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The United States will become the global crypto and blockchain leader

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cryptocurrency news

We have some great news coming out of the United States on the cryptocurrency industry this month with potentially more good news coming later this fall. On Oct. 6, Gary Gensler, head of the U. S. Securities and Exchange Commission (SEC), confirmed during a House Committee on Financial Services hearing that the regulator will not ban cryptocurrency, potentially blazing the path for the world’s largest economy to become the global leader in the development of decentralized finance (DeFi) and blockchain technologies.

Gensler, who taught a class on cryptocurrency at MIT, also said that prohibiting cryptocurrency doesn’t fall under the SEC’s mandate and the only way to legally ban digital assets would be through Congress. “It’s a matter of how we get this field within the investor consumer protection that we have and also working with bank regulators and others — how do we ensure that the Treasury Department has it within Anti-Money Laundering, tax compliance,” Gensler said. He also added:

“Many of these tokens do meet the test of being an investment contract, or a note, or a security.”

U.S. regulators will not ban cryptocurrencies

The SEC’s announcement comes after U.S. Federal Reserve Chair Jerome Powell said on Sept. 30 that the regulator has no plans to ban Bitcoin (BTC) and other cryptocurrencies during testimony in Congress. When asked by Rep. Ted Budd, a longtime advocate for the cryptocurrency sector and a member of the Congressional Blockchain Caucus, whether he intended to “ban or limit the use of cryptocurrencies,” Powell responded with a resounding “No. [I have] no intention to ban them.”

Most of the media reports I have been reading are headlined with “The U.S. will not ban cryptocurrencies.” This is true, but this also means something much more significant: The U.S. will allow cryptocurrency to grow and will embrace the community to be involved in the process of discussing better ways for regulating the industry.

When the largest economy in the world announces that it will allow cryptocurrency to exist with its current financial industry — of course, with proper regulation — all other nations should take notice and begin considering opening their doors and regulating the industry in a fair way that spurs innovation and helps to create new jobs.

The U.S. allows crypto as adoption increases

As we have been seeing, U.S. regulators are incorporating the cryptocurrency industry into its financial system — allowing the traditional banking system to work alongside the new and fast-growing decentralized financial system. This could enable the U.S. to become a frontrunner in fintech development, blockchain technologies and even into more unconventional parts of decentralized finance such as insurance, trade finance and fundraising.

Related: Crypto in the crosshairs: US regulators eye the cryptocurrency sector

From a regulatory standpoint, there is plenty of work that still needs to be done by the cryptocurrency community and the U.S. government to pinpoint where their interest aligns and how they can work tougher, therefore making a smart decision together on how to regulate the industry, including the regulation of stable coins, decentralized exchanges, cryptocurrency derivatives and yield farming, just to name a few.

It is also very possible that the SEC could approve as many as four Bitcoin futures this fall, based on Bloomberg Intelligence’s count. On Oct. 3, the analyst put the chances the SEC would approve a Bitcoin exchange-traded fund (ETF) at 75%, with ProShares and Valkyrie already leading the race, getting their approvals coming on Oct. 19 and Oct. 22, respectively.

Related: Bitcoin futures ETFs: Good, but not quite there

The U.S. set to lead in blockchain technologies

It’s also nice to note that even American lawmakers are buying Bitcoin. U.S. Senator Cynthia Lummis disclosed that she scooped up the world’s largest cryptocurrency on Aug. 16, worth between $50,001 to $100,000.

Since the U.S. government won’t ban cryptocurrencies and American politicians are investing in them, it would be a good idea for all of us to reevaluate our investment portfolios and take a long look at Bitcoin, Ether (ETH) and other new blockchain technologies.

The U.S. is clearly signaling that it will embrace and regulate Bitcoin, blockchain technology and other cryptocurrencies, which from a geopolitical perspective, couldn’t have been more smart — positioning itself to receive massive foreign investment and attract the best talent on the planet. I expect to see the U.S. become the leader in decentralized finance over the coming years as regulators continue to work with the cryptocurrency community to build a sustainable and secure industry.

