Japan's blockchain industry has been growing rapidly in 2020 despite the economic struggles and the global pandemic. A new report by one of the country's largest digital currency companies revealed that the sector has grown by over 30% since 2019.

Japan has been a trailblazer in the blockchain industry for years, being one of the first countries to formulate and implement a regulatory framework for the industry. Its blockchain-friendly approach has led to a rapid growth of the industry, a new report now shows.

In the past year, the industry has grown by 30%, the report by the Monex Crypto Bank showed. The bank is a subsidiary of the Monex Group, the operator of Coincheck exchange which it acquired in 2018.

The report revealed that as of May this year, there were 430 blockchain companies in Japan. This is a 30.7% rise from the 329 companies reported in July last year.

64% of these companies focus primarily on blockchain technology, the report showed, with the rest being involved in a secondary capacity. The report further revealed that blockchain technology is not limited to startups, with 193 of the companies being labeled as large corporations. Of these, over half focus primarily on blockchain technology.

Moreover, there are 31 publicly-listed companies in Japan that are pursuing blockchain technology.

On the available blockchain products, the study found that finance had the highest share, accounting for 19% of the 422 active products. Entertainment accounts for 10%, with service, infrastructure, real estate and retail all accounting for less than 3%.

The digital currency exchange and mining sectors are still the biggest in the industry, the report notes. However, the gaming sector is quickly rising to prominence, using blockchain to change the experience for both the operators and the gamers.

While the Japanese blockchain and digital currency exchange industry has come a long way, it still faces challenges that have hindered its growth. Hacks and data breaches have been one of its biggest threats.

China's fight against digital currency trading has now turned to the over-the-counter trading sector. Police in the country have been detaining OTC traders and platform operators to assist them with investigations. The most renowned is Zhao Dong, one of China's most prolific traders and a prominent investor in Bitfinex.

Dong was detained this week, with reports about his detention first emerging on local social media channels on Thursday. Local blockchain news outlets picked up on the reports, with some claiming that he was detained in Hangzhou while others claimed he was in Yancheng.

Following the widespread rumors, Dong's OTC digital currency OTC lending company RenrenBit took to social media to shed more light. In a statement on Weibo, RenrenBit revealed that the police had detained Dong upon arrival in China from Japan in late June. He was actively assisting the police in digital currency anti-money laundering investigations, the company claimed.

RenrenBit also revealed that Dong wasn't the only digital currency trader the police had detained. It claimed that in June, police had detained an entire OTC team working in Beijing. However, it clarified that it was just detention and that none of the traders were under arrest.

Matthew Graham, the CEO of Beijing-based blockchain investor Sino Global Capital confirmed the detention on Twitter.

A source with knowledge on the matter however revealed that Dong's detention isn't a targeted attack at him. It's part of a bigger effort by the government to stamp out OTC trading in China, claiming that it's being used to launder money.

The source, who spoke to CoinDesk, claimed that police in China have increased their scrutiny over OTC platforms since last month. This scrutiny has led to the detention of an unnamed number of OTC trading desks to assist in money laundering investigations.

The detention of Zhao Dong is however the most high-profile one yet. Dong is one of China's most renowned traders.  He is also reportedly an investor in Bitfinex, playing a big role in its $1 billion UNUS SED LEO token initial exchange offering. As Sino Global's Graham explained, in the Western world, it's the equivalent of detaining one of the Winklevoss twins.

The detentions follow the freezing of over 4,000 bank accounts belonging to digital currency OTC traders. As CoinGeek reported, authorities in Guangdong province froze the accounts claiming they were connected to digital currency money laundering..

Miner outflows of bitcoin have dropped to decade lows, with analysts suggesting a hoarding mentality is partly responsible.

The seven-day average of the total amount of bitcoin transferred out of miners' addresses declined to 987 on Thursday, hitting the lowest level since Feb. 3, 2010, according to data source Glassnode. The previous decade low of 988 was registered on May 23.

glassnode-studio_bitcoin-miners-outflow-volume-7-d-moving-average
Source: Glassnode
The number of coins being sent by miners to exchanges is also at its lowest point in over a year, as noted by Glassnode in its weekly report.

"It is a sign of efficient miners continuing to hoard (only selling a proportion of BTC)," said Asim Ahmad, co-chief investment officer at London-based Eterna Capital.

The increase in miner holding does not necessarily have long-term bullish implications for the cryptocurrency's price. Miners tend to operate mainly on cash and liquidate their holdings almost on a daily basis to fund operations.

As such, miner hoarding could be termed as temporary deferral of BTC sales, possibly due to fears that the market lacks the strength to absorb the regular amount of supply. Essentially, they may be waiting for the market to show strength and prices to rise before realizing their profits.

