Herman Gref, CEO of state-owned Sberbank – Russia’s largest banking conglomerate – believes that global governments won’t “let go” of centralized models to “allow” decentralized cryptocurrencies to flourish within the next 10 years, local news agency RIA Novosti reports Oct. 18.

According to Gref, governments are not yet ready to part with centralized currencies and thus will not let decentralized digital coins gain mass adoption:

“[The future] of cryptocurrencies is not clear so far as the state will not give up its central role, won’t allow [decentralized] cryptocurrencies. Though this might be the proper model – as for me, I’m for a distributed model, including in money supply. But it seems like that is not in the cards for the next — well, let’s be optimistic – ten years.”

At the same time, Gref remained confident about the future of crypto’s underlying technology, blockchain, saying the tech would be “ready” for adoption in a shorter time span, 3-5 years:

“The technology [blockchain] isn’t ready right now. When will it be ready? In my view, in 3-5 years [...] [Blockchain’s] potential is huge. The philosophy embodied in it could drastically change approaches in many areas. Improving this technology could bring huge value both to business and society.”

Sberbank’s CEO also encouraged governments to seek for a middle ground between mitigating fraudulent activities and “killing” cryptocurrencies. A ban on crypto could do harm for lots of companies that develop distributed ledger technologies (DLT), such as blockchain, he concluded.

Gref expressed this opinion while participating in finance innovation forum Finnopolis held in the South Russian city of Sochi. The forum was also attended by the head of Russia’s central bank, Elvira Nabiullina, who, unlike Gref, expressed clear scepticism towards cryptocurrencies, comparing interest in them to a “fever” that had finally diminished. 

Sberbank’s CEO partly shared Nabiullina’s point of view in stating that crypto “hype” was over.

Generally, Gref’s comments this week were consistent with his previously expressed stances on crypto and blockchain.

Sberbank the institution has also consistently promoted blockchain-based technologies and generally shown interest in cryptocurrencies. In June, Sberbank and another large Russian bank, Alfa-Bank, began testing crypto investment options for retail investors within the central bank’s “regulatory sandbox.”
In early October, Sberbank signed a partnership agreement with state-owned power giant Rosseti to consult the corporation on blockchain implementation.

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The sia blockchain network has released the formal code for an imminent hard fork that will block miners using hardware produced by Bitmain and other major manufacturers.

David Vorick, founder and CEO of Nebulous – the for-profit firm behind the $239 million distributed storage protocol – announced the release of code version 1.3.6 in sia's official channel on Discord Tuesday, reminding miners that the hard fork will be activated on Oct. 31.

"All users who want to stay on the Sia network need to upgrade prior to the hard fork date. All major exchanges will be participating in the hard fork," Vorick said.

As CoinDesk reported, after a year of debate, the sia blockchain community decided to enact a hard fork early in October. After activation, the new code will ensure only application-specific integrated circuit (ASIC) processors designed by Nebulous subsidiary Obelisk can be used to mine the network for block rewards.

As a result, other ASIC miners, including those made by industry giants like Bitmain and Innosilicon, will become blocked from the sia blockchain at the end of this month.

Bitmain launched its AntMiner A3 product in January specifically targeting the network's token siacoin, as well as adding support for siacoin on its mining pool, AntPool.

In his Tuesday post, Vorick said the new code also included major updates to resist Sybil attacks – which create fake identities to exploit a network – and "other methods that could be used to manipulate a host unfairly into the top ranks."

For miners who do not wish to align with the hard fork, sia's network developers are also offering an alternative upgrade, version 1.3.5. Released alongside version 1.3.6, the alternative also fixes detected security issues, but omits the hard fork portion of the code.

"The only difference between v1.3.5 and v1.3.6 is the activation of the hardfork, meaning that users can safely upgrade to v1.3.5," Vorick wrote.

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Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest independent semiconductor foundry, predicted that its fourth-quarter revenue would increase by only a couple percentage points, forecasting revenues of 9.35 billion to 9.45 billion. Its 2017 fourth-quarter revenue was 9.2 billion.

Weakening Crypto Demand

TSMC, based in Hsinchu, Taiwan, is not only the world’s largest semiconductor foundry, but it was the world’s first, founded in 1987 by Morris Chang, widely credited as the “godfather” of the semiconductor industry. The company boasts high-profile clients such as Apple, which accounts for 17% of its revenue. It is widely considered Taiwan’s most influential tech company, with a valuation of around 200 billion dollars.

The company – listed on both the Taiwan Stock Exchange and the New York Stock Exchange – pointed out the fact that while there is still solid demand from the smartphone sector, that cryptocurrency demand has decreased dramatically. As a result, the high-performance computers associated with cryptocurrency mining has been affected. TSMC even pointed out the fact that the mid-tier smartphone appeared to stagnate, but the solid demand for high-end smartphones worldwide – the sector that TSMC is most in demand for – remained robust. 

