Bitcoin (BTC) could soon shoot to $20,000 as a result of emergency measures from the United States Federal Reserve, also known as The Fed, one of the industry’s biggest firms has said.

Fed echoes 2008 crisis moves

In a tweet on Sept. 18, Arthur Hayes, CEO of derivatives giant BitMEX, forecast that fresh quantitative easing (QE) would further decrease faith in fiat currency.

The comments come a day after the Fed swooped to decrease interest rates on some loans which reached more than 10%, or four times its target. More than $53 billion was pumped into the economy. 

“QE4eva is coming. Once the Fed gets religion again, get ready for #bitcoin $20,000,” Hayes wrote.

The Fed’s QE injection marked its first emergency intervention since the end of the 2008 financial crisis, an event directly leading to Bitcoin’s creation. 

While the cryptocurrency has yet to see a global crisis of the same scale, markets have shown that Bitcoin price benefits from political and economic uncertainty.

Hayes doubles down on Bitcoin price

Not just the Fed, meanwhile, but also the European Central Bank (ECB) is following the QE trend once more this year. 

Completing its latest move last week, commentators believe markets want the ECB to continue the same behavior, giving rise to the “QE4eva” phenomenon described by Hayes.

Earlier this month, Hayes already said Bitcoin would again hit its all-time high of $20,000. As Cointelegraph reported, BitMEX is still grappling with unwanted attention from U.S. regulators, who suspect that Americans are bypassing BitMEX geoblocking and accessing the platform.

The United States’ largest bank faced fresh ridicule from Bitcoin (BTC) circles this week after prosecutors said traders had conducted more market fraud.

As Bloomberg reported on Sept. 16, JPMorgan Chase is facing an inquiry over the behavior of at least a dozen precious metals traders.

JPMorgan performed “thousands” of illegal moves

According to investigators, the employees willfully engaged in price-fixing of precious metals on thousands of occasions. Both market participants and JPMorgan’s own clients suffered losses as a result, they claim.

“Based on the fact that it was conduct that was widespread on the desk, it was engaged in thousands of episodes over an eight-year period… We’re going to follow the facts wherever they lead, whether it’s across desks here or at any other bank or upwards into the financial institution,” Bloomberg quoted Assistant Attorney General Brian Benczkowski as saying.

JPMorgan is well known as being one of the more vocal skeptics of cryptocurrencies. CEO Jamie Dimon became notorious for his soundbites, which began in 2017 when he labeled Bitcoin a fraud in itself.

Dimon since appeared to have a change of heart, pledging not to discuss Bitcoin again in public, while denying he disliked it in private comments to Cointelegraph.

Bitcoin, bankers and fraud

More recently, the bank released its own digital currency offering, JPM Coin, which gained similar criticism over its technical characteristics.

The irony of the precious metals scandal was thus not lost of crypto commentators.

“They were charged with wire fraud, bank fraud, and market manipulation. But I was told by the CEO that Bitcoin is the fraud,” Twitter analyst known as Rhythm summarized.

JPMorgan is not the only bank to issue warnings over cryptocurrency’s alleged fraudulent nature while being embroiled in legal turmoil.

In 2018, Dutch institution Rabobank claimed Bitcoin contained money laundering compliance hazards. Subsequently, authorities fined it $369 million for money laundering.

Bitcoin (BTC) mining infrastructure firm Northern Bitcoin AG has announced the completion of tests for its new air-cooled mining container, which houses 144 ASIC miners.

A press release published on Sept. 9 outlined that the highly mobile container solution has been designed as a piece of flexible and efficient infrastructure that will enable the firm to establish mining pools in countries with year-round cool locations.

Setting up shop anywhere energy is cheap, sustainable

Headquartered in Frankfurt am Main, Northern AG develops and operates Bitcoin-focused mining hardware that uses renewable energy sources and aims to attain optimal efficiency and sustainability.

The press release notes that Northern AG has developed and operated a mining pool with 21 water-cooled 41-foot containers — housing 210 ASIC miners each — in Norway for over a year.

The new water-cooled container has reportedly been developed with partners in Germany and will allow the firm to extend its operations, flexibly and at short notice, to new locations across Scandinavia.

Its 20-foot design — with a capacity to house 144 ASIC miners — has a significantly higher miner density than the earlier water-cooled containers. The firm says it is focused on deploying its mobile mining solutions in permanently cool locations where sustainable energy sources such as hydropower are cheap and abundant.

As the press release notes, efficient temperature control is critical for compute-intensive Bitcoin mining operations, during which the hardware required typically generates significant heat.

Bitcoin mining getting more energy-efficient

As recently reported, fresh data from aggregator Statista has indicated that Bitcoin (BTC) energy consumption is becoming rapidly more efficient, even as the global network’s hash rate continues to hit record highs.

Energy consumption as of July 2019 was 69.79 terawatt hours per year. In July 2018, the figure was 71.12 terawatts, while hash rate was almost 60% lower than at present.

A study in June found that three-quarters of Bitcoin mining activity is powered by renewable energy sources. 

Mining hardware manufacturers such as Bitmain are similarly seeking to develop new solutions with greater processing capabilities and lower energy demands.

Gold Bullion International co-founder Dan Tapiero has said Bitcoin’s (BTC) value is a truth machine.

Tapiero made his regards during an interview with business news outlet AlphaWeek published on Sept. 10. He said:

“What it is is an invention, and I think it should be referred to as an invention rather than all the other things. It’s a, you know, what it really is […] It’s a truth machine. […] It’s a way to eradicate all fraud or lying by human beings.”

