Taxing Crypto: Currency or Commodity?

The world saw its first bona fide cryptocurrency in 2009 with the advent of Bitcoin. Since then, cryptos have taken the realm of fintech by storm. Its rise in popularity billowed so rapidly, in fact, that nations are unsure how to regulate it. The truth is, cryptocurrency is such a novel technology that we still don’t quite know how to handle it.

Should we consider cryptocurrencies commodities or actual currencies? The answer to this question is not so simple. In fact, tax regulations around the world differ on the interpretation.

Our current understanding of cryptocurrencies is that they can basically be either, depending on how they’re used.

Crypto as Currency

As the name itself implies, cryptocurrency can function much like fiat money. By that token, one may use them for the purchase of goods and services (in some countries, anyway). They may also be exchanged into other currencies, making them functionally the same.

So that settles it, right? After all, cryptos do everything money does, for the most part. Well, not quite. While they may operate like currency, and intuitively it makes sense, some traits make cryptos difficult to classify as currency.

For one, it is a decentralized currency. In other words, it is not tied to any third party authority (country, bank, etc.); there’s the sender and the receiver, nothing more. This stands in stark contrast to how traditional money has worked up until now.

Secondly, cryptos cannot be produced arbitrarily according to a country’s current economic state. It instead requires “mining,” and only a fixed amount of them exists. This makes cryptos more of an asset, like gold.

Crypto as Commodity

From a certain perspective, cryptos can also be considered a commodity. Granted, the line between currency and commodity is quite fine. The key difference between the two is that the former acts as a clear-cut facilitator for exchange which quantifies the value of an item or service.

That being said, a cryptocurrency does possess fungibility, i.e. the ability to be interchangeable with other commodities on the market. Beyond that, commodities can afford to be volatile, whereas currencies don’t have that luxury. Having in mind Bitcoin’s value history, it certainly fits the profile of a commodity.

This view certainly isn’t without legal precedent. In early 2019, Indonesia greenlit legislation that treats Bitcoin as a commodity for trade. Meanwhile, the Australian Tax Office (ATO) suggested the same ruling on the matter for other cryptos as well, rendering them subject to the Goods & Services Tax. Australia ultimately dubbed Bitcoin as money.

The main idea that stops cryptocurrencies from being pure commodities, however, is the idea of value. Commodities have intrinsic value, like crops, for example. Cryptos, on the other hand, hold only the value that current market expectations give them. It’s only worth what it can buy, and nothing else.

In the Eye of the Beholder…

As things currently stand, crypto seems to dip its toes in both ponds, performing as both commodity and currency. And until we reach a deeper understanding of crypto, regulation cannot consistently come to the same decision on the matter. Thus, for now, it’s up to each individual country to make up its mind about this conundrum. Until then, take a look at this insightful infographic below:

How Crypto Is Disrupting the Financial Ecosystem


Erisx Launches Regulated Bitcoin Futures Market BTC $BTC

Crypto trading platform Erisx has launched a bitcoin futures market regulated by the U.S. Commodity Futures Trading Commission (CFTC). Its physically-settled bitcoin futures contracts trade alongside its spot market which supports four cryptocurrencies. Erisx has obtained a license from the U.S. Financial Crimes Enforcement Network (FinCEN) and is currently approved to operate in 44 states, with a plan to expand to 53 states and U.S. territories.

Article Published on Bitcoin.com

Physically Settled, Regulated Bitcoin Futures

Erisx announced on Tuesday the launch of its regulated bitcoin futures market. The platform’s physically-settled bitcoin futures contracts are offered alongside its spot market for “price transparency and collateral efficiency,” the company detailed. Initially, only monthly and quarterly contracts are offered.

Since the contracts are physically settled, “settlement will be made by the movement of the digital currency to the buyer of the futures contract and US dollars to the seller of the contract,” Erisx’s website describes. The current requirement to become a member of the platform is a minimum balance of $10,000.

Erisx’s current futures product.

Prior to Tuesday’s launch, the company ramped up its team and developed technology for its exchange’s matching engine (TME) and clearinghouse’s clearing system (TCS). The company also developed risk-mitigating functionality to enable efficient price discovery such as self-match prevention, price banding, and maximum order sizes. Its futures clearing platform was built from scratch. Currently, Erisx’s spot trading platform supports BTCBCHETH, and LTC, which can be traded against the USD or BTC >> READ MORE


Announcing LiveView: Look into the top of book for any crypto currency pair across all of the major exchanges

Announcing LiveView by Mainbloq: your live view into the crypto markets. We built LiveView to demonstrate to our clients the power of our technology, now we're giving it to anyone with a web browser: www.mainbloq.io/liveview

We're always building new technology for our clients—you may have read about our Smart Order Router and Trading Algorithms in previous articles—but today we're releasing something for EVERYONE.

