Blockchain Bites: Chainlink’s Interest, Ethereum’s ‘ReGenesis’ and Crypto Taxes
Binance announced the rollout of its crypto debit card, the U.K.âs central bank is thinking hard about a digital currency and the taxman cometh. Hereâs the story:
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BitGo is offeringÂ API support for the Financial Action Task ForceâsÂ (FATF) âTravel Rule,â which stipulates the originators and beneficiaries of financial transactions over $1,000 be identified and that their personal data must âtravelâ with those transactions. BitGoâs offering seeks to remove the headache of identifying wallets and transferring personally identifiable information between clients that use the San Francisco-based firmâs technology or custodial services.
Binance has announced theÂ first major rollout of a debit cardÂ allowing users to pay for goods and services in crypto. Users in the European Economic Area (EEA) will be able to apply for a card from August; those in the U.K. will be able to do so afterwards. The service is powered by Swipe, the online payments juggernaut. Users can spend crypto â currently bitcoin, Binance Coin, Swipe Coin, and Binance USD â at any merchant that supports Visa payments.
Retail interest in Chainlink, which acts as a bridge between cryptocurrency smart contracts and off-chain data feeds, isÂ now at the highest levelÂ it has been in well over a year. According to Google Trends, worldwide queries for the word âChainlinkâ on the search engine reached a score of 100 in the week ended July 12, more than double what it was the preceding week. A score of 100 indicates it is the maximum number of searches observed for a term during a given time frame. Â
Ethereum developers are aspiring to launch Eth 2.0 in 2020. The sum of account balances maintained by the networkâs nodes â called the state âÂ continues to grow larger and largerÂ as applications and projects transact. Adoption is good, but runaway growth is bad. Independent developer Alexey Akhunov may have a solution â one pulled from Cosmos, the interoperability blockchain. His new proposal, dubbed âReGenesis,â posted on EthResearch on June 24, would bring stateless client research to the current Ethereum chain (also known as Eth 1.x) by ânukingâ certain nodesâ states and swapping them with a math proof on a rolling basis.
The U.K.âs central bank isÂ discussing the possibility of launching a digital currency.Â Speaking during an online event, Bank of England Governor Andrew Bailey told a group of U.K. students on Monday his institution was having talks over the plan, as reported by Bloomberg Tuesday. Bailey said ongoing investigations would look at a central bank digital currency (CBDC), which would have implications across âpayments and society.â Calling it a âvery big issue,â he anticipated the CBDC could be a real possibility in several years, once the coronavirus has passed.
- Canadian Prime Minister Justin Trudeauâs half-brother was paid by theÂ federal government to speak at a blockchain conferenceÂ last year.
- What do Ethereum developers do when thereâsÂ no conferences to attend?Â
- Paradigm is sponsoring a Bitcoin Core developer. (The Block)
- Bitcoin environmental impact grows following post-halving dip. (Decrypt)Â
The deadline to file and pay your taxes in the U.S. is tomorrow, and hodlers are as confused as ever.Â
CoinDeskâs Nikhilesh De looks into how the Internal Revenue ServiceâsÂ public guidance on crypto taxÂ reporting fails to account for much of the innovative financial tools enabled by decentralized tech. Passive income earned through staking, highly leveraged margin trading and crypto earned through airdrops or hardforks all have antecedents, but retail investors taking advantage of these products are still in the dark about they have to do. Thatâs because the IRS hasnât clarified the precise tax implications or forms associated with these services, tax pros say. Â
âWhat the IRS has made clear is taxpayers need to file if they made (or lost) any money as a result of exchanging their crypto for fiat or another cryptocurrency, if they gained any crypto as a result of airdrops or hard forks, or if they gained funds as a result of staking or mining,â De writes.Â
âSometimes the IRS publishes final regulations more than a decade after taxpayers wish they were available. But it does make for unpredictable outcomes and forces individuals and businesses to file more in hope than expectation that theyâve acted correctly,â Kirk Phillips, a certified public accountant and author of âThe Ultimate Bitcoin Business Guide: For Entrepreneurs & Business Advisors,â wrote inÂ an op-ed.
While the IRS is working to create a guide for tax obligations, Phillips notes historically much âde facto tax guidanceâ comes from audits and tax court. Thereâs an irony in this as one public advocate, the IRSâs own Taxpayer Advocate Service, now claims a letter sent to crypto holders last summer may have violated taxpayersâÂ right to privacy and the right to be informed.
Another irony: Despite Bitcoinâs initial anti-state ideological underpinnings, the current tax landscape is likely one of the biggest barriers to mainstream adoption today.Â
Bitcoinâs ongoing low-volatility range play is reminiscent of theÂ price doldrums observed ahead of a sudden 40% price crashÂ in the second half of November 2018. This time, however, the price squeeze may end with a bullish move, as the spread between volatility bands and the 20-day moving average suggests. âA prolonged period of low volatility consolidation often ends with a violent move in either direction,â CoinDeskâs Omkar Godbole notes. But the macroeconomic climate â seen by monetary and fiscal stimulus and Bitcoinâs tripling from March lows â could precede a strong move to the higher side.Â
An index of 50 low-capitalization cryptocurrencies, the so-called Shitcoin Index, isÂ up 114% so far this year.Â Launched in 2019 by FTX, the index was trading at an all-time high of $1,065 Monday after making all-time highs for the past three consecutive trading days. The novel futures product has outperformed bitcoin by 88 percentage points this year.
Minecraft of Finance
Camila Russo, founder of The Defiant and author of âThe Infinite Machine,â the first book on the history of Ethereum, out today, thinks Ethereum has achieved much of what it set out to do five years ago: become aÂ âMinecraft of crypto-finance.âÂ From token issuance to decentralized exchanges through to novel derivatives platforms, Ethereum is the base layer to an alternative and open financial system. âThe next five years will be about strengthening these scaling solutions and making these financial applications more robust and secure,â she predicts. You can read an excerpt of herÂ new book here:Â
The Real Story Behind Teslaâs Crazy Rally
Elon Musk is now richer than Warren Buffett and Tesla comprises more than 25% of the value of the entire auto market. In the latest episode of The Breakdown, NLW looks at theÂ narratives behind this stock-market phenomenonÂ including Muskâs cult of personality, the Robinhood effect and whether Tesla is a tech company.Â
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