Bitcoin is a reward for network maintenance

Tapiero also noted that the system is now 10 years old and has a good track record, all of which contributes to his will to ask “what is a security platform like that, with that track record” worth. In the end, he concluded:

“Bitcoin, really, is just the reward that miners get for guaranteeing the security of the framework of the network, that’s what it is.”

BTC is worth hundreds of billions of dollars

Tapiero also asked what it would cost for a company to develop such a system. He said that he believes it would cost hundreds of billions of dollars, touching on the number of work hours dedicated to the development and maintenance of Bitcoin and its ecosystem.

He also added:

“Could a company even develop that? You know, maybe Satoshi realized it can only be developed slowly over time in a decentralized way.”

As Cointelegraph reported earlier today, Blockstream CEO said that Bitcoin is reverting to its historical market dominance of more than 90% at altcoins’ expense.

A $1 billion Bitcoin (BTC) transaction has become conspicuous not because of its size but because its sender spent far too much on fees.

Someone could have sent 94K BTC for $35

Social media users were guessing at the origin and destination of the funds on Sept. 6, which involved 94,504 BTC ($1.018 billion).

According to Twitter-based monitoring resource Whale Alert, the transaction did not involve known wallets or those belonging to a specific cryptocurrency-related organization, such as an exchange.

One theory suggested the funds may be tied to institutional trading platform Bakkt, which begins accepting client deposits today.

“Institutions building inventory for their market-making needs going forward,” commented Max Keiser on the giant transaction. He added:

“This = effective ‘put’ on the BTC price at $9,000 (as I’ve been reporting for several yrs now). Ie, institutions are net-buyers of any BTC that shows up at $9k. Risk/reward now for buyers is excellent.” 

Its sender, who may have been sending funds to themselves, nonetheless selected a very high fee rate.

At 480 satoshis per byte, the fee totalled around $700.

Bitcoin fees can vary depending on how quickly a sender wishes a transaction to be processed by miners. Many wallets allow manual fee-setting; the more money paid, the fewer blocks a user must wait for a transaction confirmation. 

Under current conditions, getting a transaction included in the next block — maximum ten minutes — is just 23 satoshis per byte, meaning the $1 billion sender overpaid 20 times. The funds could have settled in around 10 minutes paying a fee of just $35.

Bitcoin’s low fees era continues

Bitcoin fees have remained low in 2019 despite the cryptocurrency’s rapid rise in price.

As Cointelegraph reported, the situation marks a stark contrast to 2017, when Bitcoin circled all-time highs and fees grew in step. At the time, developers of projects such as the controversial Bitcoin Cash (BCH) aimed to take users away with the promise of lower fees.

The total hash rate of Bitcoin — the amount of computing power involved in the mining process — continues to reach new highs, and is now more than 1000% larger than in September 2017.

Altcoin Bitcoin Cash (BCH) faced fresh criticism this week after one of its lead developers appeared to admit its network was unable to process its larger blocks.

In a Reddit exchange on Sept. 2, Amaury Séchet, via his account known as u/deadalnix, responded to criticism of some miners by another pro-BCH user. In the response, the developer suggested a BCH node would not be able to process a block of transactions 2 megabytes or larger.

Séchet is the lead developer of Bitcoin ABC, the first incarnation of the Bitcoin Cash network client.

Large blocks would make nodes “trip over themselves”

“Sure or we can mine large block, so we move the problem from the mempool to indexing node that fill trip over themselves bsv style as they are not optimized to handle 100x the usual demand. Or we can solve the problem rather than trading it against another,” the response reads.

Larger blocks were a central tenet of BCH when it came into being in 2017. Its main proponent, Roger Ver, frequently champions bigger blocks as a cure-all for capacity problems which have faced Bitcoin (BTC) in the past.

Admitting the network cannot in fact process them, therefore, did not go unnoticed by BTC figures.

“No big deal. Just the main developer for #bitcoincash saying it can’t currently handle bigger than 2MB blocks,” Blockstream engineer Grubles commented retweeting Séchet’s post.

Grubles additionally referenced another Reddit comment which shows another user asking Ver to manipulate BCH mining practises.

An admission of failure?

Others advised caution, noting Séchet had not specifically stated the bigger blocks narrative was redundant.

“He didn’t said it directly but didn’t denied the premise. But it is something I have suspected and talked about for a year. As they never have had a 30 days constant blocksize of even 1MB,” Bitcoinated forum moderator AvatarX added.

Like the majority of major altcoins, BCH has fallen fast against both BTC and most fiat currencies in recent times. Controversial from the outset, an ongoing war between the coin and its hard fork, Bitcoin Cash SV (BSV), continues.

The latter, since diverging from BCH in Nov. 2018, has faced even more technical difficulties, leading to critics panning its security credentials and purported use cases.

Bitcoin (BTC) now has the highest share of the overall cryptocurrency market since before its record-breaking $20,000 bull run in 2017.

According to data from major monitoring resource CoinMarketCap, Bitcoin now accounts for 70.5% of the total cryptocurrency market cap as of Sept. 3.

Bitcoin market cap hits pre-$20K high

That figure has not been seen since March 2017, and comes as BTC/USD makes gains at altcoins’ expense.

As Cointelegraph reported, continued underperformance in cryptocurrencies other than Bitcoin has triggered warnings from traders and analysts alike.

Among them are Peter Brandt and RT host Max Keiser, the latter again claiming this week that altcoins would never recover from this downturn.

“Alts never coming back… Sorry,” he tweeted on Sept. 3, also referencing market cap statistics. Brandt reiterated similar warnings.

“When will altcoin junkies understand that $BTC is the crypto with real and lasting value,” wrote Brandt, who added:

“Altcoins are to Bitcoin what lead is to Gold.”  

Some sources had reported Bitcoin hitting the 70% mark as early as last week.

