DPW Holdings Inc. will use power generated by the Valatie Falls, New York hydroelectric dam for a bitcoin mining farm that is expected to become operational in the fourth quarter.

Valatie Falls Hydro LLC bought the 1-megawatt dam in March 2018 using debt financing from Digital Power Lending, a DPW subsidiary. DPW’s Super Crypto Mining subsidiary will establish a cryptocurrency mining farm at the site of the dam, using the company’s AntEater miner. The company developed the cryptocurrency mining device in partnership with Samsung Semiconductors this year.

Low-Cost, Renewable Energy

The hydroelectric dam, originally built in 1983, will produce low-cost, renewable electricity for the mining farm, which will become fully operational during the fourth quarter, DPW Holdings announced in a press release.

“Our successful repurposing of Valatie Falls dam to provide clean, low-cost, renewable power to Super Crypto’s future co-located mining farm is another important step in our strategy to create an economically viable, self-sustaining cryptocurrency mining business,” Milton “Todd” Ault, III, DPW Holdings CEO and chairman, said in a prepared statement. “This project provided a unique opportunity for DPW subsidiaries to collaborate and innovate to create a new model for cryptocurrency mining, for which electricity is by far the largest operational cost factor.”

The company’s power solution engineers at Coolisys Technologies, Inc. worked with its cryptocurrency mining engineers and Valatie Falls Hydro, LLC’s hydroelectric engineers to retrofit the dam, Ault said.

Regulators Scrutinize Crypto Power Use

bitcoin mining farm

The lower cost power rates could allow the company to mitigate the impact of possibly higher rates for crypto mining farms. The New York State Public Service Commission announced in March that upstate power authorities can charge crypto mining businesses with high density loads higher rates.

The commission allowed municipal power authorities to enact tariffs for high density load customers having a maximum demand surpassing 300 KW and a load density exceeding 250 KW per square foot annually that do not quality for economic development assistance.

The regulator’s action was spurred by a petition from 36 municipal power providers that called the New York Municipal Power Agency to act in response to high electricity costs for residential and business customers caused by the rising power demand from cryptocurrency miners.

Last month, the New York State Public Service Commission approved new rates for the Massena Electric Department that will permit high density load customers, such as cryptocurrency customers, to quality for service under individual agreements. Cryptocurrency and other high load customers with maximum demand in excess of 300 KW will be eligible for service under the individual service agreement.

Due to the abundance of low cost power in upstate New York, the commission believes it can serve the needs of existing customers and also encourage economic development.

The commission believes Massena could receive “significant revenues” if cryptocurrency companies establish operations in the region.

Also read: John McAfee-led company to launch hydro-powered  bitcoin mining operation

Precedent Already Set

DPW Holdings is not the first company to establish its own hydropower facility for crypto mining.

MGT Capital Investments secured a location in central Washington in 2016 with hydropower to launch a bitcoin mining operation. The company expected the facility to generate processing power to operate ASIC computers for mining.

Growing demand for hydroelectric power among bitcoin miners is expected to drive higher electricity rates in some regions. This past February, Hydro-Quebec said it could consider raising its rates for bitcoin miners.

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The Australian Securities Exchange (ASX) has disclosed that millions of dollars in savings could be generated by Australian firms once the exchange migrates from the existing Clearing House Electronic Subregister System (CHESS) to a blockchain technology-based platform.

Currently, it is estimated that the average fee that large investors are charged for clearing and settlement services is approximately 1.2% of the assets. The superannuation industry, on the other hand, incurs costs of approximately $23 billion.

“If the value of what we can deliver by providing an enriched, real-time source of truth information to the industry ultimately allows the industry to offer new services that create only 5% incremental revenue or cost savings to end-issuers and investors, we think it’s absolutely worth pursuing,” the CEO of ASX, Dominic Stevens, said during the exchange’s full-year results briefing.

Simpler, Faster, Cheaper

According to Stevens, adopting distributed ledger technology will make reconciliation processes redundant as participants will be in a position to access the correct data in real-time without having to consult the securities exchange. Additionally, a DLT-based system will reduce risk and costs as well as complexity. Currently, there are many disparate databases and supporting, upgrading and maintaining them is expensive. The adoption of distributed ledger technology will also spur innovation.

“By doing all of this within a highly secure environment where permissioned users have access only to the data that they are entitled to see, ASX is safely liberating the source of truth information in real-time such that it can be used by participants and other providers to build new services across the value chain,” Stevens added. “This will provide tremendous value by being a great business enabler for our customers, and a significant enabler of innovation for issuers and investors.”

