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Blockchain

Busting Myths Around BLOCKCHAIN Ecosystem & Cryptocurrencies

The idea of Blockchain came into existence around 1991. But it’s only around 2008, credit to the whitepaper from Satoshi Nakamoto on “Bitcoin: A Peer to Peer Electronic Cash System”, the platform on which a bitcoin could be utilized started becoming popular. As the decentralized and digitalized currency seemed promising as an alternative, the framework […]

The post Busting Myths Around BLOCKCHAIN Ecosystem & Cryptocurrencies appeared first on PrimaFelicitas.

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The idea
of Blockchain
came into existence
around 1991. But it’s only around 2008, credit to the whitepaper from Satoshi
Nakamoto on “Bitcoin: A Peer to Peer Electronic Cash System”, the platform on
which a bitcoin could be utilized started becoming popular. As the
decentralized and digitalized currency seemed promising as an alternative, the
framework on which it functions came into limelight, and hence people
started taking Blockchain Ecosystem earnestly
.
The blueprint of blockchain initially focused on financial services only. But
after observing and examining its potential, the architecture started being
employed in several other industries as well.

Inter-Connection between Cryptocurrencies, Stablecoins,
and CBDC’s:

For someone who knows the inside-out of
the financial industry may observe the connecting points between Cryptocurrencies,
Stablecoins, and Central Bank Digital Currencies (CBDC)
.
For a layman, he/she may view these terms as different iPhones coming into the market
or the updates for the software making it more efficient. In the initial
interval since blockchain’s entrance, several hurdles came across in the forms
of scams, phishing, etc leading to the increment of volatility in the
structure. Just like in the scenario of the entrance of the World Wide Web,
with empirical evidence, the overall structure got modified. As
cryptocurrencies started being prominently utilized around 2014, various frauds
also occurred in that interval. Due to numerous cases of volatility being
compromised, Multinational Corporations and other stakeholders lost a big
proportion of money. To compensate and fix the issue, stable-coins came into
the picture. One key factor among others which appealed stakeholders because of
its similarity with traditional currency. That objective is acting as a store
of value and a medium of exchange and a unit of account as well.

A stablecoin at the core is a
cryptocurrency that maintains a stable value concerning the target price like
the US Dollar. Mostly, stablecoins combine the algorithmic techniques along
with the management of supply. Doing so makes the market incentivize by making commerce
the coin for $1 or less. A stablecoin unlike other cryptocurrencies can minimize
the exchange rate of volatility but isn’t entirely open and permission-less. Technically
speaking, stablecoins are fabricated over Ethereum Blockchain Protocol. The
reason for it is to swiftly modify the compatibility of the freshly issued
asset along with the pre-existing infrastructure. The most recent modification with
regards to stablecoins is in corporate governance. Specifically,
crypto-exchanges, clearinghouses, and many more to come can be categorized
under Electronic Shares on a Distributed Ledger. In a nutshell, the recent
version of stablecoins may establish an architectural layer for crypto assets.
Theoretically and practically as well, stablecoin could become the norm for
usage as it can permit liquidity to exchanges. To make the blockchain ecosystem
enter the mainstream financial institutions, CBDC’s would have to imbibe such
newer digital currencies and invest in them to regain the people’s trust.
Observing and using such technologies in daily activities will make them
(individuals utilizing the technology) want to use blockchain,
cryptocurrencies, stablecoins, consciously, or unconsciously.

Cryptocurrencies perceived as Speculative Bubbles:

The most recent bubble in the technology
industry was the dotcom bubble also referred to as the internet bubble. A
bubble or one may also call it an illusion, starts with an assumption that firms
in which venture capitalists invest may deliver profits in the future. But due
to several factors like non-genuine technology, discarding financial
accountability, focusing more on brand building, etc, the bubble or the
illusion busted. At the core, a
speculative bubble
can be examined and
deduced of consisting economical and behavioral factors. A bubble is defined as
a scenario where the circulation or the broadcasting of some information
propels the investor’s eagerness psychologically from one individual to another.
Economists and people in the Financial Services Industry as well have
scrutinized prior bubbles busted. Some common factors/biases include:

  1. Purchasing an overvalued
    commodity even after knowing it beforehand.
  2. Building expectations based
    on preceding prices.
  3. Thoughtful disparity.
  4. Herd behavior.
  5. Overconfidence.
  6. Fear of missing out.
  7. Exaggerated optimism.