Market cap readings set highs across the board

Bitcoin itself delivered a sudden return to form late on Monday, having previously dropped to just $9,350. At press time Tuesday, BTC/USD was circling $10,360, bringing 24-hour gains to 6.2%.

Altcoins in the top twenty, however, mostly failed to achieve more than 4%, meaning they, in fact, lost value in Bitcoin terms.

Some commentators voiced caution about placing faith in Bitcoin’s strength. Market cap, they argued, is a poor measure of performance, as it includes many altcoins which do not even have any trading volume.

Earlier, Cointelegraph reported on the phenomenon of Realized Market Cap, a metric designed to solve those inconsistencies which has also set new records in recent weeks.

The development of R3’s enterprise blockchain platform Corda is being plagued by fundamental disagreements over its core vision, causing frustration and delay.

The claim was made in a report from FT Alphaville on Aug. 22, citing numerous insider sources.

“Corda maximalists” versus interoperability proponents

Sources close to R3 reportedly allege that there is a gulf between Corda’s engineers and its senior management as regards the product’s design and development. The engineers have purportedly lost faith in the technology itself, considering it to be functioning poorly and underscoring that it lacks scalability. 

They have also pointed to the allegedly 5-figure monthly bills R3 is ratcheting up in payments for cloud services, which cast a shadow over the platform’s long-term viability.

Other sources have spoken of tensions at the level of the workforce, accusing the R3 engineers of being susceptible to a “three-year itch” they believe besets the enterprise blockchain sector as a whole.

Sources mention irresolution regarding R3’s identity — split between pitching itself as being a financial software firm to a more wide-ranging tech consortium.

As regards Corda itself, they claim there is a lack of ambition and clarity regarding exactly what kind of blockchain it aspires to be — and whether or not it will at all remain committed to distributed ledger technology also known as DLT.

This split has become tribal, they allege, with a split between so-called Corda maximalists and those open to pursuing interoperability.

The bottom line is that many reportedly fear the platform will not offer diverse businesses the efficiency gains it promises.

“Powerful but not very useful”

Among the R3 engineers, anonymous sources have said the consortium is trying to market software that is still ill-conceived and underdeveloped; they added that R3 is struggling to manage its burgeoning client base.

FT Alphaville was told by other in-house engineers that the flagship product “still feels like an engine without a car — powerful but not very useful.”

Notably, some have alleged the company would have faced a cash crisis had it not reached a settlement in 2018 with erstwhile rival Ripple over a legal dispute involving the breach of an option agreement that would have allowed R3 to purchase XRP at a discounted price.

Earlier this month, R3 announced plans to open a second European office in Dublin in 2020, just weeks after doubling the size of its London hub as part of an aggressive expansion plan.

[the article interchanges ‘ASIC’ and ‘Mining Rig’ (the toy boxes) arbitrarily]

Bitcoin (BTC) mining giant Bitmain will increase its capacity by 50% in the next six months on the back of a giant hardware order, a source close to the deal has said.

Bitmain eyes 50% capacity increase

As reported by Chinese social media network WeChat on Aug. 23, Bitmain, which has seen a dramatic reversal of fortunes in 2019, will now buy 600,000 mining chips.

According to a source close to the Taiwanese chip manufacturer processing the order, the chips will be of the most recent 7nm variety, the hash rate of which will be 50 tera hashes per second [per AntMiner mining rig].

“Based on this calculation, after half a year, Bitmain’s total network computing power will skyrocket by about 50%,” the publication notes, adding Bitmain’s valuation will subsequently top $12 billion.

Mining operators trickle into the black

In July, the company and competitor Canaan Creative sold 5,000 application-specific integrated circuit mining rigs, or ASICs, to German operator Northern Bitcoin.

As Cointelegraph reported, the increase in Bitcoin mining profitability this year has improved the prospects for operators like Bitmain. In late 2018, pressure was visible, with the company closing down operations and firing staff in some countries.

The impact of the previous Bitcoin bear market lingers on, Bitmain reporting losses of $625 million for January and February.

Renewed plans to conduct an initial public offerings — or IPO — in the United States could meanwhile come to fruition before the beginning of 2020.

A decade ago, the thought of self-driving cars was far from reality, but with 2020 looming large, massive strides have been made in the field of autonomous vehicles. Meanwhile, in the space of a decade, Bitcoin has thrust cryptocurrencies and blockchain technology into the mainstream consciousness. The latter has become a tool that is quickly being integrated into the world of finance, governance, logistics as well as the motor industry.

Some of the world’s leading automobile companies have been exploring the applications of blockchain technology and how it can be used to improve vehicles, the systems that operate them as well as how they interact with the world around them.So how is blockchain being used to drive the development of autonomous vehicles around the globe?

Machine-to-Machine communications

As recently as August 2019, Daimler carried out a test run in which trucks made machine-to-machine payments using a blockchain platform without any human interaction. Frankfurt-based bank and financial services firm Commerzbank tested payments between the trucks and electronic charging points, which were settled using the blockchain technology.

The banking firm tokenized euros, which were then used by Daimler to test and process the payments using the pilot platform. The success of the project could be a potential driver for the use of blockchain technology to facilitate settlement systems for autonomous vehicles.

While this is the latest instance of blockchain-powered autonomous vehicle interaction, there have been a number of major projects that are leveraging blockchain technology to store and use vehicle data.

Back in May 2018, the Mobility Open Blockchain Initiative (MOBI) was launched by a joint venture made up of over 30 companies, headlined by major automobile companies BMW, General Motors, Ford and Renault.

The principal work of the project was the creation of the MOBI Vehicle Identity Standard, which is looking to create a blockchain-based database for Vehicle Identity Numbers, which goes further than the current system that is used to register newly created vehicles.

