4days ago, 16 May, Thursday
Satoshi Nakamoto is/was an individual, and not a group of people, claims Blockstream’s Adam Back
Consensus 2019 was a lively affair with a host of noted crypto-proponents gracing the event. The conference came days after a major hack hit Binance, while the larger cryptocurrency market continued to make significant gains. The event allowed many popular crypto-proponents to be interviewed. Adam Back, CEO of Blockstream, was one of them. In his interview with Cryptofinder, on the sidelines of Consensus, Back discussed his views on the identity of Satoshi Nakamoto and network decentralization.
Back stated that he strongly believes that Satoshi Nakamoto is/was an individual, and not a group of people. He supported this claim by pointing out the “continuity in coding and writing style” in Satoshi’s emails and papers. Back added,
“The original (Bitcoin) version is implemented on Windows, which is also kind of atypical. Most of the applied crypto and networking programmers or consultants tend to work on Linux.”
Back added that his initial email conversations with Satoshi Nakamoto made the sender seem like an individual “who looked at the (inflation) problem afresh.” Further, Back also discussed the implications of increasing the block size for the crypto industry. He argued that using ‘bandwidth’ for processing transactions can be taxing for developing demographics such as Africa and India. On the other hand, he also said that implementing ‘memory-based processing’ can slow down transaction times as “pointers in data structures tend to use up a lot of space.”
Back suggested the use of satellite bandwidth, which he believes, can help countries with expensive Internet connections and cut processing costs. He added,
“Another way to scale is to have different layers, which can avoid people with different use cases, cost sensitivity, and access to bandwidth to compete for the same resource.”
Crypto.com Partners with Ledger to Provide Custody Solution
Cryptocurrency and payments platform Crypto.com announced this Thursday that it has joined forces with Ledger, a big player in security and infrastructure solutions for crypto and blockchain, to provide its institutional-grade custody solution.
Ledger Vault, the core business unit of Ledger, is a crypto wallet management solution that requires multiple authorisations. Through the partnership, Crypto.com will use Ledger Vault to manage its own funds as well as its clients’ digital assets.
Because Ledger Vault has multi-authorisation rules, the custodian of the wallet is able to create, authorise and broadcast transactions to the chain. This can be done without needing multi-signature participants in the same room.
According to the statement, by doing this, custodianship becomes a process that can be scaled in a fast-moving global market, whilst still being protected against threats to cryptocurrency – such as hacking, human error, etc.
Commenting on the partnership, Kris Marszalek, Co-Founder and CEO of Crypto.com, said: “We are thrilled to work with Ledger and their institutional grade digital asset custody solution – Ledger Vault. With 100% of Crypto.com client funds always held in cold storage, Ledger Vault allows us to operate the business at scale while maintaining the highest standards of security.”
Security Remains Top Concern for Crypto
Security in the cryptocurrency industry has long been one of the biggest threats to the industry. Hacking, in particular, is a threat to both exchanges and traders alike, with even top exchanges such as Binance falling prey to hackers.
“By using Ledger Vault, Crypto.com will give their customers peace of mind that their assets are fully safe and secure. To support long term growth, the proper infrastructure must be in place. People are taking security and governance very seriously and we’re pleased to support Crypto.com in their mission to provide this to their users,” added Pascal Gauthier, the CEO of Ledger.
Ethereum Surges 20%; Will Altcoins Pump When Bitcoin Corrects?
For the third day in a row crypto markets have hit a new 2019 high in terms of market capitalization. This time Ethereum is in the driving seat as it surges 20 percent in a day. Will the other altcoins follow suit when Bitcoin corrects?
BTC Correction Inevitable
Markets always pull back; we have seen it countless times over the past few years. The Bitcoin parabola cannot continue and a correction is inevitable. However, a few hours ago during Asian trading Bitcoin hit another new high for the year at $8,300. This is its highest level for a year aside from a brief spike in July 2018. It has since retraced back to $8,000 where things are holding for the time being.
Ethereum is getting the FOMO today as it pumps a whopping 20%. From an intraday low of $225 ETH surged to $270 before pulling back slightly. This is the highest price Ethereum has seen since August 2018. Daily volume is currently at record levels of over $15 billion which is higher than it was during the 2017 bull run.
Comparatively, however, ETH prices are still on the floor and down over 80 percent from its all-time high above $1,400. Bitcoin has now recovered to a 60 percent drop from its peak of $20k in 2017. As traders take profits from Bitcoin’s recent rally they are likely to look towards lower priced altcoins rather than converting back into fiat.
ETH prices 24 horus – coinmarketcap.com
Altcoins To The Moon
This appears to be what is happening at the moment as altcoins start surging, led by Ethereum. Stellar is a train at the moment, surging over 30 percent today to reach an intraday high of $0.157. XLM has not been at these lofty heights since before the big November dump. As a result it is poised to knock Tether off eighth spot in terms of market cap.
Bitcoin Cash, Litecoin, EOS, Binance Coin, Cardano, Tron, Bitcoin SV and IOTA have all pumped a further 7 percent today as altcoins lift off. Ethereum Classic is shadowing its big brother with a 15 percent surge and NEM has gone to the moon adding 35 percent on the day.
Managing partner at BlockTower Capital, Ari Paul, is extremely bullish tweeting;
“In the last bull cycle, crypto got big enough to threaten securities regulators. In the next bull cycle, it will get big enough to threaten central banks. Things may get ugly. Major shifts in power usually don’t happen without a fight.”
Tyler Winklevoss added to the sentiment with this;
Bitcoin breaking 8k this time feels lot different than the last time. So much progress has been made since then and it's only the bottom of the first inning
— Tyler Winklevoss (@tylerwinklevoss) May 16, 2019
Total market cap for all crypto assets has hit another 2019 high of $264 billion – a level not seen since July 2018.
TIOmarkets Appoints Head of Affiliates & Partnerships
Although still in its pre-launch stage, TIO Markets Ltd (TIOmarkets), a foreign exchange (forex) broker, has managed to secure Eleni Nicolaou as its Head of Affiliates & Partnerships in anticipation for its upcoming official launch.
Although the Financial Conduct Authority (FCA) regulated broker is yet to open its doors for trading, the company is onboarding recruits to lead the company through its launch and beyond. At the company, Nicolaou is working with the management team to create an “industry-leading partnership program”. The aim of this program is to generate traffic for the brokerage once its services go live.
At present, TIOmarkets is in its pre-launch stage and is the FX trading provider of trade.io. At present, the company is offering a 3-month free trading subscription. However, as was highlighted through Finance Magnates, according to management, the subscription period will end soon as they are closely approaching their target of onboarding 10,000 clients.
TIOmarkets Enters FX Industry in Difficult Period
With the broker planning to launch its operations soon, it would be an understatement to say that it is entering into a market that is more difficult than it was a year ago. Brexit and product intervention measures from ESMA has made the FX and CFD industry tricky to navigate.
Commenting on the appointment, Terence Tan, Head of Business Development for TIOmarkets, stated that all professional staff have been carefully selected. “We have handpicked all talent that we believe will help with the positioning of our company as an industry leader.”
According to the statement, Nicolaou specialises in building and maintaining relationships with company partners. This ranges from affiliates to introducing brokers and more. She was raised in Germany.
Speaking on her new role, Nicolaou said: “TIOmarkets is unlike any other broker I’ve worked for. It’s different. I think the low-cost subscription model will really resonate with traders, and the benefits of this will of course trickle over to our partners, too.”
“I admire the exec team of TIOmarkets. They have a huge amount of experience behind them and they want to use that knowledge to make a fresh, effective, successful FX brand. The potential for growth is limitless,” she added.
Polychain CEO Says Facebook’s Rumored Stablecoin Blockchain Should Be Public
Polychain Capital CEO Olaf Carlson-Wee thinks Facebook would be smart to build its stablecoinon a public, open blockchain infrastructure. Carlson-Wee delivered his remarks at the Consensus 2019 panel “To the Moon and Back” on May 15.
Carlson-Wee explained that the blockchain platform he is referring to is one like bitcoin’s, in which the creator relinquishes control over the platform they built. He argues that such an arrangement would be beneficial to the social media giant, saying:
“I think given all the problems that Facebook has had with policing their platform and things like that, I think that the strategic move for Facebook would actually be to build public infrastructure. And that public infrastructure could be incorporated onto all the Facebook platforms, which of course are proprietary. But that public infrastructure, if they don’t try to own it, I think that’s where they will have the most success.”
Carlson-Wee notes that an additional benefit would be that by relinquishing control over the platform, they also avoid liability for controversy that takes place on the platform; he compares the situation to the creation of the internet:
“The people that made the internet aren’t responsible for everything that’s said on the internet.”
The CEO continued to share a broader vision for cryptocurrencies, in which they are used as a common and accessible store of wealth. He stated:
“If big technology companies want to put their resources toward building public peer-to-peer crypto infrastructure, I would be ecstatic.”
