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China’s BSN predicted as long-term global project, still ahead of others

China’s Blockchain Service Network may not have a global impact anytime soon, but the region’s national blockchain infrastructure continues to outpace other regions…

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First announced in October 2019, China’s Blockchain Service Network, also known as BSN, is aimed at providing a global public infrastructure designed to support both private and public blockchain networks across interconnected cities. 

According to the BSN introductory white paper, the project serves as an “information infrastructure” designed to advance the development of smart cities for the emerging digital economy. The white paper also explains that the goal of the BSN is for cities to build one or more public city nodes that are linked via the internet to form a nationwide — and eventually, worldwide — physical city node blockchain service network. 

Although ambitious, China’s BSN appears to be making progress since its launch one year ago. For example, the BSN officially became available for global commercial use in April this year. The initiative is backed by the Chinese government policy think tank, The State Information Center, along with major players involved with China’s communication, financial and software industries.

Even during the BSN’s beta phase, the project has reportedly attracted more than 2,000 developers, who have created applications to advance public water supply systems, item traceability and electronic invoices. Since then, China’s BSN has launched an international website designed to bring in more developers. The website also states that major cloud providers, including Google and Amazon Web Service, are part of the initiative. Most recently, the BSN announced that three well-known public blockchains have joined its growing ecosystem.

Yet, progress doesn’t always equate success, especially when it comes to a global infrastructure with goals as lofty as the BSN’s. As such, market research company Forrester revealed in its 2021 enterprise blockchain predictions that China’s BSN will “languish” due to the region’s current geopolitical climate.

Martha Bennett, principal analyst at Forrester and a co-author of the report, told Cointelegraph that within China, build-out for the BSN will continue at a steady pace. However, Bennett explained that China’s ambitions for the BSN to be a truly global network won’t be fulfilled in the near term:

According to Bennett, sanctions, along with many countries’ desire to reduce dependency on China, will impact global progress for the BSN. While Bennett’s thoughts about the BSN are just a prediction, some recent statistics reveal that unfavorable views of China have now reached historic highs. In addition, the United States has demonstrated a fear of technology controlled by the Chinese government, seen through bans being called for apps reportedly associated with the Chinese government, such as TikTok and WeChat.

However, some beg to differ that China’s geopolitical climate will affect the BSN development. Yifan He, CEO of Red Date Technology — the private company behind the daily operation and maintenance of the BSN — told Cointelegraph that the current geopolitical climate has not affected the development of the BSN. “Half of our tech partners are from the U.S, and we are working closely with Amazon Web Services and Google Cloud as our global cloud partners,” he said. He further noted that the BSN is currently more of a technical project:

Specifically speaking, the BSN white paper discusses the potential of blockchain for an initiative like the BSN. The document states that blockchain will enable a resource-sharing mechanism for smart cities, greatly lowering the cost of resources. The white paper states that blockchain application publishers can “use uniform public services provided by the BSN and lease shared resources as needed. This greatly reduces the publishers’ and participants’ costs.”

According to He, the BSN is moving forward smoothly, noting that the BSN testnet for permissioned blockchains was recently launched. “In the long run, we really think the broadcasting way of data transmission created from blockchain technologies will reshape, even rebuild the Internet for better security and better privacy,” he added. He further commented that a date has not been set or even predicted as to when the BSN will make a global impact.

It’s also important to point out that there are two versions of the BSN: one is called “BSN China” and the other is “BSN International.” According to He, BSN is still one network, but the governance is divided between BSN China and BSN International. “Just like the Internet, China has one agency to regulate the Internet, and the U.S. has another,” he said.

Although the idea makes sense, skepticism regarding BSN International is being demonstrated. Kevin Feng, former chief operating officer at enterprise blockchain company VeChain, told Cointelegraph that China’s geopolitical climate is definitely one of the key challenges for BSN International. “It’s a concern to U.S. or EU-based companies that most of the BSN blockchain infrastructure is hosted on China-based cloud providers,” he said.

Moreover, Feng pointed out that BSN China only utilizes permissioned, private blockchain networks, while BSN international incorporates permissionless, public blockchains. Feng believes that China BSN can make a swifter impact, yet he noted that the international version is “more for marketing purposes for public blockchain protocols.” Feng further commented on flaws with this model, like charging users based on the traffic generated:

Although skepticism remains around the BSN initiative, Forrester’s recent enterprise blockchain report also predicts that China’s national blockchain infrastructure will advance faster than most regions. According to the report, in 2021, the Chinese government will make strategic investments in most provinces, with deals signed and systems going into production. The report states: “This national investment will help create bridges between siloed processes in areas like citizen services that have been especially challenging in China. This concerted effort will propel China ahead of other regions.”

