The cryptocurrency market is in the red two days in a row. On Monday, Bitcoin tried to overcome the seller congestion zone at $10,000. However, the pr There is fear that missing ISIS’s £246 million may have been hidden in cryptocurrency waiting to be used for war chest. By 2040, it is estimated that 95% of commerce transactions will happen online. With a huge chunk of Africa unbanked and failing economies that are seeing countries like Zimbabwe without their own currency, cryptocurrencies and the Blockchain may be the way to go.
The cryptocurrency market is in the red two days in a row. On Monday, Bitcoin tried to overcome the seller congestion zone at $10,000. However, the price action hit a wall at $9,957 (current week high). Selling activities have dominated the market since then with Bitcoin bulls battling to keep the price above $9,500.
As the European session begins, Bitcoin is trading 1.89% lower on the day. The granddaddy of digital assets adjusted from $9,725 (opening value) to $9,533 (prevailing market value). BTC/USD is facing expanding volatility and a bearish trend according to the cryptocurrencies live rates.
Looking at the daily chart, Bitcoin is still holding within an ascending channel despite the retreat from $10,000. Moreover, a golden cross is likely to come into play with the 50-day SMA crossing above the 200-day SMA. With the proper volume, Bitcoin could rally above $10,000, renewing the desire to beat 2019 high at $13,800.
Ethereum is struggling to balance above the short term support at $210. The second-largest cryptoasset is trading 1.86% lower after a correction from $214.77 (opening value) to $210.79 (prevailing market value). Like Bitcoin, Ether is also dealing with increased seller activity amid expanding volatility. If the price fails to hold above $210, $200 is the next support target.
XRP/USD has not been spared as it has lost 1.7% of its value. Ripple has, however, managed to hold above the critical $0.20 support. On the upside, movements are capped at $0.21. The consolidation above $0.20 could allow buyers to gather strength as they wait for a technical breakout.
Also read: Ripple Price Analysis: XRP/USD dancing between the 50 SMA and the 100 SMA, $0.21 level is unbreakable
Among the top 100 cryptocurrencies, the best performing assets include Metaverse Dualchain Network Architecture (up 9.60%), Baer Chain (up 8.79%), MonaCoin (up 9.59%) Electroneum (12.14%) and Steem (up 17.90%) in the last 24 hours. On the other hand, some of the worst-performing cryptos include HEX (down 18.18%), MINDOL (down 1564%), DigiByte (down 10%) and Elamachain (down 10%).
Chainlink, one of the fasted growing cryptocurrency projects has signed a partnership deal with South Korea’s Kakao affiliate firm, Klatyn. Klatyn is the firm behind the development of KakaoTalk, a popular mobile messaging app in the Asian region. The partnership seeks to integrate Chainlink’s oracles with Klatyn’s smart contracts. According to Klaytn’s CEO, Sangmin Seo:
Chainlink can provide Klaytn with a secure oracle framework for building blockchain applications that interoperate with traditional infrastructure, increasing our capacity to develop more advanced products across a more diverse set of markets.
At the time of writing Chainlink is trading 2% lower on the day and has a market value of $3.82. While the partnership news was well received by LINK’s community, the price is yet to react upwards. Instead, LINK is caught up in the market’s general bearish trend.
Bitcoin’s third halving took place without the hype of a price rally. However, experts still believe that a halving rally is still possible towards the end of the year. However, what is apparent is the rising transaction fee in the Bitcoin network. Analyzed data onBitInfoCharts has shown that the fee has hit 11 months high ($5.82 on Monday). The surge has been gradual since January 2020 but spiked in the last three weeks. As transaction fee hikes, users are likely to seek alternatives Ethereum and Ripple which eventually could affect Bitcoin’s performance.
In an announced via Twitter on Monday, Square and Twitter CEO Jack Dorsey revealed that Cash App users have the ability to set their recurring Bitcoin purchases ranging from daily, weekly, or bi-weekly. The set minimum is $10 on all the three schedules. Another new feature that was announced was the ability of users to change the balance display from BTC to Satoshis (sats). The recurring purchases feature has come at a time when people are focusing on “Hodling;” buying to keep for a long time.
Japan’s cryptocurrency exchanges have started implementing changes in regards to the new crypto laws. The revised Payments Services Act (PSA) came into effect on May 1. Some of the changes start with amendment of all references to “virtual currency” to the term “crypto asset.” Exchanges also have to comply with the directive that users’ money is handled separately from the platforms’ cash flows.
ISIS Millions Could Be Hidden in Cryptocurrency Ready-to-Fund War Chest
Experts have disclosed that ISIS is using crypto platforms to conceal donations and bypass financial security measures. Experts have made such a revelation after identifying an increase in advertising for donations.
