VISA not keen on crypto investments just yet

Credit card company VISA is waiting for cryptocurrencies to be more widely used before making them a business priority.

CEO Al Kelly said in a CNBC interview with Jim Cramer that “there has to be some market that it becomes somewhat like a fiat currency in order for us to be comfortable” investing in cryptocurrencies.

Kelly said that a sign of the market being big enough to warrant the company’s focus was when “crypto starts moving from being more of a commodity to actually really being a payment instrument.” At the moment, he said the industry posed no threat “in the short term to medium term in any way.”

He said that when the market moves in the direction of cryptocurrencies, “we will move in that direction… We want to be in the middle… of every payment flow in the world regardless of how it happens or what the currency is behind it. So if we have to go there, we will go there. But right now, it’s more of a commodity than a payment vehicle.”

The blockchain community sees the advantage of cryptocurrencies like Bitcoin Cash (BCH) as precisely reducing intermediaries for money transfers. BCH transactions are currently recorded in 32MB blocks, although this is set to go up to 128MB as the network upgrades in November. Blockchain research and development firm nChain is already offering the Bitcoin SV (Satoshi Vision) client version 0.1 through GitHub, with default maximum block size of 128MB, which further increases the number of transactions possible on the BCH blockchain.

So far, VISA’s foray into cryptocurrencies has been limited to allowing companies to facilitate cryptocurrency debits for payments. Competing firm Mastercard has also dabbled in the blockchain business, currently studying how the technology could improve its payment systems.

Mastercard has also filed a patent for blockchain to be used in the management of fractional reserves, where loans could be made multiple times that of the amount deposited, as done in the modern fiat banking system. In its patent application, the company notes how blockchain’s ability to allow for payments while keeping other personal information safe and secure could be beneficial if such transactions could be sped up. “The anonymity of the blockchain may leave the payee at a disadvantage, because the inability for the payee to identify the payer may prohibit the payee from utilizing various risk or fraud detection methods. Therefore, many entities… may be wary of accepting blockchain currency for products and participating in blockchain transactions,” the application read.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Bitcoin Unlimited testnet sees transaction level comparable to Visa’s network

Many like to argue against blockchains and cryptocurrencies, stating that the networks aren’t capable of handling the transaction loads necessary to be considered a true form of cryptocurrency. In making their argument, they often refer to the speed of the Visa network, pointing out that Visa processes around 24,000 transactions per second (tps). The problem with this comparison is that it is completely wrong.

Visa doesn’t process 24,000 tps, or even 56 tps. The higher numbers that have been represented are only theoretical figures—in real-world applications, the Visa network only processes around 1,700 tps.

1,700 tps is still a substantial number by any standards and is more than what most blockchains can handle. Some blockchains, like NEO and EOS, attempt to skew the numbers in an effort to make their networks appear stronger than they really are, but what they boast of with their speeds is gained at a cost of decentralization.

By today’s standards, network speed and decentralization are proportional—the higher the speed, the lower the decentralization. However, improving technology is allowing better speeds, or scaling, without risking decentralization.

To that end, Bitcoin BCH is leading the way. A recent Twitter post by Reina Nakamoto highlighted the fact that Bitcoin Unlimited was able to process 166,302 tps using a block of almost 32 megabytes (MB). She was responding to a post by Andrew Stone, who first tweeted about that 166,302 transactions were completed on a block of 31,999,125 bytes, or just under 32MB. The processing took place on a testnet, but it is still a step in the right direction.

Given the number of retail transactions currently seen on the Bitcoin BCH blockchain, it is more than capable of handling the load. As the September stress test showed the network is capable of easily handling blocks of up to 10MB and even as large as 21MB.

