Report: ICOs Raised $118 Million in Q1 2019, Over 58 Times Less Than in Q1 2018

Report: ICOs Raised $118 Million in Q1 2019, Over 58 Times Less Than in Q1 2018

About $118 million has been raised in ICOs in Q1 of 2019, over 58 times less than $6.9 billion, the amount raised in the same period the previous year.

About $118 million has been raised via initial coin offerings (ICOs) in Q1 of 2019, over 58 times less than $6.9 billion, the amount raised during the same period in 2018, the Wall Street Journal (WSJ) reports on March 31.

The report cites data provided by ICO analytics website TokenData. The WSJ argues that investors have been scared off by regulators’ actions against non-compliant ICOs, as well as by the general bear market over the past year.

One of the latest cases happened in February, when the United States Securities and Exchange Commission (SEC) charged crypto firm Gladius Network with selling unregistered securities after the company self-reported to the commission.

Last month, founding partner of Future Perfect Ventures, Jalak Jobanputra, claimed that venture capital valuations have also been deeply affected by the cryptocurrency bear market.

The recent report also reveals that of the 2,500 projects that TokenData tracked since 2017, purportedly only 45 percent successfully raised money.

Furthermore, WSJ also cites TokenData as saying that only 15 percent of tokens issued in successful ICOs are trading at or above their original price.

The article cited attorney and consultant Joshua Ashley Klayman as stating that ICOs themselves may disappear, but the market for digital securities won’t. Recently, so-called security token offerings (STOs) have received increased attention from both the private sector and government regulators globally.

In the U.S. context, investors are faced with a patchwork regulatory landscape when it comes to tokens sales. In February, the state of Wyoming passed a blockchain tokenization-related bill, while a similar law was passed in Delaware in September 2017.

This week, Cointelegraph reported that the owner of a startup that ended up canceling its ICO was trying to sell the company on eBay for $60,000. The startup, named “Sponsy,” is described as a blockchain project that is fully prepared to launch both an ICO and an STO.

Hodler’s Digest, March 25–31: Top Stories, Price Movements, Quotes and FUD of the Week

Hodler’s Digest, March 25–31: Top Stories, Price Movements, Quotes and FUD of the Week

This week saw the hacks of several large cryptocurrency exchanges, while the SEC pushed back their BTC ETF decision.

Top Stories This Week

Owner of ICO That Never Happened Attempts to Sell Project on eBay for $60,000

The owner of a crypto-related startup dubbed Sponsy, which never launched its initial coin offering (ICO), is attempting to sell the project on eBay for $60,000. The project is described as a blockchain-related identity that is able to launch both an ICO and a security token offering (STO), with the author of the posting claiming that the project was both audited by an investment firm and approved by several investment banks. Sponsy also claims to have a solid social presence, although its Twitter and Facebook page posts have around ten likes on average. The eBay poster noted in an interview that he lost out on the ICO craze by taking time to develop a product, rather than first launching an offering.

Over 130-Year-Old Liquor Company William Grant & Sons to Track Whiskey on Blockchain

Premium scotch whisky brand Ailsa Bay, which is owned by William Grant & Sons (WG&S), a liquor company founded in 1887, is set to launch what it claims to be the world’s first scotch whisky tracked on the blockchain. According to the company, the whisky will be tracked in collaboration with blockchain firm arc-net, which will develop the new products and a system to track manufacturing from distillery to store. The reason behind the blockchain tracking is to prevent whisky counterfeiting in the United Kingdom, as well as allow the firm to gather data on both existing and potential customers by employing location systems for the purchases.

Tim Draper Urges Argentina’s President to Legalize Bitcoin to Improve Economy

When speaking to Argentine president Mauricio Macri, crypto bull and investor Tim Draper said that the legalization of Bitcoin (BTC) in the country could help improve their economic situation. During the meeting, Draper noted that the use of blockchain and crypto could help improve major economic problems, including the devaluation of the Argentine peso (ARS). Draper also reportedly proposed a humorous bet, stating that if the peso would be valued more than Bitcoin, he would double his investment in the country, but if BTC became higher than the peso, Argentina would have to declare the crypto a national currency.

Weiss Crypto Ratings Puts Bitcoin Aside EOS and XRP in Annual Outlook

The newest Weiss Crypto Ratings and given top cryptocurrency Bitcoin an “A,” along with Ripple (XRP) and EOS. In the report, which was based on an analysis of 120 cryptocurrencies, letter grades were assigned based on an evaluation of the possibilities for adoption and technology. XRP received the “A” ranking as it is well-positioned to compete with global interbank system SWIFT, while EOS was noted as making a solid attempt to become the “backbone of the new internet.” Bitcoin’s “A” ranking was due to its Lightning Network upgrade and use as of store of value. However, another ranking based on risk and reward factors failed to give any cryptocurrencies an “A.” The three currencies are followed by Ethereum (A-) and Cardano (B+).

 Crypto Exchange Bithumb Reportedly Hacked of Almost $19 Mln in EOS and XRP

Crypto exchange Bithumb reported this weekend that they have experienced a hack of an unknown amount, and are currently working with various law enforcement on the issue. The exchange notes that withdrawals and deposits have been temporarily paused, and that the loss does not affect users’ funds, but only those of the exchange. Unconfirmed reports state that around 3 million EOS (around $12.5 million) and 20 million Ripple (about $6.2 million) are the funds lost. The company’s post about the hack indicates that it was an insider job, but the details are as of yet unspecified.

Winners and Losers

The crypto market has ended with week with Bitcoin well above $4,100, Ethereum is at $143 and Ripple at about $.31. Total market cap is $144 billion.

Top three altcoin gainers of the week are AICHAIN, BBSCoin and HondaisCoin. Top three altcoin losers of the week are Luna Coin, Crowdvilla Ownership and Coinonat.

Winners and Losers

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“All of the big tech companies will come and say blockchain, blockchain, blockchain. I say, ‘Show me the use case. You bring me the use case and I'll try it.’”