The ISIS (Islamic State of Iraq And Syria) has been recognized as the world’s richest terror group. Governments across the world are aware of the terror group and actively looking to block and track all funding efforts through banking channels. However, such difficulties have not stopped ISIS from using other ways to bypass money-laundering filters and sanctions. The group is using cryptocurrencies as it looks for untraceable and anonymous ways to transfer money.
Terrorists Think Cryptocurrency Is the Perfect Hiding Place
According to the latest report, experts fear the terror group’s missing £246 million war chest could have been transferred into cryptocurrency in an attempt to hide it from the authorities.
In the previous year, ISIS used crypto to fund the Easter Sunday terror attack in Sri Lank that left at least 250 people dead after suicide bombers targeted four hotels and three churches in quick succession.
Hans-Jakob Schindler, director of CEP (the Counter Extremism Project, a specialist think tank tracking the trend of terrorism financing), revealed that since 2017, the authorities have been searching for the terror group’s mission war chest and it is feared that it may have been converted into cryptocurrency to be used at a later date.
Schindler stated: “I’m wondering if from 2017-2020 there has been $300m that we have not found and that’s why I’m thinking this might have been one of the ways it might have been used.”
“This would be an ideal storage mechanism until it is needed. If done right it would be unfindable and unseizable for most governments.” He said.
ISIS is considered to be the first terror group to face prosecution in court for crypto activities.
Ali Shukri, a US teenager, was put in prison for 11 years in 2015 for providing an online manual to ISIS supporters on how to use Bitcoin to conceal financial donations.
Schindler mentioned that there have been consistent cases of Hamas and ISIS using cryptocurrencies since 2014. From these early days of cryptocurrency, ISIS has been interested in what could be done with the new technology. Due to the anonymity of the user, when digital transactions are broken up into small transactions, it is next to impossible for the terror group to be traced back to a particular entity.
Schindler is urging the EU governments to work together to develop a regulatory framework to build tighter regulations.
Yaya Fanusie, a director at the Foundation for the Defense of Democracies, has been studying terror groups using crypto since 2016 and first saw an increase in advertisements for crypto donations in crowdfunding sites. He identified supporters of ISIS increasingly rely on the sophistication of blockchain technology to generate funds for the terror groups. Rather than one blockchain address, there are multiple addresses, which make it difficult for law enforcers to track. He said that the terror group is using software that supporters can download and, therefore, they don’t have to go through a crypto exchange.
In the previous year, a report by US security group, the NSRD (National Security Research Division) urged for international cooperation between the intelligence community and law enforcement in dealing with the issue. The US security group said that the high adoption and use of these technologies are critical uncertainties, which have significant operational impacts.
This analysis suggests that oversight and regulation of cryptocurrencies, together with international cooperation between the intelligence community and law enforcement, would be vital steps to prevent terrorist groups from using crypto to support their activities.
Terrorist Groups Use Telegram for Raising Cryptocurrencies
Last year in August, MEMRI (the Middle East Media Research Institute), a Washington-based nonprofit research organization, issued a new report indicating that social media has demonstrated to be fertile ground for soliciting funds used in terror financing. Terrorist groups like Hamas, Al-Qaeda, and ISIS are increasingly using social media sites to raise cryptocurrency. Donors may not even know that they are giving their money to fund conflicts. Encrypted messaging app Telegram is identified as the most preferred app by these terror groups. The terrorist groups regularly publish their Bitcoin addresses when they seek donations on social media sites like Twitter, Telegram, Facebook, and others. They also share detailed instructions via these sites to explain how potential donors can donate in cryptocurrencies. MEMRI mentioned that it has been in touch with the US government and other western government agencies to inform them about their findings. Pavel Durov, Telegram’s CEO, obtained letters from the US Congress to take immediate action against the evidence provided of terrorist groups using his platform.
Author: Nicholas Otieno
Why it is imperative that Africa looks into cryptocurrencies and Blockchain
The Bitcoin craze came and made millionaires while, unfortunately, making many more lose their hard earned cash. A lot of people are still debating if cryptocurrencies are here to stay and whether they will replace cash. Billionaires like Bill Gates and the eccentric Elon Musk think that it is a given that eventually they will. Considering that we moved from barter trade, to the gold standard, to fiat, to digital currency and considering the fact that everything is bound to grow and to change, they are probably correct.
On the other end, there are people like Warren Buffet who see cryptos like Bitcoin as a house of cards.
As with most new things, people are afraid and suspicious of what they don’t know. Some African countries like Morocco, Algeria, Libya, Zambia and Namibia have already banned cryptocurrencies altogether. While Senegalese-American hip-hop artist Akon is setting his sights on Africa with his own cryptocurrency.
Akon is getting advice from Bancor co-founder Galia Benartzi, to issue a pan-African currency and establish Akon City, a sustainable and eco-tourism smart city in Senegal. Akoin, his cryptocurrency, will be the primary digital payment solution and currency within the city.
