Coinbase and the Power of Bitcoin Exchanges

Many fondly remember their first Bitcoin transaction. It likely took place on Coinbase, one of the first exchanges to serve the Western marketplace. Bitcoin became tradeable on Coinbase when the price of a coin was in the single digits and daily volume couldn’t match the population of a small country town. Since then, this exchange has helped Bitcoin gain traction and made it more accessible to consumers the world over. There’s no doubt that Bitcoin fans today have a soft spot for the exchange, and those who began trading early probably have Coinbase to thank for their riches.

The company wields its influence over the market quietly, but this power in the cryptocurrency world is undeniable. As a certain wise uncle once said, with great power comes great responsibility, and Coinbase currently sits in a precarious position. Some questionable behavior in the past is raising eyebrows inside the community and out, yet few seem to grasp just how thin a line the exchange walks.

Exchanging the Game

Bitcoin was originally a closed ecosystem, with those who mined it the only ones to receive the cryptocurrency as a reward. This is the unique “proof of work” algorithm that keeps the ecosystem running to this day, reimbursing miners with Bitcoin for verifying and processing transactions on the network. However, exchanges allowed trading between Bitcoin that had already been mined, and fiat money like Dollars, Pounds and Yen. In some ways, this was good: It put Bitcoin into the hands of those who didn’t want to, or couldn’t, mine it, but it also opened a whole new can of worms.

Exchanges are vital to the Bitcoin economy because they remain the primary way of obtaining value from one’s Bitcoins, since merchant acceptance of Bitcoin is still quite low. Though eCommerce is relatively eager to adopt cryptocurrency as a payment solution, like in the case of Alibaba or Overstock, brick and mortar is still slow on the uptake. Unfortunately, many people still patronize physical stores and shops where cash or credit cards are infinitely easier to use.

Naturally, a place to turn your Bitcoin into cash becomes an extremely in-demand service. Though it gives people an easy way to grasp the value of their Bitcoin, it also opens the market for speculation. Coinbase and other early exchanges created a relationship between fiat currencies and Bitcoin and changed the name of the game forever. No longer was it about creating a new banking system, or an easier way to trade. It was about hitting the “moon,” “hodling” and making the coin’s price its only measure of success.

The Power of Exchanges

Because exchanges are an avenue to Bitcoin trading, they also have a lot of influence on the price of Bitcoin itself. Many understand that when an exchange adds an altcoin for Bitcoin pair trading, the price of that coin is likely to rise significantly due to a new source of volume. Early buyers of altcoins like NEO have petitioned the world’s exchanges to accept NEO as a tradeable coin, and it’s largely working. In turn for listing popular coins, the exchanges profit from fees (if they even impose them) and the spread.

They can also take advantage of high volume in more sinister ways. Throughout the years, many have noticed that during times when the price of Bitcoin is falling rapidly, Coinbase goes offline. Though the company says it’s because of an influx of new customers, unmanageable trade volume, insufficient server capacity and the like, many suspect Coinbase of front-running.

During these times, an exchange could theoretically fill their own buy and sell orders before clients’ and make a great deal of money. In fact, US watchdog organization the Commodities and Futures Trading Commission is currently investigating Coinbase’s GDAX exchange for potential margin trading violations following Ethereum’s flash crash this summer.

Any exchange that has so much influence and goes mostly unchecked is troubling. The US has mostly let cryptocurrency flourish in the country, but should a rogue politician get scared and encourage restrictive measures like those imposed in China and South Korea, Coinbase might have something more to worry about. Should it ever be ordered offline like some others, it will surely cause a sizeable crash in the price of Bitcoin.

On the Bright Side

Coinbase might have to get its story straight for when regulators come knocking and wish to poke around more thoroughly. However, it will also have a lot of good on its record. It’s currently insured by the FDIC and is largely compliant with all the guidelines established thus far in its home country, Coinbase is based in San Francisco. As more time passes, and more governments, central banks, and financial institutions realize the good that cryptocurrency and Blockchain can do, they may take a less harsh stance on those already operating within their borders. For Coinbase and their customers, this is welcome news.

