Ultimate Resource For The Gemini Crypto Exchange (#GotBitcoin)
Gemini, the crypto exchange founded by the Winklevoss twins, has updated its wallet infrastructure to include support for Segregated Witness (SegWit) bitcoin (BTC) addresses. The news was revealed in a Gemini blog post on April 15. Crypto Ultimate Resource For The Gemini Crypto Exchange (#GotBitcoin)
SegWit is a scalability solution for the bitcoin network, first activated in late 2017. As well as increasing block size, Segwit moves the “witness” signature data to a separate location. It thus solves what is known as transaction malleability, which is conducive to second-layer solutions like Lightning Network (LN).
Claiming that Gemini is the first major crypto exchange to launch full — rather than partial — SegWit support, the blog post’s author, Brian KimJohnson, wrote that Gemini will enable SegWit addresses to be used for both bitcoin deposits and withdrawals. The platform has also launched support for transaction batching, he reported.
KimJohnson also wrote that Gemini did not make the decision lightly and that its “choice to use native SegWit addresses was based on block space savings as well as safety concerns.”
His arguments in favor of SegWit emphasize that with its segregation of digital signatures from transaction data, “bitcoin transactions weigh around 30–40 percent less, thus taking up less ‘block space’ on the network and reducing the transaction fee.”
The blog post lastly underscores that the support will lay the groundwork for solutions such as LN — a second-layer solution to bitcoin’s scalability limitations, which works by opening payment channels between users that keep the majority of transactions off-chain.
As previously reported, major crypto exchange and wallet service Coinbase and its professional trading platform Global Digital Asset Exchange GDAX — now known as Coinbase Pro — rolled out SegWit support for bitcoin transactions in early 2018.
Both Coinbase Pro and Gemini have recently been included in a newly-launched index for 10 cryptocurrency exchanges from crypto analytics firm Messari. The index, dubbed “Real 10 Volumes,” was evidently created in response to widespread concerns over allegedly rampant fraudulent trade volume reporting among unregulated exchanges.
Cryptocurrency Exchange BitMEX Enables Native SegWit Support
Cryptocurrency exchange BitMEX added support for native segregated witness (SegWit) addresses for Bitcoin (BTC) withdrawals, which lets users pay lower transaction fees.
According to an announcement on Dec. 12, BitMEX now allows its users to withdraw Bitcoin to Bech32 addresses, the one that natively supports the segregated witness standard.
Bitcoin Address Formats
As the announcement explains, the Bitcoin network currently supports three address formats. The first one — Bitcoin’s original address format — is pay to public key hash (P2PKH), which starts with a 1.
The second format is the pay to script hash (P2SH), which allows users to send Bitcoin to an address secured through a script without knowing details about it — such as a multi-signature wallet. This is the kind of address to which BitMEX’s users deposit their funds. P2SH addresses start with a 3.
Lastly, the Bech32 format — also called the native SegWit format — starts with bc1 and allows users to take full advantage of segregated witness scalability, higher efficiency and lower fees. The announcement reads:
“The key advantage of Bech32 addresses is that transaction fees can be saved when spending Bitcoin, which was already sent to a Bech32 address. Therefore this upgrade will not directly result in fee savings when customers withdraw from BitMEX, however in the next transaction, when the bitcoin already withdrawn from BitMEX is spent again, our customers may benefit from lower transaction fees.”
BitMEX also explains that, when spending from an address that is not in the Bech32 format, the user adds around 20 bytes of data to the transaction. The lack of this data in native SegWit transactions saves fees and allows the network to scale more. Overall, native SegWit spends save about 37% compared to traditional transactions and 17% compared to non-native SegWit transactions.
What Is SegWit
SegWit, an update implemented in August 2017, protects against transaction malleability and increases block capacity by separating the data required to check transaction validity (witness) from the list of transaction inputs.
SegWit also added a weight parameter that limits the block size to 4 million weight units, which allowed blocks that are larger than 1 MB without a hard fork. Furthermore, this update was the last change needed to implement the Lightning Network.
The next wallet upgrade planned by BitMEX is enabling non-native SegWit support on its P2SH addresses. The announcement reads:
“As explained above, SegWit can result in significant blockweight savings of around 25% to 40%, however in the case of BitMEX, the savings will be even higher. A BitMEX withdrawal is a 3 of 4 multi-signature P2SH transaction. […]. The benefits of applying the witness discount to these large transactions is far greater than for typical non-BitMEX transactions. Therefore BitMEX would benefit from a blockweight saving of around 65% by adopting SegWit. ”
SegWit support is ever increasing. As Cointelegraph reported in November, major global crypto exchange Bitfinex has also added support for Bitcoin Bech32 addresses.