One Harmonized Database

Unlike the CHESS platform which has multiple versions of multiple applications programmed in multiple languages residing on multiple databases, the ASX’s DLT-based system will use a standard modeling language for Ethereum-like smart contracts and this will sit on a harmonized database.

So far ASX has spent 3 years researching and developing the technology which is expected to go live in two years. This will make it the world’s first industrial-scale application of blockchain in critical financial market infrastructure. Development of the distributed ledger technology to replace CHESS will be done in collaboration with Digital Asset Holdings, a fintech firm based in New York. ASX Limited owns a 5% stake in the startup.

As CCN reported at the time, ASX initially began considering replacing its CHESS platform with a blockchain-based one in October 2015 when it was headed by Elmer Funke Kupper. Early the following year, the world’s16th biggest exchange announced that it had picked Digital Asset Holdings to develop the blockchain-based system.

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China has released its blockchain rankings for August, rating public blockchain networks like Bitcoin and Ethereum based on their application and technology.

The rankings, created by China Electronic Information Industry Development Research Institute and the China Software Testing Center, featured the contributions of professors and researchers at the country’s most prestigious educational institutions including Tsinghua and Beijing University.

EOS #1 as Expected

Previous rankings ranked EOS above both Ethereum and Bitcoin as the best blockchain network in the global cryptocurrency sector. The newly created rankings by CCID and CSTC, two institutions funded by the Chinese government, had EOS ranked as the top blockchain network in the world once again, with Ethereum and Bitcoin falling behind.

This month, China ranked Ethereum at second and Bitcoin at tenth, placing tokens and other major cryptocurrencies like NEO and Stellar ahead of the dominant cryptocurrency.

Komodo, Nebulas, NEO, Stellar, Lisk, GXChain, and Steem all ranked higher than Bitcoin, with strong points in applicability and technology. Bitcoin recorded the highest points in the category of innovation, mostly likely due to its long track record and the status as the first blockchain network and cryptocurrency in the market.

In July, CCID ranked Bitcoin as the seventeenth best blockchain network in the market and in the past month, Bitcoin has risen through the ranks.

In the past 30 days, Bitcoin and the rest of the cryptocurrency sector have not experienced major technical developments or changes in the codebase of major digital assets. Hence, it is possible that the strong performance of BTC as a store of value in the crypto sector led the government to rank Bitcoin higher than it did before.

Smart contract protocols and blockchain networks designed to support decentralized applications (dApps) will always rank higher in the rankings of CCID, because the criteria used by the institution establishes technology and application as the two main categories.

Application in the context of the CCID rankings refers to the applicability of the blockchain in other systems. Technology, based on the previous rankings released by CCID, refers to the scalability and capacity of blockchains.

In the case of EOS, which received the highest points in the category of technology at 104.3 points, it is highly likely that its proof-of-stake (PoS) consensus algorithm, which is capable of processing a significantly large number of transactions in comparison to other blockchains like Ethereum and Bitcoin, led the government to rank it as the top blockchain.

But, if the PoS aspect of EOS allowed it to be ranked as the top blockchain, it remains unclear why Cardano was left behind at 15th, as it is the second biggest PoS blockchain network in market valuation behind EOS.

Track Record is Important

The logic behind CCID’s decision to rank EOS, Ethereum, and Stellar, which in essence are high performance blockchain networks, above Bitcoin is clear, given the criteria which prioritizes innovation and application.

Nebulas has been able to secure a sixth place in the rankings because it supports 6.800 dApps and 35,000 transactions per second on its network.

But, track record and security are also important to consider in a ranking which encompasses a wide range of blockchain networks, including bank-focused Ripple, store of value like Bitcoin, and PoS dApp networks like EOS.

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A working group led by cryptocurrency exchange Gemini will hold its first meeting in September to discuss forming a self-regulatory organization (SRO) to oversee the burgeoning U.S. crypto trading market.

Announced on Monday, the Virtual Commodity Association (VCA) initially includes participation from four cryptocurrency exchanges that serve U.S. customers: Gemini, Bitstamp, Bittrex, and bitFlyer USA.

Representatives from these firms will meet in September to discuss forming an SRO, which will include drafting best practices for the industry and determining guidelines for membership in the VCA. They will also choose an executive director for the organization.

“This is the first of many steps in policing the digital asset markets and answering the call of regulators,” said Yusuf Hussain, head of risk at Gemini.