As previously reported by Cointelegraph, an anonymous source told Bloomberg that Facebook will roll out its cryptocurrency, purportedly a stablecoin, some time in the third quarter of 2019. Sources at the Wall Street Journal say that Facebook is seeking investments up to $1 billion to fund the upcoming “FB Coin.”
Blockchain adoption will depend on project and industry, says IBM Japan’s Tsuyoshi Hirayama
While numerous non-financial organizations have taken concrete steps to mark their territory in the crypto-ecosystem, the number of organizations joining the domain has skyrocketed in 2019. The latest buzz was created by IBM. Although the tech giant had previously announced its involvement in leveraging blockchain for its future projects, Tsuyoshi Hirayama, Director of Digital Innovation Business Development, IBM Japan, shed light on some recent IBM blockchain developments at the Consensus 2019 conference.
During the interview, Hirayama addressed his interest in working with IBM Japan’s blockchain initiatives, and attributed it as the only reason to join the company. He also stated that his “Hyperledger background and Amazon Web Services experience” could also help IBM in catalyzing innovation.
When asked about IBM’s position in the current market, Hirayama said,
“IBM maintains the highest blockchain technology adoption rate and holds the best financial customers.”
While stating that giants like Microsoft and Oracle are not a competition to IBM in the blockchain space, he added that the inclusion of more companies will only help “users within the overall blockchain community.”
Hirayama was also questioned about blockchain’s commercial use, to which he answered,
“It depends on the project and the industry.”
He also hinted at making blockchain technology available through smart contracts, informing viewers that IBM is leveraging historical data from other industries to implant blockchain-based processes.
Crypto Startup Launches Bitcoin Term Deposit Offering 9% Annual Interest
A Delaware-based cryptocurrency startup called BitLeague has recently launched a Bitcoin term deposit product designed to bring mainstream-like services to the crypto economy and attract new users.
The move was announced at Consensus 2019 and, according to a press release, the term deposit will offer 9% annual interest, with a lock-in period of 3 to 36 months. Adnan Gilani, the company’s president, was quoted as saying:
Our mission is to create a more equal, open financial platform, which brings more benefits to users, grows their wealth, and provides more liquidity to the system. The commercial bank only pays about 2% for one year Certificate of Deposit, we offer 9% fixed rate, this is how we add value to our clients.
The move highlights a new trend in the cryptocurrency space that has been seeing firms launch new products that allow users to earn interest on their cryptocurrency holdings. Crypto lending firm BlockFi, for example, has launched a cryptocurrency deposit accountoffering users over 6% a year in compound interest.
Nexo, a Switzerland-based startup, has also been offering users ‘instant’ cryptocurrency-backed loans, offering investors up to 6.5% interest on stablecoins. Similarly, cryptocurrency wallet Cobo offers options that let users earn income on their crypto holdings.
BitLeague itself is set to also launch a zero-commission trading service in 14 states in the United States, with the goal of helping “people to adopt bitcoin, the next generation sound currency for everyone.”
The firm’s products are notably hitting the market at a time in which bitcoin, the flagship cryptocurrency, is seeing its price surge. According to CryptoCompare data, BTC is now trading over the $8,000 mark, after rising 49% in the last two weeks.
Reserve CEO Predicts Central Banks Will Tokenize, Still Room for Stablecoins
Freeman delivered his remarks at the Consensus 2019 panel “The End of Volatility? Stablecoins on the Rise” on May 15.
During the panel, moderator Joel Telpner, a partner at Sullivan & Worcester LLP, asked the speakers why banks could not simply tokenize their national currency and drive fiat-backed stablecoin services out of business.
Freeman replied that he thinks banks will do this, but will not offer the same privacy of current stablecoin services. He thinks that central banks would want to track transaction history and ownership of the tokenized funds.
However, he argues that wealthy businesses and people will choose a service that offers privacy in their transactions over another that has the only potential upside of being issued by a central bank.
In an interview at the conference with Freeman, a Cointelegraph correspondent asked whether stablecoins such as TrueUSD and Paxos are actually anonymous. Freeman responded that when converting from fiat to crypto and vice versa, your identity is checked and verified. All the transactions in token form, however, are pseudo-anonymous.
Freeman added that Reserve, for its own part, aims to make a “stable bitcoin.” He told a Cointelegraph correspondent:
“We are trying to create stable bitcoin. These other projects that are fiat-backed… they are very useful but they are legitimate trustworthy versions of tether, they are not stable versions of bitcoin. And the critical piece is that they are missing is that if you want to be a stable version of bitcoin is that everyone can see that the thing is just there, in reality, and can not be shut off no matter what anyone thinks of it.”
Pseudo-anonymity is the term used to describe the privacy offered by cryptocurrencies such as bitcoin (BTC), since bitcoin balances and transactions are public, even though there is no public identity associated with the addresses involved.
As previously reported on Cointelegraph, bitcoin developer Pieter Wuille has recently published two proposals for a taproot soft-fork, which aims to provide more privacy for bitcoin users by hiding transaction details via techniques involving the Merkelized Abstract Syntax Tree and the Schnorr signature scheme.
2020 Presidential Hopeful Andrew Yang Says Regulators ‘Owe’ Clarity on Rules for Crypto Industry
Presidential contender Andrew Yang took the stage at Consensus 2019 on Wednesday, facing a friendly (if not slightly boisterous) crowd as he discussed bitcoin, blockchain and his bid for the White House.
Amid jokes about a possible YangCoin, Yang essentially pitched himself as a sympathetic friend of the crypto community in an appearance that came weeks after his campaign issued a policy statement on digital asset regulation.
He also opined on the declining influence of traditional media, the threat of climate change, his Freedom Dividend pitch, and current U.S. president Donald Trump (“The opposite of Donald Trump is an Asian candidate who likes math.”)
As CoinDesk reported in April, Yang promised “clear guidelines in the digital asset world so that businesses and individuals can invest and innovate in the area without fear of a regulatory shift,” a position that he reiterated during his onstage conversation with Coin Center’s Neeraj Agrawal.
He argued that the current framework in the U.S. is unclear and unfair to people working with the technology, saying:
“If you’re a builder it’s just ‘look, tell me what the landscape’s going to look like and we’ll figure it out from there’ but no one knows what the landscape will look like.”
For the record, Yang told CoinDesk after his talk that he doesn’t own any crypto but that he has some funds in a vehicle which has some crypto holdings.
On regulators’ practice of setting policy through enforcement actions rather than issuing guidance, Yang told CoinDesk:
“I think it’s unfair to folks and I think it’s a clear emblem of the U.S.’s approach, and [customers] ask ‘what the heck’ … It’s one thing that they [regulators] come down when there’s clear guidelines [but there aren’t in crypto]. So the regulators owe us some degree, owe the community some degree of clarity.”
Similarly, Yang acknowledged the digital privacy concerns that motivate many crypto users, telling the audience: “I’m sympathetic to members of the community who want to have more of these transactions occur in a non-monitored manner or context.”
Yang also offered some more light-hearted advice for crypto advocates. “Don’t eat, sleep and breathe [crypto] too much. Every once in a while go on a hike,” drawing laughs and a response from Agrawal: “I guess I should do that.”
‘One of the key technologies’
Looking ahead to his possible occupancy in the White House, Yang called blockchain “one of the key technologies” that he envisions forming part of a next-generation economy, and reiterated that he would be a friend to the industry should he prevail in the 2020 vote (not to mention the crowded Democratic Party primary, which begins in earnest this summer when the official debates begin).
“The work you’re doing is difficult…but it is the future,” he said. “If I’m in the White House oh boy are we going to have some fun.”
In the follow-up interview, Yang also highlighted the question of how tokens are classified (whether they’re commodities, securities, or something else), and reckoned that his push for clarity would in part focus on this area specifically.
Speaking to CoinDesk after the appearance, Agrawal struck a positive note about Yang’s perspectives on the technology and the regulatory hurdles the industry faces.
“It was remarkable to see a candidate think through the cryptocurrency policy issues as deeply as Andrew Yang has, and I think this bodes well for cryptocurrency leadership,” he said.
Study Finds Most Ransomware Solutions Just Pay Out Crypto
A study by ProPublica found that most ransomware solutions providers have one weird trick for getting rid of hackers – paying them off.
Ransomware activity is growing weekly according to experts at Coveware . The result? Companies who just want to pay the ransom and move on.
According to Coveware, ransomware attacks were up in Q1 2019:
In Q1 of 2019, the average ransom increased by 89% to $12,762, as compared to $6,733 in Q4 of 2018. The ransom increase reflects increased infections of more expensive types of ransomware such as Ryuk, Bitpaymer, and Iencrypt. These types of ransomware are predominantly used in bespoke targeted attacks on larger enterprise targets.
Once hackers encrypt an infected computer, however, the real question is how to unlock your data. ProPublica found that many data recovery firms simply pay the ransom and then charge a premium for their trouble.
Proven Data promised to help ransomware victims by unlocking their data with the “latest technology,” according to company emails and former clients. Instead, it obtained decryption tools from cyberattackers by paying ransoms, according to Storfer and an FBI affidavit obtained by ProPublica.