Bitcoin Network SegWit Adoption Hits 66% After BitMEX Embraces Upgrade
More Bitcoin (BTC) transactions now use so-called Segregated Witness (“SegWit”) technology than ever before, the latest data shows.
According to various resources including SegWit.Space, adoption of the protocol has reached up to 66% of all Bitcoin transactions as of Jan. 4.
Two In Three BTC Payments Now SegWit
The volume underwent a significant increase in late 2019, jumping from around 40% in September to nearer 60% in October.
The statistics, however, are subject to variation. SegWit.Space, a dedicated monitoring resource, lists current SegWit propagation as 66%. Other charts, such as transacationfee.info and Woobull, the data resource by statistician Willy Woo, currently put the figure at around 59%.
All three nonetheless agree on the general trend as highly bullish for SegWit, which has had a long road to acceptance since its release in 2017.
Straggler Exchanges Come On Board
Designed to increase the speed and efficiency of Bitcoin transactions and reduce their bulk, SegWit initially saw slow implementation. Bitcoin proponents argued that exchanges reluctant to make an effort to adopt the technology were putting needless strain on the Bitcoin network.
Binance, one of the world’s largest exchanges by volume, is yet to upgrade, and still uses legacy Bitcoin addresses.
The platform’s CEO, Changpeng Zhao, known as “CZ” in crypto circles, claimed in May last year that developers would be working on addressing the issue. In October, well-known Bitcoin support Udi Wertheimer even pledged to personally advertise Binance if SegWit appeared.
Derivatives giant BitMEX, another exchange sector heavyweight, added native SegWit support to its operations last month.
Gemini Launches Firm To Insure Its Own Crypto Custody Branch For $200M
The Winklevoss’ Gemini Exchange has launched an insurance company to cover up to $200 million for Gemini Custody — reportedly the largest amount for any crypto custody service in the world.
Head of risk at Gemini Yusuf Hussain shared the news with Cointelegraph on Jan. 16. The captive insurance company is called Nakamoto, Ltd. and will secure Gemini’s custody business for up to $200 million.
Aiding Nakamoto, Ltd.’s launch were major traditional insurance brokers Aon and Marsh. Gemini’s custodial clients will also reportedly be able to purchase additional insurance from Nakamoto, Ltd. in order to secure their own holdings beyond the general $200 million.
Hussain said the advancement in the company’s custodial coverage will allow a number of Gemini’s institutional clients to continue to meet their own regulatory requirements. He explained that the move “is consistent with Gemini’s approach of being a security-first, compliance-first, and regulatory friendly exchange and custodian.”
Gemini first launched their custody wing in September.
The State Of Insurance In Crypto
Insurance has been a major barrier to crypto investment services looking to court more risk-averse traditional financial players.
Legendary insurance firm Lloyd’s of London has gotten involved, securing hot wallet holdings for Coinbase as well as Kingdom Trust’s custody business.
Speaking of Gemini’s history with advancing insurance into crypto investments, Hussain pointed to Gemini’s 2018 move to insure hot wallet holdings as further evidence of their desire to provide more security in the industry.
Gemini president Cameron Winklevoss stated, “Obtaining meaningful insurance in the crypto industry remains a challenge, and our captive will help to increase our insurance capacity and move the industry forward.”
Ledger Vault, the custody arm of hardware wallet manufacturer Ledger, acquired a crime insurance policy for custodied assets through insurance company Arch Insurance Limited in November 2019. The policy provides up to $150 million in crime loss coverage for users’ digital assets on the platform.
Deloitte Approves Gemini Crypto Exchange in High-Level Security Evaluation
U.S.-based crypto exchange and custodian Gemini has finished a SOC 2 Type 2 evaluation, proving the operation’s security.
“The Type 2 is the highest level of security compliance that any organization can demonstrate,” Gemini’s head of risk, Gemini Yusuf Hussain, told Cointelegraph in an interview about the Jan. 23 announcement.
In preparation for its SOC 2 Type 2 evaluation, Gemini achieved its SOC 2 Type 1 inspection in 2019, completed by auditing giant Deloitte. The accounting behemoth also completed Gemini’s SOC 2 Type 2 inspection, Hussain mentioned.
A regulatory-focused company, Gemini places a high level of importance on compliance and security with the intent of garnering customer trust, Hussain explained.
Indeed, Gemini released an advertisement campaign a year ago, in which one of several slogans to appear on buses and placards was “Crypto needs rules.”
Noting the importance of protection, Gemini’s head of risk said, “Doing security wrong in this industry will result in direct loss of customer funds.”
