We are traditionally presenting a news digest from the cryptocurrency world: from Telegram TON to Bitcoin, from China to Iran. The world is perpetually changing, and cryptocurrencies and blockchain are becoming an integral part in the life of modern people. Be in the trend, read the digest!
Telegram allowed access to the test version of the TON network to a limited number of professional teams, Russian companies among them.
It seems that the cryptocurrency community will see the completed version of the TON network in the near future. At least that’s what the Vedomosti news agency reported, citing information from two sources.
Essentially, the teams were able to establish a network node. The leaders of the two companies, who reported this news to the information portal, noted that it was premature to talk about any results at the moment.
The first reports about the early launch of the TON test network appeared in early February. At that point the project readiness was estimated at 90%. The TON virtual machine was 95% ready, but the work was actively carried out on “basic smart contracts and their samples,” whose readiness was estimated at 20%. The developers reported in the supporting documents that launching a test network with the support of the simplest smart contracts is the priority at the moment.
In the same month, some information leaked online indicated that agreements on the purchase of TON Gram’s proprietary network tokens may be canceled if the project is not launched before October 31, 2019.
Some Chinese cryptocurrency investment companies and funds have switched to the lending market, as it brings in a steady income even in a bear market. The number of new cryptocurrency lenders includes well-known companies, such as Bixin Capital, FBG Capital and DGrouр. The latter was founded by Dong Zhao - the operator of one of the oldest over-the-counter sites in the region. The above-mentioned companies along with the Babelbank startup have issued loans for a total amount of $60 million over the past 5 months. The lion’s share of this amount is cryptocurrency, but one fund works with the yuan, which carries increased risks associated with regulatory issues.
Companies’ representatives reported that such services are especially popular among local retail investors, hedge fund traders and even cryptocurrency miners. The latter rely on the fact that the Bitcoin price will rise over the next few months, so they borrow money in USDT, which is then exchanged for the yuan to pay electricity bills.
Bixin Capital opened a cryptocredit division in November 2018, noting a decline in investment activity. Now the company has about $10 million in loans issued, which brings several bitcoins in net monthly profits. The company provides loans in popular cryptocurrencies: BTC, ETH, EOS, LTC and USDT, requiring one of the five assets as collateral. At the moment, the annual rate is about 7%.
The FBG Capital Fund has been engaged in the cryptocredit business for a long time, but in mid-2018 it decided to make this it a separate business. The amount of loans they’ve given out at this point is approximately $15 million.
All of the above companies provide slightly different services than traditional financial institutions.
Let’s note that the cryptocredit sector is actively gaining momentum, and not only in China. For instance, Mike Novogratz’s Galaxy Digital Foundation plans to raise up to $250 million in order to issue loans. At In early March, Blockii, a Galaxy Digital-sponsored company, announced that over a period of two weeks it had managed to attract $25 million in investor deposits in Bitcoin and Ethereum. These funds will be used to issue loans to large institutional clients.
Bitcoin is bullish
Vinny Lingham, general partner of Multicoin Capital and the head of Civic, believes that if the Bitcoin rate rises above $6,200, it will signal the beginning of a new bull market cycle.
Head of Civic stressed that although the price could rise sharply during such bullish jolts, it would not correspond to the fundamental factors and the actual adoption of cryptocurrencies.
Lingham explained that Bitcoin can leap up as high as $10,000, or even up to $100,000. However, its dominance in the cryptocurrency market will not grow proportionately. That is, other assets will grow as well. But they have no prerequisites for this, it is just speculation, which will again lead to a bear market cycle.
Note that at the end of January Vinny Lingham predicted the possibility of the bearish trend continuing and the fact that "a cryptocurrency winter can turn into a nuclear one." It seems that this hasn’t not happened, the rate of the first cryptocurrency increased significantly, and the capitalization of the cryptocurrency market recently exceeded $185 billion.
Chinese miners in Iran
Many Chinese miners have migrated to new jurisdictions due to the PRC’s prohibitive policies. However, in other countries they also continue to experience difficulties in setting up their business.
Chinese miners have been leaving their home country for over a year to continue their work. Major mining companies are moving their operations abroad, with Canada, the United States and Iceland among the main areas, while the majority of small and medium-sized enterprises move to Thailand, Cambodia and Vietnam and other Southeast Asian countries due to geographical proximity. However, as reported last year, there have been some difficulties in these regions as well.
Since the end of 2018, oil-rich Iran has also become popular with migrating Chinese miners. The country is attracting an increasing number of Bitcoin miners due to cheap electricity, which only costs $0.006 per kilowatt/hour. At the same time, the electricity supplied by hydroelectric power plants in the southwestern of China usually costs about 0.1 yuan ($0.015) per kilowatt/hour during the summer high water period. With the onset of winter, the price triples and reaches $0.04 per kilowatt/hour.
Liu Feng, a farm manager with over 20,000 Antminer T9 devices, was attracted by the extremely cheap electricity in Iran and is among the first miners to move there. Over 90% of Iran’s electricity is generated by natural gas, and the country offers preferential policies to power plants.
This makes Iran a true haven for cryptocurrency mining. But establishing farms in the country is not as simple as it seems.
However, customs did not prevent Liu from importing mining equipment to Iran. With the help of an agent who declares mining devices as computer processors, the first batch - 3000 T9 miners - successfully crossed the border.
But the customs aren’t the only barrier to farm operators. Setting up an enterprise is also difficult. Feng claims to have found a power station that could offer electricity at a price of $0.009 per kilowatt/hour. After deducting operating expenses, he agreed with the organization on the 70/30 distribution of profits. But two months later, the power station demanded half the profit and doubled the price of electricity.
The first attempt to create an enterprise in Iran ended in failure for Feng, and he sold his mining equipment. A few months later he found a metallurgical plant where the devices could be positioned. Since the plant itself consumes a huge amount of electricity, the energy consumption of 3,000 mining devices is a drop in the ocean. But the locals reported the noise from ASIC miners, and all of them were confiscated.
In February, it was reported that Chinese miners are returning to Sichuan because of cheap hydropower. At the same time, the National Development and Reform Commission of China recently proposed banning cryptocurrency mining in the country, since it spends resources, violates the requirements of the laws in place and generally hinders the country’s development. However, such large Chinese companies as Bitmain and Canaan do not see a threat in the possible ban on mining in China.