According to Charlie Dai, a Forrester analyst and co-author of the report, China’s “new infrastructure” national initiative makes blockchain an integral part of the country’s digital infrastructure. Bennett further pointed out that while this isn’t much different from Europe’s blockchain ambitions, China is a single country where technology and the build-out of a network can be translated into reality more quickly:

Moreover, Czhang Lin, network blockchain advisor for Haier Group — a Chinese multinational corporation — told Cointelegraph that China’s national blockchain infrastructure will move faster than other regions, mainly due to the country’ historical top-down central planning culture. “Since President Xi announced blockchain as national strategy level technology in 2019 October, we have seen a massive interest among governments of all levels to study and plan blockchain adoption,” he remarked.

Source: https://cointelegraph.com/news/china-s-bsn-predicted-as-long-term-global-project-still-ahead-of-others

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Ethereum loses key support level as ETH price falls to two-month lows against Bitcoin

Ethereum’s value against Bitcoin dropped below its 200-day exponential moving average for the first time since March 2020, raising risks of further declines in the coming sessions.

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Ethereum’s native token Ether (ETH) rallied by more than 15% in the first twelve days of October. But, compared to Bitcoin’s (BTC) 30% gains in the same period, the second-largest cryptocurrency is currently in a downtrend when priced in BTC.

So far into October (and the fourth quarter of 2021), the ETH/BTC exchange rate has plunged by over 12%, reaching 0.060215 BTC for the first time in more than two months on Tuesday.

ETH/BTC daily price chart. Source: TradingView.com

The drop also pushed ETH/BTC below one of its longest-standing support zones, the 200-day exponential moving average (200-day EMA; the orange wave), as shown in the chart above. This raises the risk of more downside with 0.055304 BTC serving as the next possible target.

Bitcoin dominance rises on ETF hopes

More evidence for ETH/BTC’s weakness came from rising Bitcoin’s dominance in the crypto market.

In detail, the Bitcoin Dominance Index (BTC.D), which measures the flagship cryptocurrency’s capitalization against the rest of the crypto market, surged from 42.39% on Oct. 1 to 46.64% on Oct. 12. On the other hand, Ethereum’s dominance (ETH.D) dropped from 18.15% to 17.57% in the same period.

Bitcoin dominance index daily chart. Source: TradingView.com

That shows that more capital flew/rotated into the Bitcoin market than altcoins so far into October.

Related: Institutional crypto products eye record AUM as investors pile into Bitcoin

The rising Bitcoin dominance coincided with expectations that the United States Securities and Exchange Commission (SEC) would approve four Bitcoin-based exchange-traded funds (ETF) in a matter of weeks. The applicants are Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust, and Kryptoin Bitcoin ETF.

SEC chair Gary Gensler hinted at an optimistic outcome for Bitcoin ETFs despite the securities regulator’s history of rejecting similar applications for eight years in a row. Gensler noted that this time, however, the Bitcoin ETF applicants filed under the Investment Company Act of 1940, which offers higher investor protection.

Earlier this week, two “light” Bitcoin ETFs started trading in the U.S., named Invesco Alerian Galaxy Crypto Economy ETF under the ticker SATO and Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC). However, the funds invest 80% of their assets in crypto-related companies, not Bitcoin itself.

SATO ETF 15-minute price chart. Source: TradingView.com

The SEC also approved a third crypto equity ETF. Dubbed the Volt Crypto Industry Revolution and Tech ETF (BTCR), the fund will gain exposure “in entities that hold a majority of their net assets in bitcoin or derive a majority of their earnings from bitcoin mining, lending or transacting.”

Bitcoin to go “insane”?

James Seyffart, an ETF analyst with Bloomberg Intelligence, said the news would be “very bullish” for Bitcoin. Similarly, independent market analyst Lark Davis also predicted “insane” market reactions should the SEC approve a Bitcoin ETF having exposure to actual BTC.

I don’t think people are fully prepared for how insane the markets will go once we get a #bitcoin ETF approved!

— Lark Davis (@TheCryptoLark) October 8, 2021

So it appears, the speculation over Bitcoin ETF approvals raised traders’ appetite for the top cryptocurrency in recent days with BTC outperforming its top rivals, including Ether.

