Calls for cryptocurrency regulation were a resounding theme at the World Economic Forum in Davos last week.The world’s most prominent financial institutions remain wary of going all in on cryptocurrencies, amid fears of future regulation leading the market to tank.
Governments around the world have signaled their ongoing or imminent intent to legislate and regulate cryptocurrencies around the world, and it seems the largest banking and financial firms are waiting for more clarity before they forge ahead with plans to enter the market.
According to Catalini, it is because of the hype and excitement around the cryptomarket through the end of last year, a correction was bound to happen. He concluded. “The space was ripe for a correction after the craziness of the end of 2017.”
Bitcoin continues to slide, now into February, and it seems to be borne on the back of a lot of negative press – some real, and some less than convincing. As several countries, notably China and South Korea, target a crackdown, Neil Wilson, analyst for ETX Capital, said: “Explaining moves in Bitcoin is always tricky but this plunge … may well be a result of recent signs that regulatory pressures are building.”
The Korean crackdown was a paper tiger and debunked by the countries highest authority, but bad news leaves its mark on such a speculative market. Regardless, today’s price proves that negative press has a big role to play in the way the market moves. And the flipside of that is so does positive news.
At the sidelines of a conference on the future of payments and currencies, Wozniak, a mathematician by training, explained why he thought Bitcoin was better than the US Dollar and Gold. Quipping that unlike Gold or the US Dollar, Bitcoin has a predictable finite supply and is tamper proof, Wozniak claimed Gold’s value will be diluted once more efficient methods of mining are invented. He also remarked that the US Dollar is ‘kind of phony’ due to the centralised control over creation and use, lending itself to abuse.
Adding that he admired Bitcoin from the very start, Wozniak said he wasn’t interested in the financial part of it but rather believed in the promise Bitcoin held as a currency. The tech geek also shared how he found it hard to buy Bitcoins in the early days after its launch. Comparing Bitcoin to a house, Wozniak said that no matter how much the price went up or the government taxed it, the house would still exist as a real stable asset, undiluted and worth what it’s made of. In the same way, he said, Bitcoin is limited in amount and nobody could ever dilute the supply, making it valuable as a stable asset.
The transaction process
The BTMs save Know Your Customer (KYC)/Anti Money Laundering (AMC) details, scrutinise them and report suspicious activity to the regulatory authority. After obtaining these details, the machines allow you to buy Bitcoin. The operators buy Bitcoin from exchanges and allow BTM users to withdraw Bitcoin from their wallets. One can buy as much Bitcoin as the operator holds.
Operating a BTM
In most jurisdictions, operating a BTM is a challenging task. BTM operators have to meet stringent regulatory norms. In the United States, operators have to register under the federal financial crimes enforcement network as well as obtain state-specific money transmitter licence.
Bitcoin Core is the original BTC client and is available for Windows, Mac and Linux. Core is a ‘full node’ Bitcoin client, meaning that on first-run it will download the current version of the blockchain (currently around 160GB) by connecting to other nodes. It will then continue to download and process data about Bitcoin transactions.
One advantage of this is that it’s much more difficult to link a specific BTC payment address to your identity as Core downloads data about all Bitcoin transactions everywhere. This also protects you against certain types of fraud such as someone trying to spend the same BTC twice, or fooling you into believing you’ve received funds you haven’t actually got.