According to Hyman Minsky, an American
economist, there consists of 5 phases in a life-cycle of a bubble, namely:
Displacement, Boom, Euphoria, Profit-Taking, Panic phase. In the displacement
phase, investors commence intriguing about a fresh idea’s prototype. In the
boom phase, a slight increase in the price is observed. The third phase or the
euphoria phase experiences a tricky scenario where a commodity is purchased at
an overvalued price knowing about it beforehand, just to sell it to an amateur
at a higher rate. In the profit-taking phase, financial institutions, institutional
investors, and several others start identifying a forthcoming crash and selling
assets for a profit before the bubble bursts (specifically those who’re able to
detect the unavoidable crash). In the last stage, the price of the
asset/commodity starts collapsing gradually.

The internet bubble happened around the mid-1990s
to 2002. The initiation took place with the launch of the Mosaic browser. The
displacement phase took off in 1993, as people were getting new ideas to do
business online, and fresh regulations to back them up. Credit to that, more
companies began opening up, and hence, more investors started investing in
firms being operated through World Wide Web. This made the entrance of the boom
phase. With investors becoming overly optimistic and confident, the euphoria
stage entered the picture. The simple reason being, the NASDAQ index indicated
a value of around 500 in the initial 1990s, while it reached 5048 in March
2000. As a large percentage of Dot-com firms believed the motto, “get big
fast”, the profit-taking phase started around 2000. Various pieces of research
imply that as the blockchain ecosystem is in its growth phase, stablecoins,
cryptocurrencies, and alike digital currencies would be of big aid in the long
term.

Functional Approach against boasting of Regulatory Uncertainty:

Individuals or firms mostly tend to go
against the Rules and Regulations because of uncertainty in the policy designed
and implemented, loopholes not getting rectified, political or personal
vendetta, etc. As the overall Blockchain
Ecosystem’s policies and regulations

are still underway, some portion of the population has started boasting about
the regulatory uncertainty out of fear or constructive criticism. There’s a
saying in the sales and marketing field, “one should know the appropriate time,
place, medium of communication, and the psyche of the consumer to convince them
to purchase or think of buying a product/service”. Similarly, thorough research
needs to take place before implementing a policy, and that to which has a
nature of modifying constantly depending upon numerous variables. A premature
regulatory or postmature regulatory would have certain drawbacks and not offer
a desirable result. On one side, the blockchain
architecture and applications

run through it updates quickly, while policy drafting and implementing on the
ground is a time-taking process.

Political, Personal, and Economical Hurdles:

There are quite a handful of people who
prefer to view everything from a pessimistic perspective. Few economists who
might be renowned globally for their contributions in the area of economics,
but don’t know much about the latest technology, and still want to offer their
point-of-view just for namesake. One illustration of it is an individual by the
name Nouriel
Roubini
. The individual may not a lot about
economics, but not much about the inside-out of the technology. Him making a
decision that may impact hundreds of thousands of lives (socially,
technologically, economically) would not be a good idea. An individual or a
group of individuals who have expertise in both the financial industry and
technology industry should be allowed to make pivotal decisions and not create
fear among the population across the world just for their personal or political
gains.

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Blockchain

Members of WallStreetBets Forum Alleged in Telegram Crypto Scam Stealing $2M in BNB and ETH

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Members of the popular WallStreetBets Reddit forum were suspected of a presumable cryptocurrency fraud that could have caused losses of no less than $2 million. By creating a designated Telegram group, they duped investors by guaranteeing remarkable returns through capitalizing on the recent crypto market rally.

The Core of the Hoax

Per a report by Bloomberg, alleged members of the WallStreetBets Reddit Forum used the Telegram messaging service to execute a blatant scam. A particular account by the name of ”WallStreetBets – Crypto Pumps” presented users the chance to purchase a new token certified as WSB Finance before it was listed on crypto exchanges. The operation is known as a pre-mine sale.

The essence of the fraud was connected to the recent cryptocurrency boom as bitcoin and most altcoins skyrocketed in value lately. With some of the digital assets reaching 1,000% gains, the targeted WSB members conned investors into sending money without asking questions and with the potential of netting huge profits.

The notorious account also urged users to transfer popular cryptocurrencies such as Binance Coin (BNB) and Ethereum (ETH) to a designated crypto wallet and then to reach its ”token bot” to gain WSB Finance coins.

However, the perpetrators never dispatched those coins. Furthermore, another message on Telegram revealed that the people who had already issued a payment had to send an equivalent amount again or they would risk losing their initial investment.