Money on Mougayar? Business Blockchain Author Launches Crypto Fund

Author and investor William Mougayar has launched a blockchain-based cryptocurrency index fund.

Announced yesterday, Mougayar is one of 12 managers to open up a fund on iconomi, a blockchain-based digital asset management platform. According to Mougayar, however, his fund will distinguish itself by allowing investors to benefit from something he is uniquely able to provide – his expertise.

"I'm able to balance and rebalance the basket in a favorable way. And that insulates the average user from some of the blind spots that they may be facing," he said.

On this point, Mougayar offers no shortage of credentials, having authored a book "The Business Blockchain," published by Wiley last year, as well as launching a popular conference focused on the emerging digital asset economy last May.

Mougayar told CoinDesk:

"The value proposition is that I am part of this market. I talk to these companies. I know their CEOs. I know their founders. I know the real story."

Notably, for more novice investors, the fund will seek to invest in the broader cryptocurrency asset class, beyond better-known options such as bitcoin.

Toward that end, the fund will include allocations of 15 cryptocurrencies that will change based on Mougayar's outlook on the cryptocurrency space. Currently, Mougayar will hold the largest allocation, at 20 percent of the total index, in ether, and 10 percent in bitcoin.

Three lesser-known cryptocurrencies – steem, nexium and cofoundit – will each represent 10 percent of the index's holdings. The remaining 10 cryptocurrencies, which include melon, augur and basic attention token, will each represent 4 percent of the holdings.

"Having a basket of cryptocurrencies, managed by someone who knows what they are doing, in a way removes some of the risks for the average consumer," Mougayar said.

Fund costs and structure

But while new crypto index funds are launching almost daily, Mougayar's fund seems to be courting a new class of retail investor – those with more experience in cryptocurrency than in traditional markets.

Mougayar's index charges a relatively low total fee of 5 percent, which is in stark contrast to the very high "two-and-twenty" fee structure fiat-based hedge funds sometimes charge.

Managers of those funds will typically argue that their research work, and sometimes active trading, drive up costs – and that their returns justify their fees, though that assertion is a highly controversial one. Mougayar told CoinDesk that he charges a premium over the 2 percent sometimes charged by low-fee passive funds because he believes active management can provide investors with substantial additional value creation.

Also, unlike other cryptocurrency hedge funds, Mougayar's does not require a minimum investment, something that should appeal to smaller retail investors.

"It's like you're on an exchange. You can buy 0.1 bitcoin. There is no minimum," he said.

Diving deeper, Mougayar's partnership with Iconomi divides two responsibilities typically consolidated in a single firm in other lower-fee tracking funds.

In order to invest in Mougayar's fund, users must first load their account by depositing bitcoin or ether on the Iconomi platform. While Mougayar selects the initial portfolio allocations and re-weights regularly, the investor's user account will reside on the Iconomi blockchain platform.

An additional advantage of partnering with Iconomi, Mougayar argued, is that investors do not need to manage the custody of their own key pairs.

GAW Miners CEO Held Liable for $9.8 Million Judgment in SEC Case

A US federal judge has signed off on a final judgment against Homero Josh Garza, the CEO of the now-defunct cryptocurrency mining firm GAW Miners.

The judgment, entered on October 4, comes less than two years after the Securities and Exchange Commission (SEC) first filed suit against Garza, GAW Miners and ZenMiner, a related firm. Garza was accused and chargedwith violating securities laws through the offering of so-called "Hashlets," or "virtual miners" which were sold to customers through an internal exchange.

Today's judgment follows a guilty plea from Garza, given in July, in a related criminal case pursued by the U.S. Justice Department. Garza plead guilty to a single wire fraud charge and faces sentencing early next year.