Catherine Bessant, Bank of America (BoA) chief technology officer


“If Quadriga was licensed under the Bermuda Monetary Authority, what has happened would not have been able to happen, because we have rules regarding the custody of master keys and making sure they’re not held by a particular individual.”

David Burt, Premier of Bermuda

“One of my theses here is that the cypherpunks’ attempts to get into the money business forced them to realize some other things along the way. And [one of those things] is that money is a fundamentally social thing in a much deeper way than, say, two-party encrypted communication You have to start thinking about governance, social contracts, common shared expectations in this community, how do changes get made, how do we decide how changes get made, how do we discuss things. These are all very political things.”

Vitalik Buterin, speaking at the RadicalxChange conference


"I do believe that the regulators right now are a little careful about just rubber stamping anything as it relates to crypto. You are going to have to have an offering that the regulators are going to have to get comfortable. And I think it is hard to get comfortable with something that is so new like this.”

Terry Duffy, CEO of United States derivative market CME Group


"What we are seeing is a collection of standards being created [that] will inevitably converge over the next three to five years to create a situation where you can move information and value between all these different systems ー not just Bitcoin to Litecoin to Ethereum to Cardano ー but also your regular bank account.”

Charles Hoskinson, a founder of IOHK, the firm that developed cryptocurrency Cardano (ADA)

Prediction of the Week

Sharp Bitcoin Rally in 2019 Unlikely

According to Emmanuel Goh, a former JPMorgan Chase derivatives trader and founder of crypto data firm Skew, Bitcoin is unlikely to recover its former five-digit highs in 2019. Goh has noted that, according to options traders, there is a five percent chance that Bitcoin will reach $10,000 by September of this year. The trader also noted that there is even a $20,000 call option for this June, but the probability of BTC reaching that price is zero, as it was likely a “bullish trade that was made last year when investors were still discussing the short-term possibility of making new highs.”

FUD of the Week

US SEC Delays Decision on Bitcoin ETF Applications From VanEck and Bitwise

The United States Securities and Exchange Commission (SEC) has again delayed its decision on a rule change to the Securities Act that would allow the listing of Bitcoin (BTC) exchange-traded funds (ETF). According to the latest notice, the SEC has extended the period to 90 days, after Bitwise’s Feb. 15 application reached the end of its 45-day time period. According to the extension, the SEC must now reach a decision on the rule change by May 16, 2019. The two firms, NYSE ARCA and Bitwise, had announced their recent plans to launch Bitcoin ETFs in January, with the former intending to launch five separate ETFs linked to both bull and bear futures contracts on NYSE Arca. The SEC has also extended its decision on the VanEck/CBOE Bitcoin ETF

Analysts Claim CoinBene Transactions, Recent Activity ‘Consistent’ With Exchange Hack

Elementus, a blockchain infrastructure firm, published details of recent transactions at crypto exchange CoinBene that they consider to be suspicious in the wake of a presumed hack. After $105 million in crypto was moved from the exchange’s hot wallet this week, CoinBene had assured users that it was a period of unforeseen maintenance responsible for the suspicious activity. Elementus has noted that they are not contradicting what CoinBene has claimed, but that their findings are consistent with the modus operandi for how hack are normally carried out, as the amount of crypto transferred is large and was quickly sold.

Android Malware Targets Users of 32 Crypto Apps, Including Coinbase, BitPay

According to research, a new strain of Trojan malware for Android phones is now targeting the global users of cryptocurrency apps including Coinbase, BitPay and Bitcoin Wallet, as well as banks including JPMorgan, Wells Fargo and Bank of America. Cybercrime analytics firm Group-IB noted that this is the first time that the Trojan, dubbed Gustaff, has been reported or analyzed, and that it is described as being designed for mass infections and spread by SMS messages linked to load malicious Android package kit files. The group notes that the malware’s creators have made a system that increases the scale of thefts by triggering autofills of payment fields for legitimate Android apps to maliciously reroute transfers to the hackers.

Best Cointelegraph Features

The Lightning Torch: How the Community United to Teach Jack Dorsey About Feeless, Rapid Off-Chain Transactions

After Twitter’s Jack Dorsey joined the Lightning Network Torch recently, awareness of the second-layer solutions both benefits and drawbacks have become more debated in the crypto ecosystem. Cointelegraph examines how the LN has changed over time, and how Dorsey’s reference to the technology has brought it more into the public eye.

Indian Street Protests for Cryptocurrency

After the Reserve Bank of India’s ban on crypto dealings last year, the crypto community is coming together again, this time in the form of a series of blockchain supporter rallies held across the country. With the fourth rally set for Bangalore, Cointelegraph looks at the possible public impact of this movement.

Meet the 21 Year-Old Entrepreneur Trying to Sell His Failed ICO on Ebay

After an eBay listing for a cryptocurrency- and blockchain-related project was posted with a price tag of $60,000, Cointelegraph reached out to the lister himself to find out what happened with the project that led him to sell it online in this particular format.

Bitcoin Pushes Past $4,100 as Top Cryptos See Mixed Movements

Bitcoin Pushes Past $4,100 as Top Cryptos See Mixed Movements

The top 20 cryptocurrencies are reporting mixed movements as Bitcoin reaches $4,100.

Sunday, March 31 — the top 20 cryptocurrencies are reporting mixed, mostly mild, price movements on the day by press time, as Bitcoin (BTC) reaches just over $4,100.

Market visualization

Market visualization courtesy of Coin360

Bitcoin has seen nearly no price movement on the day, up just a fraction of a percent trading at around $4,105, according to CoinMarketCap. Looking at its weekly chart, the current price is over two percent lower than the value of BTC one week ago.

Bitcoin 7-day price chart

Bitcoin 7-day price chart courtesy of CoinMarketCap

Ethereum (ETH) is holding onto its position as the largest altcoin by market cap, which is at about $14.9 billion. The second-largest altcoin, Ripple (XRP), has a market cap of about $12.9 billion by press time.