Another U.S. company, Florida-based MonsterCloud, also professes to use its own data recovery methods but instead pays ransoms, sometimes without informing victims such as local law enforcement agencies, ProPublica has found. The firms are alike in other ways. Both charge victims substantial fees on top of the ransom amounts. They also offer other services, such as sealing breaches to protect against future attacks. Both firms have used aliases for their workers, rather than real names, in communicating with victims.
Ransomware is getting worse.
After US Attorney General traced and indicted two Iranian hackers for releasing ransomware called SamSam, authorities hoped the prevalence of attacks would fall. Instead, it rose, beating 2018 levels considerably.
The reason, many believe, is because ransomware is so lucrative. Hackers can launch an attack and then, when the victims discover the hack, they negotiate briefly with companies like MonsterCloud and others to unlock the computers. However, many of these companies offer recovery methods and many security researchers work on free methods this one for the popular WannaCry ransomware.
Unfortunately, the hacks are getting worse and the software necessary is getting more complex.
Coveware admits to actually negotiating with scammers. They’ve found it to be one of the simplest methods for getting data back. The concern, however, is that these efforts are inadvertently funding terrorism. Further, they write, it is taking longer to decrypt hacked computers, thanks to new versions of the ransomeware. In Q1 2019, wrote Coveware, the “average downtime increased to 7.3 days, from 6.2 days in Q4 of 2018.”
Coveware CEO Bill Siegel has found that the average ransomware recovery isn’t really a negotiation with “terrorists” as US Government officials believe. They’ve negotiated a “few hundred” ransomware cases this year and find that each hacker is different and often just frustrated.
“Our sense based on our study of the industry and experience is that the vast vast majority are relatively normal people that don’t have legal economic prospects that match their technical abilities,” Siegel said. “They also live in parts of the world that are beyond the jurisdiction of Western law enforcement, and are ambivalent about stealing from the West.”
Their process for talking with the hackers is also quite precise.
“We study their communications patterns so that we can build up a database of experience. There is a surprisingly small group of threat actors that are active at any given time, so identifying them is relatively straight forward. From there, we have scripts and tactics that we have honed over our experience. We draw on those to develop a negotiation strategy on behalf of our client. We know the hackers based on the profile and patterns they exhaust. We don’t communicate with them outside of representing our clients in a negotiation. All of the data exhaust we create from our cases is provided to law enforcement on a quarterly basis as well.”
Zohar Pinhasi of MonsterCloud said his company worked hard to use both methods – recovery and ransom.
The recovery process varies from case to case depending on the scope and nature of the cyber attack. Our methods for achieving data recovery and protection are the product of years of technical experience and expertise and we do not disclose the process to the public or to our customers. That is communicated clearly up front. However, what I can tell you is that we are a cyber security company, not a data recovery company. We have vast knowledge and experience dealing with these criminals, and we spend countless hours staying atop their evolving methods in order to provide our clients with protections against all future attackers, not just the one infiltrating their data at the time they come to us. We offer a money back guarantee to any client if we are unable to recover their data, and to date we have not had a single client report a follow-up attack from the same criminals or any other attacker.
While sending a few thousand BTC to a strange address might not sit well with many victims, it still looks like the best way to reduce downtimes. After all, it’s the organization’s fault for catching the ransomware bug in the first place. Prevention, as they say, is often better than the cure.
Blockchain Project Thundercore Releases Code for ‘Pala’ Consensus Protocol
Public blockchain platform provider ThunderCore has just released proof-of-concept code for a new consensus protocol, dubbed Pala, on GitHub.
According to Elaine Shi, chief scientist for ThunderCore, the work represents “a dream consensus protocol.”
As stated on the newly released GitHub page:
“Pala is a byzantine fault tolerant consensus protocol…It can achieve low latency and high throughput in a partially synchronous network setting.”
In layman terms, for blockchains that use a system of block creation and transaction validation known as proof-of-stake (PoS), Pala is way in which to switch out certain bad actors from the network without sacrificing speed or liveness.
ThunderCore was previously reported by VentureBeat to have raised $50 million in their pursuit of a highly-scalable PoS blockchain. The startup’s public blockchain network, also called ThunderCore, launched this month and is fully compatible with applications running on the world’s second largest blockchain platform, ethereum.
The ThunderCore blockchain also leverages the ethereum network for chain finality.
On the newly released ThunderCore blockchain, bad actors in the PoS system are detected and switched out by leveraging finality on the ethereum blockchain. The ethereum blockchain essentially acts as a network for the ThunderCore blockchain to fall back on should consensus be broken.
However, confirmations of blocks and transactions on the ethereum blockchain takes roughly 10 minutes to generate, according to Shi.
“When we want to use the slow chain for the fall back detection…we are going to suffer from slow chain confirmation times,” said Shi. “This is what ThunderCore is doing right now.”
With Pala, ThunderCore is able to rotate out bad actors without touching the “fallback” chain. Shi emphasized that Pala will be integrated into ThunderCore’s mainnet network once fully tested.
Shi told CoinDesk:
“Open-sourcing the Pala protocol is an important milestone for us. It means other projects can use the protocol for other blockchain platforms if they need fast consensus.”
World’s Fifth-Largest Electrical Company Is Using an Ethereum Dapp
One of the world’s largest electrical companies is teaming up with ethereum app iExec on a new test.
EDF, the fifth largest electrical utility company with a $33 billion market cap, has launched its visual simulator software GPUSPH on iExec, a decentralized application that operates on ethereum mainnet. With this, EDF can test how the program operates on a blockchain rather than a more normal computing environment.
Specifically, the simulator explores a field called “smoothed particle hydrodynamics” for modeling fluids. It’s technical in nature, but the general idea is that the GPUSPH application is useful for studying all sorts of things, like water dams, for example, or even lava cooling. EDF is trying to determine whether ethereum adds any benefits to the simulator, which typically runs on a GPU.
As EDF blockchain engineer Gilles Deleuze told CoinDesk:
“In a wider perspective, […] development of distributed computing is a credible scenario for the future, and blockchain may be a nice lever in this scenario. So, let’s explore it.”
Originally an extension of a decade-old research project, iExec is one of the longer-running ethereum apps, launched in 2016 to explore the concept of cloud computing on the blockchain. While the world of cloud computing is currently dominated by large companies, like Amazon, they’re trying to decentralize the form of computing on ethereum.
iExec head of innovation and adoption Jean-Charles Cabelguen argued to CoinDesk that the advantages of using iExec for GPUSPH are many, including clear monitoring of the state and computational power of the app and increased “resilience” of the app, as it’s running on a decentralize network.
But perhaps one of the most pressing problems ethereum faces is that it doesn’t scale well, at least not yet. But iExec argues they’ve come around with their own scaling solution to at least ensure their dapp is scalable.
“The heavy computing is done off-chain and does not overwhelm ethereum. Afterward, blockchain is used to reach a consensus on the validity of computation’s results. A hash of this result is stored on the blockchain,” Cabelguen said.
That said, EDF thinks the technology is worth exploring. Deleuze even added that EDF plans to launch other experiments on iExec in the future, stating:
“The plan is to continue with other open scientific codes requiring possibly other types of workerpools.”
5days ago, 15 May, Wednesday
Staking-as-a-Service Startup Raises $2 Million From DHVC, Plug and Play
InfStones, a Silicon Valley staking startup, has raised a $2 million seed round to expand its block-producing capacity in proof-of-stake (PoS) networks.
The company said in an announcement on Wednesday that leading investors in the round include venture capital firms such as Danhua VC (DHVC) and Plug and Play Ventures, which is known for investing in the early stages of PayPal and Dropbox.
InfStones, which was founded in 2018 and operates as a full node and block producer for PoS blockchains, said it will use the new equity financing to expand its existing five-person team and bring its service to additional PoS chains.
“While proof-of-work has become stable and well-established thanks to early participants, we believe PoS will be the driving force to bring exponential growth to the blockchain industry in the future,” said InfStones founder and CEO Jonathan Shi, a former engineer at Oracle.
Currently, the firm is a block producer for nine PoS blockchains including EOS, Tron, Cosmos and Tezos. The company aggregates PoS token holders’ votes to participate in the block producing process of PoS chains in order to receive mining rewards.
InfStones then distributes these rewards to holders who cast votes but takes a 10–30 percent commission, depending on the design of the different chains.
For instance, ranking data for the EOS blockchain shows InfStones’ full node has over 90 million votes, staking over $450 million worth of EOS on its node, based on the current price of EOS.
In addition to its investment, Shi said DHVC helped InfStones get large EOS holders to use the service for staking EOS.
Coinbase Custody Now Has $1 Billion of Crypto Under Management, CEO Says
Coinbase CEO Brian Armstrong said the exchange’s custody service, Coinbase Custody, has $1 billion in assets under management (AUM) in just 12 months after launch.
In an on-stage discussion at CoinDesk’s Consensus 2019 event on Wednesday, Armstrong was asked by panel moderator and Wall Street Journal reporter Paul Vigna about the status of institutional involvement in the cryptocurrency industry.