“We believe in the value of self-regulation, which we pursued in Europe almost from our inception, and look forward to following a similar path in the U.S. Those that can’t or won’t comply with regulations put consumers – and their own operations – at risk,” added Bitstamp CEO Nejc Kodrič

In the meantime, the VCA’s interim executive director is Maria Filipakis, who formerly served as executive deputy superintendent at the New York Department of Financial Services (NYDFS) and helped draft the agency’s controversial cryptocurrency regulatory framework, commonly referred to as the “BitLicense.”

“I applaud the VCA and its members in their commitment to strengthen the digital asset industry’s regulatory landscape, rules for the protection of customers, and bring forth industry setting best practices and market transparency,” Filipakis said.

Notably absent from the VCA’s list of initial members is Coinbase, which according to market research firm Bernstein accounts for half of all U.S. cryptocurrency trading and was one of the first exchanges to receive a BitLicense. The San Francisco-based company did not immediately respond to a request for comment.

As SEC Slaps Down Bitcoin ETF, Industry Wants to Show it’s Grown up

Jay Clayton SEC
The SEC, which is led by Chairman Jay Clayton (right), has not yet approved a bitcoin ETF, though there are several applications on its desk. | Source: YouTube/Brookings

Gemini, which was founded by brothers Cameron and Tyler Winklevoss, first proposed the VCA in March, arguing that “a thoughtful SRO framework that provides a virtual commodity regulatory program for the virtual commodity industry is the next logical step in the maturation of this market.”

At the time, the proposal earned praise from sitting CFTC Commissioner Brian Quintenz, who published a statement of support on the regulatory agency’s official website.

The formation of the VCA follows the SEC’s recent announcement that it had denied the Winklevoss twins’ second attempt to create a bitcoin ETF. By establishing an SRO, industry exchanges likely aim to signal that the industry is mature enough to warrant exchange-traded products (ETPs).

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Over the weekend, Venezuelan President Nicolas Maduro began broad economic changes that ultimately ties Venezuela’s currency to the contentious ‘oil-backed’ cryptocurrency Petro.

As CCN reported, President Maduro announced the plan last week and has followed through. As part of the fiscal changes, The Central Bank of Venezuela devalued the nation’s currency by 95% (about five zeroes) due to the ongoing hyperinflation of the Bolivar. The new value and currency is now renamed to the “sovereign bolivar,” which is pegged to the oil-backed Petro cryptocurrency that Maduro launched earlier this year as an ERC-20 token.

A History-Making Event, but under Poor Conditions

Venezuela’s switch to a cryptocurrency-pegged currency marks the first time that a nation has done so. However, economists warn that the subsequent devaluation will only worsen the inflation rated, which is growing at an annualized rate of a whopping 108,000 percent, according to Bloomberg.

As CCN reported, Venezuelans were already liquidating their bolivars into Bitcoin earlier this year, in spite of a government ban. The population has also been fleeing Venezuela to avoid the momentary crisis, which now borders on a humanitarian crisis. Though the conditions are not rosy for the history-making event for the cryptocurrency, President Maduro ultimately followed through with sweeping monetary changes, while the world watches the eventual outcome.

The switch to the Petro is far from a solution to the Venezuelan economic crisis. The country still teeters on economic collapse. President Maduro also faces losing power over the country or an outright ousting. An assasination attempt with a drone occurred earlier in August while Maduro gave a speech.

The dramatic changes reflect the “government’s willingness to do what it takes to stay in power,” Raul Gallegos, an associate director at Control Risks, told Bloomberg from Bogota. “Maduro looks vulnerable, clearly something could happen.”

Banks and ATMs have been closed while they scramble to accommodate the new currency rules.

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A U.S. Congressman has invited 32 cryptocurrency industry organizations to Capitol Hill to discuss initial coin offering (ICO) regulation.

Axios reports that the summit, sponsored by Rep. Warren Davidson (R-OH), will take place on Sept. 25 and feature participation from a variety of businesses and non-profits, including Intercontinental Exchange (ICE), Nasdaq, CME Group, Andreessen Horowitz, Union Square Ventures, Circle, Kraken, Ripple, and Coin Center, among others.

Chief among Davidson’s questions is whether ICOs should be regulated as securities offerings, which fall under the oversight of the Securities and Exchange Commission (SEC). To date, the agency, led by Chairman Jay Clayton, has maintained that it’s conceivable that an ICO could be structured such that it is a “utility token” and not subject to SEC oversight. However, Clayton has also said that he has never personally seen an ICO that is not a security.

That said, the agency has left open the possibility that a cryptocurrency token may shed the security label by becoming sufficiently decentralized. As CCN reported, a top SEC official announced earlier this year that ether — the native token of the Ethereum platform — is not a security, despite the fact that a large supply of ether tokens was initially distributed through an ICO-style crowdsale in 2014.