ETH has also seen little change today, down by a fraction of a percent over the last 24 hours. At press time, ETH is trading around $141, after having started the day at nearly the same price. On its weekly chart, however, Ethereum has seen its value increase by about three percent.

Ethereum 7-day price

Ethereum 7-day price chart courtesy of CoinMarketCap

The market’s second-largest altcoin, XRP, has lost about one percent over the 24 hours to press time, and is currently trading at around $0.309. Looking at the coin’s weekly chart, its current price is nearly identical to the one it reported a week ago.

Ripple 7-day price chart

Ripple 7-day price chart courtesy of CoinMarketCap

Earlier this week news broke that India’s Federal Bank, a commercial private bank, has partnered with Ripple to use its network for cross-border remittances.

Among the top 20 cryptocurrencies, the one reporting the most notable price movement is Tezos (XTZ), which is up by about 16 percent. XTZ’s value has seen huge growth of 56 percent in the past week, following Tezos protocol developments.

Dash (DASH) has also seen notable price movement on the day and week, up seven and 12 percent respectively.

Litecoin (LTC) — currently the fifth largest coin by market — has seen its price double in the first three months of the current year, growing from about $30 to about $60. This constitutes the best first quarter performance for the coin so far.

Litecoin 3-month price chart

Litecoin 3-month price chart courtesy of CoinMarketCap

The total market cap of all cryptocurrencies is currently equivalent to about $144 billion, which is about 3 percent higher than $140 billion, the value it saw one week ago.

As Cointelegraph reported earlier today, the most popular social media platform in Russia, VKontakte, is allegedly considering developing its own cryptocurrency.

Russian Social Media Giant VK Eyes Launching its Own Crypto: Report

Russian Social Media Giant VK Eyes Launching its Own Crypto: Report

Russia’s most popular social media platform, VKontakte, is considering developing its own cryptocurrency, according to local media.

The most popular social media platform in Russia, VKontakte (VK), is considering developing its own cryptocurrency, local news outlet RNS reported on March 28.

Per the report, an unspecified person familiar with the company’s plans told the outlet that the project involves the creation of individual cryptocurrency accounts for all the users of the platform. Still, the article also claims that the firm has not yet made a final decision about whether or not to launch the coin.

According to the report, RNS has obtained a presentation from the VK that shows how one of the ways users would be able to obtain the firm’s tokens is in exchange for their activeness and time spent on the platform. According to the article, the coins earned this way could be accumulated, transferred between users, exchanged for goods and converted (presumably to fiat currency) via VK Pay.

According to its official website, VK Pay is a cashless money transfer service that lets VK users send money to each other in messages using a credit or debit card. According to RNS, the service was launched in June last year.

Per the report, VK also plans to integrate a tipping service so that users would also be able to send the bespoke cryptocurrency to the authors of posts that they like.

Market research company eMarketer forecasted in 2017 that VK would surpass 42 million users in Russia before 2018. Along with being a top social media platform, VK is currently ranked third most popular website in Russia, according to Alexa.

Meanwhile, VK’s founder is Pavel Durov, who also co-founded the privacy-centric messaging service Telegram, popular in the ranks of cryptocurrency enthusiasts.

In February, rumors spread that Telegram has to launch its own blockchain network, TON, by October this year to keep from voiding its token contracts. Previously, the company planned to hold a public initial coin offering, but reconsidered after receiving abundant funds — $1.7 billion — in its private two private token sales.

Also in February, a New York Times article claimed that Facebook is “hoping to succeed where Bitcoin failed” with its highly secretive cryptocurrency project.

Meet the 21-Year-Old Entrepreneur Trying to Sell His Failed ICO on Ebay

Meet the 21-Year-Old Entrepreneur Trying to Sell His Failed ICO on Ebay

The bear market has not been easy on the crypto market.

The bear market has not been easy on the crypto market, especially when it comes to initial coin offerings (ICOs). The demand for small-value tokens issued by relatively unknown projects — some of which eventually might or might not turn out to be viable investments — has been dying out, and the days of “to the moon” meme seem to be well behind.

Now, people who jumped on the ICO bandwagon a bit too late are looking for a way out. Enter Ivan Komar, the 21-year-old owner of a startup called “Sponsy,” who is trying to sell his project on eBay for $60,000 after failing to gain the interest of the public in his tokens.

Сareer Profile / Ivan Komar

“There was one person who bought some tokens for $10, so it can’t be counted as an ICO”: Sponsy’s brief history of failure

Komar started his project at the end of 2017, as he told Cointelegraph over Skype. The idea was drawn from experience: Komar was organizing a hackathon for software developers in his hometown of Minsk, Belarus at the age of 19 and faced difficulties while trying to raise sponsorship funding for some of his earlier business ventures there. He said:

“It required me to approach each single sponsor directly and communicate with them one by one, which took much time and energy. Actually, a really small proportion of the sponsors that I approached were willing to sponsor our event. So I had an idea to create a platform which would make it as easy as possible to organize sponsorship deals.”

Thus, Komar decided to develop a platform that would facilitate sponsorship transactions and make them transparent.

“We worked hard on developing tech, and we also had an idea to run a token sale to raise some money funding to facilitate and accelerate some software development efforts. However, we did not manage to raise a single dollar. That’s why I don’t think that our product will be ever completed.”

Despite being advertised as a “blockchain project,” the platform’s core component is actually centralized. “It works with a typical centralized server,” Komar revealed during the conversation. “But we have some components which work on blockchain, and it would be easy for us to create some interpretability between the blockchain part and centralized part. It exists both in centralized and decentralized worlds.” The Sponsy founder also told Cointelegraph that they developed some smart contracts on the Ethereum (ETH) blockchain.