“We launched our custody 12 months ago, we’ve just crossed $1 billion AUM or institutions, 70 institutions have signed up, adding about $150 million AUM a month, so, to a large degree that has been a success.”
He added the institutions are not merely interested in having their funds sit idle while in custody either.
“They want to be staking and voting, doing governance on-chain,” Armstrong said. “I think that will grow rapidly.”
He also noted bitcoin is still the main asset of interest for institutions, but the interest for other cryptocurrencies is growing, too, so Coinbase currently offers services for 30 coins for institutions, including staking-as-a-service for some.
Both panelists, Armstrong and Union Square Ventures partner Fred Wilson, noted the institutions involved are not necessarily the big, traditional players most are familiar with, such as BlackRock.
“The token funds and venture funds will make up the first two big institutional funds,” Wilson said. “For them [traditional institutions] to take their chips and go all in, I don’t see that in the next year or two.”
“When people read in the Wall Street Journal that institutions are coming to crypto they think Goldman is coming, but in reality, maybe 100 token funds in the U.S. and 100 in Asia are all in so far.”
The Coinbase trading platform geared toward more advanced traders, Coinbase Pro, is seeing notable institutional involvement as well, Armstrong said, with more than half of its trading volume now coming from said institutions.
“Sixty percent of our trading volume is from institutions,” Armstrong said.
While so far a success, Coinbase being the sole custodian of user funds is not the exchange’s end goal.
Armstrong envisions users themselves taking a more active role in the custodial process, stating:
“I would love to be in a world where people could self-custody … and still participate in exchanges, we’re talking to people at StarkWare about that.”
ConsenSys-Backed Kaleido Launches B2B Tech Stack With ‘Plug-and-Play’ Features
Kaleido has launched a new business-to-business (B2B) tech stack with a view to helping companies “reinvent their core payment systems and supply chains,” according to a news release obtained by Cointelegraph on May 15.
The ConsenSys-backed company said the stack brings together the necessary tools and technologies that businesses need to build modern networks delivering operational improvements and new revenue streams.
According to Kaleido, businesses that use its platform will easily be able to digitize assets by issuing custom tokens. Other features, including an asset registry, document store and app-to-app messenger, are “plug and play” — and the company says this means enterprises will no longer need specialized skills in order to build and benefit from decentralized applications.
Steve Cerveny, the founder and CEO of Kaleido, said:
“Blockchain has brought a radically better way for businesses to solve an age-old problem of transacting with trust and transparency. The leading networks we’re partnering with are spotting pockets of this future before everyone else does.”
Kaleido claims it has helped multinational corporations including T-Mobile, Heineken, Sony, Shell and Fox implement blockchain-based solutions in their businesses.
In November, Kaleido and Amazon Web Services launched a marketplace to help enterprises implement blockchain solutions — a move designed to eliminate the custom code required to build blockchain projects.
Last May, the Enterprise Ethereum Alliance released its architecture stack, which was designed to standardize specifications for Ethereum-based business applications. The group has hundreds of major companies among its members, including Santander and JPMorgan.
Luxury Fashion Brand Alyx to Use Iota’s DLT for Supply Chain Tracking
Per the report, Iota’s system will be implemented in partnership with global manufacturing company Avery Dennison to allow Alyx’s customers to have full insight into their supply chain. By scanning QR codes with an app, it will reportedly be possible to track the course traveled by the item from its creation to the point of sale.
The Block claims that data concerning the apparel’s production location, date and raw materials will be stored on Iota’s DLT, allowing users to consult it. Debbie Shakespeare, senior director of sustainability and compliance at Avery Dennison, reportedly commented:
“Brands and consumers can know that the information they are being shown about the garment’s creation process is 100% accurate and can be trusted implicitly.”
According to fashion news outlet GQ, Alyx creative director Matthew Williams explained that the brand puts a strong emphasis on sustainability by using recycled materials and, for instance, a leather dying process which consumes CO2. Lastly, he announced:
“We're taking it a step further: we're going to be the first brand to introduce blockchain technology this month in Copenhagen.”
SEC Slaps Blockchain Author Alex Tapscott, Firm With Fines Over Securities Violations
The U.S. Securities and Exchange Commission (SEC) has fined blockchain author Alex Tapscott and his investment firm NextBlock Global over securities violations.
The SEC says that Canada-based NextBlock had been offering securities that were not registered with the SEC “in any capacity” and that false misrepresentations were made about the firm when soliciting investors. The agency has therefore ordered Tapscott, co-author of the book “Blockchain Revolution,” to pay a $25,000 penalty and also issued a cease-and-desist on further securities violations by him or his firm.
The SEC said it had taken into account the remedial acts “promptly undertaken” by Tapscott and NextBlock when agreeing the terms of the settlement. It also said that, following the firm’s payment of a 700,000 Canadian dollar (roughly US$520,000) administrative penalty, it had not imposed a further civil penalty on the company.
NextBlock was launched in 2017, raising $20 million via convertible debentures – a type of debt instrument – at the time to invest in blockchain and cryptocurrency companies, the commission said.
The SEC further said that, in order to solicit funds from investors in the U.S., Canada and elsewhere, NextBlock and Tapscott falsely claimed that as many as four “prominent” individuals in the blockchain industry were serving as advisors to the firm.
NextBlock and Tapscott also initiated a second funding round and hired two Canadian investment banks as advisors for the effort, as well as to help list the firm on the Toronto Stock Exchange, according to the order. However, due to media reports of misrepresentations to investors, NextBlock canceled the round and its initial public offering plan.
Later, NextBlock voluntarily initiated court proceedings in Ontario to wind up operations and liquidate its existing digital asset holdings, and return the funds to debenture holders with principal investment plus profits (approximately 140 percent as of March 2019).
Tapscott has voluntarily surrendered his right to collect his share from NextBlock’s profits worth over $2 million, an amount that was retained by the firm and formed part of the distributions to debenture holders, the order states.
Bitcoin’s [BTC] rally has received more attention from retail and institutional investors, says Coin Shares’ Meltem Demirors
Coin Share’s CSO, Meltem Demirors, spoke to CNBC and explained what she thinks of Bitcoin’s sudden surge in price and how institutional/retail investors are reacting to this.
Meltem Demirors said that there could be an indirect correlation between the trade wars and questions about global growth; also adding that it could be a factor in Bitcoin’s recent rally.
“There are three main themes going on, one, there is a lot of global macro unrest, there is a lot of volatility in the market; times have changed, the end of 2018 was rough in the capital market, now we are seeing a lot of volatility in tech stocks and so maybe Bitcoin is starting to look, not so crazy to investors.”
The second main theme that Demirors stressed was privacy. She said that there were big efforts on the Hill, especially with new privacy regulations coming, the potential breakup of Facebook, and people talking about Apple’s anti-trust suits.
Finally, Demirors spoke about the third theme, which was performance of “tech stocks.” She added,
“We’ve seen a lot of tech IPOs that haven’t performed the way investors expected. So again, the idea of a new asset class, the idea of Bitcoin connecting with legacy finance is really appealing for class investors looking for innovation and high growth.”
Further, Demirors spoke about Bitcoin’s price and whether it will climb higher in the near future. She said that the price of Bitcoin corresponded to the inflows into Bitcoin and that the price would reflect positively as more people buy and hold it.
According to Demirors, Square, which is the primary way retail investors can access Bitcoin, reported an increase in Bitcoin purchasing volume. This signified
Upbit Operator Dunamu Invested $46 Million in Blockchain Startups in Last Year
South Korean fintech firm Dunamu, operator of cryptocurrency exchange Upbit, says it invested 55 billion won ($46 million) in 26 blockchain startups over the past year.
The firm said Wednesday that the investments have been made mainly via its subsidiary Dunamu & Partners, which was launched in March 2018. At the time of the launch, the firm announced a three-year plan to invest 100 billion won ($84 million) in the blockchain industry.
The investments have been into companies that are focused on developing core blockchain solutions, as well as those related to fintech and games, Dunamu said, which also operates the Kakao Stock trading app.
Portfolio companies now include stablecoin-based payments network Terra, fintech startup Rainist and gaming software firm Dalcom Soft, according to the announcement. Peer-to-peer lending platform Honest Fund, online travel agency Tide Square and blockchain-based investment platform Finhaven have also seen investments from Dunamu.
Ryan Lee, CEO of Dunamu and Partners, indicated that the firm will continue to invest in blockchain and fintech startups this year, regardless of their size, stage and region.
“Our goal is to contribute to the healthy growth of the blockchain ecosystem by actively investing in startups with world class technology and services with potential for real-life implementation,” said Lee.
In particular, the firm will focus on companies that will help drive mainstream adoption of blockchain-based services and mobile fintech services, as well as those centered around individual content creators, according to the announcement.
Indeed, earlier this year, Dunamu backed a $3 million seed round for blockchain startup Band Protocol, which incentivizes reliable content producers with token rewards and staking.
The firm added Wednesday that it also partnered with games developer Neptune in April 2018 to set up a 100 billion won ($84 million) fund to invest in blockchain-based gaming companies.