The market, therefore, could face an above-normal miner supply during the next meaningful price rise. That, in turn, could put the brakes on a price rally.

Hoarding aside, the other main reason for the decline in outflows is the reduction in bitcoin being mined since May's reward halving, said Ahmad.

Indeed, transfer volume from miner addresses fell from 2,334 BTC to 1,034 BTC in the nine days following the May 11 reward halving, which reduced the per block emission by 50% to 6.25 BTC.

That sharp decline in profitability forced out less inefficient miners, as evidenced by a drop in the seven-day average of the hash rate – the total computing power dedicated to mining blocks on the blockchain. That fell from 120 tera hashes per second (TH/s) to 90 TH/s in the two weeks following halving (though it's since climbed as more efficient machines were switched on).

Forced out miners, however, may return to bitcoin's blockchain if prices rise sharply, making older hardware once again profitable.

Bitcoin is currently trading largely unchanged on the day near $9,370, according to CoinDesk's Bitcoin Price Index.

The cryptocurrency has been largely restricted to a narrow range of $9,000 to $10,000 since mid May. The direction in which the range is breached will likely set the tone for the next big move. 

Challenger bank startup Revolut has amended its terms and conditions, giving users 'beneficial rights' to digital currency bought through their platform.

The change in terms follows the U.K. bank allowing all customers access to digital currency trading for the first time, having previously been reserved to its Metal and Premium users.

While users will not be able to carry out the transactions themselves or send funds to an address other than one held by another Revolut customer, the change in terms means they will have rights to the financial value of the digital currency bought through the platform.

The distinction gives users legal title to their digital currency on the platform for the first time, giving them the freedom to direct what happens to their money.

"You will own the rights to the financial value of any cryptocurrency we buy for you. We will hold it on your behalf and you will have a right (called a 'beneficial right') to it. This means you can tell us when to sell or transfer it (within the limits of these terms and conditions). You have complete control of your cryptocurrencies, and we will only act upon instructions you give us. You will not be able to carry out transactions yourself."

The title to the digital currency is limited by the terms, and users are only able to transfer to other Revolut users through the app. This means users can pass title to buyers within the Revolut ecosystem, but are unable to move the digital currency to wallets not controlled by the bank.

Furthermore, the terms mean it is no longer possible to pay in crypto via a Revolut card. Those holding only digital currency balances will see card payments fail if there is insufficient fiat on account to cover the transaction.

The development comes as Revolut has launched its app in the U.S., as it aims to expand on its global user base. 

A South Korean university has announced that it's building a blockchain and artificial intelligence (AI) campus in the city of Daegu. The campus will take a year to construct, with admission set to begin in 2021.

Suseong University partnered on the initiative with the Korea Artificial Intelligence Association (KORAIA). In an announcement on local outlet Money Today, the university revealed that the campus will also focus on other emerging technologies such as big data and cloud computing.

A number of technology companies based in Daegu have already signed up to be part of the project. They will provide training to the students, as well as practical experience. They include Wooshin Co. Ltd, an AI company based in Daegu.

The COVID-19 crisis has created a need for more robust systems, and combining blockchain with AI is the best way to respond to this need, according to Kim Kun-woo, the university's Planning and Coordination Division director.

Kun-woo further revealed that the university intends on giving students at the campus firsthand experience in the blockchain and AI industries by pairing them up with experts in these fields.

South Korea has been a global hub for blockchain technology, with the government playing a key role in the industry's development. As CoinGeek reported recently, the country launched a fintech sandbox that has promoted the growth of several blockchain startups. In its latest report, the Financial Services Commission revealed that the sandbox has attracted $111 million in the last year and created 380 jobs.

Elsewhere, the country's central bank published a report that touted the use of blockchain-based digital currencies. The Bank of Korea pointed to the decline of cash use and the advancement of digital payment technologies as key reasons why central banks are increasingly developing CBDCs. The report further claimed that several central banks have developed IT systems that rely on DLT to record digital currency transactions.

The instability of the rupee combined with high remittance fees is driving digital currency adoption in India, according to a new report.

The report from exchange OKEx in partnership with Coinpaprika found an increasing share of global digital currency business in India, projecting significant growth relative to other countries over the coming two years.

The problem of remittance fees is particularly acute in the country, with 17 million Indian employees working overseas and remitting money home. Of the $80 billion remitted from overseas workers in 2018, some $5.67 billion in fees were incurred.

According to the report, increasing liberalization of digital currency rules in India could set the country on a similar path to Mexico, where digital exchange Bitso has grown to account for 2% of U.S.-Mexico remittance.

The growth in digital currency uptake has accelerated since the Supreme Court ruled against the Reserve Bank of India's ban on banks serving crypto businesses. OKEx has reported a 545.56% increase in traffic from India, with sign-ups during the first quarter of the year up 4,100%.