Davidson, the publication reports, intends to introduce an ICO regulation bill later this year. The Ohio Republican, who sits on the House Financial Services Committee, has said that he favors a “light touch” approach to cryptocurrency regulation.

Elsewhere, industry companies are considering how to adopt self-enforcement policies to demonstrate to regulators that the ecosystem is maturing into a respectable marketplace.

Earlier this year, Nasdaq reportedly hosted a closed-door meeting to discuss ways to legitimize cryptocurrency as an asset class. Just today, a group of U.S. cryptocurrency exchanges led by Gemini announced that they had formed a working group to discuss creating a self-regulatory organization (SRO) whose mission would be to police American exchanges.

Featured Image from Warren Davidson for Congress/YouTube

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The Bitcoin price regained some of its lost value on Thursday following a small but noteworthy correction.

The BTC/USD pair yesterday established a new intraday low at 6131-fiat, a level that attracted buyers waiting to buy the dip, and has gained as much as 7% value ever since. The early Asian trading hours today witnessed a weak upside momentum, due to which price dropped towards 6181-fiat. However, in the mid-European session, the BTC/USD formed a bull flag following a sudden influx of buying orders. The pair gained 6 percent during the upside rally.

But, if one notices, the correction is as volatile as the fall was. We are still forming a baby ascending line at this moment that could fail to extend its stay – we are still in a downward trajectory. Let’s have a look at it in our technical analysis section.

BTCUSD Technical Analysis

As long holders, we decided to look into bear trajectory formation, indicating that the downside momentum is not decreasing, but intensifying. We are once again close to testing it and realizing a pattern of bulls leaving their long position near the trajectory resistance. If it breaks, the BTC/USD can push itself towards the 61.8% Fibonacci retracement level at 6780-fiat. This could be also where bulls exit their long positions and cause a pullback.

As far as moving averages are concerned, the BTC/USD pair is still below its 50H, 100H, and 200H ones. The RSI and Stochastic, in the meantime, are in the selling area, awaiting further upside correction.

Overall, we are still in a strong bearish bias.

BTCUSD Intraday Analysis

We switched to a 15-minute timeframe for today’s analysis following the previous drop. Anyway, we were able to squeeze out a decent profit from our short position towards 6280-fiat. However, we also had to bear a small loss when our stop loss executed on a failed short position towards 6086-fiat. The bias reversed way before testing it as our primary downside.

As for today, we now have a new range defined by 6551-fiat as interim resistance and 6181-fiat as interim support. We are now consolidating sideways after finding a temporary base near 6419-fiat. If one notices, this consolidation is also a formation of a bullish pennant after the previous pole. With that said, we are first waiting for the price to break above the bear trajectory (explained above), which also coincides with our interim resistance. This would allow us to put a long towards 6630-fiat, our primary upside target.

A stop-loss two-pips below the entry point, in the meantime, will help us minimize our losses in case the price falls back inside the bear trajectory.

Looking south, we will put a short position towards 6181-fiat upon breaking below 6419-fiat. In this position, a stop-loss 2-pips above the entry point will define our risk.

Have a great intraday!

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Chilean cryptocurrency exchange Crypto MKT has recently announced that the country’s citizens can now buy products and services with cryptocurrency from over 5,000 merchants through a new integration with a crypto payment processor.

According to the announcement, a partnership between Crypto MKT and online payments platform Flow.cl allowed the merchants to add cryptocurrency payment options through a platform called CryptoCompra.com.

CryptoCompra’s platform is available in Chile, Argentina, Brazil, and Europe, and lets customers pay businesses using bitcoin, stellar, or ethereum, while letting merchants receive their payments in pesos, the country’s fiat currency.

From Crypto MKT’s end, there’s a guarantee fund that ensures payments made in crypto aren’t affected by significant price fluctuations. The announcement reads (roughly translated):

“There is a guarantee fund that allows payments not to be affected by large increases or decreases in the price of Bitcoin, Ethereum and Stellar. This gives tranquility and security to the client, since it will not have surprises in its payments.”

It further states that accepting cryptocurrencies allows businesses to accept payments from all over the world, and gives them a chance to be recognized as a “vanguard company” that can enjoy fast, secure payments.

The development is notable, as Chile is a country in which the top cryptocurrency exchanges, Orionx, Buda, and Crypto MKT, endured what was considered a blanket ban on the crypto industry, as local banks shut down their accounts, prompting them to seek clear regulations.