Congressman Emmer to Reintroduce Tax Bill Focused on Crypto Hard Forks
U.S. Representative Tom Emmer plans to reintroduce a bill that would benefit taxpayers who hold cryptocurrency resulting from blockchain network splits, or hard forks.
Emmer revealed his intention to reintroduce the “Safe Harbor for Taxpayers with Forked Assets” bill, first announced in 2018, during a panel on the relationship between government and technologies at Consensus 2019 on Monday.
The Minnesota congressman was joined on stage by Chamber of Digital Commerce president and founder Perianne Boring, Fidelity Investments deputy general counsel David Forman, and CoinDesk advisory board chairman Michael Casey.
For his part, Emmer reaffirmed his commitment to supporting the development and use of blockchain tech and cryptocurrencies, and bemoaned the complex network of regulators that the industry must navigate, pointing to the CFTC, the SEC, and others who “all have bits and pieces” of the regulatory picture, but have failed to provide regulatory certainty.
He indicated that Congress’ job is “getting government in line” such that the blockchain industry can generate new opportunities and innovations.
In practice, the certainty that Emmer and his Blockchain Caucus, co-chaired by Representatives David Schweikert and Darren Soto, have sought to provide has come in the form of measures like proposing that crypto miners should not be classified as money transmitters.
CoinDesk has further learned that the Safe Harbor for Taxpayers with Forked Assets bill would prevent the IRS from penalizing unreported crypto assets gained through hard forks until the IRS issues clear guidance on their regulatory treatment. The bill may also include airswaps, which were not covered in the bill’s earlier iteration.
However, Emmer noted that Congress still has some work to do before it could effectively advocate for the blockchain industry.
“You have members who have quite frankly a range of understanding and backgrounds, and there isn’t a lot of range when it comes to blockchain technology,” he said. “A lot of them have these preconceived notions, all they’ve ever heard of is the Silk Road.”
During the panel, Boring contended that the U.S. government lags behind other areas of the world in its exploration of blockchain. The EU, for example, has already invested 80 million euros in blockchain initiatives, she said, adding that they plan to invest 340 million euros by 2020.
Boring also pointed to China as being at the cutting edge of blockchain development, citing a state media report which called blockchain “10 times more important” than the internet.
Both Emmer and Forman emphasized that it’s important for the blockchain industry to make its voice heard and push for a better informed government.
“Talk to your regulators,” Forman advised the audience, while Emmer added: “We need your story.”
Bank of America CTO Catherine Bessant: We Haven’t Found a Blockchain Use Case in Finance
Catherine Bessant, chief technology officer at Bank of America, admitted that the institution has yet to find blockchain use cases for the financial services sector. Bessant made her comments during an interview with Bloomberg published on May 14.
Speaking to Bloomberg, Bessant said that — while she believes this technology to hold a lot of potential — blockchain is “full of sound and fury, yet to signify something.” Still, she noted that she believes blockchain has practical applications:
“I believe that there are use cases that makes sense today, we have yet to find them at scale in financial services. We’re experimenting heavily, we have more patents than any other financial institution in the blockchain space, but have yet to find something that makes a difference for our clients or our customer.”
The views expressed by Bessant are seemingly in contrast with what she said in March, when she told CNBC that she is privately bearish on blockchain despite the bank holding more patents than any other financial institution.
According to Crunchbase, Bank of America has an estimated revenue of $91.1 billion and is one of the world’s largest financial institutions, serving approximately 51 million consumers and small business relationships.
Bitcoin Price Rally Stalls As Ether, XRP Shine
Alternative cryptocurrencies are flying high while bitcoin is having a breather above $8,000.
Notably, ether (ETH) has hit a seven-month high of $235 and looks set to extend gains further toward $256 (Sept. 22 high) in the near-term. XRP, meanwhile, has confirmed a bull breakout.
With hourly chart indicators diverging in favor of the bears and the daily relative strength index (RSI) reporting overbought conditions, bitcoin is looking increasingly vulnerable to a price pullback to the key rising trendline, currently placed above $7,200.
Bitcoin could challenge Tuesday’s high of $8,335 and possibly break toward $8,500 if the lower highs pattern seen on the RSI is invalidated.
With bitcoin (BTC) price rally showing signs of exhaustion above $8,000, investors have begun diverting money into relatively cheap alternative cryptocurrencies (altcoins).
The world’s leading cryptocurrency by market value jumped to a 10-month high of $8,335 in the early European trading hours on Tuesday. The rally, however, stalled with BTC witnessing a minor pullback to lows near $7,600 in the U.S. trading hours.
As of writing, BTC has returned to levels just below $8,000, representing little change on the day.
While bitcoin is showing signs of bullish exhaustion, the altcoin market is a sea of green with prominent coins like ether – the second largest cryptocurrency by market value – rising to $235 on Bitstamp, its highest level since Oct. 1, 2018.
At time of writing, ether is trading at $232 – up 12 percent on the day – having witnessed a golden crossover, a bullish cross of the 50-day and 200-day moving averages (MAs) last month.
Even ether’s strong performance, however, is being overshadowed by XRP, which is the best performing top cryptocurrency of the last 24 hours.
The price of a single XRP jumped to $0.45 earlier today, the highest level since Dec. 24, confirming a double bottom breakout (a bearish-to-bullish trend change) on the three-day chart. As a result, the third largest cryptocurrency could rise further toward $0.50 in the near-term.
XRP has appreciated by 14.7 percent in 24 hours, with prices hitting 4.5-month highs near $0.45 across major cryptocurrency exchanges.
Stellar (LM), cardano (ADA) are also up by nearly 12 percent each.
Bitcoin cash is flashing red, having hit a six-month high of $410 on Tuesday.
While major altcoins have found some love, the flow of money is also heading towards lesser-known cryptocurrencies, as seen in the chart below.
Project Pai, ranked 71 as per market capitalization on CoinMarketCap, has appreciated by 28 percent in the last 24 hours and is currently the best performing top 100 cryptocurrency.
In second place is tezos (XTZ), up 21 percent. The cryptocurrency trapped sellers on the wrong side of the market last week with a fake head-and-shoulders breakdown and printed six-month highs near $1.68 earlier today.
The surge in altcoins has pushed their total market capitalization to $95.65 billion – a level last seen on Nov. 8, 2018.
BTC 4-hour and hourly charts
The lower highs on both the relative strength index (RSI) and the Chaikin money flow (CMF) on the 4-hour chart (above left) indicate that bullish momentum for BTC has weakened. The cryptocurrency could see a price pullback, possibly to the ascending trendline support, currently at $7,300.
The case for a deeper correction would strengthen if the 50-hour moving average (MA) support is breached. That average, currently at $7,872, has reversed pullbacks twice in the last 24 hours.
The case for a rally to $8,500 and higher would strengthen if the hourly chart RSI (above right) violates the falling trendline, representing bearish divergence. The bulls, however, may have a tough time holding onto gains above $8,500 (July 2018 high), as the daily RSI reporting extreme overbought conditions.
Ether 3-day chart
Ether’s rise to seven-month highs validates the ascending triangle breakout (bearish-to-bullish trend change) signaled witnessed in the three-days to May 12 (previous 3-day candle).
The cryptocurrency has violated the 16-month-long falling trendline, while the 5- and 10-candle moving averages (MAs) are trending north, indicating a bullish setup.
Prices, therefore, could challenge the immediate resistance at $256 in the near-term. The bullish outlook would be invalidated only if prices fall back below the high of $187 registered in the three days to April 10.
Fintech Firm Billion Seals $2.1 Mln European Commission Grant for Blockchain System
Polish-British fintech firm Billon has reportedly sealed an almost €2 million (~$2.1 million) grant from European Commission’s Small and Medium-Sized Enterprises (SME) Instrument program to develop a blockchain document management system. The news was reported by Billion in a press release on May 14.
The Commission’s SME Instrument program provides funding for innovation projects which are close-to-market, and has reportedly awarded Billon a grant under Phase 2 of the program — which provides enterprises with up to 70% of the costs of their proposed project.
Billon’s system, dubbed B4TDM (Blockchain for Trusted Document Management), is reportedly a proprietary blockchain-powered solution for storing, signing and sharing digitized documents.
The system reportedly both digitizes documentation and provides encryption and customizable access control rights. Billon is said to have estimated that the blockchain implementation can help firms cut management costs by close to 50%.
In a statement, Billon Group CEO Wojtek Kostrzewa underscored B4TDM’s potential efficiency gains and enhancement of regulatory compliance, noting that the system will aim to protect:
"Document identity content, and to provide control over data they choose to share or delete. With the funding [...] Billon will fulfill MIFiD2 and GDPR requirements with innovation that puts a customer in control of their own data and documents."
Kostrzewa’s reference to the General Data Protection Regulation (GDPR) — a landmark European Union-wide legal framework for personal data privacy — points to the specific regulatory context within which Billion has been developing its blockchain solution.
In particular, GPDR established new digital era rights by introducing statutory requirements such as individuals’ right to be forgotten and other far-reaching privacy requirements.