Nonetheless, Ethereum boasts a strong decentralized application ecosystem and remains the key force behind the booming decentralized finance (DeFi) and nonfungible token (NFT) sectors.

David Gokhshtein, the founder of Gokhshtein Media and PAC Global, noted that Ethereum’s healthy network effect could send Ether to $10,000 by the end of this year. Meanwhile, as Cointelegraph covered, an ongoing supply crunch in the Ethereum market should remain a major talking point for the bulls moving forward.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Source: https://cointelegraph.com/news/ethereum-loses-key-support-level-as-eth-price-falls-to-two-month-lows-against-bitcoin

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El Salvador’s Bitcoin detractors: Opposition groups gather as crypto law rolls out

While President Bukele enjoys widespread popularity, his law that makes Bitcoin legal tender does not.

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The year 2021 will probably go down the history books as one of Bitcoin’s (BTC) most interesting years, given its recent uptake by billionaires and adoption by mainstream institutions, not to mention El Salvador’s move to make it legal tender.

In El Salvador’s case, it almost seems as if the whole world is watching this experiment to see whether it will be a success or a total failure for the Central American nation.

With Sept. 7 marking the official implementation of Bitcoin as a legal tender in El Salvador, a wave of protests in the country against the move has roused suspicions and uncertainty over how the new law will be enforced.

From the arrest of individuals criticizing the Salvadoran government over the new law, to the wave of citizens across the country protesting Bitcoin’s legal status, the seminal crypto is facing some headwinds.

How Bitcoin became legal tender

It all began in early June after Salvadoran president Nayib Bukele announced in a tweet that the country’s legislative assembly had passed a bill making Bitcoin legal tender. The law was set to be implemented on Sept. 7 and would see the country’s 4.5 million citizens able to make purchases with Bitcoin at stores nationwide.

In his announcement, Bukele said that once an official bill to make Bitcoin legal tender was passed, “Chivo ATMs” — Chivo being the name of the official BTC wallet for El Salvador — would eventually be “everywhere” in the country. This would allow El Salvadorans to withdraw Bitcoin in cash without incurring any commissions on their holdings, as is the case with services such as Western Union.

Moreover, Bukele assured citizens that no one will be forced to use Bitcoin. In a statement, the 40-year-old president said that “someone can always queue up at Western Union and pay a commission.”

“What if someone doesn’t want to use Bitcoin? [Well] don’t download the app and continue living your normal life. Nobody is going to take your dollars,” he said.

The first wave of resistance

Following the announcement, a group of protestors called the Popular Resistance and Rebellion Block (BRRP) block emerged to protest against the Bitcoin law.

“President Nayib Bukele passed the law making the cryptocurrency legal tender in the country without proper consultations with the people,” one activist said.

Although the protest group highlighted complexities such as Bitcoin’s volatility as reasons for caution, their main claim is that the law mainly serves large businesses linked to alleged money laundering to the benefit of corrupt officials.

“Bitcoin only serves some large businessmen, especially those linked to the government, to launder ill-gotten money,” one protestor said.

A letter from the BRRP group said that “entrepreneurs who put their capital in Bitcoin will not pay taxes on their earnings and the government would spend millions worth of taxes to execute the whole campaign.”

Indeed, the bill to make Bitcoin legal tender includes some interesting proposals such as a zero capital gains tax on BTC. The bill also promised investors permanent residency in the country with a three BTC investment in El Salvador.

The arrest of Mario Gómez

As the controversial Bitcoin bill became a law on Sept. 7, both supporters and detractors continue to emerge with the latest in events around the law being the arrest of Mario Gómez.

According to several local news outlets in El Salvador, Mario Gómez — a computer and crypto expert as well as an avid critic of the government — was arrested by local police and held for a few hours before being released.

Gómez has been known to regularly post on social media opposing the government’s move to make Bitcoin legal tender. Observers such as Steve Hanke — an economist from Johns Hopkins University — criticized Gómez’s arrest as an “authoritarian police tactic in action.”

Hector Silva, a counselor of the mayor’s office in San Salvador, said, “the arrest of Mario portrays the fragility of the government in terms of the implementation of the Bitcoin law but confirms something even more dangerous.”

“They are willing to manipulate whatever institutions are necessary to push critical voices out of the way,” added Silva.