The ordeal saw the exchanges take the banks, Itau Corpbanca, Bank of Nova Scotia, and state-owned Banco Estado, to an appeals court that agreed to hear them. Chile’s anti-monopoly court ordered two major banks, Banco Estado and Itau Corpbanca, to re-open the accounts of Buda, an exchange that was reportedly seeing a daily trading volume of over $1 million before its accounts were closed

As CCN covered, Orionx later on won its case against Banco Estado, as the court noted the financial institution made an “arbitrary and illegal action” in closing its account. While it’s unclear whether Crypto MKT managed to see banks re-open its accounts, the other two cases seemingly point that way.

The president of Chile’s central bank, Mario Marcel, has earlier this year revealed he is considering implementing cryptocurrency regulations that would give financial institutions information needed to “monitor associated risks.”

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Bitcoin cash has been confirmed as the second cryptocurrency payment option by subscription model pay-TV provider, DISH. As announced on the company’s website, in addition to bitcoin which was adopted in 2014 as a payment system, subscribers can now pay for services using bitcoin cash.

Since 1980, DISH Network Corporation has played a significant role in the evolution of pay-TV. The company provides services to millions of customers across the globe through its numerous subsidiaries. The services include satellite DISH TV and streaming Sling TV services. The company also operates a national in-home installation workforce and advertising solutions among other services.

Maintaining Brand Versatility

The adoption of bitcoin cash by DISH happens at a time when the company is also migrating to BitPay as a new blockchain payment processor for cryptocurrency transaction with customers.

John Swieringa, executive vice president and chief operating officer of DISH, notes that the addition of bitcoin cash as a payment system is aimed at serving customers who have adopted a new way of doing business.

“We have a steady volume of customers paying with cryptocurrency each month, and BitPay will allow us to continue offering more choice and convenience to our customers.”

BitPay is the pioneer company in bitcoin and blockchain payment processing. With offices in North America, Europe and South America, the company is also established in cross-border payments, and enables consumers to manage digital assets with the BitPay Wallet.

Enabling a Seamless Transition

To pay with bitcoin or bitcoin cash, a one-time payment is executed by a DISH customer through the website or DISH’s hopper DVR. On sending the exact payment amount in bitcoin or bitcoin cash, BitPay exchanges the funds into U.S. dollars immediately, thereby avoiding the risk of volatility usually associated with cryptocurrency transactions.

According to Sonny Singh, chief commercial officer of BitPay, the goal of his company is to offer DISH Network a seamless transition that will enable all customers who are currently use bitcoin for payment to have the extra option of paying with bitcoin cash.

Singh notes that cryptocurrency is an increasingly popular way for customers to make purchases and pay for services online as it reduces credit card fraud and is cheaper for the merchants.

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Bitcoin investors might be suffering under the weight of one of the asset’s heaviest-ever bear markets, but for cryptocurrency derivatives exchanges like BitMEX, the mood is anything but sour.

“What market downturn?,” began a press release sent from a public relations firm representing BitMEX, reporting that the Seychelles-based exchange had on Wednesday crossed 1 million BTC in daily trading volume for the second time.

Altogether, the platform saw 1,027,214.62 bitcoin contracts traded for the day, worth approximately $6.6 billion at the present exchange rate.

“Once again meeting our own record of 1 million bitcoin traded within 24 hours is a major milestone for the crypto-coin market and testament to the strong community BitMEX is growing,” said BitMEX CEO Arthur Hayes.

bitcoin price chart
For cryptocurrency exchanges and derivatives platforms, bear markets are often not nearly as dire as for individual investors. Though aggregate volume generally declines, exchanges can still reap significant profits from intraday volatility.

Hayes attributed the milestone in part to the firm’s recently-launched ETH/USD perpetual swap product, which allows traders to make leveraged bets on the ethereum price without ever holding ether.

The exchange previously crossed the 1 million BTC mark on July 24, notching a record both for the exchange and the industry at large. At the time, those contracts equated to more than $8 billion in 24-hour volume.

BitMEX isn’t the only cryptocurrency derivatives platform that has seen an uptick in trading in spite of the bear market. As CCN reported, U.S. exchanges CME and CBOE have each seen a steady rise in bitcoin futures volume since these products launched in December, with the two platforms accruing a combined $572 million in volume on the same day in which BitMEX crossed 1 million bitcoin contracts for the first time.

LedgerX, a lesser-known U.S. cryptocurrency derivatives exchange that exclusively serves wealthy investors and institutions, also reported that its clients had traded a record $50 million worth of contracts on the CFTC-regulated platform during July.

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