As Komar explained it previously to the Financial Times, his company missed the ICO boom of 2017, and no one became interested in its tokens later in 2018. The reason why they were so late, the young entrepreneur said, was his lawyer, who advised him to develop the actual product before launching an ICO — a decision Komar now seems to regret:

“We would not have tried to build a product first, we would have tried to run a token sale as soon as possible, to jump into this crypto craze bandwagon and raise as much money as possible before building any product. And that’s exactly what others were doing.”

While speaking to Cointelegraph, Komar described his lawyer as “a reputable guy” with many clients:

“I mean, at least none of his clients got into jail, so that’s a good lawyer.”

Despite the legal advise, Komar actually attempted to hold an ICO at the start of 2018. According to the token sale website that he actively promoted in Sponsy’s Telegram groups, SPONS tokens (basic ERC-20 tokens with no utility use) were being sold for $0.085 each during a private sale that started on Jan. 28 and ended on April 7. Since then, the tokens have been sold for $0.10 as part of the so-called presale, which is set to expire on May 1, 2019, according to the website.

Komar confirmed that he attempted to sell tokens, but didn’t agree that it could be classified as a token sale:

“There was one person who bought some tokens for $10, so it can’t be counted as an ICO.”

He added that he failed to sell more mostly because of advertising-related difficulties:

“We tried contacting a couple of media outlets to spread the word about our project, but nobody was interested to write about yet another ICO, because so many ICOs were failing. Those who agreed offered an insanely high price for press coverage.”

Andrew Hinkes, co-founder of Athena Blockchain and an adjunct professor at the NYU Stern School of Business and NYU School of Law, told Cointelegraph that a substantial amount of “2016-2018 vintage ICOs” were mostly offerings without compliance with securities laws and are therefore not viable in the United States, where sales of investment products are regulated by the state.

Non-existent sponsors and unattended events

There are other inconsistencies with Komar’s project. While there is indeed an iOS app available for downloading on the App Store, it appears to be quite undeveloped. Specifically, under the “sponsors” tab, there are just three companies, two of which are Adidas and Coca-Cola.

When asked whether Sponsy has signed any documents with the commercial giants, Komar replied negatively:

“No, we haven’t signed any legal partnerships with those companies. And the fact that you see those sponsors on the app is mainly because it was some sort of a test. Those Adidas and Bosch have nothing to do with real Adidas and Bosch.”

Further, Sponsy’s website claims that the startup has visited various blockchain conferences, but the titles of those events don’t match up with their logos. Specifically, Sponsy claims to have attended San Francisco Blockchain Week, which is listed under the logo for BlockShow, a separate event powered by Cointelegraph. However, the BlockShow attendees’ database shows no record of either Ivan Komar or Sponsy. Googling the title “Sponsy” along with other events listed on the startup’s website shows no relevant results.

During the interview with Cointelegraph Komar, claimed that Sponsy did a roadshow “across San Paulo, Singapore and Hong Kong.” The entrepreneur also complained that he was promised meetings with “top-notch investors” there, but those turned out to be “randomly selected people who had nothing to do with investment.”

Further, the project claims to have a “solid social presence,” with over 10,000 likes on Facebook and 8,000 subscribers on Twitter. However, the Twitter page has only been updated twice a month since the company announced its forthcoming token sale last December, and the posts have around 10 likes on average. Sponsy has similarly maintained accounts on other social media, with posts randomly commented on by bot-like users, most of which describe how profitable and successful the project seems to be. Komar claimed that those are “totally real people.”

“They come from a program called ‘bounty program.’ It’s very common among crypto startups. They are designed to spread the word about the project through those people who are commenting, liking, tweeting and stuff. But they [the participants] have no fantasy. I mean, they have poor English, mostly because they are based in Indonesia, Philippines and other poor Asian countries, and all they can do is write the same messages which do not make sense.”

Those people receive compensation for their efforts in the form of SPONS tokens, Komar clarified, adding:

“But they are not going to make any real cash out of it, because we are selling our project. We did not manage to sell enough tokens or get on any crypto exchange. So, we can sympathize to [sic] those guys.”

When asked whether he felt responsible for that, the Sponsy founder said:

“No, because either way they wouldn’t have made cash out of it. It could be like one-two-three dollars, not any substantial amount of money. Even for Indonesia.”

Finally, Sponsy is described as a blockchain project that could launch both ICO and a security token offering (STO). The author of the offer claims that the project was audited by a United Kingdom-based law firm. The Financial Times reported that Komar was actually referring to a Poland-based company called Memorandum Capital, which claims to have its head office in Manchester. However, 132 other companies are listed at that address, according to Companies House Data, the publication established. A Google Maps search reveals that the firm’s office is actually a residential house with satellite television.

Moreover, the eBay listing states that the solutions developed by Sponsy comply with European Union and U.S. regulations.

Komar told Cointelegraph that his startup had received all the documents required for holding a token sale from the same lawyer who advised him not to run an ICO before having developed any actual product. Launching an STO for his project, in turn, would require additional funding and documents, he said:

“We decided to abandon those plans. But we believe that some person out there might be interested in this. That’s why we wrote about the fact that the buyer could run an ICO or STO with our project.”

Andrew Hinkes informed Cointelegraph that, while a product or service can comply with a law that governs it without a piece of paper as evidence, there are complex regulatory issues surrounding fundraising, crypto and advertising:

“Of course, if a seller is making a false claim to induce a sale, there may be civil or criminal penalties associated with those claims. Potential investors should always conduct diligence on any investment opportunity prior to making an investment.”

“I still expect that we will be able to negotiate the price”: Will Komar actually sell his business on eBay?

Somewhat ironically, Komar has finally got what he wanted: the public’s attention. “I Googled about other crypto startups selling on eBay and I realized that there was no competition in this regard,'' the entrepreneur said. “I thought that this could potentially attract the attention of journalists and the media worldwide. And that’s what seemingly happened.”

Since the Financial Times ran a story about Sponsy, 47 people have followed its eBay listing. More importantly, Komar has been approached by seven people, he told Cointelegraph. While no one has offered to pay the full price, someone is apparently willing to pay as much as $50,000 for the startup. “I still expect that we will be able to negotiate the price to get it as close to $60,000 as possible,'' the 21-year-old said. When asked about how much he spent on the startup so far, he replied after a short pause:

“It was north of $50,000, I guess.”

