A recent report published by the Bank of Spain states that Bitcoin is a solution for the creation of a system without censorship. This is in contrast to public comments made by most central bankers who are prone to attack cryptocurrency with little insight into why it is needed.   

Also Read: Survey: ‘Blockchain’ Was Most Overrated Buzzword of 2018

Explaining Peer-to-Peer Electronic Cash to Bankers

Banco de España, Spain’s central bank and supervisor of the Spanish banking system, recently published a report aiming to explain how Bitcoin works. The document details the functions of the cryptocurrency, as well as analyzing its strengths and weaknesses from the point of view of the established financial order. It also explains that the best way to understand the aims of the new system is by consulting the original Bitcoin whitepaper written by Satoshi Nakamoto.

The report mentions that according to Nakamoto the world needs “an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” Thus the goal is to create an electronic payment system similar to cash which allows remote payments without the need for the intermediation of institutions such as banks. This is meant to enable truly irreversible payments and reduce intermediation costs.

A System Without Censorship

The report concludes that cryptocurrency was envisioned as a payments system without the possibility of transaction censorship or a central authority with the power to authorize or reject transactions. It states that “bitcoin is an imaginative and elegant solution to this problem” of “the creation of a system without censorship.” However the central bank’s report also determines that traditional payment systems do not seek to resolve this problem and therefore cryptocurrency is not an alternative to them.

In line with the common position usually expressed by central bankers, the report ends by saying: “Taking into account that for most agents the existence of trusted intermediaries is not a problem, along with the costs and inefficiencies generated when an attempt is made to eliminate these intermediaries, it does not seem that bitcoin, as it currently stands, is going to have a significant impact for the financial sector as an alternative payment system to the traditional channels.”

What do you think about the conclusions of this report? Share your thoughts in the comments section below.

Images courtesy of Shutterstock.

Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.

Avi Mizrahi

Avi Mizrahi is an economist and entrepreneur who has been covering Bitcoin as a journalist since 2013. He has spoken about the promise of cryptocurrency and blockchain technology at numerous financial conferences around the world, from London to Hong-Kong.

The U.S. Securities and Exchange Commission (SEC) may make an initial decision on not one, but two different bitcoin exchange-traded fund (ETFs) proposals by April 5.

A bitcoin ETF proposal submitted (for a second time) by VanEck, SolidX and the Cboe BZX Exchange is expected to be formally published in the Federal Register Wednesday, kicking off the initial 45-day clock for approval, rejection or extension. The proposal was first posted on the SEC’s website on Feb. 13.

Once the proposal is officially published, the general public will have three weeks from Feb. 20 (meaning until March 13) to file their initial responses to it. Then the SEC will have another three weeks, until April 5, to make a decision or give itself an extension.

At the moment, the proposal appears in the Public Inspection section of the Federal Register website, meaning it has not yet been officially published. As the current page notes, “only official editions of the Federal Register provide legal notice to the public and judicial notice to the courts,” while the most recent version of the proposal itself says that it is scheduled to be published Wednesday.

The VanEck/SolidX proposal will join one filed by Bitwise Investment Management and NYSE Arca, which was published in the Federal Register on Feb. 15, meaning the SEC has until the beginning of April to decide on it or postpone the decision.

The Bitwise/NYSE Arca proposal was previously filed last year, and was widely expected to be the first proposal to be approved by the U.S. securities regulator. However, this proposal was withdrawn during the longest U.S. government shutdown in history and re-filed at the end of January.

If approved, an ETF could potentially bring new liquidity into a bitcoin market that is starting to show signs of recovery. However, it’s important to remember that the SEC can give itself up to three extensions on any rule change proposal, meaning it could still be months before a final decision is reached on either ETF.

Early feedback

While the formal comment period has not officially opened yet, the VanEck/SolidX proposal is already receiving feedback.

The filing’s first response, listed as from Sam Ahn at Hana Trading, asks how the companies are defining bitcoin’s intrinsic value. The question of intrinsic value is important for investors who may consider buying into the ETF, Ahn explains.

Ahn’s response links to seven previous responses on different ETF proposals, all of which also question bitcoin’s intrinsic value.

Gabor Gurbacs, VanEck’s digital asset strategy lead, declined to comment on this response.

Gabor Gurbacs image via CoinDesk archives

Coinbase has acquired the cryptocurrency surveillance company Neutrino, whose team will be joining the American exchange’s European operation. The Milan, Italy-based startup develops blockchain intelligence platforms for crypto companies as well as law enforcement agencies.

Also Read: Survey: ‘Blockchain’ Was Most Overrated Buzzword of 2018

Coinbase Acquires Neutrino

Coinbase, the San Francisco-based cryptocurrency exchange, announced on Feb. 19 that it has acquired Neutrino, which it described as a blockchain intelligence platform. The team of blockchain engineering and security experts will join the exchange’s workforce, and Neutrino will continue to operate as a standalone business based out of Coinbase’s London office.

“Blockchain intelligence is increasingly important in the crypto ecosystem, and is necessary to achieve our mission of bringing the open financial system to the world,” stated Varun Srinivasan, Engineering Director at Coinbase. “By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from people’s accounts, investigate ransomware attacks, and identify bad actors. It will also help us bring more cryptocurrencies and features to more people while helping ensure compliance with local laws and regulations. Neutrino’s technology is the best we’ve encountered in this space, and it will play an important role in legitimizing crypto, making it safer and more accessible for people all over the world.”

Intelligence Platform for Law Enforcement Agencies

Neutrino was founded in 2016 by a team of cyber security specialists with over 30 years of experience in the field of technology exploitation and intelligence gathering. The company offers a platform specifically developed for companies operating in the cryptocurrency ecosystem. It promises to enhance AML/KYC checks and procedures by setting up customized “red flags” that involve checking the origin of incoming funds, verifying suspicious spending behaviors and more.

Neutrino has also developed a platform specifically for law enforcement agencies, built for criminal investigations and intelligence gathering. It allows investigators to follow the flow of specific coins and their interaction with exchanges, mixers and other services as well as to spot people buying and selling goods on darknet markets, how much they spent, what they bought and from whom. Supported cryptocurrencies it analyzes include BTC, LTC, ETH, BCH and USDT, with more promised to be coming soon.

What do you think about this acquisition of Neutrino by Coinbase? Share your thoughts in the comments section below.

Images courtesy of Shutterstock.

Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.

Avi Mizrahi

Avi Mizrahi is an economist and entrepreneur who has been covering Bitcoin as a journalist since 2013. He has spoken about the promise of cryptocurrency and blockchain technology at numerous financial conferences around the world, from London to Hong-Kong.