Although the police released a statement saying that Gómez was detained as part of a financial fraud investigation, news reports claimed that he was arrested without a warrant and an attempt was made to take possession of his phone and computer.

The citizens’ protest

Right before Gómez’s arrest, some retirees in El Salvador took to the streets to protest, worried about the government using the cryptocurrency to pay their pensions.

While speaking to reporters, one demonstrator from the crowd — which included veterans, disability pensioners, workers and retirees — said, “we know this coin fluctuates drastically. Its value changes from one second to another, and we will have no control over it.”

While Bukele has promised that the use of Bitcoin in the country will be optional and that salaries and pensions will still be paid in United States dollars, the protestors still highlighted a lack of knowledge of the technology.

Citizens have also complained that there has been too little explanation from officials about the pros and cons of Bitcoin. “We don’t know the currency. We don’t know where it comes from. We don’t know if it’s going to bring us profit or loss. We don’t know anything,” one Salvadoran added.

In response, Bukele’s administration has stated that the use of Bitcoin is not mandatory and that necessary training and other alternatives to Bitcoin will be provided.

Mixed opinions

Although President Bukele enjoys incredibly high approval ratings, recent polls concerning the Bitcoin law show a widespread lack of support for the measure. A recent poll conducted by El Salvador’s Universidad Centroamericana José Siméon Cañas shows that up to two-thirds of respondents are inclined toward a move to repeal the law, and more than 70% prefer the U.S dollar over Bitcoin.

International institutions like the International Monetary Fund have also warned about macroeconomic, financial and legal issues brought about by El Salvador’s adoption of Bitcoin.

Siobhan Morden, head of Latin America Fixed Income Strategy at Amherst Pierpont, said that “the plans for Bitcoin under an increasingly autocratic regime will likely only compound concerns about corruption.”

On the flip side, others remain optimistic that the new law will eventually benefit Salvadorans given that the country’s economy is heavily reliant on remittances sent home by migrants overseas. Last year alone, the country’s remittances totaled $6 billion, accounting for a fifth of gross domestic product.

“El Salvador’s adoption of Bitcoin as legal tender by law offers the country some optionality in financial matters and sovereignty,” said Alexander Blum, managing director of Two Prime.

His sentiments were echoed by Alberto Echegaray Guevara — an artist and entrepreneur — who said, “President Bukele’s Bitcoin Law is not only trying to make international money transfer cheaper and easier for 70% of his unbanked population but also creating a new economic hub and new remittances platform in Central America.”

Adrian Pollard from HollaEx told Cointelegraph, “It is typical for new technology rollouts to have bugs and apposition but that’s exactly why it was made voluntary.”

“I suspect there will be more bumps along the road for El Salvador but it will be worth it long term. In fact, I believe other South American nations aren’t far behind and will follow,” added Pollard.

In his announcement, Bukele said that once an official bill to make Bitcoin legal tender was passed, “Chivo ATMs” — Chivo being the name of the official BTC wallet for El Salvador — would eventually be “everywhere” in the country. This would allow El Salvadorans to withdraw Bitcoin in cash without incurring any commissions on their holdings, as is the case with services such as Western Union.

Source: https://cointelegraph.com/news/el-salvador-s-bitcoin-detractors-opposition-mounts-despite-crypto-rollout

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The future of DeFi is spread across multiple blockchains

Creating interoperability, not competition: Multichain solutions will positively impact the blockchain space in terms of accessibility, innovation and economic viability.

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Long stuck in the shadows of Bitcoin (BTC), Ethereum (ETH) finally took hold of the market in 2020 during the decentralized finance summer. Designed to recreate traditional financial systems with fewer middlemen, DeFi is now being used across lending, borrowing, and the buying and selling of tokens. The majority of these decentralized applications (DApps) are run on Ethereum, which saw activity on the network increase during 2020. This activity also trended upwards due to yield farming, also known as liquidity mining, which enables holders to generate rewards with their crypto capital.

But as activity on Ethereum increased, so too did the network’s transaction fees. In May, it was reported that Ethereum gas fees were skyrocketing. It’s intuitive that engaging in DeFi is only worthwhile when handling capital that exceeds any network fees. Consequently, it soon became clear to users that the blockchain was verging on unusable.