In the SEC's civil case, Garza has been held liable for $9,182,000, an amount that the court order said will be "deemed satisfied by the order of restitution that will be entered against him when he is sentenced in the related criminal case." It comes after the agency won a default judgment against GAW Miners and ZenMiner for $11 million in disgorged profits and civil penalties.

GAW Miners, prior to its collapse, previously offered hosted mining services. It later moved into the cloud mining business, through which customers can purchase hash power generated by hardware owned by the miner. But in the case of GAW, the firm didn't actually possess as much hash power as it sold – prompting a harsh rebuke from federal prosecutors in their original complaint from December 2015.

"Though cloaked in technological sophistication and jargon, defendants' fraud was simple at its core – defendants sold what they did not own, and misrepresented the nature of what they were selling," they wrote at the time.

Council Staffers Fired for Bitcoin Mining in Crimea

Two IT workers employed by an authority in Crimea were fired late last month after they were reportedly caught mining bitcoins at work.

RIA Novosti reports that the two unnamed individuals were employees of the Council of Ministers of Crimea, part of the disputed territory's executive branch. The news service indicates the workers installed mining software on computers owned by the council, though the report didn't state how long the operation had been in place.

Through mining – the energy-intensive process by which new transactions are added to a blockchain – the two were said to have raised only a small amount of bitcoin before being discovered.

Whether the council is pursuing charges against the individuals remains uncertain at this time.

The incident is the latest instance in which an employee used official resources to mine bitcoin – only to get caught and terminated for doing so.

In January, an IT employee for the Federal Reserve board of directors was fined $5,000 and put on probation after using a server to mine bitcoins. Later in July, a New York City employee was disciplined after being caught using a government computer to mine bitcoins.

Losing Steam? Dash Price Rallies Over $300 But Upside in Doubt

With a rally in bitcoin pushing up the wider cryptocurrency asset class, dash is back above $300.

At press time, the dash-US dollar (DASH/USD) exchange rate is down over the last week (as expected) falling to $285 on October 3; its lowest level since September 17. The cryptocurrency is now trading at $306; down 1.6 percent in the last 24 hours as per CoinMarketCap.

Yet, the sell-off seen over the last week serves to highlight a peculiarity of the cryptocurrency – that is proving somewhat disconnected with the broader market. For example, while bitcoin remained strongly bid over the weekend, dash suffered losses.

One possible explanation for the behavior, however, is that the market is becoming more conscious that dash is seeking to compete with bitcoin as a payment network focused on consumer transactions.

As the bitcoin blockchain has hung tightly to limitations on network storage (see: the scaling debate), other blockchains, dash included, are seeking to compete. At press time, the average dash transaction fee was $0.02, or about $1.50 at current prices.

Larger debates about blockchain mechanics aside, dash could remain well bid above $300, and any signs that this value proposition is strengthening could potentially lead it to act as a viable bitcoin hedge.

However, the price action analysis suggests, the uptick in dash could run out of steam around $320 levels.

4-hour chart

• A bullish break of the falling channel would open doors for a rally to $324 (4-hour 200-MA) and $330 levels.

Daily chart

The chart above shows:

• 5-day moving average and 10-day moving average is sloping downwards. Thus, upticks above $320 could be short-lived.
• The 50-day moving average is still sloping upwards and currently, stands at $323 levels.

View

• In the short-run, a move to $320-330 looks likely. Caution is advised above $320 levels as the 10-day moving average is still sloping downwards.
• Only two consecutive days-end close above the 50-day moving average would open doors for a rally to $373 levels (Sep 27 high).

Cloudflare Suspends Torrent Website for Cryptocurrency Miner 'Malware'

Internet domain provider Cloudflare has begun to crack down on websites running hidden cryptocurrency miners.

The news came to light yesterday, when the operator of torrent site ProxyBunker told TorrentFreak that Cloudflare had moved to remove all its relevant domains due to a miner hiding in the website's code. A portal to other torrent sites, ProxyBunker had been running the "Coinhive" monero miner for four days prior to the suspension.

