with other cryptocurrencies like Ether, Ripple, and Litecoin.

The three founders saw that the largest problem with Bitcoin was the fact that it was difficult for the average, non-technical person to get to grips with the buying and storing of digital currency. Being as India has a rapidly expanding mobile phone user base, yet only a small percentage of the population has access to a computer, it made sense to direct their business towards the mobile market. India enjoys some of the lowest network tariffs on the planet and if the recently reported figures are anything to go by, the decision to target mobile users is starting to pay off.  Saurabh Agrawal, CEO of Zeb Ventures commented to Forbes of India:

We worked hard to understand and solve the pain point of understanding bitcoins. We made a key decision that mobile phones are huge in India and internet penetration is big through phones. So we decided on an app-only presence in India.

The application-only service differed from the other major Indian exchanges in that there would be no website. The aim with Zebpay was to provide a one-stop shop for users to buy, store, and even spend their Bitcoins using just their mobile phone. The founders’ overriding goal has always been one of simplicity for the end users.

The company has helped to drive the massive growth in Bitcoin usage in India since they initially impressed angel investors at a Las Vegas startup pitch competition in September 2014. However, with the space remaining unregulated for now, the effect the eventual legislation will have on Zebpay is currently unknown. According to news source Factor Daily, the Indian central bank are working on regulating the cryptocurrency space within the country. The publication are not expecting the all-out bans that the likes of Bolivia and Ecuador have introduced but rather a taxed, legal industry. In their interview with Forbes of India, however, the Zebpay founders seem unconcerned about any domestic legal developments in cryptocurrency.

NEOUSD TECHNICAL ANALYSIS

That flash buy on Friday pushed NEO prices higher. However, since price movement over the weekend remained muted, the minor resistance trend line drawn from 08.10.2017 and 14.10.2017 highs and the 20 period MA is a lifeline for NEO bulls. Right now, the price is rejecting any price above $30 and continues to trend lower. Anyway, my deduction is simple, there is no buy signal which we expected after that bullish push on Friday and consequent bull volumes are waning. Break below support of $24 means sellers are in charge and USD bulls are in the trade. Conversely, break above $32 resistance triggers NEO bulls. Refer Figure 1 (Above): NEOUSD-Daily Chart-16.10.2017

DASHUSD TECHNICAL ANALYSIS

altcoin, analysis, dash, oct 16
Figure 2: DASHUSD-Daily Chart-16.10.2017

Price is oscillating within a tight $80 range marked by 12.10.2017 doji candlestick. By any standard, bull price rejection happens around $330 to $340 which is a resistance confluence zone marked by the resistance trend line-that between 24.09.2017 and 12.10.2017 highs and the support turned resistance drawn from 14.09.2017 and 05.10.2017 lows. My recommendation is patience until there is a break above $340 for bull entry or if in case that resistance trend line stands and the bear trend continues, sellers should join in below $250 which is a safe entry zone. Either way, there is a buy signal in place but these whipsaws and dojis give mix signals which is not beneficial for trend traders. We remain neutral as we watch stochastics and volume behavior to predict the most probable trend direction.

IOTUSD TECHNICAL ANALYSIS

iota, altcoin, analysis, oct 16,
Figure 3: IOTUSD-Daily Chart-16.10.2017

Buy momentum is sustained as shown by stochastics and on another level, the resistance trend line managed to rebuff any price appreciation above $0.45. On these three days when prices were constricted within a tight $0.10 range defined from 12.10.2017 Hi-Los, volumes remained tepid and on a negative trajectory after recording a record 19M. The 19M surge in bear volumes was the force behind that bear candlestick which closed below $0.45. Following my Saturday’s recommendation, bull trigger happens when there is a break above $0.48 highs of 12.10.2017 and a consequent break above 30.09.2017 and 12.10.2017 resistance trend line. Important bear levels remain at $0.38 which is 04.09.2017, 15.09.2017 and 12.10.2017 support levels.

MONERO-XMRUSD TECHNICAL ANALYSIS

xmr, monero, altcoin, analysis, oct 16
Figure 4: Monero-XMRUSD-Daily Chart-16.10.2017

There was a brief price appreciation on Saturday before a correction on Sunday. For the record, price tested 23.08.2017, 15.09.2017 and 27.09.2017 highs of $102. That level is turning out to be significant for bulls. In the meantime though, correction towards the support trend line or the 20 period moving average around $86 to $95 provides a wonderful opportunity for bulls to buy at a cheap and aim for that resistance level at $122 as long as there is a buy signal and increasing momentum. Also, notice how volumes have been sustained above 25K daily average in the past 3 days. There is obvious supply-demand push and pull at these current price levels.

LSKUSD TECHNICAL ANALYSIS

LSK, lisk, altcoin, analysis, oct 16
Figure 5: LSKUSD-Daily Chart-16.10.2017

Despite across the board bull pressure in most alt-coins, USD bulls are pushing LSK down. On Saturday, we mentioned that as long as prices remain below that resistance trend line then we remain bears until when there is a clear push above. That should be accompanied by a strong bullish engulfing pattern or a two-bar reversal pattern. In this case, though, price action remains within 12.10.2017 Hi-Los and that minor support trend line connecting 09.10.2017 and 14.10.2017 lows still holds. There is a buy signal but bear volumes are still below the daily average trading range and therefore, today’s candlestick can lead to a break above resistance or below minor support for bear trend continuation. We remain neutral for now until a clear trend is defined.

Contributed by Dalmas Ngetich, an expert with 3 years in Forex, Commodity and Cryptocurrency trading. All charts, courtesy of Trading View