What's in LiveView:

  • An insider's look into the top of book for any currency pair across all of the major exchanges and their liquidity pools.
  • See total volume and liquidity for currency pairs across exchange in real-time.
  • Identify price differences between exchanges to see where to get the best price.
  • A real-time calculation of stable rates normalized to give the true best price.

So what can you do with LiveView? You can trade smarter. That's what we're all about at Mainbloq, we give you the tools to make better trading decisions.

The one thing that we see as most salient is if you are only executing on one exchange you are leaving money on the table. To make the most efficient trades you need to execute cross-exchange.

One thing you can't do from LiveView is trade. If you're looking to trade smarter in real-time contact us here: https://mainbloq.io/contact/

About Mainbloq
Mainbloq is a data, research, and technology company focusing on blockchain and digital assets. Mainbloq offers a cloud-based, modular platform including a smart order router, suite of trading algorithms, the ability for clients to integrate their own algorithms, and consulting services to help clients execute on their trading strategies. Mainbloq is building the best-in-class platform for researching and trading digital assets. For more information visit https://mainbloq.io/


Bitcoinexchangeguide.com: Crypto Analysis Company Mainbloq Launches New Algorithm To Automate Trading Activities


FinanceMagnets.com: Mainbloq Launches Algorithm Suite for Crypto Trading

The suite has 8 algorithms to offer.

News ( CryptoCurrency 

The crypto analysis company has launched a suite of cryptocurrency trading algorithm to automate the trading process.

MainBloq has kept the suite versatile considering the wide spectrum of the crypto trading market. The company’s algorithm can be used within its proprietary order management system. It has also launched API support, which will enable the algorithm to be integrated into any third party OMS or EMS, detailed the April 4th announcement >> READ MORE


LGO Markets, the New Industry Standard for a Safe, Secure & Transparent Digital Asset Exchange

LGO Group CEO Hugo Renaudin

LGO Group announced Monday the launch of LGO Markets, a digital asset trading platform dedicated to institutional clients. Trading on LGO will start on March 11th, 2019.

Institutional investors have been waiting for a reliable and suitable infrastructure to enter the cryptocurrency market. With this in mind, LGO Markets has been specifically designed to remove the main hurdles faced by institutions: risk and lack of transparency.

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The company is committed to providing a highly secure and trustworthy environment for its clients. Data and volume manipulation are prevented through the use of blockchain technology. Trading on LGO Markets also means no counterparty risk as clients hold their funds (non-custodial). LGO Markets aims to be fully compliant with regulations and is currently applying for a BitLicense and a FINRA broker-dealer license.

LGO Markets’ platform will initially offer a physically settled Bitcoin to USD spot market. Hugo Renaudin, CEO of LGO Markets added: “This could be considered as the simplest financial product, yet it does not exist in the cryptocurrency market. By bridging the processes of traditional financial exchanges and the benefits of blockchain transparency, LGO is built to be the reference venue for institutional digital asset trading .”

As for now, more than ten institutional clients have already joined the platform. They are mainly OTC trading desks, hedge funds, crypto businesses, and market makers.

The company is aspiring to bring innovative solutions to the financial markets, where all representations of value can be exchanged seamlessly, transparently and with less risk thanks to the blockchain technology. Frédéric Montagnon, Co-Founder and Executive Chairman of LGO Markets, added: “This launch is only our first step towards achieving our long term mission. We see an opportunity to accompany the whole financial industry to transition to blockchain and distributed ledger technology. By rolling out our offer on the Bitcoin market, we position ourselves to become the leading exchange for blockchain-based assets - whether cryptocurrencies or tokenized traditional financial contracts .”


Samsung Galaxy S10 includes storage for digital currency private keys

Samsung’s latest flagship phone will include a dedicated secure storage function designed for cryptocurrency private keys.

CoinDesk - Samsung Confirms Galaxy S10 Will Include Private Crypto Key Storage
CryptoNews - The Mystery of Samsung's Galaxy S10 Private Key Storage Remains
Forbes - Samsung Confirms Galaxy Fold And S10 Security Surprises

The news that Samsung added a private key storage to its new Galaxy S10 smartphone shook the crypto world, as many have taken it as a sign of endorsement from the South Korean tech giant. However, as details are scarce, many are wondering what “hardware storage” the company announced and why it wasn’t mentioned during keynote presentations.