Justin Paine, head of trust and safety at Cloudflare, reportedly told ProxyBunker that the decision was taken because the miner was operating in secret, with no option for visitors to disable the code, and was thus considered "malware."

Paine was quoted as saying:

"Multiple domains in your account were injecting Coinhive mining code without notifying users. ... We consider this to be malware, and as such the account was suspended, and all domains removed from Cloudflare."

A website miner works by tapping the processing power of visitors' computers to mine cryptocurrencies. This particular process has gained notoriety in recent days, given instances such as torrent site The Pirate Bay's controversial decision to launch a Web-based miner, which was later removed following a public outcry.

Perhaps more notably, well-known companies like TV content provider Showtime have reportedly had mining malware hidden on their websites, stealing processing power from unwitting users.

Further, the number of torrent sites running mining code has reportedly increased.

The trend has been met with mixed responses, but according to TorrentFreak, website miners could serve as a novel financing method for low-profit services, such as torrents. Yesterday, torrent website PassThePopcorn announced it will be introducing an "opt-in" version of the software as a way of funding its service.

Circle Is Building a Master Mobile Payments Network on Ethereum

Blockchain startup Circle has unveiled new software aimed at connecting the world's digital wallets.

Known as 'CENTRE', the project seeks to create a way for digital wallets (like Venmo, Alipay or the startup's own Circle Pay) to communicate with one another. Put more simply, CENTRE as envisioned would let the companies behind those apps to transmit and settle funds between them.

At its heart, the project targets the so-called "walled garden" issue, wherein different platforms – whether they be a social media site like Facebook or a payments app like Venmo – exist largely within their own ecosystems. Circle is aiming to build a bridge between them, betting that it would make for a more inclusive consumer payments environment.

Circle released today a new white paper outlining the specifications and intended use for CENTRE, which notes that the project has grown since being established as an internal method for transacting in both cryptocurrencies and fiat currencies in digital form. Notably, the startup is planning to develop a new implementation of CENTRE on top of the ethereum network, complete with its own ERC-20 token, the CENT.

CENTRE makes further use of the token standard, however, as node operators – whether they be an app operator, a bank or another financial institution – could issue their own ERC-20 tokens tied to a particular fiat currency to send between other parties on the CENTRE network.

Transactions between nodes would be settled through smart contracts, or self-executing pieces of code that trigger when certain conditions are met. That the startup would move in this direction is perhaps unsurprising – last December, Circle revealed its work on "Spark", a smart contract platform it uses to settle transactions.

CENT, according to the paper, is meant to act as a common medium of exchange between apps that originally use entirely incompatible currencies. This means that while nodes aren't required to accept, say, a USD-tied token issued on ethereum by another party on the CENTRE network, they do, by default, have to accept the CENT.

The startup explains:

"The CENTRE Token, in addition to its other uses (such as accessing the service provider protocol), provides a way for wallets which have no fiat tokens in common to transact, as they will be able to use CENTRE Tokens to obtain the needed fiat token in common to transact."

Circle is planning to create a CENTRE Foundation to spearhead development of the initiative, and the establishment of that nonprofit group is expected to happen in the coming months.

Though it's unclear who will make the shift, the startup said that "several key Circle employees" are expected to form the foundation's early leadership team.

Singapore Central Bank Reveals 3 New Blockchain Payments Prototypes

Singapore's de facto central bank has disclosed new details about its research into financial applications of blockchain technology.

The Monetary Authority of Singapore (MAS), along with the Association of Banks in Singapore (ABS) trade group, today unveiled a new set of distributed ledger prototypes that form the second phase of "Project Ubin," an initiative that began last year with the goal of testing how a tokenized version of the Singaporean dollar could be created.

To date, the MAS has taken a more proactive approach to its work with blockchain compared to some central banks. Its research dates back to as early as 2015, when the regulator revealed that it was looking at uses that included leveraging the tech for record-keeping purposes.