Related: Where does the future of DeFi belong: Ethereum or Bitcoin? Experts answer

Without a doubt, Ethereum remains the most active and populated blockchain, but other potential players are popping up, providing a viable alternative to Ethereum. For example, layer one protocols such as Binance Smart Chain (BSC) and Solana (SOL) are attracting billions in assets under management, whereas layer two solutions such as Polygon (MATIC) are capturing Ethereum’s disgruntled users’ attention due to their compatibility with Ethereum-based protocols. This is in addition to delivering low fees and quick transaction speeds. However, despite Ethereum gas fees reaching a high over the past year and the growth of faster networks, none of these chains have killed Ethereum yet.

It’s because of this, as we enter the second half of 2021, that the narrative of “Ethereum vs. the rest” is starting to change — developers are realizing the value of a cross-chain future rather than having to pick one blockchain to build on. It’s no longer a case of creating a chain with a competitive edge, but of ensuring all chains can work interchangeably to improve the industry.

Related: A multichain future will accelerate innovators and entrepreneurs

Benefits and drawbacks of a multichain future

Due to its prominence and longstanding presence in the market, Ethereum has the first-mover advantage and remains the most significant blockchain within the DeFi ecosystem as of Q1 2021. But with other chains gaining momentum, it is these alternatives to Ethereum that are providing the benefits of faster transaction speeds and significantly lower fees.

The introduction of other chains isn’t necessarily a bad thing, even for Ethereum fans. After all, a multichain ecosystem brings additional space for new protocols to enter, each with a strong user base. Each new chain also creates a new community, vacancies for services, and an individual identity and culture.

Related: Too little, too late? Ethereum losing DeFi ground to rival blockchains

One possible drawback, depending on how you look at it, is that some blockchains require unique programming languages, such as JavaScript, Rholang, Simplicity, Rust or Solidity, which may present a barrier to entry for developers. At the same time, however, different coding languages can present a new way for developers to solve a problem. And as the blockchain space moves further towards multichain, it may inspire developers to create and innovate as they witness the diversity in viable blockchain projects. It’s for this reason that projects which don’t innovate could be seen as lagging and abandoned by their community.

Not only that, but separated blockchains create innovation silos, presenting challenges to progress and adoption. Joining the multichain future together can be seen as seamlessly connecting these specialized groups. This could be seen as a difficult objective to achieve in the traditional tech world, but cryptocurrency and blockchain are challenging these existing infrastructure monopolies, and this industry has the ability to pioneer an ecosystem that works cohesively rather than competitively.

Related: Life beyond Ethereum: What layer-one blockchains are bringing to DeFi

More blockchains, more value

It’s inevitable that projects will eventually connect multiple blockchains, making the transfer of information from one chain to another seamless. In fact, the cryptocurrency market and multichain adoption is less of a zero-sum game than is often cited. And, as the multichain future becomes more apparent, it will only become clearer that the additional functionality, usability and scalability it brings is contributing to the onboarding of new users.

Related: The great tech exodus: The Ethereum blockchain is the new San Francisco

Rather than viewing the existence of a multichain future with doubt, it should be looked on positively. There are plenty of different smart contract platforms in the crypto ecosystem, all of which impact the blockchain space in terms of accessibility, economic viability and innovation. Blockchains may be separated right now, but everything will come together in the end, creating an interoperable and fast network of protocols that fulfils our daily needs. The beauty of this is that we won’t have to worry about how we’re transacting or what we’re transacting on, as it won’t matter.

We’re still far from achieving the end goal of interoperability, but once it’s achieved mass adoption, the crypto industry will be unstoppable. And, as the sector continues to grow, projects are finding that they have to adapt to a multichain future soon or risk getting left behind.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Michael O’Rourke is the co-founder and CEO of Pocket Network. Michael is a self-taught iOS and Solidity developer. He was also on the ground level of Tampa Bay’s Bitcoin/crypto meetup and consultancy, Blockspaces, with a focus on teaching developers Solidity. He graduated from the University of South Florida.

Without a doubt, Ethereum remains the most active and populated blockchain, but other potential players are popping up, providing a viable alternative to Ethereum. For example, layer one protocols such as Binance Smart Chain (BSC) and Solana (SOL) are attracting billions in assets under management, whereas layer two solutions such as Polygon (MATIC) are capturing Ethereum’s disgruntled users’ attention due to their compatibility with Ethereum-based protocols. This is in addition to delivering low fees and quick transaction speeds. However, despite Ethereum gas fees reaching a high over the past year and the growth of faster networks, none of these chains have killed Ethereum yet.

Source: https://cointelegraph.com/news/the-future-of-defi-is-spread-across-multiple-blockchains

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