Competing Outlooks

Nvidia was even harsher with its cryptocurrency outlook.  Earlier this year, the company had experienced a tremendous boost in sales of graphic chips to Ethereum miners. In the first quarter, the company revealed that it had generated $289 million in revenue in the first quarter, just from the cryptocurrency mining sector. 

Jensen Huang, Nvidia’s CEO, acknowledged that “crypto miners bought a lot of our GPUs and it drove our prices up”. Nvidia acknowledged that the next quarter should see a significant drop of around 66%. It would appear that even this dramatic prediction was too high, considering that Nvidia only generated $18 million from the cryptocurrency sector – a stark difference from the expected $100 million. The company stated “the revenue is likely to disappear going forward”.  Nvidia is a company that still maintains a solidified presence in the gaming and data center sectors, and its revenue is on course to be double that of 2016.

Nvidia’s main rival in the GPU market, Advanced Micro Devices, also experienced the benefits of the “crypto gold rush” of early 2018, as 10% of its revenue in Q1 2018 derived from cryptocurrency mining. The company’s CEO, Lisa Su, was more optimistic than others, claiming that she believed “they’re not necessarily buying just for mining”, and pointing out the fact that she believed the “blockchain infrastructure is here to stay”. 

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Singapore-headquartered cryptocurrency exchange Huobi announced the creation of what it calls a “stablecoin solution” in a blog post Friday, Oct. 19.

Set to go live from Friday, the project, known as HUSD, will consist of Huobi’s own stablecoin asset which investors can use as an go-between to interact with four USD-backed stablecoins currently listed on the exchange.

Specifically, Huobi will accept and store Paxos Standard (PAX), True USD (TUSD), USD Coin (USDC) and Gemini Dollars (GUSD), giving users a balance in HUSD as a kind of aggregator of all four.

According to Huobi’s post, users can then cash out the same stablecoin they deposited or select from any of the other three.

HUSD will also be tradeable against other cryptocurrencies, beginning with controversial stablecoin Tether (USDT), followed by Bitcoin (BTC) and Ethereum (ETH).

Commenting on the project, Huobi said it would expand it to cover other stablecoins in future.

“We will keep a close watch on new stablecoins that appear on the market and optimize the HUSD standards,” executives wrote:

“We look forward to more stablecoins being involved in the HUSD system.”

Huobi announced the listing of the above four USD-backed stablecoins earlier this week, following a similar move by OKEx.

Huobi is currently the third largest crypto exchange globally by daily trading volumes, seeing about $416 million in trades on the day to press time.

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The Armenian government has presided over the opening of what it claims is one of the biggest cryptocurrency mining farms in the world. At a ceremony in the capital, Yerevan, acting Prime Minister Nikol Pashinyan was joined by the head of the consortium that has constructed the farm, Armenian billionaire (and so-called oligarch) Gagik Tsarukyan.

Per news outlet Yerkramas, Tsarukyan claims that the farm, which is the brainchild of his Multi Group conglomerate, cost some USD 50 million to construct, and has been equipped with an initial 3,000 mining rigs. The company is planning to expand that number to 12,000 in the near future.

The farm will initially mine Bitcoin and Ethereum. Yerkramas states that the facility is based on two floors: the ground floor is a business and management center, with an entire floor given over to servers and equipment above.

The media outlet says that Tsarukyan and Pashinyan – who tendered his resignation from his post two days ago in a bid to call snap elections – were joined by business leaders from China, South Korea, the United Arab Emirates and “a number of other countries” for the opening ceremony.

Tsarukyan is quoted as saying, “Guests are coming to Armenia from almost 40 countries [to see the mine]. This is an important step towards the development of the information technology sector in Armenia, especially since representatives of foreign business circles are planning to meet with members of the government to discover more about the possibilities of making new, larger investments in the Armenian economy.”

The farm will initially receive some 50MW of power from a thermal energy plant, with “an agreement in place” to provide an increase in capacity to 200MW, per Armenpress.

Earlier this year, the country’s government legalized mining in anticipation of the farm’s opening, although cryptocurrency trading remains illegal in Armenia. The country says it is planning to create a Free Economic Zone for overseas crypto and blockchain companies – in the vein of Belarus’ Hi-Tech Park and Kazakhstan’s Astana International Financial Center.

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The president of Venezuela Nicolas Maduro called on workers to save in gold and state-run cryptocurrency Petro during a salary shake-up he announced Thursday, October 18, local news portal Noticiero Digital reports.

In a television broadcast, Maduro said that “in the coming weeks,” workers would begin receiving bonus payments “based on” Petro, rather than extant fiat currency, the Sovereign Bolivar.

Since receiving its formal launch, Petro has continued to garner suspicion from multiple sources both within and outside Venezuela, criticism stemming from its alleged backing from a state oil company with larger debts than the cryptocurrency’s market cap.

The tenuous situation led to an investigative piece by technology publication Wired in August describing it as a “scam on top of another scam.”