The SOC 2 Type 2 exam includes Gemini’s trading and investing platform, as well as its custody services, Hussain said. “We’re the only crypto exchange and custodian to demonstrate this level of security compliance of getting a SOC 2 Type 2,” he pointed out.
Additionally, Gemini has plans to undergo a SOC 2 Type 2 evaluation every year going forward, according to a statement Gemini provided to Cointelegraph.
Earlier this month, Gemini launched Nakamoto, Ltd., an insurance company for its crypto custody service.
Winklevoss’ Gemini Cryptocurrency Exchange Scores Another Security Qualification
The Winklevoss brothers’ Gemini cryptocurrency custodian and exchange has obtained a new security qualification, SOC 1 Type 1.
According to an April 21 blog post by the company’s head of risk, Yusuf Hussain, Gemini became the world’s first digital currency custodian and exchange that was granted a Service Organization Control (SOC) 1 Type 1 certification. The examination was carried out by Big Four accounting firm Deloitte.
Meeting High Security Standards
Passing an SOC 1 review means that Gemini’s financial operations and customer reporting controls comply with requirements set by the American Institute of Certified Public Accountants. Basically, the examination proved that Gemini is capable of mitigating the risk of significant error, omission and data loss. Hussain noted:
“While vital to both our exchange and custody platform, the SOC 1 Type 1 is particularly important to our exchange operations, which execute a significant volume of complex financial transactions for our customers. The SOC 1 Type 1 validates the design and implementation of those operations and the integrity of their corresponding reports.”
In January 2019, Gemini completed an SOC 2 security review.
SOC Standard-Compliant Crypto Companies
Some other crypto projects have also undergone SOC evaluationz. Most recently, the crypto custody arm of major United States-based cryptocurrency exchange Coinbase, Coinbase Custody, procured an SOC 1 Type 2 and a SOC 2 Type 2 report by major accounting firm Grant Thornton.
Last September, business advisory company Aprio confirmed major crypto payment services provider BitPay’s compliance with the SOC 2. Last April, blockchain security firm BitGo, which gained an SOC 2 Type 1 certification from Deloitte in 2018, upped its procedures to conform to the Type 2 requirements of the same standard.
While an SOC 1 report provides information on the internal controls relevant to a user organization’s financial reporting, SOC 2 reports provide information on “security, availability, processing integrity, confidentiality and privacy.”
Winklevoss Brothers Reportedly Eye Public Listing For Gemini Crypto Exchange
Gemini may soon become the latest United States-based crypto exchange to pursue a public listing.
Renewed interest in the cryptocurrency market in recent months is seeing more United States-based cryptocurrency businesses consider going public.
According to Bloomberg, Gemini co-founders Tyler and Cameron Winklevoss are mulling a public listing for the exchange, stating:
“We are watching the market and we are also having internal discussions on whether it makes sense for us at this point in time. We are certainly open to it.”
The Winklevoss twins will have multiple means to take Gemini public, including an initial public offering or by merging with a blank-check firm.
Indeed, Bitcoin (BTC) futures exchange Bakkt recently utilized the latter route by merging with VPC Impact Acquisition Holdings — a special purpose acquisition company.
Fellow U.S. crypto exchange platform Coinbase is also reportedly moving toward a public listing via an IPO. The company has already filed a draft registration with the Securities and Exchange Commission and is also in talks with Goldman Sachs.
Gemini recently revealed that it had crossed the $10 billion mark in assets under custody. Back in April 2020, the exchange scored a Service Organization Control certification from “Big Four” accounting firm Deloitte.
Meanwhile, Gemini is set to launch a credit card service with a 3% Bitcoin rebate feature. The company also acquired crypto payments startup Blockrize, which already has a waitlist of 10,000 people for the Gemini credit card.
As previously reported by Cointelegraph, the Winklevoss twins are the richest Bitcoin billionaires, with a combined worth of about $2.8 billion in BTC, according to Forbes. They famously invested $11 million into Bitcoin back in 2013.
Gemini Exchange To Launch Credit Card With 3% Cashback Rewards Paid In Bitcoin
Gemini Credit Card will allow users to earn rewards paid in Bitcoin and other cryptocurrencies.
Users of the Gemini exchange can now sign up for a cryptocurrency rewards credit card that lets them earn up to 3% back in Bitcoin (BTC).
The Winklevoss-led exchange and custodian announced Thursday that the waitlist for the Gemini Credit Card is now open. According to an announcement shared with Cointelegraph, the new card will be launched later this year.
Gemini disclosed that it has acquired Blockrize, a crypto payments startup headed by product developers formerly of American Express, JPMorgan Chase, Google and BitMEX. Blockrize has a waitlist of 10,000 people and they too will receive early access to the Gemini Credit Card.