By storing data on a blockchain, digital certificates for information including vehicle identity, ownership, warranties and current mileage can be securely stored in an electronic wallet. This data will be immutably stored on the blockchain and cryptographically verified. The vehicle can then communicate with various networks and pay for parking or tolls autonomously.

The data of the vehicle can only be accessed by permissioned parties. This would then allow service providers and government entities to verify credentials and track certain data in real time. This connection with the world around the vehicle will also allow for digital currency transactions to happen autonomously in a cryptographically secure network.

It is an ambitious project but it is easy to see the benefits for the industry. A shared but secure database of vehicles that can interact with the world in real time could be useful to a number of industries, from dealerships and service departments to vehicle insurance companies.

Aside from its involvement in MOBI, GM has been making its own moves to use blockchain technology. In December 2018, the company filed a patent for a blockchain-powered solution to manage data from autonomous vehicles.

The patent builds on an original filing back in 2017 and sets out in detail how the platform would work, allowing the distribution and communication of data between autonomous vehicles and services and facilities on roadways or in cities.

GM’s patent suggests that a blockchain system would be best suited for this type of information sharing. The range of data shared would be anything from navigation, charging and refueling services, validity of licenses as well as recording balances for payable services like tolls and parking.

The American vehicle manufacturer isn’t the only company looking to develop technology in this vein. Multinational IT giant IBM is well known for filing patents for future blockchain-based projects, and it has made some big moves in the field of autonomous vehicles as well.

In April 2019 the company filed a patent for a project that would allow it to manage data and interactions for self-driving vehicles using blockchain tech. This specific patent outlines technology that would allow autonomous vehicles to identify nonautonomous vehicles around it and predict their behaviour based on data from those vehicles’ driving record.

When making use of the blockchain technology, other users data remains secure, but autonomous vehicles can access the information in order to improve their navigation on the road. Only authorized parties would be able to access this data in real time, because it is cryptographically secure.

A practical example would be an autonomous vehicle driving on a highway. As it progresses, it can scan the license plates of nearby vehicles with sensors in order to access the necessary data using a blockchain-based application.

Payment solutions for autonomous vehicles

Blockchain technology and cryptocurrencies have proven their worth as disruptive payment alternatives, and this very application is one that is being actively developed for use by autonomous vehicles.

In July 2019, Daimler announced that it had partnered with a blockchain startup to develop a hardware wallet solution for vehicles. The solution is a blockchain-based platform that would allow for the use of vehicle identities to process secure transactions on a blockchain ledger.

The end goal is to provide a software solution that will power a marketplace for vehicles that goes further than just autonomously paying for tolls or parking. The platform could be used for ride-sharing and secure exchange of traffic information to alleviate congestion.

Alternative solutions

The applications of blockchain technology are seemingly endless, and creative ideas have led to some ingenious use cases. For example, in May 2019, a research project was announced involving Honda and General Motors that would look into the interoperability between electric vehicles and smart power grids. The project is working under the scope of the aforementioned MOBI consortium.

The project will explore the possibility of using electric vehicles to stabilize the supply of energy in smart grids. The parties hope to develop a platform that will see electric vehicle users earn rewards for storing power and exchanging it with the grid when needed.

An academic perspective

The examples of blockchain’s use cases in the development of autonomous vehicles and the improvement of their processes is clear to see. Alejandro Ranchal-Pedrosa, a researcher in blockchain technologies at the University of Sydney, has done significant research in the space.

Having co-authored a published use-case paper on blockchain technology for autonomous vehicles, the researcher told Cointelegraph that the applications of the technology in the automotive industry are plain to see, from payments per transport or unit of fuel, data-sharing for traffic and better transport to insurance.

Ranchal-Pedrosa believes there is one major hurdle to overcome in the use of blockchain tech in autonomous vehicles:

“It is understandable that the industry is taking its time, mainly, in my opinion, due to the scalability problem of blockchains and the latency requirement for autonomous vehicles which is why in most cases the automobile industry would leverage offchain protocols, when possible. We showed how offchain protocols and its fully trustless exchange of infinitesimally fragmentable goods give the possibility of new applications to the industry.”

It is difficult to identify the most beneficial use case of blockchain technology considering the massive potential and variety of possible uses. Various industries will tailor the technology to serve their greatest needs, but Ranchal-Pedrosa believes the most popular use case in the field of autonomous transport will be for transactional exchanges:

“The biggest influence is without any doubt towards the possibility of exchange of goods on-the-go, in a trustless manner. Insurance companies may or may not find blockchain technologies as the best fit for their services, but trustless exchange of transport (sort of a carpool in which you can sign a contract with literally anybody to pay per kilometer), fuel, or any other product/service seems to me like a perfect fit for the current industry, and especially the future autonomous vehicles and machine to machine communications.”

Last week, Big Four firm Deloitte unveiled a mobile platform designed to host blockchain networks on a small scale for demonstration purposes. The product is “based on client interest in understanding blockchain capabilities in live interactions,” as per the press release.

With this move, the Big Four companies — comprised of Deloitte, PwC, Ernst & Young (EY) and KPMG — continue their expansion into the field of blockchain. Combined, the firms brought in over $148 billion in revenue last year, as they handle over 50% of audits for both public and private companies. Consequently, their presence in the crypto space could be a reflection of the state of blockchain adoption.

So, how far have the Big Four gone while exploring distributed ledger technology (DLT), and can blockchain offer any particular perks for those companies?

Big Four: Consistent, but limited interest in blockchain

At this point, all of the Big Four companies have at least demonstrated some interest in blockchain, albeit their approaches tend to differ. Some companies, like Deloitte, have been mostly researching how this technology has affected the general market, while EY, for instance, has focused on releasing software solutions tailored for the needs of cryptocurrency businesses.