Unfazed, Maduro said the new bonus scheme represented payments “as it should be,” while also requesting viewers to turn to gold and Petro for their savings.

“I call on workers to invest a part of their bonuses in the gold savings plan, come here, legally, you will have your legal certificate, invest it in Petro to strengthen the family economy,” he said.

The announcement comes the same week Maduro authorized six alleged cryptocurrency exchanges in Venezuela to begin offering Petro trading.

Those involved have already attracted scrutiny themselves, with one, Cryptia, appearing to have zero trade volume for its existing assets Bitcoin (BTC), Ethereum (ETH), Dash (DASH) and Ripple (XRP).

In August, Maduro had mentioned Petro’s forthcoming use as a unit of account for salaries.

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On October 6, major bitcoin exchange Bitfinex obtained banking services from HSBC with a private account held by a Hong Kong corporation.

Less than two weeks after establishing HSBC as its primary bank to handle deposits and withdrawals, Bitfinex has moved to Bank of Communications, the fifth-largest bank in mainland China and Hong Kong, according to sources of The Block.

Through a corporate alias “PROSPERITY REVENUE MERCHANDISING LIMITED,” Bitfinex has secured a temporary channel to process deposits to its exchange. But, based on historical evidence, the relationship between the exchange and Bank of Communications is expected to be short-lived.

Bitfinex’s Banking Problem Isn’t Shared by Other Exchanges

The problem with Bitfinex is that its solution to its serious banking issue is only temporary. It is moving bank to bank by creating shell companies and private bank accounts with different financial institutions so that when existing accounts are shut down, they can always move to the next bank.

The statement released by Bitfinex on its site is concerning for traders and investors because it asked users to keep the banking information of the company private. Bitfinex told its users that bank information is “commercially sensitive and confidential” and that it is only being provided “for purposes of contributing to good faith funding.”

For a company that is supposedly valued at billions of dollars and clear hundreds of millions of dollars worth of trades on a daily basis, it remains unclear why the exchange is still not able to obtain stable banking services.

As eToro CEO Yoni Assia noted, it is possible that the lack of transparency in the operations of Bitfinex and the failure to establish its exchange in a specific jurisdiction has led to unsolvable banking issues for Bitfinex.

“All the ones you mentioned are doing full KYC, and are (semi) regulated, and have banks in their own jurisdiction where they are based.”

South Korea’s Bithumb for instance, the country’s largest crypto exchange, opened public discussions with Nonghyup, a major commercial bank in the country, to process bank deposits and withdrawals on its exchange.

In mid-2017, Nonghyun denied banking services to Bithumb due to the two consecutive hacking attacks and security breaches the platform experienced in July. However, by August, Bithumb finalized its partnership with Nonghyup and reopened deposits.

Binance, the world’s largest cryptocurrency exchange by daily trading volume, recently launched a fiat exchange in Singapore with stable banking services with the support of local authorities and cryptocurrency sector.

Lack of Transparency and Communication

The method in which Bitfinex is acquiring banking services from different financial institutions through the establishment of shell companies is causing the struggle of the exchange to form a trusted relationship with large banks.

It is possible, given the history of the exchange and various unclarified operations of the exchange, that banks are not willing to engage in a strategic partnership with the exchange.

The general sentiment regarding the situation surrounding Bitfinex is that eventually, if Bitfinex fails to find a permanent solution to its banking issues, the instability of its services could hinder its loyal user base.

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After days of suspense and constant speculation, the Tron Foundation and Justin Sun have finally confirmed the partnership reports with Baidu circulating on the web, are actually true. The Tron foundation made the announcement via twitter. The tweet was soon retweeted by Justin Sun and read as follows:

 #TRON is joining forces with Internet service giant Baidu and will continue to work with large cloud service providers to offer blockchain solutions, make the technology more accessible for users and small business alike. End goal: mass adoption of. $TRX

What Next for the Two Giants?

Earlier on in the week, Crypto Crimson had explored how the partnership between Tron and Baidu might work. Further dissecting the tweet by the Tron foundation, the words that stick out are the following:

“[Tron] will continue to work with large cloud service providers to offer blockchain solutions, make the technology more accessible for users and small business alike. End goal: mass adoption of.”

Blockchain As A Service

This statement can be interpreted to mean that the Tron foundation and Baidu, might just be in the process of offering something known as Blockchain As A Service (BaaS). As earlier explained, this is a service where customers leverage cloud-based solutions to build, host and use their own blockchain applications, smart contracts and functions.

This in turn means that Baidu and Tron will handle the back-end blockchain operations and infrastructure as their customers cater for their businesses and how to offer more efficient services to their customers. Developers can also build and launch their decentralized applications on the cloud.

In conclusion, Baidu has been confirmed as Tron’s newest partner as they strive to bring blockchain services to businesses and developers. One possible way they will accomplish this, is through BaaS. Amazon has been offering this service to its clients and the partnership with QTUM goes to prove that something similar will happen between TRON and Baidu.

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