Sponsy’s case seems to illustrate the critical condition of the ICO market. Indeed, just during Q3 2018 — from July to September 2018 — ICO funding overall fell by a whopping 48 percent, according to a study from ICO analysis firm ICORating.

Komar said that he doesn’t believe in ICOs anymore. The market has been corrupted by bad actors, he added, clarifying:

“[ICOs were spoiled] by people who were raising millions of dollars and disappeared. The only words they left on their website was ‘penis.’ Those kind of organizers spoiled the whole scene and no one believes in ICOs anymore. Actually, ICOs were mostly interesting to retail investors who were spending their money on buying tokens and losing that money, obviously. I think that the ICO mechanism is dead mostly because of scams and fraud.”

While selling a startup via eBay might appear rather peculiar, it can be legal. “Generally, a person can sell their property, including a business that they may own,” Hinkes told Cointelegraph. “While eBay maintains a list of restricted goods that cannot be sold on its platform, it appears that there are specific areas on eBay's website designed for the sale of businesses; and Sponsy is listed on a page that appears to allow the sale of web pages and internet companies.”

However, Hinkes added, most sales of businesses are complicated transactions that can’t be performed without lawyers’ involvement:

“A sales transaction typically includes contracts that identify assets being sold including inventory, IP, existing commercial relationships, operations, customers, etc, will carve out certain assets not sold, and will include warranties, representations and disclaimers about the sale. For this reason, sales of businesses are typically conducted in consultation with lawyers. It is unlikely that the sale can be fully affected over eBay without other legal documents being executed by the buyer and seller.”

The Implications of Fusing 5G and Blockchain

The Implications of Fusing 5G and Blockchain

5G promises to boost development efforts in IoT and blockchain

Analysts have been anticipating the implications of the Internet of Things (IoT) for several years. However, there have been two main impediments to its success: capacity and security.

But now, the introduction of a new technology could change that. This year, major carriers like AT&T and Verizon will be introducing 5G, the latest generation of cellular mobile communications. The 5G platform brings a high data rate, reduced latency, energy savings, cost reduction, higher system capacity and massive device connectivity, according to analysts.

The combination of 5G and blockchain technology has the potential to unleash a surge of economic value. In order to understand this connection between 5G and blockchain, one must think of the relationship as multifold. The power of 5G coverage through its reduced latency, high speeds and capacity allows for IoT devices to become widely used. Simultaneously, these devices can leverage the security, decentralization, immutability and consensus arbitration of blockchains as foundational layers.

That means smart cities, driverless vehicles, smart homes and other sensor-driven enhancements will finally have a technology that can handle their needs.

Internet of Things Application

As foundational layers, blockchains can provide consensus and security while the majority of IoT transactions and contracts occur on second-layer networks, with the opportunity to settle payment channels and transaction disputes on-chain. The network capacity of IoT, however, will be enabled by the power of 5G coverage.

Furthermore, 5G will directly assist blockchains by increasing node participation and decentralization, as well as allowing for shorter block times, driving forward on-chain scalability — all of which, in turn, further supports the IoT economy.

Here is a first look at how 5G is rolling out and when real usage might be seen.

The rollout of 5G

Network providers have started rolling out 5G within select United States cities, while global coverage is expected to come online in 2020.

Verizon will start delivering its coverage in Chicago and Minneapolis from April 11, with services moving to 30 cities throughout the remainder of 2019.

On the vendor side, Samsung is expected to release its 5G-compatible Galaxy S10 model next month. Other companies, such as Huawei and LG, have announced models of their own that are expected soon.

In terms of modems, we are still waiting to see one that supports both 5G and LTE. Qualcomm is expected to release such a product, the X55, in either Q3 or Q4 of this year.

Apple consumers will have to hold off until 2020 before seeing a 5G-compatible iPhone, though, with the company apparently still evaluating market conditions.

Waking up the Internet of Things

The benefits of 5G are its high speeds, capacity, low latency and ability to connect with vast numbers of devices. Latency refers to the time between when a signal is sent and received. In blockchain terms, latency is the time between a transaction being broadcast and it being received by nodes. However, for IoT, whether it be applied to smart homes or autonomous vehicles, achieving low latency is critical if devices are going to communicate with each other without experiencing long lag times.

This reduction could unlock another concept, the Internet of Skills (IoS). This is the process by which specialists conduct their work remotely through virtual reality headsets. For instance, a dentist would be able to perform procedures remotely. If latency cannot be minimized, then the specialist will not be responsive enough, endangering the patient and undermining the entire function.

It is these new applications that are driving the projections for the economic impact of 5G. A study from Qualcomm showed that 5G could lead to $12.3 trillion in additional global GDP by 2035.

Importantly, 5G — with speeds of up to 10 gigabits per second — is an improvement to current home broadband services, as well as cellular networks. To put this in perspective, the average global, nonmobile internet speed stands at just 7.2 megabits per second. As such, 5G could well become the de facto internet network worldwide.

The effects of 5G on IoT and related concepts are going to be further augmented by multi-access edge computing. This is a form of networking whereby service is disseminated from centralized nodes to peripheral ones, resulting in an even greater increase to speeds while also reducing latency.

IoT will rely on this capacity and ability for tremendous numbers of devices to connect with each other. It has been estimated that there could be as many as 100 billion IoT connections by 2025, according to research from Huawei, with growth likely turning exponential after that.  

Ramping up automation

When talking about automation, it is typical to think in terms of robots replacing paid jobs currently done by humans. However, in reality, the scope of automation may eventually be far broader than this, including the replacement of chores and unpaid mundane tasks.

This can already be seen in the advent of smart homes, with domestic appliances communicating with each other, keeping stock levels and managing inventory. Autonomous cars and trucks are already moving past testing, with legislation being the main impediment.