Kostrzewa further referred to the Markets in Financial Instruments Directive II (MiFID 2) — introduced as a part of the EU’s January 2018 financial reforms — which enacts stricter transparency requirements to combat money laundering and terrorist financing.
Billon’s approach to tackling GDPR compliance is reportedly to design its system so that enterprises will be able to delete access to data at a customer’s request to be forgotten.
Ostensibly due to such provisions, the B4TDM solution has reportedly already been adopted by the Polish Credit Office, with the first local banks to begin adoption by the end of Q2 2019.
As reported, the debate over blockchain’s interaction with data privacy laws has intensified since GDPR took effect in May 2018, with some arguing that its immutability principles — especially in the context of public, rather than permissioned, networks — pose an obstacle to compliance.
French and Israeli Financial Regulators Sign Cooperation Agreement
The French Autorité des Marchés Financiers (AMF) has just announced that it signed a cooperation agreement with the Israeli Securities Authority (ISA). The financial regulators of both countries have agreed to cooperate closely with each other in several key areas.
Focusing primarily on sharing information that will ensure better investor protection and financial innovation, the agreement was signed at the annual conference of the International Organization of Securities Commissions (IOSCO) in Sydney.
The French AMF and the Israeli ISA will be exchanging information on fintech trends in their respective markets as well as discussing regulatory issues related to blockchain, crypto-assets, artificial intelligence or the use of data and the development of automated financial consulting.
The regulators stated that they intend to support innovative companies in their international development and assist them to better understand the regulations in each jurisdiction. The ISA’s FinTech Innovation Hub created in June 2018 and the AMF’s FinTech divisionfor Innovation and Competitiveness are two divisions which are strongly focused on the main points of cooperation.
Commenting on the news, the President of the AMF, Robert Ophèle , said: “For the past three years, the AMF has shown its commitment to supporting financial innovation and strengthening the competitiveness of Paris as a financial center. The cooperation between our two authorities will provide significant synergies for both markets and a better mutual understanding of innovation trends.”
Anat Guetta, President of ISA, elaborated that Israel is known as a nation for start-ups. In an environment of rapidly developing companies, the regulator aims to create an environment that facilitates the development of innovation in financial technology.
“We have set up an innovation center and we already support several start-ups. We have signed a cooperation agreement with the International Forum for Advancement of Financial Technology (GFIN) and we are part of the government Sandbox team. The agreement with France, promotes an innovative approach to regulation,” Guetta elaborated.
Bitcoin is an “Insurance Policy” Against Irresponsible Manipulation from Banks. Travis Kling Explains Why BTC Will Keep Rallying
Bitcoin is increasingly proving its usefulness, not only in the world of trading and speculation but also at the political level. Travis Kling, Chief Investment Officer (CIO) at Ikigai Asset Management told TD Ameritrade that Bitcoin is gaining ground as a kind of safe investment in the face of problems caused by bad government administrations.
“This is a hedge against irresponsibility from governments and central banker …The world is waking up to the value of [bitcoin as] a hedge against the largest monetary policy in human history – quantitative easing.”
“This is a hedge against irresponsibility from governments and central bankers…the world is waking up to the value of a hedge against quantitative easing.”@OJRenick and @Ikigai_fund's @Travis_Kling go down the checklist for why #bitcoin won’t stop rallying.
— TD Ameritrade Network (@TDANetwork) May 13, 2019
He explained that Bitcoin won’t stop rallying because the current geopolitical circumstances are perfect for reinforcing its appeal to investors and people seeking to escape the monetary policies of their respective governments. The clearest example is precisely “the increase in stress from what’s going on with the trade war”.
Hearing Mr. Kling talk about this “Cold War” between the United States and China strengthens a theory that has run among experts and enthusiasts. After the United States announced sanctions against China and China responded with a similar measure, the traditional financial markets suffered a sharp drop while Bitcoin started a rally that took it from $4000 to $8000 in a few days.
He explained that in recent months, central banks have had a kind of erratic policy, something frightening for many investors. In the United States they talked about markets being in “autopilot” and then several central banks emulated this policy. For the renowned investor, “Bitcoin is an insurance policy against that … It is a way to step outside all of that”.
Kling said it is difficult to know for sure what is the cause of this new rally, however, he explains that there are certain differences when compared to 2017. The expert analyst thinks one of the main aspects to take into account is the increase of hedge funds and institutional investors that have put large amounts of money in the crypto market, generating heavy long positions.
Mr. Kling believes this tendency is difficult to reverse since generally when observing the behavior of the markets, more and more small investors replicate this type of strategies, which in turn will increase the effect of the trend in the medium term.
Bitcoin is Better Than Fiat
Bank of France Is Closely Watching Stablecoin Developments, Says Governor
Villeroy has said that the bank is “observing with great interest” growing networks that allow members to exchange stablecoins for tokenized securities, goods, and services. He makes a point to distinguish stablecoins from cryptocurrency tokens at large, however, saying that stablecoins “are quite different from speculative assets like bitcoins, and more promising.”
“We need to be clear: Bitcoin is in no way a currency or even a cryptocurrency. It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility. The Bank of France reminds those investing in bitcoin that they do so entirely at their own risk.”
Mario Draghi, the President of the European Central Bank (ECB) — of which Villeroy is a governing council member — has recently echoed these sentiments, saying that cryptocurrency is not a currency, but rather a risky asset. Draghi points to the lack of backing for tokens such as bitcoin, rhetorically asking, “Who is behind the cryptocurrencies?”
Unlike bitcoin, stablecoins are designed such that their value is always tied directly to some asset, such as gold, or are stabilized by an algorithm. A number of stablecoins have their value pegged to fiat currencies, such as TrustTokens’ line of fiat-backed coins, which include TrueUSD (U.S.dollars), TrueGBP (British pounds), TrueAUD (Australian dollars) and TrueCAD (Canadian dollars).
German State Announces Plan to Establish European Blockchain Institute
According to NRW Economics Minister Andreas Pinkwart, the European Blockchain Institute will be founded in the city of Dortmund later this year, inside the Fraunhofer Institute for Material Flow and Logistics (IML).
The press release says that critics of blockchain have voiced concern over the amount of energy consumed by mining bitcoin (BTC). Pinkwart addressed these concerns and praised the benefits of blockchain tech, saying:
"This technology can be safe, decentralized, affordable and, when used properly, not too energy-intensive.”
According to the press release, Europe is behind the United States in blockchain advancements and “has to catch up,” which is a goal that NRW hopes to lead the way in achieving.
As reported by Cointelegraph, Ripple’s Director of Regulatory Relations Ryan Zagone commented at Consensus 2019 on the need for the U.S. to lead the way in implementing blockchain and crypto infrastructure:
“There is a broad discussion in Washington around 5G being dominated by foreign firms and the U.S. being reliant on foreign technology and foreign expertise… With blockchain and crypto, I think there's a recognition now that these will be part of our future infrastructure… It’s important both for national security and from an economic perspective, that the U.S. is a leader in that.”
Crypto Custodians Foresee Growth in Partnerships with Traditional Custodians
Alexandre Kech, CEO of Onchain Custodian, predicted that collaboration between crypto and traditional custodians will grow. Kech’s remarks came during a panel called “Custody: The New Global Competitive Landscape,” part of Consensus 2019 on May 14.
Kech observed that crypto custodians are much better at adding new token support to their wallets and are willing to hold a variety of crypto assets. “We have the agility, both in terms of compliance and technology, to deploy those coins way faster.”
By Kech’s reasoning, traditional custodians are often reluctant to take on new coins due to institutional barriers. They partner with crypto custodians so that they can gain access to these assets for their customers. Meanwhile, the crypto custodians benefit from these arrangements because customers who may be cautiously interested in crypto assets are more willing to invest in them if they can do so via a trusted bank or custodian.
Fellow panelist Matt Jennings, CEO of Kingdom Trust, said that his organization has “worked with the large, traditional custodians for a long time.” Jennings noted that these institutions are inherently conservative, saying “Their offerings are limited. They are for a limited group of customers and they typically own a limited group of assets and I don’t see that being any different in crypto space.” Given these limitations for each individual custodian, Jennings sees space for everybody.
CEO of Coinbase Custody Sam McIngvale agreed with the other speakers, adding that selling custody is ultimately selling “trust and a track record.”
As Cointelegraph previously reported, the lack of trusted custodial solutions remains a deterrent to potential professional and institutional investment in crypto assets.
In recent encounters between traditional financial institutions and crypto custodians, the Intercontinental Exchange (ICE), operator of the New York Stock Exchange, was reportedly considering licensing its crypto custodial platform the Digital Asset Custody Company (DACC) in New York as of early May.
Bitcoin exchanges and custodians are too big to bail; can fail like pre-1914 gold banks, says Tuur Demeester
Tuur Demeester, Founder of Adamant Capital, recently remarked that, “Bitcoin exchanges and custodians are too big to bail,” on his official Twitter handle. Further, Tuur Demeester also stated that there was a possibility that platforms may fail the same way as “pre-1914 gold banks could.”
