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IRS Commissioner Makes Crypto Tax Clarity a Priority

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The U.S. Internal Revenue Service (IRS) is planning to overhaul its methods for determining the federal taxes due on cryptocurrency payments to improve clarity for taxpayers.

The decision stems from the recent attempt by Minnesota Representative Tom Emmer to pass legislation reforming the way that hard forks and the resultant “forkcoins” are viewed by tax agencies. Joined by members of his “Blockchain Caucus,” Emmer’s initial attempt to pass the bill failed in September 2018 and he has promised to reintroduce a similar bill in May 2019.

On April 11, 2019, Emmer and the Blockchain Caucus sent an open letter to IRS Commissioner Charles Rettig drawing attention to their concerns about forkcoins under the U.S. tax code and raising more general questions about crypto tax reform.

On May 16, 2019, Rettig responded with an open letter to Congressman Emmer, thanking him for his request for more clarity around cryptocurrency taxes.

“I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions and have made it a priority of the IRS to issue guidance,” Rettig wrote. “Specifically, your letter mentions (1) acceptable methods for calculating cost basis; (2) acceptable methods of cost basis assignment; and (3) tax treatment of forks. We have been considering these issues and intend to publish guidance addressing these and other issues soon.”

As a show of good faith, Rettig also invited Emmer and the members of the Blockchain Caucus to contact him and his office with any questions they may have about the IRS’ future efforts.

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Bitcoin News

Google Searches for ‘Bitcoin’ Starting to Catch Up With $10K Euphoria

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Data from Google Trends’ search analytics resource indicates that internet googling of ‘bitcoin’ (BTC) is approaching a monthly high as of today, June 24.

According to the data, searches for bitcoin are continuing their ascent in the week after the unveiling of Facebook’s new cryptocurrency and blockchain-powered financial infrastructure project, Libra, even as searches for Libra itself have tapered off since June 18 — the date the white paper for the forthcoming token was published.

Google trends data for search terms ‘bitcoin’ vs. ‘libra.’ As of June 24 2019

As Cointelegraph noted yesterday, from a wider perspective, the number of Google searches for “bitcoin” remain only around 10% of what they were in 2017 — the year of the top coin’s historic bull run, which peaked at $20,000 in December of that year.

The resurgent public interest is seemingly correlated with the renewed bull market, with bitcoin is currently trading at $10,881, up almost 35% on the month, according to coin360 data.

By country, the top five nations currently googling bitcoin are Nigeria, South Africa, Austria, Switzerland and Ghana — as compared with Uruguay, Dominican Republic, Nicaragua, Albania and Panama for Libra.

As Cointelegraph noted yesterday, the fact that Google trends data for bitcoin remains well below its former peak apparently suggests that retail FOMO has not yet become a major driver of the coin’s renewed price momentum. Instead, several parameters indicate that institutional demand for bitcoin is increasing in lockstep, and that network fundamentals are hitting all-time-highs.

While high-profile industry figures such as Ethereum co-founder Joe Lubin have critiqued Libra over its lack of decentralization, researchers at top crypto exchange Binance, have proposed that the social media giant’s token could spark additional volume in the cryptocurrency space.

At press time, BTC/USD is consolidating under the $11,000 mark — up over 3% over the past 24 hours, according to Cointelegraph’s bitcoin price index.

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Altcoin News

Maker (MKR) Standing Above $600.00 Withstanding Sellers

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Implemented on the second largest blockchain Ethereum (ETH) network while depended on the concept of smart contracts, Maker [native token MKR] is a case when the much criticized crypo-volatility is overcome to an extend being backed by Ether.

Despite that Tether is one of the most popular stablecoins, much doubt surrounds the coin. Lack of decentralization and transparency, emerged proof that it is backed by the dollar and the rumours that it was used to move Bitcoin’s BTC price for one’s [group] benefit could possibly make it unworthy of its fame.

On the other hand, with the use of its MKR token, the Maker balances its DAI [stablecoin planned along fractional reserve banking ideals] which is linked close to the aforementioned tokens. The dual token concept is based on the idea that MKR can not be mined but is created or the contrary as a reply to DAI price movement so it is floating approximately $1.00 against the US Dollar.