Such diversity can be explained by the very nature of those companies — being professional services networks, they offer a variety of services, including audit, tax, consulting, enterprise risk and financial advisory. It is also the reason why the Big Four have yet to fully dive into blockchain instead of merely flirting with the technology, as Cal Evans — the founder of Gresham International, a compliance and strategy firm — opined in a conversation with Cointelegraph:

“Because the Big Four work in such a wide scope of sectors, they are unable (or unwilling) to dedicate serious time to blockchain. This makes sense, given that they cannot invest in every new technology set which comes along (although we view blockchain as different). One key thing to note is that many of the big four only got into blockchain when Crypto projects began using them to show more transparency. The Big Four are known to only get involved with something when their client base is using it, blockchain was and is no exception.”

“These appear to be just early steps,” Juan M. Villaverde, chief crypto analyst at Weiss Ratings, said. “They [the Big Four] have begun to recognize the potential of DLT, but they have not yet figured out how to leverage that potential.”

According to recruitment platform Indeed, as of March 2019, PwC had 40 blockchain-related job offerings, being the top recruiter in the field among the Big Four. EY came second with 17 vacancies, followed by Deloitte with 10 job offers.

Meanwhile, a more up-to-date search shows that PwC is still the most active professional services network when it comes to blockchain technology, but has only 13 positions directly mentioning the word “blockchain” left. EY has four job offerings, while apparently neither KPMG nor Deloitte are hunting for any blockchain talent at this point. That seems to confirm that the Big Four’s interest in the crypto space is existent, but moderate: PwC, for instance, has a total of 1,010 open vacancies on Indeed, meaning that its 40 blockchain-related job offers account for a minuscule fraction of that number.

Maurizio Raffone, CEO at crypto-focused consultancy and advisory firm Finetiq Ltd., told Cointelegraph:

“My impression is that the Big Four are keen on blockchain as an additional area where they can provide consulting services rather than audit services. There has been a trend by audit firms to move into more lucrative consulting and blockchain offers them yet another opportunity for that strategy.”

Related: How Blockchain Is Reshaping External Audit: Crypto Developments by PwC, KPMG, EY and Deloitte

Nevertheless, blockchain itself should also prove especially useful in the auditing market due to its transparent nature, as Evans told Cointelegraph:

“Blockchain is one of the few technology sets that can actually aid in most auditing respects. Financial auditing can be assisted by an end-to-end blockchain-based company as all transactions will be open and verifiable. They will also be contained within one ledger, which is one of the largest problems for an independent financial audit. Of course, there is more than one type of audit. Blockchain can be deployed across different sectors to make, for example, a service level agreement audit more effective. Companies could be monitored using blockchain to ensure that they are meeting compliance and the clients wishes.”

Raffone agrees that auditing practices could benefit from having blockchain in place. “I see blockchain as a cost-saving technology in the auditing space,” he told Cointelegraph. “Given the public nature of financial accounts, a blockchain solution would be rather efficient.”

However, Villaverde of Weiss Ratings is wary that the Big Four can stimulate crypto adoption only in certain scenarios. If the Big Four seek to involve themselves exclusively in the support of private blockchain solutions, the expert said, then it would hardly have any effect on the market at large, because “a private, permissioned blockchain is little more than a glorified database.” He went on, saying:

“It’s only when these firms decide to leverage the power of public blockchains, such as Ethereum or Bitcoin, that we envision these initiatives having a significant impact on public adoption.”

PwC

• Crypto/blockchain market reports: Yes
• Blockchain-based software solutions: Yes
• First-hand adoption (Bitcoin acceptance, crypto ATMs): Yes
• Investments in the crypto market: No

Having started accepting Bitcoin (BTC) as a payment for a part of its services back in 2017, PwC today is arguably the Big Four company that is the most proactive in exploring cryptocurrencies and blockchain. The company even has a major training program in place to boost its employees’ knowledge on the field.

Thus, PwC is no stranger to the crypto space and its major problems: In its 2018 study entitled “Blockchain is here. What’s your next move?” the firm highlighted regulatory uncertainty and trust as major barriers to blockchain adoption among businesses. Additionally, PwC has paid particular interest to stablecoins — another increasingly important part of the industry — and struck a partnership with decentralized lending platform Cred to advise on issuance of a United States dollar-pegged cryptocurrency.

However, the firm has not limited its blockchain presence to its advisory department. In March 2018, it partnered with leading global asset management company Northern Trust in a bid to enable real-time equity audits via blockchain and hence make the underlying transactions more transparent. Two months later, PwC invested in VeChain, a large cryptocurrency startup specializing in web services, supply chain management and anti-counterfeiting. In July of the same year, news broke that PwC was going to audit Tezos, the ambitious cryptocurrency project that was going through an internal dispute and several class-action lawsuits at the time. As per the accompanying press release published by the latter, it was allegedly the first time a “large-scale blockchain organization” had been accepted as a Big Four audit client.

Most recently, PwC announced the release of a cryptocurrency auditing software solution. Specifically, the company updated its Halo auditing suite to accommodate “entities engaging in cryptocurrency transactions” by providing independent evidence of private-public key pairing and collecting information about transactions and balances from blockchains.

EY

• Crypto/blockchain market reports: Yes
• Blockchain-based software solutions: Yes
• First-hand adoption (Bitcoin acceptance, crypto ATMs): No
• Investments in the crypto market: No

EY has released more solo crypto-related software projects than any of its Big Four rivals. First, in April 2018, EY announced Blockchain Analyzer, becoming the first mainstream auditor to offer its services specifically for the needs of cryptocurrency companies, which allowed for the gathering of an organization’s entire transaction data from multiple blockchain ledgers. A year later, the firm followed up with a major update, introducing “the second generation” of EY Blockchain Analyzer. According to Paul Brody, the global innovation leader for blockchain at EY, the new version can be used for multiple purposes — such as audit, tax and transaction monitoring.