The shift to crypto also coincides with instability in the rupee, which has lost 7% of its value against the dollar since the beginning of the coronavirus crisis.

Complex rules for exchanging foreign currency in India have made it difficult for those looking to transfer rupees into more stable fiat currencies, which the report said had also been a factor in driving more people to turn to digital currencies.

While the report found digital currency was currently being used as a vehicle for ultimately transferring funds to alternative fiat currencies, it suggests more Indians could turn to digital currency directly as the market continues to mature.

The move follows similar trends seen in other countries with unstable fiat currencies, and from those with large overseas remittance industries.

Happy Pizza Day! And this year, please make mine extra spicy. Yes, it's May 22 again, the day all Bitcoiners celebrate by ordering a pizza. Any pizza is good, but to make it special you'll need to buy it with Bitcoin—don't make the mistake of using BTC these days though, because at the time of writing the average transaction fee on the BTC network is US$6.28.

What is Pizza Day and why is it significant?
Today is actually the 10th anniversary of Bitcoin Pizza Day. It's significant because it marks the first (or at least, the first documented) purchase of real-world goods with Bitcoin. Before then, mining and transacting with Bitcoin was largely a hobbyist pursuit, so the purchase proved that Bitcoin could have a real-world dollar value. This in turn sent a price signal to the nascent "market" for Bitcoin, and became the first benchmark for BTC value. The rest, as they say, is history.

On May 18, 2010, Laszlo Hanyecz of Jacksonville, Florida, posted on the Bitcoin Talk forums:
"I'll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day. I like having left over pizza to nibble on later. You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I'm aiming for is getting food delivered in exchange for bitcoins where I don't have to order or prepare it myself, kind of like ordering a 'breakfast platter' at a hotel or something, they just bring you something to eat and you're happy!"

It took a few days to finally get a taker—user "jercos" (Jeremy Sturdivant) ordered two large pizzas from Papa John's for delivery to Hanyecz's home, paid in USD and collected the 10,000 BTC. The pizzas themselves cost US$41.

You can see photos of the now-famous Bitcoin pizzas here.
Technically, Hanyecz didn't buy the pizzas directly for Bitcoin so you could say the price included Sturdivant's service fee. Since the Bitcoin price in May 2010 was officially $0, he did take on a $41 risk.

As we now know, that risk paid off—the current market value of BTC is $9053, meaning either owner of the 10,000 coins would now have US$90,530,000. If BTC's all-time-high price stands at $19,891 then 10,000 coins would've been worth $198,910,000. Had they kept those coins in time for the two forks that shifted Bitcoin protocol development to BCH and finally to Bitcoin SV (BSV), it would be millions more.

Only BSV now is Bitcoin according to the Satoshi Nakamoto whitepaper and the original protocol, and 10,000 BSV is currently US$1,915,900.

Million-dollar pizzas, but value is priceless
Yes, that's an expensive pair of pizzas (for pedantic reasons, remember it was two large pizzas instead of the single "198 million dollar pizza" often mentioned in the media). Naturally, Hanyecz often finds himself in demand for a quote on whether he regrets his purchase. He's on the record as saying he doesn't at all, since his move kickstarted the Bitcoin economy. Had he not sent those 10,000 coins, and had no-one else taken the plunge either, Bitcoin's value could still be $0 today.

It's a sign that, unless people are willing to take risks and do something to give Bitcoin value, it doesn't have any. What if Hanyecz had abided by BTC's "HODL" mentality, or cared about all the people who called him crazy over the years, reminding him of his (theoretically) lost millions?

Most people who've been in the Bitcoin community for many years have "Bitcoin Pizza" stories of their own to tell. This writer likes to show off his "thousand dollar" Bitcoin keychain; everyone hates to be reminded of how much money they'd have now if they'd never spent those coins.

But again, if no one had ever spent Bitcoin then the value of Bitcoin would be $0. Bitcoin only has value if it's used in the real world. And thanks to the people who invested time, effort and money building user-friendly services so more people could use Bitcoin, that value has increased even more over time.

Think about all that next time you hear someone say "HODL" (ie: save your Bitcoins, don't spend them). HODLing creates no value whatsoever. BTC wouldn't even have speculative-gambling value if no-one sold them, and that's about the only utility BTC has nowadays. If you know any committed BTC HODLers, remind them how much that $6.28 transaction fee they just paid could be worth at some random point in the future. That's extra spicy.

BSV, on the other hand, recognizes real-world usage as the main value driver and its people build services that aim to solve real-world problems. The large-volume, low-fee model is creating a global immutable ledger for enterprises, and yet remains cheap enough to send individual transactions for cents, or much less.

But enough of that—Happy Pizza Day once again, and enjoy the food!