Against the US Dollar – MKR is standing strongly having one of the most positive second-month of 2019 performances out of the leading cryptocoins in the market. Going by market capitalization the 16th largest cryptocurrency – is in the green at 4.79% for the last 24-hours leading the BTC market for 4.11% making sure to position itself far upward the declining trend that has been taking place since Jan 2018.

MKR

Source: coinmarketcap

Just recently – MakerDAO decided to raise the stability fee from 0.5 to 1 with the target to decline and easier-flow fluctuations in DAI’s price peg of the US Dollar. Many appreciated and welcomed the plan set in motion as an advancement towards better economic assurances and stability by the team. Additionally, the automated ETH exchange protocol – Uniswap, took over Ethfinex exchange platform as in the first place by trading MKR against ETH.

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Bitcoin News

Ethereum’s Constantinople, St. Petersburg Upgrades Have Been Activated

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The Constantinople and St. Petersburg network upgrades for the world’s second largest cryptocurrency, Ethereum’s (ETH), occurred today Feb. 28, according to ethstats.net.

Specifically, the updates went live on the main network at block 7,280,000, in accordance with previously released schedule. Although the upgrade has two names of two originally separated updates, they have subsequently been combined into one.

Per Ethernodes.org, not all Ethereum users have adopted the updates. Only 22.3 percent of Geth and Parity clients are reportedly already running the Constantinople-compliant version.

Constantinople is set to bring multiple efficiency improvements to the platform, including cheaper transaction fees for some operations on the Ethereum network. As previously reported, the Constantinople hard fork was delayed in January due to a newly discovered vulnerability.

The St. Petersburg upgrade is meant to delete a previous update, Ethereum Improvement Proposal (EIP) 1283, from Ethereum’s test networks, since that EIP had been identified to have security vulnerabilities.

In January, major United States cryptocurrency exchanges Coinbase and Kraken became the latest to confirm support for Ethereum’s upgrade. The two exchanges join Binance, Huobi and OKEx, who had started to monitor the event before its first implementation attempt.

At press time, ETH is up 2.59 percent over the day and is trading at around $137.19. The altcoin started the day around $132, according to CoinMarketCap.

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India’s Crypto Ban Predictably Triggers Massive Bitcoin Price Premiums

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By CCN Markets: The bitcoin price has reached $11,200 at its peak earlier this month on major exchanges including Bitstamp and Coinbase following a large spike in volume and overall interest.

The bitcoin price is up from $9,000 to $11,200 in the past week (source: coinmarketcap.com)

According to reports, bitcoin is trading higher in India and Iran with premiums ranging from 5 to 30 percent, two regions that have practically restricted bitcoin trading.

Is banning bitcoin not productive?

In 2018, the Reserve Bank of India (RBI) requested banks under its oversight to stop providing services to crypto exchanges, putting an end to fiat-to-crypto trading platforms in the region.

The RBI said at the time:

Virtual Currencies (VCs), also variously referred to as cryptocurrencies and crypto assets, raise concerns of consumer protection, market integrity and money laundering, among others… In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs.

Since then, despite the move of the G20 to regulate the crypto sector through the imposition of a unified regulatory framework, the government of India has pushed forward with its restriction on crypto.

In April of this year, The Economic Times reported that government departments have begun drafting a bill to ban cryptocurrencies in the country entitled “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019.”

Consequently, due to regulatory uncertainty and the restriction on banks from working with crypto exchanges, most crypto-related businesses in India have shut down and moved to other markets.

Similarly, Iran, which is yet to release a clear guideline for exchanges and businesses, drafted a bill that restricts the operations of crypto-related entities. The proposed legislation was criticized by the local crypto community which then offered an alternative proposal to the government.

In both countries, it is difficult for investors to purchase crypto assets like bitcoin and ether, the native crypto asset of the Ethereum blockchain network. Most trades are processed in the over-the-counter (OTC) market or in a peer-to-peer manner.

In May, LocalBitcoins, a major peer-to-peer bitcoin trading platform, closed its services in Iran in a move which many have speculated to be because of the sanctions placed upon Iran by the U.S. government.