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.

Raymond Hsu is the co-founder and CEO at Cabital, a cryptocurrency wealth management platform. Prior to co-founding Cabital in 2020, Raymond worked for fintech and traditional banking institutions, including Citibank, Standard Chartered Bank, eBay and Airwallex.


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Blockchain and Artificial Intelligence

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Artificial intelligence (AI) was introduced in 1955 by John McCarthy

Artificial intelligence (AI) is the ability of a computer program to think, learn and mimic human thought. Introduced in 1955 by John McCarthy, artificial intelligence has several different fields of study. These fields include computer science, mathematics, psychology, and philosophy, among many others. AI is linked to several different use cases. The most prominent use cases include machine learning, supply chain optimization, speech recognition, self-driving cars, and manufacturing optimization.

Now we know a bit about AI, let’s review a few examples of how AI is improving decentralized networks like blockchain.

Cryptocurrency Trading

During the past few years, artificial intelligence has substantially increased its presence in the area of crypto trading. This is particularly true with high-frequency trading (HFT). Essentially, HFT is a type of algorithmic financial trading characterized by high speeds and high turnover rates. High-frequency trading is a perfect vehicle for cryptocurrency trading because the crypto universe has several different exchanges.

HFT uses artificial intelligence to analyze multiple technical indicators across various exchanges in an effort to take advantage of market opportunities. AI is still in its infancy stage in regard to crypto trading. Going forward, artificial intelligence will play a pivotal role within the crypto trading community. These are commonly known as trading bots.

Suggested Read: What Are Public, Private, and Consortium Blockchains? – Cryptobite

Blockchain Security

Unfortunately, industries that find themselves in a hyper-growth phase are more susceptible to cyberattacks and malware. Without question, blockchain technology, along with digital assets, is currently experiencing an explosive rate of growth. Consequently, the blockchain industry has endured an exponential increase in malware, phishing, fraud, and digital theft. Based on data provided by industry experts, $9 million is lost to cryptocurrency scams on a daily basis.

The key to successfully thwarting a blockchain hack is to identify the threat and understand the nature of the attack as quickly as possible. Hackers are acutely aware that they must strike quickly in order to launch a profitable attack. Unfortunately, crypto exchanges have a poor track record in preventing cyber-attacks. AI-based cybersecurity systems are designed to detect a hack in real-time and dramatically increase the likelihood of stopping the attack. AI systems are far superior to traditional cybersecurity systems because AI has the ability to detect patterns from previous attacks. This information can be used to prevent future cyber threats.

Bitcoin Mining

As you know, all crypto transactions are verified and added to the blockchain by Bitcoin miners to maintain the integrity of the network. In exchange for their work, miners are rewarded with Bitcoin. Crypto mining requires energy consumption and computing power. Over the past few years, Bitcoin miners have explored the idea of using artificial intelligence to reduce energy waste and computing power to reduce costs.

A few of the largest mining companies have created AI-based systems, allowing companies to share power and increase profitability. AI algorithms have made crypto mining faster, more profitable, and more efficient. Without question, artificial intelligence will continue to play an essential role throughout the crypto industry.

Brief Summary of Blockchain and Artificial Intelligence

Artificial intelligence (AI) was introduced in 1955 by John McCarthy

  • AI is the ability of a computer program to think, learn and mimic human thought.
  • AI encompasses several different fields of study.
  • AI has increased its presence in cryptocurrency trading.
  • High-frequency trading uses AI to analyze technical indicators across many exchanges.
  • AI-based cybersecurity systems are designed to detect a hack in real-time.
  • Bitcoin miners use AI to reduce energy consumption and computing power.
  • A few of the largest mining companies have created AI-based ecosystems.
  • AI algorithms have made crypto mining faster, more profitable, and more efficient.
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How Does Blockchain Compare to Other Innovations?