 New Samsung Galaxy S10 Includes Baked-In Storage for Private Keys
New Samsung Galaxy S10 Includes Baked-In Storage for Private Keys

Samsung announced in February that their newest phone, the Galaxy S10, will include secure storage for its users’ cryptocurrency private keys.

The company made a press release detailing the phone’s many features, notably including Samsung’s proprietary defense platform, Samsung Knox, which will feature secure private key storage that it claims is specifically “for blockchain-enabled mobile services.”

Baked-in support for cryptocurrencies in smartphone platforms is not completely unique to the space, although this initiative by Samsung represents a major step for the technology’s integration into mainstream products. As it stands, there are currently two smartphones that support crypto assets: HTC’s Exodus 1 and Sirin Labs’ Finney.

These two phones have seen much more limited adoption than any product Samsung could release for several reasons....


BlockEstate real estate security token: STO Analysis

BlockEstate is planning to launch its very own security token offering (STO). According to the official whitepaper, the idea behind the project is pretty simple:

Proceeds from the STO will form a fund that can then be used to purchase promising real estate in U.S. (North and South Carolina) with profits from the leasing or resale of the real estate being used to buy out and eventually burn the native token, a.k.a. BEAT. This method will increase the cost of the tokens over time. The remaining profit goes to the acquisition of new real estate and the cycle continues.

The investment will be of two types: long-term and stable assets which are expected to get a 6-9% per annum and high-yielding but risky assets with an expected yield of 15-30% per annum.

The investment scheme is further described in the whitepaper. In particular:

Token

Thanks to its partnership with Polymath, which is responsible for the release of the BEAT security token, the underlying asset will be built according to the ST-20 standard on the Ethereum blockchain. The total number of tokens offered for sale is 100 million but the team has the right to issue an additional 10% for its members in the case of a full collection of caps and an increase in the fund’s estimate of at least 25%. This tokens will serve as a form of performance fee with the BlockEstate team. Team tokens are locked for five years.

In terms of the distribution of proceeds from the STO, the main part (93-99%) in the first year will go to direct investment in long-term real estate projects as described in the scheme above; 0.5% per quarter for operating expenses; and 1-7% of the fund’s value will be held in dollars as a reserve.

Profit Sharing...


‘Bull Cross’ Points to Positive Bitcoin Market Shift

View

  • Bitcoin’s three-day chart is showing a bullish crossover of the 5- and 10-day exponential moving averages for the first time since July. The crossover looks decisive as both EMAs are now trending north, validating the bearish-to-bullish trend change signaled by the high-volume triangle breakout seen on the 3-day chart.
  • The cryptocurrency could test December highs above $4,200 in the near term.
  • A minor pullback to $3,800 may be seen in the next 24 hours, as signs of bullish exhaustion have emerged on the hourly and 4-hour charts.
  • The bullish case would weaken if BTC finds acceptance below $3,614 (the low of the previous three-day candle), but that currently looks unlikely.

A much-followed bitcoin (BTC) price indicator has turned bullish for the first time in seven months, indicating a trend change in the market.

On the three-day chart, the 5-candle exponential moving average (EMA) has crossed the 10-candle EMA from below – the first decisive bullish crossover since July 17, 2018.

Back then, BTC was trading above $7,300 and the crossover was followed by a rally to highs above $8,400 on July 24.

Moving average crossovers help identify shifts in momentum. A bearish-to-bullish trend change is confirmed when a short-term moving average crosses through a long-term average from below.

Many would argue that EMA crossovers are lagging indicators. While that is true, crossovers between the short duration averages help traders distinguish between bullish and bearish scenarios. The long-term MA crossovers like the “golden cross” (bullish crossover of the...


Bitcoin (BTC) transaction average & median fees

Transaction fees make the bitcoin blockchain go round. The miners are compensated for their efforts, not only through inflationary block rewards but also through fees charged to users for adding their transaction to blocks. While fees on average make up about 4% of the total miner revenue per day, with the lion’s share coming from block rewards, sometimes economic shocks cause those fees to rise.

The average fee per transaction is approximately $1.63 with the median being $0.88 over the past five years. The fees are the prices charged for a transaction to get into the limited space of a 1 MB block that occurs every 10 minutes. This results in about 1,800 transactions (~556 average transaction size in bytes) that are able to fit into a block. If the standard 144 blocks are mined per day, we observe a ceiling of about 260,000 transactions per day. Thus there is always a backlog of unconfirmed transactions that reside in the mempool awaiting miners to select them for inclusion in the blockchain.

According to Blockchain.Info, there are about 3.4 million bytes awaiting inclusion in the mempool. Miners will usually include the transaction with the highest fees and work their way down as capacity dwindles to the lower fee transactions. Imagine you are commuting to work and...