Moreover, in March 2019, EY unveiled another software solution — this time, for tax purposes exclusively. Dubbed Crypto-Asset Accounting and Tax, or CAAT, the tool was designed to assist its U.S. customers — both public and institutional — in filing IRS tax returns related to crypto assets.

Further, in May, EY open-sourced the code of Nightfall — its solution that enables the transfer of ERC-20 and ERC-721 tokens on the Ethereum (ETH) blockchain “with complete privacy” — and put it on GitHub. “It is an experimental solution and still being actively developed,” the company warned.

Finally, the audit titan has applied blockchain to track wine. Specifically, the platform — titled Tattoo — helps consumers across Asia determine the quality, provenance and authenticity of imported European wines. As with the aforementioned Nightall, EY’s solution enables its customers to perform secure and private transactions on the Ethereum public network by using zero-knowledge proof technology.

On top of releasing a number of blockchain-related software solutions, EY has also been supplying its regular services to crypto actors. Namely, the firm has been appointed by QuadrigaCX — a Canadian cryptocurrency exchange that went defunct under mysterious circumstances — as an independent third party to monitor the proceedings in a creditor protection case. However, some of the exchange’s former clients are not happy with how EY has been handling the case: At some point, the auditor reportedly transferred 103 Bitcoins (approximately $1 million) to the exchange’s locked-out cold wallets. According to the report released by EY in February, the loss was caused by “a platform setting error.”

KPMG

• Crypto/Blockchain market reports: Yes
• Blockchain-based software solutions: Yes
• First-hand adoption (Bitcoin acceptance, crypto ATMs): No
• Investments in the crypto market: No

KPMG has not only been increasing its presence in the blockchain space, but has also been a member of the Wall Street Blockchain Alliance (WSBA) since 2017.

Over the past 12 months, it has partnered with blockchain company Guardtime to offer blockchain-based services to clients; joined forces with the U.S. Food and Drug Administration to integrate blockchain in the pharmaceutical supply chain (the initiative will reportedly speed up the process of tracking inventory and boost the accuracy of data shared between members of the supply chain); and worked with United Arab Emirates officials to successfully test a blockchain-based Know Your Customer, or KYC, application.

Additionally, KPMG collaborated with three powerful software companies — Microsoft, R3 and Tomia — to develop a blockchain-powered solution for telecom settlements. Arun Ghosh, who leads KPMG’s blockchain consultancy, said of the initiative:

“Blockchain has the potential to deliver transparency and visibility, providing the opportunity to help reduce reconciliations and increase efficiencies associated with traditional interconnect billing, roaming and partner settlement processes.”

Apart from working on blockchain-backed projects, KPMG has also studied the cryptocurrency market with an overall bullish outlook. In a November 2018 report, for instance, the auditing company invited institutional investors to “realize its potential.” which, in turn, would allegedly benefit the industry at large. “Cryptoassets have potential. But for them to realize this potential, institutionalization is needed,” the document’s authors argued.

KPMG’s latest survey on blockchain, however, suggests that most tax and finance executives are not considering adopting the technology. Regardless, David Jarczyk, innovation principal and tax leader for blockchain at KPMG, highlighted its potential benefits for the financial world:

“Blockchain is like a spreadsheet on steroids that can automate certain tasks, build greater transparency, speed and reliability, and provide a single source of transactional information.”

Deloitte

• Crypto/Blockchain market reports: Yes
• Blockchain-based software solutions: Yes
• First-hand adoption (Bitcoin acceptance, crypto ATMs): Yes
• Investments in the crypto market: No

Deloitte was the earliest Big Four player to delve into the crypto space, as it announced its first blockchain lab in Dublin back in May 2016. By that time, the company had already collaborated with the Bank of Ireland to complete a joint proof-of-concept blockchain trial. Today, three of the Ireland’s four largest banks are reportedly using Deloitte’s blockchain solution (developed in its Dublin branch) to verify employees’ credentials.

Also in 2016, Deloitte installed a Bitcoin ATM on the premises of its Toronto office. Placed outside the security gates so it could be accessible to the general public, the machine showcased the firm’s interest in cryptocurrencies.

Since then, Deloitte has kept a close eye on the market, releasing several reports that have recognized regulatory uncertainty and Bitcoin’s infamous scalability problem among the main hurdles for mass adoption. Nevertheless, the company’s August 2018 report entitled “Breaking Blockchain Open: 2018 Global Blockchain Survey” predicted that blockchain technology was getting closer to a breakout moment. Meanwhile, the newest issue of that report unveiled that as much as 73% of Chinese enterprises believe that blockchain is a top-five strategic priority, highlighting the nation’s focus on the technology.

This summer, Deloitte has also begun supporting a new blockchain accelerator program called Startup Studio in partnership with 22 other companies, including Fidelity and Amazon. Startup Studio will reportedly host workshops for blockchain startups to help them enhance a variety of skills important for the industry.

Finally, the Big Four giant has just rolled out its own blockchain-based platform designed to provide users with blockchain demonstrations and experiments. Called Blockchain in a Box, the new product is described as “a mobile, self-contained technology platform capable of hosting blockchain-based solutions across four small-form-factor compute nodes and three video displays, as well as networking components that enable integration with external services, such as traditional cloud technologies.”

Are the Big Four doing enough?