Blockrize is Gemini’s second acquisition. It purchased Nifty Gateway, a non-fungible tokens platform, in Nov 2019.
Gemini co-founder and crypto influencer Tyler Winklevoss said the new credit card will make it easier for customers to invest in Bitcoin “without changing their existing behavior.”
“Rather than deciding how and when to buy crypto, customers can do so when making their everyday purchases. We’re excited to welcome the Blockrize team to Gemini and work together to continue to mainstream crypto.”
Gemini’s card operates as an ordinary credit card and will be available to U.S. residents in every state. Crypto rewards will be automatically deposited into the user’s Gemini account.
As digital assets continue to pique consumer interest, crypto-focused credit cards are likely to expand further in the coming year. As Cointelegraph reported last month, Visa and BlockFi have teamed up to launch a new credit card that rewards users with BTC.
Tyler Winklevoss Thinks Bitcoin Is Past The Risk Of A US Ban
Bitcoin has likely become too interwoven into the world for a ban to be plausible, says the Gemini CEO.
The United States government has increasingly stepped up its overwatch on crypto in recent years, although an outright ban on Bitcoin is now unlikely — at least according to Gemini CEO and co-founder Tyler Winklevoss.
“I think, if we were back in 2013, this would be kind of an open question,” Winklevoss told podcaster Peter McCormack when asked about regulation and a Bitcoin (BTC) ban during a Friday episode of the What Bitcoin Did podcast:
“I think that the U.S. will never outlaw Bitcoin. There’s too much precedent that’s been set in the courts. The Coinflip order, which was a CFTC [Commodity Futures Trading Commission] enforcement action which was upheld in the courts, considered Bitcoin a commodity like gold.”
Back in 2015, the CFTC referred to BTC as a commodity in the midst of dealing with Derivabit, a BTC options trading platform. According to the CFTC, Derivabit, a product of a company called Coinflip, was not compliant with the governing body at the time.
“We are a New York trust company regulated by the New York Department of Financial Services,” Winklevoss continued, referring to Gemini. “So much would have to be undone,” he said of a Bitcoin ban, adding:
“You’re talking about like companies that are providing careers, building the economy, some of them are going public. They’re going to become drivers of the stock market. To unroll that back is so unlikely to me. Of course it’s not 0%, but it might as well be.”
The crypto space as it is known today began in 2009 with the inception of Bitcoin. Since then, the asset has given birth to an entire ecosystem, with mainstream players becoming involved in various capacities. Regulatory talk has also continued moving forward in terms of providing and enforcing guidelines as they relate to crypto.
Winklevoss additionally mentioned regulators as stakeholders. They have the well-being of companies and consumers in mind, but some also may hold BTC and see it as valuable. He also noted the trend of crypto industry leaders finding their way into government positions.
“I think it’s like such a strong amount of people who believe in this in the U.S. that I think it’s like next to 0% chance that that sort of gets rolled back for whatever reason,” he said, adding:
“I think the same for the U.K. and Europe. Singapore we’re in a licensing process with the MAS [Monetary Authority of Singapore], their top regulator there. They are embracing it. All of the jurisdictions that are free markets and open markets and believe in capitalism, believe in Bitcoin, believe in crypto, and I think see it as an opportunity more than anything than a threat.”
He also pointed out that stopping Bitcoin would essentially require putting significant restrictions on the internet as a whole, which would affect other economic aspects.
Speaking of crypto leaders finding their way to government positions, the Financial Crimes Enforcement Network recently chose a former Chainalysis exec as its incoming acting director.
Gemini Users Can Now Buy Bitcoin With Apple Pay And Google Pay
Crypto exchange Gemini has integrated deposits via Apple Pay and Google Pay to simplify crypto purchases.
Major American cryptocurrency exchange Gemini now lets its users purchase cryptocurrencies like Bitcoin (BTC) with Apple Pay and Google Pay.
According to a Thursday announcement, Gemini users can now connect their debit cards to Apple Pay or Google Pay for buying crypto with fiat on the platform. The firm noted that user funds will be available to withdraw one hour after a purchase was made.
The new feature is available for over 30 cryptocurrencies supported on Gemini, including major coins like BTC, Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH), as well as Ethereum-based tokens like AAVE and Maker’s MKR. “All tokens except for DAI are available for purchase with Apple Pay and Google Pay,” a Gemini spokesperson noted.
The fees while purchasing crypto with Apple Pay or Google Pay are the same as the fees while purchasing crypto using debit cards. The platform retains 3.49% of the total purchase amount from deposits carried out via debit card transfers, while wire transfers and crypto-to-crypto deposits are free of charge.