Within the next decade, traditional industries — such as agriculture, mining and drilling — all anticipate automation through high-speed IoT, powered by billions of sensors and devices communicating over 5G.


These applications are dependent on extensive 5G coverage to provide the capacity, speeds, and latency required for these systems to perform as intended at a global scale.

But two other potential roadblocks toward 5G could present themselves.

First, malicious devices could cause chaos within networks, empowered by their interconnectivity.

Second, the 5G rollout will encompass an explosion in transactions and payments between these devices. Such volumes will likely dwarf the current capacity of centralized and decentralized financial infrastructure.

The blockchain referee

Blockchain innovations could likely solve the first problem. Public, decentralized blockchains are proficient at ensuring immutability, tamper-resistance and establishing consensus among distrusting entities.

Thus, they can be used as a foundational layer for settling disputes between IoT devices that cannot settle transactions or smart contract conditions. Since these devices can transact with money and operate vehicles, establishing an underlying protocol layer with robust security is paramount. Blockchains can excel at this.

Decentralized blockchains offer further benefits over the current client-server model used in IoT. Their decentralized architecture means that identity can be protected and guaranteed. Currently, IoT devices identify themselves via cloud servers, with their identification data held in these databases. As such, the data can be compromised, stolen or imitated, presenting a major security threat to any application that runs atop such a network.

By using a decentralized blockchain, we can protect these identities through the use of asymmetric cryptography and secure hashing algorithms. Devices would be registered according to their own corresponding blockchain addresses, guaranteeing their identity. This blockchain layer can provide a level of security and frictionless identification unmatched by the existing centralized infrastructure.

Scaling up

Unfortunately, the second problem of scale cannot be directly solved by blockchains. The sheer extent of IoT means that decentralized blockchain architectures are not capable of handling the necessary throughput. This is at least true on layer one — i.e., blockchains themselves.

It is both possible and preferable to defer the majority of transactions to layer two protocols like the Lighting Network that operate on top of blockchains, through the use of payment channels or sidechains.  

However, given that every device will need to have its own address and on-chain transactions, there will need to be an on-chain capacity that reaches tens of thousands of transactions per second. In short, scalability must improve significantly on both layers.

Blockchains such as Bitcoin Cash ABC, with block size increases, and Ethereum, through sharding, are building out far greater on-chain capacity. Simultaneously, we are seeing the steady progress of the Lightning Network as it rolls out, along with sidechains such as Liquid from Blockstream, while Ethereum’s Plasma network continues to advance. The buildout of 5G and layer two blockchain infrastructure are fortuitously occurring simultaneously, providing the necessary scalability and coverage for an IoT-oriented economy.

One other route for system architects would be to add other structures, such as graphs between the base blockchain layer and IoT devices. Designs such as directed acyclic graphs (DAGs) can be used to achieve far higher throughput. However, this typically results in undermined security and decentralization.

Navigating the trilemma of scalability, security and decentralization is a prerequisite to any blockchain-based IoT network, and deficiencies in any of these three areas could be cataclysmic for users and would undermine the purpose of using such a protocol in the first place. Until developers can produce alternative designs that achieve high throughput without sacrificing security or decentralization, IoT networks will have to use the more limited, yet secure blockchain structure.

Tamper-resistant data

5G empowered IoT devices are set to drive a massive increase in data transfer. Cisco projects that they will generate 847 zettabytes by 2021. Although blockchains at their core are distributed data storage systems, it is unfeasible to store significant amounts of data on-chain. If this IoT data is not stored on-chain, though, this still leaves it open to attacks.

However, it is quite possible to store hashes of data on-chain, with links pointing out to external data storage sites for the whole dataset. Indeed, such external storage could be run on other decentralized protocols, such as the InterPlanetary File System (IPFS) or OrbitDB. While this does not guarantee the same level of tamper-resistance, it does offer a stronger level of security than centralized alternatives. Importantly, by storing hashes on-chain, any tampering of the data will result in a change in the hash, thus drawing attention to such an attack, along with a time record via the timestamp.

Empowering smart contracts

Blockchains can also directly benefit from 5G in terms of functionality and performance.

One such example is smart contracting. Blockchain smart contracts often depend on oracles. These oracles relay external data to the contract. Of course, this information can only be transmitted with internet access. For applications such as supply chains, 5G can facilitate these oracles in remote areas where they otherwise would not be possible.

Network improvements

Blockchains can also derive network improvements from 5G.

The massive increases in range and bandwidth, in parallel with the reductions in latency aided by edge computing, could lead to a surge in additional nodes joining public blockchains. By extending coverage to remote areas as well as providing increased connectivity to nonstatic devices such as mobiles and tablets, there could be significant increases in network participation and, with that, improved security and decentralization.

In addition, due to latency reductions, developers would have more scope to experiment with reductions in block times, thus increasing on-chain throughput. In turn, this would offer far better support for IoT devices using blockchains for settlement, consensus and security.

A multi-fold relationship

To truly appreciate the values of 5G, IoT and blockchain, you have to consider them as synergistic rather than offering wholly separate value propositions. With the right architecture, this technology stack — along with second layer solutions, edge computing, virtual reality, augmented reality and IoS — is set to create an unprecedented amount of value while simultaneously radically altering working conditions, employment and recreation.

Japan’s Largest Railway Company Considers New Crypto Payment System for Transport Cards

Japan’s Largest Railway Company Considers New Crypto Payment System for Transport Cards

The president at Japanese cryptocurrency exchange DeCurret unveiled the new cryptocurrency payment system.

Kazuhiro Tokita, representative director, board member and president at Japanese cryptocurrency exchange DeCurret, unveiled a new cryptocurrency payment system during a business presentation in Tokyo on March 27. Cointelegraph Japan reported on the presentation the same day.