Based on new statements, Project Ubin has grown to include prototype tools from all parts of the interbank settlement process.

As the regulator explained:

"The three software models developed are amongst the first in the world to implement decentralized netting of payments in a manner that preserves transactional privacy. Existing netting programmes used in inter-bank payments rely on a single payment queue visible to the operator to find offsetting payments. Decentralizing the queue, however, potentially exposes payment details to an unauthorized party. The latest models in Project Ubin achieve a superior combination of decentralization and privacy."

The regulator's chief fintech officer, Sopnendu Mohanty, expressed hope that the release would spark further research developments, including those between the MAS and other institutions like it.

"We are sharing our learnings and knowledge from Project Ubin to encourage greater experimentation amongst central banks and financial institutions. We look forward to working with other central banks on the use of DLT for cross-border applications," Mohanty said.

The information release is the latest development from the MAS that finds it shaping its blockchain strategy. MAS officials released a statement on initial coin offerings (ICOs), or sales in which cryptographic tokens are sold in order to fund or bootstrap a new blockchain network.

Per the statement, the MAS believes that some tokens sales fall under the definition of a securities offering, triggering reporting requirements for those involved.

BlackRock Exec: No Point in Bitcoin ETF

An executive for the world's largest asset manager said this week that he doesn't see the case for a bitcoin exchange-traded fund (ETF).

Speaking with Bloomberg on October 3, Mark Wiedman, who serves as Global Head of iShares and Index Investments for BlackRock, was asked about his views on the prospects of a cryptocurrency-tied ETF. A number of firms have attempted to launch such a product, but to date the SEC has been largely dismissive of the concept, issuing notable rejections in the public and, in other cases, prompting some bitcoin ETF backers to withdraw their efforts.

Wiedman said in the interview that he doesn't see it happening, citing other ETF-related products that the firm would encourage clients to hold "in perpetuity." In the case of bitcoin, Wiedman said that he "would not encourage a client to hold bitcoin in perpetuity."

On the question of an ETF specifically, Wiedman went on to say:

"I don’t quite get the point of a bitcoin ETF in any case, because we’re talking about...trading products that are difficult to access. If bitcoin is ever successful – and again not my thing but – I wouldn’t recommend it. But if it were [successful], why would you need an ETF to access it?"

Wiedman isn't the only BlackRock executive to comment on cryptocurrencies this week.

That same day, BlackRock CEO Larry Fink was quoted as saying that he is a "big believer" in the potential of cryptocurrencies. That said, he took aim at the speculation in the market and suggested that cryptocurrencies are being buoyed by money laundering.

Wikipedia Founder: ICOs Can Be 'Absolute Scams'

The founder of Wikipedia had some harsh words for initial coin offerings (ICOs) in a new interview this morning.

Jimmy Wales, speaking on CNBC, said that he thinks many ICOs – through which cryptographic tokens are sold to fund the bootstrapping and development of a new blockchain network – are "absolute scams."

"There are a lot of these initial coin offerings which are in my opinion are absolute scams and people should be very wary of things that are going on in that area," he told the network.

That said, he said the underlying technology behind such offerings is "super interesting," going so far as to say that blockchain will ""be with us for some time to come," according to CNBC.

Wales' comments echo those issued by other observers in the space, including those given in the past week by Jay Clayton, the head of the U.S. Securities and Exchange Commission. Speaking before Congress earlier this week, Clayton argued that the risk of fraud is worse than in the heyday of penny stock scams.

"Pump-and-dump – it’s actually easier here than it is in the penny stock area, because it’s all electronic, it’s all anonymous, [and] it’s harder to catch the bad guys at the end of the day," he said at the time.

In July, the SEC released guidance noting that digital tokens could be treated like securities, and were "subject to the requirements of the federal securities law" under certain circumstances, and a number of other regulators have issued similar statements in recent months.