As for now, experts seem somewhat skeptical of the Big Four’s progress in terms of blockchain, arguing that their knowledge on the subject seems limited at this point. Evans told Cointelegraph:

“There have been examples in the market where companies such as PwC have actually plagiarized and copied work from other companies within the crypto space, showing that their knowledge on the subject is incredibly limited. It is hard for a company to push something they don’t fully understand themselves.”

Either way, most accounting and auditing functions have the potential to become automated with smart contracts at some point in the future, and the Big Four would have to drastically increase their presence to stay relevant, according to Weiss Ratings’ Villaverde, who continued:

“The main question is: Will the Big Four lead in the creation of this new technology? Or will smaller, potentially more nimble, players jump into the space and take over significant market share from the Big Four?”

Whether or not the Big Four will adopt blockchain in their regular service offerings, the fact that all four firms draw up regular reports on the crypto and/or blockchain market shows that they are interested and are closely following the developments in the industry.

Earlier this week, Big Four firm PwC announced the release of a cryptocurrency auditing software solution.

According to the multinational professional services network, its Halo auditing suite has now been updated to accommodate “entities engaging in cryptocurrency transactions.” The new tool reportedly allows PwC to establish crypto asset ownership and gather information about transactions and balances from blockchains.

While it is currently unclear whether Halo will now be picked up by cryptocurrency-related businesses, PwC’s move seems to mark another landmark step for the industry.

Specifics of auditing in the crypto space

Auditing in the crypto space is still a developing practice that varies substantially between stakeholders, as Maurizio Raffone, founder and CEO of Finetiq, told Cointelegraph. He also drew a parallel between on-chain and off-chain audits, explaining:

“On one side, crypto exchanges have historically focused on cyber-security measures, processes and procedures dealing with corporate governance and so forth, just like most other businesses. There are then on-chain audits that tend to focus on checking for bugs and correct workflow of a blockchain protocol or, more often, smart contracts.”

Indeed, the Association of Chartered Certified Accountants (ACCA) — a global body for professional accountants — believes that “robust and consistent” accounting treatment is required for different types of cryptocurrencies, as Narayanan Vaidyanathan, head of business insights at ACCA, told Cointelegraph via email:

“This is currently an on-going challenge that is still under deliberation within the accountancy profession. Is a crypto currency cash, inventory, a financial asset, or an intangible asset? Because if there are accounting issues, it therefore as a downstream implication also becomes an audit issue.”

Auditing services might also depend on how companies utilize cryptocurrencies, adds David Martin, chief investment officer at Blockforce Capital:

“It is important to differentiate how a firm is using digital assets in its business dealings. For instance, a company that uses cryptocurrency as a way to make transactions requires different services than an investment firm that is holding digital assets as a form of investment.”

Perhaps the most notable example here would be Tether, the company behind the eponymous stablecoin (USDT) and a wholly owned subsidiary of iFinex — which also owns crypto exchange Bitfinex.

Related: Tether, Bitfinex Stay Afloat Amid Controversy

In early 2018, Tether’s plans to release a third-party audit fell through, although the company had previously announced that it was undergoing a “balance sheet audit” by Friedman LLP, a New York-based accounting firm.

However, in late June 2018, a document was finally produced — although it turned out to be a memorandum rather than an audit performed by an auditing company. As Tether’s general counsel explained at the time, mainstream accounting firms would not conduct official audits on companies working with cryptocurrencies.

While it is unclear whether Tether was willing to provide all the required information to third-party auditors (which could be the reason it could not complete the inspection), the general problem seems to persist within the crypto industry. Ben Tsai, president and managing partner of Wave Financial, told Cointelegraph:

“Cryptocurrency companies definitely have an audit problem. Major players such as exchanges, stablecoins and hedge funds are not consistently providing proof of solvency despite the fact they need to.”

According to experts, the regulatory uncertainty within the space might be part of the issue. As Tsai told Cointelegraph, the current regulatory climate allows crypto businesses to turn to auditing firm only in case of emergency:

“Regulation does not currently require ‘proof of funds’ for stablecoins and for exchanges, which is the main reason these audits aren’t taking place. Mostly, the big four come in and audit companies after they ‘mess up.’”

Indeed, as Martin opines, cryptocurrencies remain in “a precarious situation” in regard to regulation:

“Regulatory systems are primarily reactive and laws haven’t necessarily caught up to the innovation of digital assets quite yet. The financial reporting standards in the US which are set by GAAP (Generally Accepted Accounting Principles) don’t currently directly address the accounting for cryptocurrencies. Nuances like this make auditing business activities involving digital assets and cryptocurrencies inherently difficult.”

The Big Four’s relationship with cryptocurrencies

The Big Four is a commonly accepted term used to refer to the four biggest auditing firms in the world: Ernst & Young (EY), PwC, Deloitte and KPMG. Handling the vast majority of audits for companies around the world, both private and public, they are considered a cornerstone of the mainstream financial world.

Notably, during the past few years, the Big Four have been showing particular interest in the crypto industry. However, all of the major auditors have established long-term blockchain roadmaps to remain relevant in the space.

Related: How Big Four Auditors Delve Into Blockchain: PwC, Deloitte, EY and KPMG Approaches Compared

PwC has arguably been the most active Big Four company when it comes to cryptocurrencies. It started accepting bitcoin (BTC) for its services back in 2017 and announced a training program to enhance its employees’ blockchain knowledge in the following year.

Further, PwC has also recognized the regulatory uncertainty, naming it one of the main obstacles on the road to mass blockchain adoption in its 2018 report entitled “Blockchain is here. What’s your next move?” The Big Four giant had also pinpointed the lack of insurance as another problem hindering crypto businesses in a separate interview with Reutres.