The new system would enable the SUICA payment card issued by the East Japan Railway Company (JR East), Japan’s biggest railway company, to be topped-up with cryptocurrency. Still, the report points out that there are no concrete plans as of press time, and that JR East is only considering the implementation. Data released by the company shows that as of the end of March last year, nearly 70 million SUICA cards were issued.

According to the dedicated website, SUICA is a prepaid e-money card which allows its users to pay both for some goods and services, as well as transport. As Cointelegraph recently reported, Decurret has been allowed to operate by the Japanese Financial Services Agency (FSA) since March 28.

According to Cointelegraph Japan, the trading on the exchange will start on April 16th and will involve Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC) and Ripple (XRP). The addition of Ethereum (ETH) support is reportedly scheduled for June or July, and both yen and Bitcoin will be supported as base pairs.

In other Japanese news, e-commerce giant Rakuten will soon launch its own cryptocurrency exchange, dubbed Rakuten Wallet, after announcing that it received the FSA’s approval on March 25.

Top 5 Crypto Performers Overview: Tezos, Cardano, EOS, Binance Coin, Neo

Top 5 Crypto Performers Overview: Tezos, Cardano, EOS, Binance Coin, Neo

If the Bitcoin ETF will be approved in the second half of May, it will be a pleasant surprise and give a boost to crypto prices

The crypto community will have to wait till the second half of May to know the fate of the Bitcoin ETF applications by VanEck and Bitwise, as the US SEC has again delayed its decision. Very few people expect the Bitcoin ETF to see the light of the day in 2019. Hence, even if it is not approved, the impact on crypto prices is likely to be limited. However, if the ETF is approved, it will be a pleasant surprise and will give a major boost to crypto prices.

Currently, the recovery is not led by Bitcoin: it is the altcoins that are dragging Bitcoin prices higher. Based on options data, traders are giving only a 5 percent chance for Bitcoin to reach $10,000 by September of this year. We believe that if the bulls succeed in breaking out of $4,255, the markets will start pricing in a greater probability of touching higher levels this year. Though we expect some sharp rallies during the year, we do not anticipate them to be similar to 2017.

Argentina’s deputy minister of finance, Felix Martin Soto, said that promoting crypto will reduce the demand for U.S. dollars in the Latin American nation and stabilize the local markets. Increasingly, nations are warming up to the vast potential of cryptocurrencies and blockchain technology. This will attract more investors to the asset class, as they see the transformation that the technology can bring about in their economies. Though slow in catching up, price will eventually follow fundamentals, and altcoins have been soaring in the past few weeks. Let’s look at the best performers of the past seven days.


Tezos (XTZ) has been one of the stronger altcoins in the past few days, as its price has been buoyed by some fundamental events that brought cheers to the investors. The community has completed voting on the protocol proposal that will decide the upgrade of Tezos, and the proposal is now entering an Exploration Vote Period (or “Testing_vote period”). The markets also cheered the additional grant received by Cryptium labs to develop baking and consensus improvements for the Tezos core protocol.

Coinbase Custody is offering staking services with Tezos (XTZ) to attract institutional players, wherein investors can make about 6.6 percent annual return and a client’s assets will be kept in a cold storage at all times, making the process risk-free. The Tezos foundation intimated that PwC Switzerland has completed the 2017 statutory audit, and that the same has been filed with the Swiss Federal Supervisory Authority for Foundations. PwC is also conducting the audit for 2018.

With these positive fundamental developments, can the rally continue or will it hit a roadblock? Let’s find out.  


The XTZ/USDT pair traded in a tight range of about 16 weeks before breaking out to the upside. Last week, though the breakout of the $0.33-$0.654310 range could not be sustained, the pair has followed it with another up move this week. This shows a likely change in trend. In this up move, the digital currency has broken out of the 20-week EMA and can now rally to the 50-week SMA at $1.73. There is a minor resistance at $1.295480, but we expect it to be crossed.

Contrary to our assumption, if the bulls fail to scale $1.294580, the digital currency might consolidate for a few more weeks. The recovery will lose steam if the price plummets below $0.654310 once again.  


The official arm of Cardano (ADA) announced that the popular Ledger Nano S now supports the cryptocurrency, which will help users hold their assets securely. Also, 19 Ethiopian and four Ugandans students graduated from IOHK’s Haskell Course: these software developers will use blockchain technology to solve various problems in the Ethiopian agriculture industry. Charles Hoskinson, founder of IOHK, expects that in about three to five years, information can be moved between different systems, noting that the crypto industry is still waiting for the “WiFi or Bluetooth moment.”


The ADA/USD pair has extended its recovery with another strong week: it is now nearing the overhead resistance zone of $0.082952 to $0.094256. If the bulls scale this zone and the 50-week SMA that is just above it, a rally to $0.20 in the medium-term is possible. However, in the short-term, we expect $0.082952 to $0.094256 to act as a strong hurdle. A few weeks of consolidation close to this zone cannot be ruled out.

On the downside, any pullback is likely to find support at the 20-week EMA and below it at $0.051468. If the bulls fail to defend this support, the pair will again weaken.

Traders who have purchased 50 percent of their desired allocation on our previous recommendation can continue to hold with the stop at $0.0350. We shall watch the price action for one more week and then suggest trailing the stops higher.


EOS continues to hold the first position in the Chinese government-sponsored rankings of major cryptocurrencies, and Weiss Crypto Ratings gave a ranking of “A” to EOS for its challenge to Ethereum. As of January, 48 percent of DApps users were on EOS, way higher than the 28 percent on the Ethereum network. In another hack on the Bithumb exchange, more than 3 million EOS was transferred out from the exchange’s hot wallet. Let’s see how the price is reacting to this news.


After consolidating for about four weeks, the EOS/USD pair has resumed its recovery. It will now again attempt to breakout of the overhead resistance at $4.4930. If successful, it can rally to $6.8299. The 50-week SMA is just below this level; hence, we expect $6.8299 to act as a major roadblock. But during the next pullback, if the pair manages to stay above $4.4930, it will indicate strength and will confirm that the markets have rejected the lower levels.