In contrast, other governments such China and South Korea have gone as far as banning the use of the funding model altogether.

EU Draft Report: Customs Agents Ill-Equipped to Monitor Cryptocurrencies

A draft report being developed by two committees in the European Parliament, the EU's legislative branch, highlights concerns over the ability of border agents to monitor the movement of cryptocurrencies.

The report "on the proposal for a regulation of the European Parliament and of the Council on controls on cash entering or leaving the Union and repealing Regulation," dated September 29, largely deals with cash, as well as other payment methods such as prepaid cards.

According to the text, the report is being prepared by the Committee on Economic and Monetary Affairs and the Committee on Civil Liberties, Justice and Home Affairs.

And while it offers no specific policy measures related to cryptocurrencies, the report cites them as a major issue for customs agents.

The report's authors write:

"Despite the high level of risk posed by virtual currencies as evidenced in the Commission’s report of [June 26] on the assessment of the risks of money laundering and terrorist financing affecting the internal market and relating to cross-border activities, customs authorities lack sufficient resources to monitor them."

The in-progress nature of the draft raises the question of whether the remarks about cryptocurrencies will make it in the final version.

Further, the document features proposed regulations for the monitoring of cash at EU borders, but in its current state, no amendments related to cryptocurrencies specifically are included.

Singapore's Central Bank Plans to Regulate Bitcoin Payments

The minister for the Monetary Authority of Singapore (MAS), the nation's central banking authority, has said the institution is working to create a regulatory framework for bitcoin payments.

In response to a question on the matter from an MP, Tharman Shanmugaratnam – who is also deputy prime minister of Singapore – confirmed that while the MAS "has been monitoring" cryptocurrencies such as bitcoin and ether, it has no intention of regulating them. However, certain peripheral activities will require a legal framework, he said.

MAS, he went on, is now working to create a new regulatory framework for cryptocurrency payment services, in order to ensure they are not misused for money laundering and terrorism financing.

In the statement, Shanmugaratnam clarified that, while MAS has yet to produce a targeted regulatory framework uniquely for ICOs, it will do so if deemed necessary.

Shanmugaratnam explained:

"Virtual currencies can go beyond being a means of payment, and evolve into "second generation" tokens representing benefits such as ownership in assets, like a share or bond certificate. These are financial activities that falls under MAS' regulatory ambit."

The minister also said that while cryptocurrency trading is widely popular in U.S., Japan and Hong Kong, trading volume is relatively low in Singapore. On top of that, only about 20 Singapore retailers accept bitcoin, according to the the central banking authority.

In August, MAS announced that tokens may be classified as securities. Further, the financial regulator has issued statements warning investors of potential fraudulent ICO schemes.

Last month, the bank accounts of a number of bitcoin businesses based in Singapore had their bank accounts closed without explanation. MAS said at the time that, as the closure represent a commercial decision taken by banks, it would not interfere.

ICO Central: Why Switzerland Will Remain Crypto Valley

Ian Simpson is head of marketing and communications at Lakeside Partners, an early-stage investment firm in Zug, Switzerland.

In this opinion piece, Simpson lays out why his country is poised to remain a hotbed of ICO activity for the time being, despite recent regulatory developments – and why it should not try to be the only hub.

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Last week's news that the Swiss Financial Markets Supervisory Authority (FINMA) is investigating ICOsgenerated predictably sensational headlines around the world.

Business Insider went so far as to include the "terrorist" angle in its headline – gratuitously, in my opinion. Some were quick to lump the news together with other negative announcements from around the world.

But it would be wrong to assume that FINMA's statement – even coming at roughly the same time as the U.S. Securities and Exchange Commission's announcement of charges against two ICOs – spells doom for the ICO market in Switzerland.

Those most closely involved in making ICOs happen in Switzerland are not at all naive about the possibility of scams. In a recent interview with online portal Finews, Luka Mueller of MME Legal made it clear that he was well aware of dubious tactics being used.