“If you have an account already, you will be able to withdraw your bitcoins, but you will not be able to use the platform for trading,” LocalBitcoins reportedly told a user in Iran.

As a result, premiums have begun to emerge in the bitcoin market of Iran and India, ranging from 5 to 30 percent.

When the bitcoin price peaked at $11,200 on June 22, a TrustNodes report disclosed that the asset was trading at $11,700 in India with a $500 premium.

Dovey Wan, the founding partner at Primitive said that bitcoin is now trading with a 30 percent premium in Iran’s OTC market, indicating large demand from local investors.

Regulation over a ban

The concern of most regulators regarding bitcoin and the crypto market, in general, comes down to the prevention of money laundering.

For exchanges to operate transparently in compliance with local regulators, a clear regulatory framework has to be imposed with the support of local banks.

There exists a risk in the imposition of an outright ban of cryptocurrencies that the local market may shift to a peer-to-peer market, an environment in which it becomes significantly more difficult for regulators to address money laundering and other core issues.

Click here for a real-time bitcoin price chart.

This post was last modified on (Eastern Time): 24/06/2019 06:09

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Blockchain

Why XSD?

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Benefits of staking the SOUNDAC token

There are plenty of crypto projects that have tokenized models and it isn’t always clear what the token is actually for. Is it to be used as a currency? Is it a profit sharing or dividend paying instrument? Is it merely required to pay transaction fees within the network in question? Let’s dive into the use of SOUNDAC’s core asset and define where its token – XSD – derives its value from.

XSD is a utility token, not a cryptocurrency per se. It was designed to bring utility/value to those that stake it. It is useful to a very niche audience, the music industry and its consumers. There is nothing preventing someone from using XSD to buy a dozen eggs. It is after all a fungible, divisible, scarce asset with zero transaction fees (which is true for most of the DPOS chain assets) but baked into the code are perks that will interest a specific sector of the economy. XSD is literally a token that brings utility to those in the business of producing, distributing and even consuming music, podcasts and other audio content.

A deeper dive

XSD has two forms, liquid or staked. The latter (often called VIP) means locking up your tokens for a period of time. Staked tokens are the ones that provide you with perks and grant you influence over the network. For the rest of this article, we will refer only to the staked tokens.

Digital Service Providers (DSPs)

Also referred to as music streaming platforms. These companies have a powerful incentive to hook up to SOUNDAC, as they get their royalty payment obligations covered by the blockchain. For example, 70% of Spotify’s expenses are payments to the copyright holders for the music that was streamed by the users on their platform. This is why they must charge high subscription fees or rely on advertiser dollars to support their massive royalty expenses. By plugging into this new system, playing music which is tied to a Smart Contract, and reporting all streams to SOUNDAC, the chain takes care of sending out royalty payments to the rights holders.

The supported artist will see increased exposure (hence streams and income) the more his fans use the support feature.

Streaming platforms are elected by holders of XSD. In order to get votes (to receive this subsidy), DSPs need to provide value to the SOUNDAC ecosystem. More on this in the Listener section below.

Elected DSPs need to report to the blockchain what song each user has just streamed if they want SOUNDAC to pay the royalties in their place. The more active users the DSP has and the more content they listen to, the more transactions the DSP needs to make to the chain. The number of transactions an account can make goes up with the amount of XSD it has staked. In other words, the more it wants to use the chain, the more XSD it needs to have.

To the DSP, XSD is the thing to buy and stake in order to get royalty costs offset. This is part of XSD’s demand from these businesses. The other, bigger part of demand comes from its incentives to please XSD holders, which we cover in the final section of this article.

Music creators, producers and copyright holders

Reputation

By joining SOUNDAC, a copyright holder opts into an ecosystem that can pay her directly, instantly and where she is put in control of her metadata. Whenever she logs into the rights management portal (RMP) to update some music metadata, the entire music industry is made aware of the change within seconds.

In order for her content to be trusted enough to be picked up by elected DSPs, it must have a solid reputation score along with the accounts of the uploader and participants.

A username’s reputation score is based on two things:

  1. The account’s connections – think on-chain LinkedIn connections, or Facebook friends
  2. The account in question and its connection’s amount of staked XSD

In other words, the bigger an account’s network is and the more XSD it and its connections have, the more likely the account is legitimate (and not part of a botnet.)