Following a breakout above $6.8299, we expect the virtual currency to pick up momentum. Both the moving averages have flattened out and the RSI has risen to the midpoint: this shows that the selling pressure has reduced and a new uptrend is likely. Our bullish view will be invalidated if the price fails to climb above $4.4930 and breaks below $3.8723.


Binance announced a new lottery format for the next token sale on Binance Launchpad. This is a change from the first-come-first-serve basis that was used for the previous successful token launches. Binance has also partnered with risk management and compliance firm IdentityMind to improve data protection and compliance for Binance’s global operations. The week also saw reports that many crypto exchanges were reporting fake volumes. The CEO of Binance, Changpeng Zhao, welcomed these reports, as it will help to make the industry more transparent.


The BNB/USD pair is leading the altcoin recovery from the front. After the recent recovery, it is only about 35 percent from the lifetime highs hit in January 2018. This shows that select cryptocurrencies have emerged from their bear markets and are on track to challenge the lifetime highs.

Currently, the pair is facing some profit booking at the major resistance of $18. We anticipate a few more weeks of consolidation, or a minor correction before the bulls again attempt to breakout of $18 and make a new lifetime high. On the downside, the digital currency will find support at $14 and below it at the 20-week EMA. The moving averages are completing a bullish crossover, which shows that the trend has changed.

Our bullish view will be invalidated if the digital currency breaks down and sustains below the 50 percent retracement of the recent rally.


NEO prices received a boost when, a decentralized exchange built on top of NEO, announced that it has finalized the protocol spec for Bitcoin trading. In another news, Binance has added additional stablecoin pairings for NEO that might help drive up the volume for the cryptocurrency.


The NEO/USD pair has reached the top of the $5.48080-$10.00 range, and is currently facing resistance at the 20-week EMA. The rise from the low of the range to the current levels has been gradual, which shows an accumulation by the bulls. If it breaks out of the 20-week EMA, it might pick up momentum and rally to $17 and above it to the 50-week SMA at $24.

On the other hand, if the price turns down from the current levels once again, it might extend its stay in the range for a few more weeks.

PwC is Top Recruiter for Blockchain-Related Jobs on Indeed, Big 4 Auditing Firms Follow

PwC is Top Recruiter for Blockchain-Related Jobs on Indeed, Big 4 Auditing Firms Follow

Big four auditing firm PricewaterhouseCoopers (PwC) is the top recruiter for blockchain-related jobs on recruitment platform Indeed.

Big four auditing firm PricewaterhouseCoopers (PwC) is the top recruiter for blockchain-related jobs on recruitment platform Indeed, search results showed at press time on March 30.

At press time, PwC is responsible for 40 blockchain-related job offers on the platform. Other big four auditing firms are apparently recruiting professionals in this niche on the platform: more precisely, Ernst & Young posted 17 such announcements, while Deloitte posted 10.

This leaves Klynveld Peat Marwick Goerdeler (KPMG) as the only big four auditing firm not recruiting blockchain professionals on the platform. Tech giants IBM and Oracle posted ten job offers related to blockchain as well, while global management, consulting and professional services firm Accenture posted 11.

This last company, Accenture, is also already a user of distributed technology. In November last year, Accenture deployed a distributed ledger technology platform created to manage and track software licenses.

As Cointelegraph recently reported, a blockchain and financial partner at PwC France declared that central banks should leave issuance of digital currencies to corporations such as Facebook and JPMorgan.

In February, news broke that Accenture is working with major global firms including Mastercard to introduce a blockchain-based circular supply chain.

Bitcoin Stays Near $4,100 as Top Cryptos See Mixed Movements

Bitcoin Stays Near $4,100 as Top Cryptos See Mixed Movements

The top 20 cryptocurrencies are reporting mixed movements on the day as Bitcoin stays near $4,100.

Saturday, March 30 — the top 20 cryptocurrencies are reporting mixed movements on the day by press time, as Bitcoin (BTC) stays near $4,100.

Market visualization courtesy of Coin360

Market visualization courtesy of Coin360

Bitcoin has seen nearly no price movement on the day, trading at around $4,095 after having reported a mid-day high of $4,275, according to CoinMarketCap. Looking at its weekly chart, the current price is nearly one and three quarters of a percent lower than the value of BTC one week ago.

Bitcoin 7-day price chart

Bitcoin 7-day price chart courtesy of CoinMarketCap

Bakkt, the company trying to launch the much-awaited physically delivered Bitcoin futures later this year, announced yesterday that former cybersecurity expert at IBM, Cisco and Endgame Tom Noonan will become the chairman of its board of directors.

Ethereum (ETH) is holding onto its position as the largest altcoin by market cap, which is at about $14.9 billion. The second-largest altcoin, Ripple (XRP), has a market cap of about $13 billion by press time.

ETH is up by just three quarters of a percent over the last 24 hours. At press time, ETH is trading around $142, after having started the day at nearly the same price. On its weekly chart, Ethereum has seen its value decrease by about three and a half percent.

Ethereum 7-day price chart

Ethereum 7-day price chart courtesy of CoinMarketCap

The Ethereum network is apparently losing ground as developers are switching to other projects, various experts told Bloomberg on March 28.

Second-largest altcoin Ripple has gained 1.42 percent over the 24 hours to press time, and is currently trading at around $0.312. Looking at the coin’s weekly chart, its current price is nearly identical to the one it reported a week ago.

Ripple 7-day price chart

Ripple 7-day price chart courtesy of CoinMarketCap

Among the top 20 cryptocurrencies, the ones reporting the most notable growth are NEO (NEO), which is up 4.7 percent, and Ontology (ONT), which is up nearly four percent.

The total market cap of all cryptocurrencies is currently equivalent to $143.6 billion, which is nearly 2.5 percent higher than $140 billion, the value it saw one week ago.

As Cointelegraph reported earlier today, crypto exchange Bithumb has been reportedly hacked of almost $19 million in EOS and Ripple.