He further explained that this meant,
“[…] – No lender of last resort – Private insurance only option – Ultimately good for HODLers: no socialization of risk – But: due diligence matters, buyer beware.”
The Founder stated that the “lack of centralization” in Bitcoin would be “further improved” with the use of multi-signature solutions, smart custody, and collaborative custody. He also added that this was the reason Bitcoin was “so desirable as a hedging instrument.”
“This is why bitcoin is so desirable as a hedging instrument: it can insure traditional portfolios against trust based, systemic risks. Here’s a possible scenario:”
If Bitcoin custodians get ever structurally overlevered, at some point we can expect bank runs and a response in the form of state mandated reserve associations. From the 1913 Federal Reserve Act: https://t.co/49aRi4Rotepic.twitter.com/2ctHQwAFL6
— Tuur Demeester (@TuurDemeester) May 30, 2018
This was followed by Demeester explaining the reason why the Federal Bank thinks of Bitcoin as “undesirable”. The first reason was systemic risk, where the “Bitcoin Fed” could get compromised to a security breach or even “face a bank run.” The second reason was bureaucratization, a result of private profits and socialized risk. The third reason was that the cryptocurrency’s banknotes would “only be fractionally backed,” which would be at the “expense of savers.”
He went on to state,
“Most of the people currently still claiming that “Bitcoin can’t work” operate on the premise that centralization is important and desirable. Once Bitcoin is mature, these people will inevitably clamor for a central bank of bitcoin. Imo this will become a huge public debate.”
Joe Lubin, Jimmy Song Strike $500K Crypto Bet on Ethereum’s Future
The terms of a much-hyped bet have finally been settled, and, at current prices, more than $500,000 in crypto is on the line.
“It’s a maximum pain kind of bet,” Jimmy Song said during a session of CoinDesk Live at Consensus 2019. “Skin in the game.”
The new details stem from an onstage agreement from Consensus 2018, where Lubin told Song that he would bet “any amount of bitcoin” that ethereum’s decentralized apps would have a non-trivial number of users in five years.
Song had accused Lubin of “weaseling” out of the bet in recent weeks, including calling Lubin out on Twitter.
But the meeting of the two crypto thought leaders on Tuesday did not disappoint, especially in terms of how much crypto was wagered.
If ethereum is doing great four years from now, Song will pay Lubin (or his beneficiary) 810.8 ETH. If the dapp economy is sputtering at that point, Lubin will send Song 69.74 BTC.
For Lubin to win, Ethereum needs to have five unique dapps achieving 10,000 or more daily active users and 100,000 monthly active users for any six calendar months in any 12-calendar-month period up to and including May 23, 2023.
To be clear, this is not a small bet for either side, and both acknowledge that whichever side wins, it will hurt badly. It’s also possible the loser will be giving up considerably more money in 2023 than they would today.
When the bet was first made, on May 14, 2018, BTC was trading at $8,577. So, Lubin had effectively bet $598,190 based on prices at the time. That’s $564,307 at today’s prices.
The difference in ETH was much more stark, however. At the time of the bet last year, ETH was trading at $722.86. So, Song effectively bet $586,095 at prices at the time – but only $168,030 at today’s prices.
If he wins, Song was very clear that the BTC will go straight to him. “I want it to hurt for you,” Song told Lubin. “I don’t want you to feel like you are donating to charity.”
“I’m fine with that,” Lubin replied.
The terms have slowly been hammered out over the last year since the bet was first spoken into existence. The two sides have been working on a shared document that they’ve committed to share with CoinDesk once the final piece is in place: settling on a public arbiter.
“Jimmy’s thesis was that there would be no significant applications on blockchain, and the only thing relevant in blockchain was bitcoin,” Lubin said on CoinDesk Live. “My thesis is bitcoin is awesome, and there’s a narrow set of use cases built on bitcoin and that’s wonderful. We love that, but decentralized applications are also really useful.”
There are some definitions of daily active users in the document. The point, Song explained, was for the dapp in question to achieve something like the numbers an Android mobile app would need to be deemed an early success.
Critically, Song argued that the transactions only count if they are on chain. It doesn’t matter who pays for the gas to put them on chain, he agreed (the startup itself could front that), but it needs to hit the base layer.
The sticking point had been what it meant to spend money, but once Song agreed that it didn’t have to be paid by the user – as long as it hit the chain – terms were done.
Lubin proposed a hug and Song accepted.
You can watch the full exchange here:
— CoinDesk (@coindesk) May 14, 2019
Web3 or bust
At its core, the bet hinges on whether the decentralized web will come to fruition – and whether ethereum will deliver it.
Song argued that centralized technology will always be faster and easier to develop on, and that’s why he doesn’t believe the decentralized web has a future.
“The only reason dapps exist is to raise money from gullible people or from greedy FOMO people, and that’s essentially what the ethereum platform has done,” Song said.
It’s possible that the world could change in a way that doesn’t fit the terms of the bet. For example, Felix Salmon and Ben Horowitz made a bet five years ago that bitcoin would be widely used in payments. Five years later, Horowitz lost that bet, and yet at the same time he’s still won by investing successfully in crypto.
To that point, Lubin noted:
“It’s possible that there are many many successful applications on ethereum that are sufficiently decenteralized and they don’t hit exactly those two criteria. So it’s possible I will lose and the ecosystem will be strong.”
Ripple Exec: Blockchain, Crypto Will Have a Role in US Tech Independence
Technology needs to be a national issue for the United States, with digital currencies and blockchain to be recognized within that goal, according to Ripples’ Director of Regulatory Relations Ryan Zagone, at the Consensus 2019 conference on May 14.
Zagone stated that technology needs to be a national security issue for the U.S. to ensure that the country is the leader and is not reliant on foreign innovators:
“There is a broad discussion in Washington around 5G being dominated by foreign firms and the U.S. being reliant on foreign technology and foreign expertise… With blockchain and crypto, I think there's a recognition now that these will be part of our future infrastructure… It’s important both for national security and from an economic perspective, that the U.S. is a leader in that.”
Recently, legislators reintroduced the Token Taxonomy Act, that would exclude cryptocurrencyfrom being classified as a security. The act also pursues the introduction of regulatory certainty for businesses and regulators in the U.S. blockchain industry, as well as clarifying conflicting state initiatives and regulatory rulings that have confused the issue.
Moreover, the announcement calls attention to the growing strength of digital asset markets and the blockchain industry both in Europe and China, and states that the Act is necessary in order to keep the U.S. competitive in the global market.
As reported in March, the number of lobbies working on blockchain technology issues in Washington D.C. tripled in 2018, reaching 33 projects in the fourth quarter of 2018 compared to 12 in the same period of 2017. Jerry Brito, executive director at the non-profit organization Coin Center, suggested that the growth is driven by securities regulation.
Three French Banks Join R3 Corda Blockchain-Based Loans Platform
Based on blockchain consortium R3’s open source blockchain platform Corda Enterprise, Finastra’s Fusion LenderComm reportedly enables banks to instantly share credit agreements, accrual balances and position data to lenders.
Cécile Bartenieff, Chief Operating Officer of Global Banking and Investor Solutions at Societe Generale, stated that the Fusion LenderComm initiative will bring more transparency and operational efficiency to the syndicated loan market, which is “an illustration of how blockchain can help banks optimize the entire flow of financial operations.”
Earlier today, popular Brazlian bank Banco Bradesco joined R3’s Marco Polo blockchain network for trade finance. Other member organizations include BNP Paribas, ING and the Sumitomo Mitsui Banking Corporation.
Recently, Nordic private banking institution Nordea announced an expansion of its blockchain-powered trading platform we.trade to small and medium-sized business customers (SMEs). The platform intends to bring more trust in dealing with cross-border trades by SMEs.
Hyperledger Announces Aries, a Toolkit for Blockchain-Based Identity Management
Everyone has a form of sovereign identity, said Evermym’s Drummond Reed during CoinDesk LIVE on Tuesday.
Reed and Brian Behlendorf, executive director of Hyperledger, were there to launch their new identity management system.
During his talk, Reed tapped his physical wallet full of cards and cash. That, he said, was the equivalent of state-of-the-art when it came to digital identity.
In an effort to bring identity into the 21st century, the pair have just launched a new, open source framework for identity management, Aries.
The framework, the team wrotes, is “not a blockchain and it’s not an application.” Instead, it is a method to build interoperable and verifiable credentials for secure communication.
The surveillance economy
“With DID and Aries based logins there’s no one in the middle. It’s just you and your private keys,” he said.
Reed said the Hyperledger‘s tools are already being used to build government identity projects. One project, called the Verifiable Organizations Network, is the first public permissioned production ledger for self-sovereign identity.
“They’ve issued over 10 million business credentials already,” Behlendorf said. “The business owner is the pivot point in how they engage with government agencies. If you’re a restaurant owner in Vancouver you want to get licensed to serve food that’s a local government thing, you want a license to serve alcohol and that’s a Canada thing, you want a pay taxes,” said Behlendorf. “All these involve exchanging permits and credentials. If you had to wait for all those governments to integrate all those systems you’d be waiting forever.”