A smart contract’s (song entry) reputation score is the average of all participants of that specific piece of content.

When a DSP pulls in content to make available to its customer base, it needs a way to distinguish copyright infringing content from legitimate content. Not paying the rightful owners opens you up to severe lawsuits. One method is to manually vet each and every entry the DSP comes across, which is possible but not scalable. The second method is to see which trusted accounts are vouching for this specific piece of content before choosing to import it to your service, something SOUNDAC supports. The final way is to go off of reputation scoring. A DSP could choose to accept all content with a reputation score over X. These 3 methods are not mutually exclusive mind you.

As mentioned above, a song’s reputation score is derived by the average of each participants own reputation. This means that if one of the rights holders has not staked any tokens or contributed to the graph/network of trust by connecting his account to his label’s, his drummer’s or his publisher’s account, he is bringing down the trustworthiness of all pieces of content he is a participant in. This reduces the chance that his music will be picked up by DSPs. Peer pressure can get him to get his act together in order for all participants of that song to increase the potential earnings from their creation.

Discovery

Another incentive for musicians to hold XSD is discovery.

Elected DSPs need to abide by some community rules & guidelines if they wish to stay in their privileged position. One of those guidelines is to have their user’s newsfeeds and the discovery section of their streaming platforms account for the reputation score of the song’s smart contract (based on amount of XSD of each participant).

XSD is therefore a tool for discovery on all elected DSPs. Artists looking to get discovered can buy and stake XSD until they reach the level of fame they are comfortable with.

This also removes a lot of sell pressure on XSD. Instead of cashing out their RYLT tokens (the ‘stablecoin’ used to pay out rights holders on SOUNDAC) artists can convert it to XSD, stake it and get more exposure on multiple streaming platforms, granting them even more exposure throughout the ecosystem.

XSD is therefore a tool
for discovery on all elected DSPs.

Proof-of-burn

An artist can also increase his exposure in the short term by buying and burning XSD (Sending to the @null address). This will put his content into more listener’s newsfeeds and increase his chances of being picked by the discovery algorithm. This can be used like a paid marketing campaign to promote a new release for example.

Music consumers

Elected DSPs being economically incentivized to please XSD holders means abiding by community guidelines (keep in mind some of these guidelines could be implemented on the protocol level if ever it makes sense to do so).

Another one of these guidelines is to prevent abuse and ensure users are real. Most of us have seen the “are you still listening?” message on music or video streaming platforms. It ensures the platform is not paying out royalties while no one is listening/watching. PeerTracks, the first elected DSP, has implemented an “are you still listening?” feature that takes into account the XSD balance of the user. The more XSD a user has, the less frequently he will be asked if he is listening or tested on his humanity. People trying to funnel funds out of the system by creating a thousand fake accounts to stream music 24/7 will need to properly fund their botnets first.

Elected DSPs can also decide to restrict the number of streams a user can make on their platform based on their contribution to the SOUNDAC ecosystem – this could be a protocol-level future upgrade.

It is up to the DSP to navigate the fine line between pleasing its customers and the XSD holders. The best DSPs will please both and increase the value of the entire ecosystem because of it.

DSPs, being their own business, with full control over what they chose to do can provide different perks to consumers that decide to add value to the ecosystem. This could include providing High Quality audio or giveaways to anyone with over X amount of XSD. It’s essentially up to the businesses running streaming platforms to get creative.

Fans

Here is a new feature that PeerTracks is developing which will go into testing soon. Fan-side stake-weighted voting. This has far-reaching ramifications and we hope other DSPs tinker with these types of ideas as well.

Artist support

Users on PeerTracks will soon be able to Support Artist. This will button will essentially upvote that content on the PeerTracks platform. The more XSD the supporter has, the more powerful his vote will be. The supported artist will see increased exposure (hence streams and income) the more his fans use the support feature.

Boost content

Users can also Boost an individual song/podcast/video using their stake. You can once again, Like and Share the content you find engaging, but you can also Boost it with your stake and make it rank higher in the platform’s discovery section and newsfeeds.