Whether Bitcon, Akoin or the other cryptocurrencies out there will eventually replace paper money, no one really knows. But even if they don’t, beyond the Bitcoin and crypto bubble, the underlying technology — the Blockchain — is probably the technology likely to have the biggest impact on the next decade or two.
So let’s start at the beginning. What are the problems with the financial system and paper money, especially in Africa, and how can Bitcoin and Blockchain address these problems?
The current financial system is centralised. This makes it, with the increase and advancement of tech tools, less secure and easier to hack. J P Morgan Chase, one of the largest banks in the US and the US Federal Government websites have been hacked before.
The current financial system excludes billions of people from the global economy. A 2015 World Bank research reported that sub-Saharan Africa is home to 350 million unbanked individuals, which accounts for 17% of the global total. Some of these are getting relief from the rapid uptake of mobile money technologies taking over Africa.
The current financial system is slow. A transfer usually takes between one and two working days to clear and reflect, and slightly longer over weekends and public holidays.
When paper money started to circulate, developed economies pegged their currencies to gold. The actual money was the gold, paper money wasn’t money at all. It was for ease of use and could be used to redeem the gold.
During World War One most economies abandoned the gold standard and paid military expenses in paper money but the USA carried on using the gold standard. By World War Two the US sold weapons in gold, which gave their currency an advantage and a jump over other currencies. And by 1947 the US had accumulated 70% of the world’s gold reserves. To remedy this, in 1944, 44 allied countries met in Bretton Woods, New Hampshire and pegged world currencies to the US dollar which was still pegged to gold. This in turn meant that these currencies could be redeemed for gold. The cascading effect of this move resulted in depleted US gold reserves. This prompted the then president of the United States, Richard Nixon, to delink the US dollar from gold in 1971.
This ushered in Fiat money. Fiat money has no intrinsic value, it is solely based on trust. That trust is guarded by the reserve bank and backed by the respective currencies governments.
Alongside Fiat paper money came electronic money. Electronic money is created by commercial banks when they give out loans and is not offset by any paper money at all. It is said that the amount of paper money in circulation is a mere 5% as opposed to 95% electronic. Considering that all loans are given to people who, in a sense, already have money (collateral), you can see how the wealth inequality is created and sustained.
By 2040, it is estimated that 95% of commerce transactions will happen online. With a huge chunk of Africa unbanked and failing economies that are seeing countries like Zimbabwe without their own currency, cryptocurrencies and the Blockchain may be the way to go.
Bitcoin simplified is merely a digital platform for conducting transactions without a middleman such as a bank. This seemingly simple act has created a global frenzy, making some people excited and others terrified. Bitcoin is the trailblazer for cryptocurrencies, it might not be the future, or maybe, not in its current form. But I reference Bitcoin a lot because it introduced us to Blockchain technology.
As with many great ideas, the concept that powers Blockchain — timestamping — is not new. Infect, the idea of timestamping information is centuries old. Timestamping is the process of securely keeping track of the creation and modification time of a document. This means that no one — not even the owner of the document — should be able to change it once it has been recorded.
In 1991, research scientists Stuart Haber and W. Scott Stornetta came up with a computationally practical solution for cryptographically timestamping digital documents in a chain of blocks so that they may not be backdated. This technology went unused and the patent lapsed in 2004, four years before the creation of Bitcoin.
So Blockchain, again in a simplified way, is a technology that maintains public digital files of records, called blocks, that are linked together using cryptography. Each file, called a ledger or a block, is decentralized and distributed across millions of computer networks. It is linked to preceding and successive blocks to form a chain. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.
To hack a block you have to hack not only that block but also all the previous blocks within that chain down to the first block, across multiple networks, at the same time. This is next to impossible. Therefore, by design, a blockchain is resistant to modification of its data.
So how does Blockchain help? Well, Blockchain is not just used for cryptocurrencies only. Bitcoin is just one chain, Akoin for example, another. You can create countless chains on this technology. One chain can keep track of intellectual property like music, for example. When you record a song you can maybe upload it to a music copyright chain and the chain can keep track of everywhere it’s used online and automatically deduct a small amount from the user to the creator’s account. Or it can help manage your personal data, keep track of where and how it’s used and even monetise it.
The point is, Blockchain is a powerful, new and emerging technology that has many possible applications, which with a bit of creativity, can alleviate most of Africa’s problems. Jumping on to the bandwagon late might mean we will keep being largely a developing economy and at the mercy of the US and developed economies.
Looking for alternatives and rightly applying them to our challenges, means we may have a fighting chance. Henry Ford is credited with having said, “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” Cryptocurrencies and Blockchain might as well be the revolution that Africa needs.
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