Moreover, PwC has not only recognized the importance of the field, but has started to explore it firsthand. First, in May 2018, the auditing firm invested in VeChain, a major cryptocurrency project specializing in the Internet of Things (IoT), supply chain management and anti-counterfeiting.

Related: PwC’s Pierre-Edouard Wahl: Blockchain Can Bring Positive Competition to Swiss Banking Space

In March 2019, PwC began conducting a trial of its blockchain-powered platform for ensuring the integrity of employee credentials. By the end of the same month, the company had become the top recruiter for blockchain-related jobs on headhunting platform Indeed, being responsible for as many as 40 blockchain-related job offers there (EY had 17, Deloitte had 10, while KPMG didn’t have any offers). PwC had 400 blockchain experts on board in 2018 to cater to cryptocurrency-related clients, according to the Financial Times, while this number could be higher at this point.

“We are devoting significant resources to how we might provide audit services in not just cryptocurrency, but blockchain,” a PwC representative told the publication at the time.

However, PwC wasn’t the first Big Four venture to adjust its auditing tools for the needs of cryptocurrency companies. In that sense, it has been outraced by the competing EY, which rolled out its blockchain analytics program called “Blockchain Analyzer” in April 2018.

So, can PwC’s new solution outshine its rivals in the crypto space and will it actually have an impact on the industry at all?

Details about the new version of Halo

As PwC stated in the press release, the tool newly added to its Halo auditing suite can be used to “provide assurance services for entities engaging in cryptocurrency transactions.”

The firm claims that, after the update, the Halo suite permits PwC to provide independent evidence of private-public key pairing, which is used to establish crypto asset ownership.

“Proof of ownership is really the main blocking point,” notes Tsai of Wave Financial. He told Cointelegraph:

“We had a California state auditor come into the office who struggled to grasp what ‘ownership’ of cryptocurrencies looks like. Auditors are used to custodial statements, paperwork and other forms of ‘proof’. With the blockchain, only your private key proves ownership, which makes it difficult to show ownership without exerting control over the funds (moving them around, etc.).”

Therefore, if Halo can actually prove ownership of funds and auditors can trust the tool, it would “speed up audits and cut costs and headaches,” Tsai concluded.

Raffone also argued that Halo might prove to be efficient, given that it focuses on a specific on-chain audit niche:

“This is a useful tool for sure, focused on transactional history and balances which seems suitable for institutional investors and fund managers, entities that normally require audits relating to financial transactions and assets ownership.”

Further, PwC’s Halo can now reportedly gather information about transactions and balances from blockchains. That, according to Martin of Blockforce Capital, is also a potentially effective feature.

“The Halo platform offers an easy-to-use way for firms to access blockchain information without having to spend manpower and resources that could be better spent somewhere else,” Martin told Cointelegraph, elaborating:

“For instance, the Bitcoin blockchain is open-source and can be viewed by anyone. However, just because the information is available doesn’t mean it doesn’t require a unique skill set to access.”

According to PwC, the upgraded version of the Halo suite is already being employed to support audits of clients involved with cryptocurrencies and assisting companies for which the firm is not the auditor in implementing processes and controls necessary to obtain assurance reports from their auditors. Theoretically, that could ease cryptocurrency-related audits not only for PwC, but the industry at large.

Still, the Big Four firm notes that the tool has its limitations: namely, client’s control environment, and, “at this stage,” the breadth of tokens supported by Halo. The software reportedly supports bitcoin (BTC), bitcoin cash (BCH), bitcoin gold (BTG), bitcoin diamond (BCD), litecoin (LTC), ether (ETH), OAX (ERC-20 token) and XRP.

“These considerations will be key when determining whether we are comfortable to accept an audit engagement,” PwC wrote in the press release.

It is currently unclear whether Halo is deployable in all 158 countries that PwC claims to be operating in. Cointelegraph has reached out to the Big Four company to clarify this, but has not heard back as of publication.

Related: Daniel Diemers From PwC Strategy& Switzerland: Adoption of New Technologies Requires More Education

Experts suggest that the vast geography should not be a problem for Halo, however. ACCA’s Vaidyanathan reminded that the international auditing standards (ISAs) apply globally when asked about potential clashes.

Raffone of Finetiq, in turn, stressed the technical nature of PwC’s solution:

“The audit function provided by Halo is purely technical and doesn’t seem driven by any regulatory requirement, therefore it seems a ‘upon request’ service that can be deployed across jurisdictions. Although I don’t think Halo fills any regulatory need per se currently, it is certainly comparable to similar investment fund audit services and once the crypto industry becomes mainstream, I would expect this sort of audit service to be required by regulators.”

Martin maintains a similar position. According to the Blockforce Capital’s CIO, PwC should be well-poised to take on the regulatory complexities, given its experience with running auditing and accounting practices in multiple countries:

“While adjusting to different jurisdictions is difficult, PwC is in a great position to take on the task. They are a highly respected accounting firm and have the resources to apply to such an endeavor.”

Do things get better as we go along?

In the end, the problem seems to come down to the aspect of adoption: While the cryptocurrency industry continues to grow, the recognition from mainstream corporations — such as the Big Four — could speed up this process. That is why PwC’s work with Halo is “validating” the institutionalization of the crypto space, in Tsai’s view.

On the other hand, the need for crypto-specific audits could be fulfilled even without the participation PwC, Deloitte and others, according to what Raffone told Cointelegraph:

“A whole host of specialist firms are emerging as leading crypto audit service providers, challenging the Big Four and their cost structure. Even IBM is getting in the game with a recently patented solution to audit blockchains.”

While time will tell if Halo turns out to be a viable solution for the crypto space, the remaining Big Four players have now been challenged to release their own software that would be on par with Halo in terms of functionality.