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How Does Blockchain Compare to Other Innovations

Probably, the most innovative discoveries of the past 100 years are the world wide web (i.e., internet) and the mobile phone. By now, both these things have become a must-have of modern human beings. Let’s look at the stats. In 1995, only 17% of USA residents were using mobile phones. By 2018, only 5% of US residents still did not have this device in use. While in 1995, only 16 million people (0,4% of the world’s population) were internet users, by 2018, this number increased to 4.2 billion, which is more than half of all people. Interestingly, during the first 5 years of the internet’s existence, only 5% of all people have found it worthy enough to use.

These numbers indicate how we interact with new technologies. As a general rule, most people are skeptical of discoveries and innovations at the early stages of their existence. Still, when the benefits of using a certain technology become obvious, it spreads all over the world with the speed of light.

Typically, it takes about 10 years before the average consumer makes an effort to research a new product or service. By this time, approximately 10% to 20% of the overall population had adopted the innovation. The remaining 80% to 90% of the population is still on the sidelines, unwilling to implement this new technology into their daily lives. Within 20 years of the new product’s existence, the majority of the population finally adopted it. Without question, consumers are very slow to implement new technologies.

Suggested Read: Blockchain and the Banking Industry – Cryptobite

Adoption of Blockchain Technology

But should we wait another 20 years to see the adoption of blockchain technology? Most likely, it will occur much faster than the internet, mobile phones, automobiles, or air travel. Why? Because once the blockchain infrastructure is in place, the old ledger system becomes useless. Therefore, soon, consumers will not have to choose between the new digital ledger and the old manual ledger. Companies that won’t migrate to the blockchain will be left behind and eventually forced out of business.

Within the next decade, blockchain technology will permeate our daily lives. For example, everyday things like voting, purchasing a vehicle or a home, visiting a medical care provider, investing in the stock market, obtaining a bank loan, going to college, or shopping at a retail establishment, will encounter blockchain technology.

Most probably, within the next five to 10 years, we will encounter blockchain technology daily. This explains why it will be exponentially larger than the internet.

Brief Summary of Blockchain In Comparison to Other Innovations

  • As a general rule, people are skeptical of discoveries and innovations.
  • It takes approximately 10 years for the average consumer to become a regular user of innovations.
  • Full adoption of a new product or service takes 20 to 30 years.
  • The adoption rate of blockchain will occur much faster.
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What Is Blockchain Consensus Algorithm?  

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What Is Blockchain Consensus Algorithm

Blockchain technology has many different moving parts. Hence, to operate smoothly, the architecture must be properly designed. An important piece of Nakamoto’s architectural design is the use of a consensus algorithm. 

Blockchain Consensus Algorithm in a Nutshell

In its simplest format, a blockchain consensus algorithm is a decision-making process. It is designed to assist in reaching a common decision by a group of people. Of course, in this particular scenario, the consensus algorithm involves blockchain-related solutions.

How Does it Work?

Let’s assume that 20 co-workers are asked to collaborate and offer a recommendation on a specific project. Each participant in the group will reach a decision that will provide the greatest individual benefit. The group must listen to each recommendation and decide which of them will provide the greatest overall benefit. The final recommendation must be accepted by all group members regardless of whether it offers the best solution for each individual.

Let’s assume that 20 co-workers are asked to collaborate and offer a recommendation on a specific project. Each participant in the group will reach a decision that will provide the greatest individual benefit. The group must listen to each recommendation and decide which of them will provide the greatest overall benefit. The final recommendation must be accepted by all group members regardless of whether it offers the best solution for each individual.

Suggested Read: Luxury Fashion Brands Are Entering The Crypto Space (cryptobite.io)

Brief Summary of Blockchain Consensus Algorithm

  • An important piece of blockchain architecture is the use of a consensus algorithm.
  • It is a decision-making process that helps a group of people to make a common decision.
  • The consensus algorithm always produces the optimum solution for the overall group.
  • A consensus algorithm helps to create fairness and equality in a decentralized ecosystem.
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