The cryptocurrency industry has been expanding in recent months in terms of growing integrations with traditional finance payment services like Apple Pay. In February, major crypto payment processor BitPay announced a major Apple Pay integration allowing its users to connect to Apple Wallet and pay for goods and services with digital coins like BTC, ETH and LTC. Crypto payment firm Simplex also enabled Apple Pay users to purchase the COTI cryptocurrency in March.
Gemini To Launch Bitcoin Cashback Rewards On Mastercard Credit Card
The exchange will offer up to 3% cashback in the form of cryptocurrency for users of its upcoming Mastercard credit card.
New York cryptocurrency exchange Gemini announced on Tuesday the pending release of the Gemini Credit Card, which will allow cryptocurrency holders to spend crypto and receive cashback rewards in the form of Bitcoin (BTC) or any other cryptocurrency available on the Gemini platform.
The credit card will be released in conjunction with Mastercard and will be issued by online banking institution WebBank. It is expected to be released this coming summer and has reportedly received over 140,000 sign-ups from waiting customers already, according to the company’s press release.
Gemini joins major cryptocurrency exchanges like Binance and Coinbase in launching a crypto credit card as holders seek a way to utilize their coins in real-world situations. The Gemini card will reportedly offer users 3% cashback on dining purchases, 2% on groceries and 1% on other purchases. The rewards will reportedly be paid back to the user in real-time, at the very moment the transaction takes place.
The president of Mastercard’s North American operations, Linda Kirkpatrick, said the financial services firm was happy to provide more choices for customers by enabling cryptocurrency payments and rewards.
“Our work with Gemini builds upon this position, connecting consumer needs with next-generation assets and delivering a ground-breaking experience that redefines the future of card rewards and benefits,” she said.
Gemini co-founder Tyler Winklevoss said crypto credit cards were a good way to give users a point of entry to the cryptocurrency space without them having to alter their existing spending habits.
“As more consumers look to enter the crypto ecosystem, the Gemini Credit Card gives them an easy point of entry and an effortless way to earn crypto as a reward without changing their daily spending habits,” said Winklevoss.
“Mastercard continues to evolve and meet both industry and consumer demands and commit to the crypto space. We’re excited to partner with them on our first real-time crypto rewards card, further helping to bring crypto mainstream,” he added.
Gemini’s Crypto Custody Tops $30B As Analyst Predicts Coinbase Shares Will Fall To $100
Gemini’s crypto assets in custody have trebled this year which the exchange attributes to surging interest from institutions and asset managers.
The Winklevoss twins’ Gemini exchange now has $30 billion worth of cryptocurrencies under custody as competition heats up among top U.S. exchanges.
In a May 11 announcement, the exchange attributed much of the growth this year to strong demand from institutional clients:
“Tracking with the impressive growth of the crypto market this year and increased participation from institutional investors, we have more than tripled our crypto under custody since the beginning of 2021.”
Gemini works with large asset managers including BlockFi, Blockchange, CoinList, CI Global Asset Management, DAiM, BTG Pactual, Caruso, Eaglebrook Advisors, and WealthSimple.
The New York-based company was founded in 2014 by Cameron and Tyler Winklevoss. In the lead up to rival exchange Coinbase’s April 14 direct listing on the Nasdaq, the pair told Bloomberg they were “considering” taking Gemini public too.
If Gemini or another large exchange were to be listed publicly, it could significantly impact Coinbase’s share price — which has fallen from $328.28 on its first day of trading to $288.46 currently.
Is Coinbase Over-Valued?
Veteran Wall Street analyst and New Constructs CEO, David Trainer, said in a note to clients on Tuesday that he expects Coinbase’s share price to decline to $100 or even lower due to increasing competition. Trainer suggested that Coinbase is currently overvalued, noting its current valuation implies it will exceed the combined annual revenue of Intercontinental Exchange and Nasdaq.
“Investors should expect the stock to continue to underperform, as shares could fall to $100 or less as it becomes clear the company is unlikely to meet the future profit expectations baked into the stock price.”
Coinbase is expected to report first quarter earnings of $3.07 per share on revenue of $1.82 billion on Thursday. Trainer said that even if it exceeded expectations, this would only attract more competitors and drive down future revenues.
“Coinbase will likely not be able to sustain blowout earnings going forward as competition enters the market,” he said.
In April, Trainer warned the mooted $100B valuation for Coinbase was far too high due to stiffening competition from Gemini, Bitstamp, Kraken and Binance.
Figures released in March indicated Coinbase Custody had more than $90B assets under custody by the end of 2020.
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