At this juncture, with cryptocurrency constantly receiving more support across the globe, it would make sense that all implementations of the network focus on scaling to continue to drive the capabilities and set the foundation for what will invariably be a massive adoption of Bitcoin BCH as the world’s leading peer-to-peer currency.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Another win for crypto: Bank giants fined billions for malpractice

First, Visa and MasterCard settled a class-action lawsuit over price fixing that reportedly cost the credit card giants as much as $6.2 billion. Now, reports are surfacing that major banks could be fined as much as $400 billion by 2020 for malpractice. So much for crypto being the bad guy, as traditional finance pundits would have everyone believe.

Quinlan and Associates indicates that research into US and European banks could potentially face the huge fines by regulators. The majority of the penalties are a direct result of the financial crash from 2008. The $400 billion does not include fines from other areas, such as unfair billing practices or money laundering.

This past Monday, JP Morgan Chase was fined by the Commodity Futures Trading Commission (CFTC) $65 million after it was found guilty of not doing enough its part to protect the US Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX) from 2007 to 2012. ISDA was established in 1998 and ISDAFIX is a reference rate value for fixed interest swap rates, correlated to dollars, pounds, Swiss Francs and Euros.

The CFTC said that JP Morgan published false interest rates just prior to the daily reference was captured between the five-year period. In submitting false data, the firm saw its derivatives positions benefit at the expense of other interest rate products that used the same common interest rate value.

BNP Paribas also received a hefty fine from the CFTC. The bank was ordered to pay $90 million after investigators determined that traders in the bank’s investment wing were actively bidding and executing trades at the moment the ISDAFIX was being released. This enabled them to influence the index, which impacted foreign exchange benchmark rates. The CFTC also fined the Royal Bank of Scotland $85 million for illegal practices similar to those of JP Morgan and BNP.

Some may recall that another bank, Well Fargo, has had its share of financial difficulties and missteps every year for the past couple of years. Most recently, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau hit the bank with fines of $500 million each after they determined that the bank had set unfair mortgage interest rates and forced customers to sign up for unnecessary car insurance.

Traditional financial giants may try to argue against crypto until they turn blue, but the truth is that crypto offers better protection and more transparency – and more confidence – than do the banks.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Credit card giants hit with $6.2B price fixing suit

Credit card giants Visa and Mastercard have often been accused of price fixing by disgruntled merchants. Now, the firms are prepared to settle on a class action lawsuit, which looks set to cost them over $6.2 billion, Bloomberg reported.

Visa and Mastercard have agreed to come up with around $4.2 billion in cash, with $4.1 billion of that burden falling on Visa. Equity in Bank of America, Citigroup and JP Morgan Chase will also be offered in part payment of the settlement.

The total settlement is hugely significant, almost equivalent to the entire market cap of Bitcoin BCH. It concerns a case around card processing fees brought by merchants unhappy with the service they were receiving—including hidden, excessive fees merchants allege they were left with no option but to pay.

Merchants in the United States alone currently generate as much as $90 billion in transaction fees for Mastercard and Visa every year. The lawsuit, brought under antitrust laws, dates back to 2005, when allegations of price fixing first began to surface.

Now, with the credit card companies’ willingness to settle, it looks as though merchants could be set to recoup some of those fees they allege were unfairly drawn.

The case shows the difficulties merchants face in dealing with centralised payment systems. In the case of Mastercard and Visa, both firms turnover in excess of $12 billion per annum and have a virtual stranglehold on merchant payments by credit and debit card.

However, with cryptocurrencies like Bitcoin BCH increasingly being adopted by merchants and consumers, it looks like another way is possible. Transaction fees are lower for merchants that accepting payments through credit and debit cards, while transaction processing speeds and reliability are also favourable for commercial use.

At the same time, Bitcoin is convenient and flexible for customers, increasingly being seen as the cryptocurrency of choice for online payments.

Without the centralisation of Visa and Mastercard, there is no monopoly on transactions around Bitcoin BCH. This is proving attractive to merchants looking to break their reliance on the large corporate payment institutions while providing customers with a more functional way to pay.

While the multi-billion dollar settlement will be seen as a positive sign for the merchants affected, cryptocurrency—Bitcoin BCH in particular—remains the best option for those looking for trusted, decentralised merchant payments.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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