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The Aftermath

After executing the hoax, more than 3,451 Binance Coins were withdrawn on Tuesday (May, 4th) from the wallet inside the Crypto Pumps messages.

Since the price of BNB at that point was approximately $625, the fraud caused losses of more than $2.1 million. Following the scam, thousands of people expressed their frustration and tried to expose the individuals behind the account. Moreover, the quantity of the other cryptocurrency – ether – still remains a mystery.

Two weeks ago WSB admins warned about offers that might try to take advantage of the forum’s name in order to allure the crypto audience. The ”WallStreetBets – Crypto Pumps” account has been removed from Telegram but whoever managed it left a message that might stun the affected victims:

”Buying Lambo now.”

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Source: https://cryptopotato.com/members-of-wallstreetbets-forum-alleged-in-telegram-crypto-scam-stealing-2m-in-bnb-and-eth/

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Blockchain

South Korean Crypto Exchange Accused Of $1.5 Billion Scam

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The South Korean cryptocurrency exchange platform V Global was accused of luring 40,000 people into illicit multi-level deceit. The entire scheme amounts to more than 1.7 million won, which equals $1.5 billion.

The Investigation

As reported by the Korean officials, the police raided many places in the country related to a virtual cryptocurrency exchange, and its notorious CEO – known as LEE – alleged to fundraising without regulatory permission. The authorities blocked the exchange’s cash deposits as a part of the investigation.

In total, the Gyeonggy Nambu Police Agency reported that it searched the exchange’s headquarters in southern Seoul along with 21 other places and froze more than $214 million left in the account.

Another report from today shed more light on the developments. According to Yonhap News, the name of the organization is V Global. The Korean police are examining the accusations against them for fraud under the Certain Economic Crimes Weighted Penalty Act, the Similar Receiving Act, and the door-to-door sales business.

The main accusation against the exchange is gaining a deposit of 1.7 trillion won ($1.5 billion) from 40,000 members in the period between August 2020 and January 2021. The announcement revealed that most of the people were elderly or housewives with no experience in cryptocurrency trading.


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Too Good To Be True

The investigation revealed that the exchange urged investors to entrust their funds to an account and lured the members that the expected return would be three times higher than the initial investment. According to the authorities, there was a pyramid element in the scam as the exchange promised to grant an introduction fee of 1.2 million won ($1,065) for every newly recruited member.

The report affirmed that the trading venue paid some members in the form of a block. Therefore, people who signed up earlier received funds from individuals who entered the exchange later.

Moreover, the Korean police seem confident to deal with the fraud case as it revealed its intention to confiscate 240 billion won ($214 million) left in the V Global account as of the 15th last month, even before the prosecution process.

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Source: https://cryptopotato.com/south-korean-crypto-exchange-accused-of-1-5-billion-scam/

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Blockchain

Georgia’s central bank is exploring ‘Digital Gel’ CBDC

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The National Bank of Georgia said that it is considering launching a central bank digital currency.

In an announcement today, the central bank hinted at the issuance of a central bank digital currency, or CBDC, in an effort “to enhance efficiencies of the domestic payment system and financial inclusion.” The National Bank of Georgia, or NBG, said it would be inviting fintech firms and other financial institutions to participate in the project, named Digital Gel after the symbol for the country’s fiat currency, the lari.

“CBDC holds the promise to unlock the tremendous value of innovative business models for the benefit of society,” said the announcement. “The introduction of CBDC could increase financial intermediation efficiency, help introduce new financial technologies, facilitate financial inclusion, and reach previously unbanked populations.”

However, the bank mentioned the possibility of risks in the launch of a CBDC in the Republic of Georgia given the “new and potentially disruptive technology.” The NBG said it may conduct extensive testing of the CBDC in a controlled environment to ensure a smooth rollout, but did not provide any details regarding a timeline for launch.

With a population of roughly 4 million and a gross domestic product of approximately $15 billion, a nation like Georgia falls at the smaller end of countries exploring CBDCs. The Bahamas officially rolled out its Sand Dollar central bank digital currency in October, while China has been piloting its digital yuan in select cities prior to a full-scale launch. In the United States, Fortune 500 company Accenture announced this week it would be partnering with the Digital Dollar Foundation to conduct CBDC trials.

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Source: https://cointelegraph.com/news/georgia-s-central-bank-is-exploring-digital-gel-cbdc

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