Moreover, the local blockchain community – far from rooting for each and every project that lands in Crypto Valley – is very focused on self-regulation. I have often been on hand to witness the hard questions and critical attitude during local meetups when teams from around the world show up to promote their ICO campaign.

Code of conduct

The Crypto Valley Association recently came out in favour of a code of conduct as a means to encourage the community to foster best practices and weed out scammers.

This is entirely in keeping with the spirit of the global blockchain community – peer-to-peer review and balance where no one central player needs to enforce or control things.

On a larger scale, this is one of the reasons why Switzerland is still one of the best places to conduct an ICO.

The country's legal and political system has been and will continue to be stable and predictable –and decentralised. The Swiss cantonal system with 26 semi-autonomous regions and rotating federal presidency provides a balanced framework, and a real-world example of the principles that power blockchain.

And even when politicians do get involved, it is in the spirit of "consensus-building." We recently hosted two of the seven Swiss Federal Councillors – Johann Schneider-Ammann (economic affairs) and Ueli Maurer (finance) at our offices in Zug. Both showed an openness to learn and try to understand the potential – and complexities – of blockchain and cryptocurrencies.

Leading the way

Another reason is that there is a wealth of experience and technical talent in Switzerland's Crypto Valley. What started with the founding of the Ethereum Foundation in Zug continues to grow and multiply.

At the ICO Summit in Zurich last month, nearly everyone in attendance was clear on the fact that regulations would come – as William Mougayar pointed out in his keynote speech – but with the hope that they recognize tokens as a completely new asset class. So, despite FINMA's announcement, the Swiss crypto/blockchainecosystem still offers the most stable and promising conditions for ICOs.

For now, anyway.

Because Switzerland, like every other place, should not seek to have a monopoly. This would go against the very spirit of decentralization. Instead, it should focus on trying to lead the way forward so others, including the SEC, can learn from its example.

Is Ripple's Rally Over? XRP Price Runs Into Roadblock

Fresh off setting a one-month high, the price of ripple's native cryptocurrency, XRP, is struggling to cut through resistance offered by a rising channel hurdle.

At press time, the ripple-US dollar (XRP/USD) exchange rate is $0.24, and while that figure is up 4.24 percent on the day and 21.89 percent week-over-week, it seems further gains may be difficult.

Potentially positive news drivers aside, price action analysis suggests XRP is struggling to hold above $0.21 (its September 27 high), meaning downside potential is still in play.

Daily chart

The chart above shows:

• XRP is having a tough time breaching the rising trend line resistance (upward sloping blue lines).
• 5-day moving average and 10-day moving average is sloping upwards.
• The 14-day relative strength index (RSI) is above 50.00 (bullish territory) and pointing upwards.

4-hour chart: Overbought RSI

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• XRP is likely to stay on the front foot and could eventually take out the rising channel hurdle. Prices could then proceed to test their August high of $0.2650.
• However, the RSI on the 4-hour chart is overbought (rally overdone). Thus, a minor pullback to $0.2190 cannot be ruled out.
• On a larger scheme of things, only a break below $0.20 would signal bullish-to-bearish change.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple, the developer of the XRP Ledger.

UK Central Bank Unveils Blockchain Data Privacy Pilot

The Bank of England, the UK's central bank, has added yet another blockchain proof-of-concept (PoC) to its growing fintech accelerator program.

The institution is working with blockchain startup Chain on a data privacy pilot, according to a new announcement. The project is one of four unveiled today, all of which focus on financial information processing.

Bank of England officials have been working with a number of startups and companies on blockchain applications through its accelerator since it launched late last year. Among those were a real-time gross settlement (RTGS) trial involving technology developed by Ripple, as well as an asset exchange pilot involving PwC.

In a speech to fintech firms in Cambridge this morning, Andrew Hauser, the central bank's executive director for banking, payments and financial resilience, highlighted additional details about the new pilot.

