OVERVIEW OF GLOBAL CRYPTOCURRENCY MARKET
Manifest Benefits of Cryptocurrencies
Transactions in WaterCoin, like other digital currencies, will be recorded and propagated in a blockchain distributed ledger. As a result, transactions in WaterCoin will be trustless, censorshipresistant, permissionless and private. Unlike other forms of asset control or money transfer, once a transaction in WaterCoin is confirmed by the blockchain network, it will become irreversible. As a legally compliant digital currency supported by valuable assets, WaterCoin will utilize best available protocols for digital currencies and will help promote the ongoing change in the way global asset management and financial transactions occur by removing artificial barriers caused by legacy financial institutions, enabling:
- True peer-to-peer payments anywhere in the world
- Minimal transaction fees and processing time compared to traditional banking
- Payments between pseudonymous parties ensuring financial privacy
- Non-reversible transactions preventing chargebacks and fraud
Emerging Regulatory Landscape
The substantial growth in digital currencies over the past few years has received significant attention from national regulators the world over. Notwithstanding, most countries at present affirmatively permit participation in ICOs and the purchase, sale and exchange of digital currencies without government registration or mandated disclosure. Several countries, however (notably China, Russia and South Korea), have enacted legislation prohibiting participation in ICOs or transacting in digital currencies, including transactions on exchanges. The U.S. and Abu Dhabi have published guidance effectively limiting participation in unregistered ICOs to persons holding accredited investor status. Many countries have long-standing laws regarding the issuance of securities which are clearly implicated by the issuance and sale of many digital currencies, though we are not aware of any country which has sought to actively enforce these laws to restrict ICOs except in cases involving fraud. Similarly, many countries have laws restricting the cross-border transfer of currency, which would be implicated by digital currency transfer – though enforcement is often lax or sporadic. A number of countries have taken positions hostile to digital currency and it appears that digital currency transactions by nationals could result in adverse legal consequence: these include Bangladesh, Bolivia, Dominican Republic, Ecuador, India, Iceland, Jordan, Thailand and Vietnam (again, enforcement may be sporadic – though severe).
Because the entities carrying out the WaterCoin enterprise will act as a custodian of reserve Water assets, the operation and maintenance of WaterCoin (like many other digital currencies) is not completely decentralized. WaterCoin’s commitment to regulatory compliance, maintenance of asset reserves and price stability sets the cornerstone for building future innovations that will create a robust platform for new products and services, and support the growth and utility of WaterCoin over the long run. Institutions and individuals who wish to maintain their digital currency holdings in digital form but also seek the most reputable, stable and secure digital currency will see WaterCoin as the best alternative.
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As an emerging digital currency, WaterCoin seeks to be easy to buy, sell, use and hold. In particular (i) WaterCoin exists on the Ethereum blockchain, and avoids the limitations of operating within a less developed blockchain or within closed-source software running on a centralized, private database, (ii) WaterCoin may be used in the same manner as other digital currencies, held as a store of value or transferred from peer-to-peer in a pseudonymous, decentralized, cryptographically secure environment, (iii) WaterCoin can be easily integrated with merchants, exchanges and wallets, (iv) WaterCoin inherits the properties of the ERC20 protocol which include decentralized exchange; clearly defined and auditable contract structures; browser-based, open-source, wallet encryption; and blockchain-based transparency, accountability, multi-party security and reporting functions, (v) the purchase and sale of WaterCoin is less likely to face material pricing or liquidity constraints as the supply of WaterCoin and its supporting Water reserves will expand and contract to maintain an equilibrium price of a single WaterCoin approximating the price of a single cubic meter of Water, and (vi) each WaterCoin is supported by a single reserve cubic meter of Water making its value proposition straight forward and easily understood.