This Week in Crypto – August 2, 2019
Hello everyone and welcome to this week in crypto, this is your roundup for the week ending August 2nd, 2019. The IRS is cracking down on cryptocurrency taxes, Walmart has applied for a cryptocurrency patent similar to the Libra token by Facebook, and the CFTC has not yet approved LedgerX to launch physical bitcoin futures.
This Week in Crypto – August 2, 2019
The IRS is cracking down on cryptocurrency taxes According to The Wall Street Journal, the IRS said it will be sending letters to around 10,000 cryptocurrency traders this month, warning them about the penalties for failing to pay income tax on their transactions. The mailing is likely going to the 13,000 Coinbase accounts that were provided to the IRS under a federal-court order—in March of 2018.
IRS Commissioner Chuck Rettig says “taxpayers should take these letters very seriously.” The IRS said it was expanding its efforts to crack down on tax evaders who buy and sell cryptocurrencies. Tax attorney Tyson Cross says you shouldn’t worry if you received the letter.
He says the letter is probably being sent to most Coinbase customers and not just suspected tax cheats. He also believes traders likely received the letter just by nature of having a Coinbase account. It would still be a good idea, though, to review your tax returns and make sure your cryptocurrency income is accurately reported.
Walmart Applies For Stablecoin Patent
In it’s U.S. patent application, Walmart hints at creating a USD-pegged stablecoin, similar to the Libra cryptocurrency proposed by Facebook. The filing suggests that the proposed coin could help provide financial services for those with limited access to banking.
In the application, Walmart states “Using a digital currency, low-income households that find banking expensive, may have an alternative way to handle wealth at an institution that can supply the majority of their day-to-day financial and product needs”
The patent also suggests other uses for the token, including:
- Use within the Walmart ecosystem
- Storing customer purchase histories on the blockchain, and then applying savings to future purchases in a similar way to loyalty points.
- Restrict what product categories can be bought and by whom, such as blocking age restricted products for minors.
- And unlike Libra, the ability to earn interest.
There is much speculation on the stablecoin, which is described more closely to a blockchain on a centralized database than that of a common decentralized blockchain such as Bitcoin and Ethereum.
Blockade Games x Bitcoin Lighting Network
Blockade Games is using the Bitcoin Lightning Network as an interface for Ethereum smart contracts Blockade Games announced that it has successfully bridged the Bitcoin and Ethereum networks by sending a bitcoin lightning transaction to trigger an ethereum smart contract event. By integrating bitcoin lightning network payments, Blockade Games will accept instant bitcoin payments, and instantaneously trigger a series of events on other chains, such as minting an NFT to a given ethereum address.
Ethereum co-founder Vitalik Buterin was supportive of the integration, claiming that “the future of cryptocurrencies is diverse and pluralist”. Blockade Games has run its code on the Rinkeby testnet and plans to deploy it on Ethereum mainnet in the next couple of weeks.
Ethereum Turned Four
Four years ago, on July 30, 2015, Ethereum went live, becoming one of the world’s first general-purpose blockchains. Ethereum smart contracts and its native programing language enabled developers to build decentralized applications by only writing their applications’ core logic.
It’s estimated that there are now about 800 monthly active Ethereum developers. Though, Ethereum is still in need of much development, including the delayed upgrade to Ethereum 2.0 and scalability solutions.
Litecoin Block Halving
The mining reward is currently set at 25 litecoins ($2,500) per block and will drop to 12.5 litecoins ($1,200) per block. Block reward halving is used in an effort to preserve purchasing power.
LedgerX Not Approved For Bitcoin Futures
CoinDesk initially reported that LedgerX has officially launched the first physically-settled bitcoin futures contracts on July 31st. HOWEVER, the following morning, CFTC chief communications officer Michael Short said in a statement that LedgerX has not yet been approved by the Commission.
LedgerX admitted later that it has not launched bitcoin futures, as previously claimed. Approval by the CTFC would mean any KYC’d U.S. resident can trade futures contracts for bitcoin on LedgerX’s platform known as Omni. LedgerX plans to offer the new product to both institutional and retail investors.
This has been your weekly roundup from This Week in Crypto for the week ending August 2nd 2019. Be sure to support the podcast by subscribing on your favorite podcast app including Google Home and Alexa devices. Also join us on Telegram to let us know your thoughts at t.me/weekincrypto. Thanks for listening, we’ll see you next time.