"The PoC will examine the extent to which [distributed ledger technology] based systems can be configured to enable privacy amongst participants, whilst keeping data on a shared ledger: one of the holy grails of DLT design," he told event attendees.

The UK central bank first voiced its interest in a blockchain data privacy pilot in April. At the time, Bank of England governor Mark Carney said that the institution wanted to explore "maintaining privacy in a distributed ledger."

The Bank of England is exploring multiple applications of the tech, including its use as a basis for a central bank-issued digital currency – an area that a number of central banks worldwide are also researching.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Chain and Ripple.

Banks Back Syndicated Loan Market Built on Corda Distributed Ledger

A group of banks and financial technology providers have unveiled a new syndicated loan marketplace built on top of the Corda distributed ledger platform.

The list of banks involved includes BNP Paribas, HSBC, ING, State Street and BNY Mellon, with two other unnamed institutions also taking part in the initiative. Today's unveiling from Finastra, which was formed by the merger of software firms D+H and Misys earlier this year, follows a previous pilot phase.

The project aims to create a new kind of syndicated loan market, where multiple lenders pool resources in order to fund single debtors. The idea is to use R3's Corda platform (which saw its 1.0 version released on Tuesday) as a hub for administering loans and sharing key information on things like fees and interest rates in real-time during the lending process.

Philippe Boulas, head of financing solutions for BNP Paribas CIB, said in a statement:

"We believe that the distributed ledger is appropriate in syndicated lending to deliver one single position that is immediately updated when a contract is being handled. The Finastra-led utility, Fusion LenderComm, would allow us to share position data more efficiently and pave the way for a more fluid industrialization."

The platform, dubbed Fusion LenderComm, already has its own official website, and while its launch date wasn't disclosed in today's announcement, the companies behind it are seeking additional backers – particularly lenders who would bring liquidity to the marketplace.

Fusion LenderComm's unveiling is a notable one, given that the past year has seen a number of banks test applications for syndicated loan markets.

A proof-of-concept platform for issuing syndicated loans, spearheaded this past spring by Credit Suisse, saw participation from a variety of firms, including State Street. Credit Suisse said in August that it is planning a commercial-scale release for sometime next year.

'Solstice' Approaching: Mimblewimble Blockchain Considers Fork Schedule

A soon-to-be-launched cryptocurrency based on an acclaimed white paper is considering a novel strategy for future blockchain upgrades.

In a mailing list update this week, Igno Peverell, the pseudonymous lead of the MimbleWimble project, stated the developer team is exploring how it could program in consistent changes as a buffer against faulty code. The statements come amidst a larger debate on how public blockchain networks should pursue updates, given this process can have disruptive complications.

Possible issues aside, though, Peverall believes these upgrades could "clean up" the nascent blockchain and allow for the correction of any flaws.

Peverell writes:

"As we're preparing both a fully new blockchain format and implementation we, developers, are bound to make mistakes. Some of them will be trivial to correct, and some of them will not, requiring changes in consensus parameters."

Peverell suggests that every six months, MimbleWimble will "hard fork" or swap to a new blockchain, a schedule that could occur for the first two years of the project.

In response, contributor Casey Rodarmor agreed to the proposal, and using project-specific atmospherics, suggested the upgrades could align with the summer and winter solstices. "The betas would then be available on the equinox prior," Rodarmor suggested.

Infused with Harry Potter references from the start (the term "MimbleWimble" comes from a spell detailed in the popular book series), the project, which aims to roll out a network in the coming months, has been heralded as a solution to privacy and scalability issues facing blockchains.

Another mailing list contributor, Andrew Bellenie, suggested not to limit the hard forks to the first two-year period, but rather, to schedule them as ongoing upgrades in a way that mimics monero's current strategy. Still, there are signs other factors could come into play in any decision making.

He added: "I like the solstice idea too, for entirely non-technical reasons."