Both these voting features give multiple parties very interesting metrics to play with. Such as, number of supporters, how much fan voting power is behind the artist/song, and most powerfully (in our opinion) who your biggest supporters are.

This opens up an entire new world, similar to what we see on Twitch and Patreon.

This opens up an entire new world, similar to what we see on Twitch and Patreon.

Artist can ask their followers to Like and Follow, sure, but they can also ask their listeners to Support them and Boost their content – with a simple click of a button.

Artist can now give out perks and privileges to their top supporters, which can range from simple shout-outs, to free tickets to their next show to backstage passes.

This can even bring in advertiser value. Brands that want their image associated with a specific artist can approach the artist in question and ask that he reward his top 10 supporters with the brand in question’s product.

DSPs can experiment with content sorting section such as Hot, Trending, Fan Supported, and any combination of metrics algorithm creators feel like playing around with.

These features mean there will be artists prompting listeners to support and boost them by staking more XSD. There will be fans that want to be part of their favorite bands top supporters. Both of which increases the value captured by XSD.

Sum up

After having read through these use cases, I hope you can understand why we consider XSD to be more than a transactional cryptocurrency. Its role is to be useful to the music world and solve real world problems by providing incentives, perks and privileges to Digital Service Providers looking to reduce their expenses. Musicians looking for a simpler music industry. Copyright owners wishing to get paid in a simpler, faster, middleman-free fashion. Performers wanting to get discovered and to engage with their fanbase. Finally, Listeners looking for free music that actually gets their favorite bands paid while giving them a new way to support them and making them feel like they are a part of the efforts.

The SOUNDAC Team

SOUNDAC Community Update for the sprint ending Feb 25th is here! Read the international version of the SOUNDAC Community Sprint Report here -> https://blog.soundac.io/soundac-community-sprint-report-fev-15th-march-1st

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SOUNDAC Community Sprint Report – Feb 25th, 2019
SOUNDAC Weekly Report Dec 19th – Dec 31th is here! Read the international version of the SOUNDAC Weekly Report here https://blog.soundac.io/soundac-weekly-report-dec-19th-dec-31th

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SOUNDAC Dev Sprint Report Jan 25th – Feb 11th
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The birth of the attention economy puts value on your attention and rewards you in different ways including cryptocurrency tokens in exchange for your attention.

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SOUNDAC Weekly Report Dec 19th – Dec 31th is here! Read the international version of the SOUNDAC Weekly Report here https://blog.soundac.io/soundac-weekly-report-dec-19th-dec-31th

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SOUNDAC Community Sprint Report Jan 15th – Feb 1st
SOUNDAC Weekly Report Dec 19th – Dec 31th is here! Read the international version of the SOUNDAC Weekly Report here https://blog.soundac.io/soundac-weekly-report-dec-19th-dec-31th

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SOUNDAC Dev Sprint Report Jan 7th – Jan 25th
All the SOUNDAC and PeerTracks Team wish you a Happy New Year 2019.

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All the SOUNDAC and PeerTracks Team wish you a Happy New Year 2019.
SOUNDAC Weekly Report Dec 19th – Dec 31th is here! Read the international version of the SOUNDAC Weekly Report here https://blog.soundac.io/soundac-weekly-report-dec-19th-dec-31th

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SOUNDAC Weekly Report Dec 19th – Dec 31th
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Well, the miracle of the blockchain has been changing how the world works, cutting out the suits from ever more sectors of an industry and thereby transforming whole industries – and music’s no exception.

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The dawn of attention economy and SOUNDAC
SOUNDAC Weekly Report Dec 11th – Dec 18th is here! Read the international version of the SOUNDAC Weekly Report here https://blog.soundac.io/soundac-weekly-report-dec-11th-dec-18th

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SOUNDAC Weekly Report Dec 11th – Dec 18th
Well, the miracle of the blockchain has been changing how the world works, cutting out the suits from ever more sectors of an industry and thereby transforming whole industries – and music’s no exception.

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From Freedom From to Freedom To
PeerTracks is a music streaming platform with transparency in royalty data providing copyright holders a Delegated-Proof-Of-Stake blockchain platform which pays royalties in crypto tokens in real time.

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How Blockchain Platforms can deliver a music streaming platform
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