With self-sovereign identity tools like Aires you reduce the time it takes to spin up identity systems. That, he said, is a good thing.
The product includes:
A blockchain interface layer (known as a resolver) for creating and signing blockchain transactions.
A cryptographic wallet for secure storage (the secure storage tech, not a UI) of cryptographic secrets and other information used to build blockchain clients.
An encrypted messaging system for off-ledger interactions between clients using multiple transport protocols.
An implementation of ZKP-capable W3C verifiable credentials using the ZKP primitives found in Ursa.
An implementation of the Decentralized Key Management System (DKMS) specification currently being incubated in Hyperledger Indy.
A mechanism to build higher-level protocols and API-like use cases based on the secure messaging functionality described earlier.
The project is an offshoot of two other Hyperledger efforts: Indy for identity management and Ursa for security.
The code will be available on GitHub once the project gets rolling. And with luck, according to Reed, the initiative will help do away with paper IDs entirely over the next two years.
SEC Again Delays Decision on Bitwise Bitcoin ETF Approval
The U.S. Securities and Exchange Commission (SEC) again delayed a decision on whether to approve or reject a bitcoin exchange-traded fund (ETF) on Tuesday.
In a new document published by the SEC, the regulator said it would hold off on making a decision on the Bitwise ETF proposal filed with NYSE Arca.
The proposal was first filed in January of this year, kicking off a new race to launch a bitcoin ETF in the U.S., which is expected to bring fresh money – and therefore, liquidity – to the crypto space.
The SEC last postponed a decision on both the Bitwise and VanEck/SolidX proposals at the end of March, kicking both to May. The regulator has yet to approve any bitcoin ETFs, though both experts in the space and officials with the agency seem to believe that it’s only a matter of time.
Crypto Crescent Asset Management, a digital asset and fund manager, has also proposed a crypto ETF, which would give customers exposure to both bitcoin and ether. The firm, which is partnering with NYSE Arca, has not yet formally filed its proposal, however.
There will be a public comment period for three weeks after the latest document regarding the Bitwise ETF is published in the Federal Register, plus an additional two weeks for responses.
Bitcoin [BTC] is easier to be made quantum-secure than Monero, says Blockstream researcher
The cryptocurrency community has been quite vocal about potential attacks by quantum computers in the future. According to many theories, quantum computing will become so powerful that it might eventually break and decode modern-day encrypted algorithm. Even as Bitcoin programmer, Jimmy Song, dismissed claims that quantum computing could harm digital assets, Andrew Poelstra, when asked about Monero not being fully secure and vulnerable to different kinds of attacks, admitted,
“The only threat we are aware of to the elliptic curve discrete logarithm problem for the curves that we’re all using there are indeed quantum computers”
The question, according to him, is whether there will be a quantum computer that is large enough in terms of qubits to decode the logarithm. The researcher however, claimed that it is not an immediate cause of concern. He also admitted that things like these take time to develop and that there should be an effort to develop systems that are resilient to future attacks.
He further stated that for Bitcoin, the situation would not be any better. Poelstra revealed that in practice, around two-thirds of all public keys that control coins in the Bitcoin network are currently exposed and are known to people. So, a powerful quantum computer in the future would seamlessly “steal all those points.”
With the king coin however, the only simpler thing would be the transition plan if quantum computers actually happen to breach the network. The transition, in this case, would be simpler because all it requires is to replace the digital signature algorithm in order to be quantum-resistant. But in case of the privacy coin, Monero, the replacement process would be complex as it includes replacing the Ring CT [Confidential Transactions], which is a vital part of the network.
7days ago, 13 May, Monday
Ethereum Consortium Launches New Enterprise Tools With Input From Microsoft, Intel
Member-driven blockchain standards organization the Enterprise Ethereum Alliance (EEA) has released two new specifications aiming to accelerate and enhance blockchain implementation for enterprises. The news was shared with Cointelegraph in two press releases on May 13.
The EEA, which counts over 500 members, describes itself as a “standards organization whose charter is to develop open, blockchain specifications that drive harmonization and interoperability.”
EEA members include global consulting firm Accenture, banks Santander and JPMorgan Chase, blockchain incubator ConsenSys, Big Four auditor EY, tech giants Intel, Microsoft and IBM and blockchain consortium R3.
One of today’s newly-released specifications is a set of standard application programming interfaces (APIs) — published as the EEA Off-Chain Trusted Compute Specification V1.0 — which support development work with programs for blockchain transactions that demand privacy, oracle services and compute-intensive workloads.
The off-chain solution is reportedly designed to enable enterprises to choose the most appropriate trusted compute technology for their use case — supporting methods such as Trusted Execution Environments, Zero-Knowledge Proofs and Trusted Multi-Party-Compute.
In a statement accompanying the solution’s release, EEA executive director Ron Resnick acknowledged in particular the input of EEA members such as Microsoft, Intel, Banco Santander and ConsenSys.
He noted that many enterprise blockchain use cases demand complex “privacy, security, throughput, and latency” solutions, and thus that:
“Temporarily moving some transactions off-chain for computation elsewhere, and then returning a summary to the main chain is a promising method for achieving such requirements.”
EEA’s parallel new release is the Enterprise Ethereum Client Specification V3, which reportedly simplifies and makes the Client’s permissions systems more flexible.
To develop the latest specification, the EEA Technical Standards Working Group tackled performance and interoperability issues based upon feedback from users and cross-industry EEA Special Interest Groups.
It also heeded the implementation experience and customer feedback for BlockApps’, Clearmatics’, ConsenSys’, and JPMorgan Quorum’s enterprise blockchain software.
As Cointelegraph reported in April, the EEA launched a blockchain-neutral Token Taxonomy Initiative which will seek to define tokens in non-technical and cross-industry terms in a bid to drive enterprise token adoption at scale.
BitMart and Genesis Block announce strategic partnership
itMart, a premier global digital asset trading platform, is pleased to announce a strategic partnership with Genesis Block Group Holdings LLC and its affiliates [“Genesis Block”], a blockchain and digital asset-focused services platform that includes a registered broker-dealer subsidiary, GB Capital Markets, Inc.
The partnership is the first long-term strategic collaboration between a global leading digital asset trading platform and a US-based digital assets financial services platform and promises to accelerate the connection of the digital asset and real economies to drive long-term enterprise value creation and growth across U.S. and international markets and financial centers.
BitMart and Genesis Block share a strong belief in the promise of distributed ledger technology and its applications and will work jointly to develop a number of opportunity sets, including primary and secondary markets for digital securities and cross-border markets for digital assets and related products and services.
Distributed ledger technology infrastructure will be used to create entirely new markets in heretofore illiquid assets, including funds, art, and collectibles, real estate, natural resources.
World-class primary and secondary market infrastructure for digital securities will provide a number of benefits, including 24/7 markets, lower transactions costs, fractional ownership, automated and quicker settlement Sheldon Xia, Founder and Chief Executive Officer of BitMart, stated,
“We are delighted to collaborate with Genesis Block. The partnership will combine the power of BitMart’sAsian and international presence, technology infrastructure and development teams with Genesis Block’s regulated broker-dealer capabilities and unparalleled knowledge of the regulatory aspects of blockchain-driven financial markets. In short, we believe this partnership will accelerate the evolution of a new paradigm in global capital markets.”
Sam Proctor, Chief Executive Officer of Genesis Block, mentioned,
“We believe that the future evolution of financial market structure is inextricably linked with the development of international mechanisms that leverage distributed ledger technology.
We are honored to enter into a partnership with a premier global digital asset trading platform and management team that shares this belief.”
Bakkt Sets July Test Date for Bitcoin Futures
Bitcoin futures exchange Bakkt announced Monday that it is moving forward with plans to launch physically-settled bitcoin futures products.
In a blog post, Bakkt CEO Kelly Loeffler wrote that Bakkt had “worked closely” with the U.S. Commodity Futures Trading Commission (CFTC), the regulatory agency in charge of overseeing derivatives products in the country, and would be testing its bitcoin futures contracts this summer.
No launch date was announced, and indeed, Loeffler did not explicitly say that the company’s proposal to self-custody its bitcoin and clear through its parent company’s warehouse (Intercontinental Exchange’s ICE Clear US) had been approved.
Rather, Bakkt, through ICE, will self-certify its bitcoin futures products, meaning that the CFTC will have to assess whether or not the proposals violate any laws or regulations. If the regulator does not find any issues within a 10-day deadline, the products will move forward.
This is different from asking the CFTC to explicitly approve a product, which Bakkt was previously said to be doing. CME and Cboe both self-certified their bitcoin futures contracts when they were first announced in 2017.
However, unlike CME and Cboe’s products, Bakkt will deliver actual bitcoin, rather than the cash equivalent, upon a contract’s expiration.
An individual familiar with Bakkt’s process, who did not want to be named, told CoinDesk that the company does not have a final launch date set yet, but would be cleared to proceed should the CFTC not raise any objections.
The individual added:
“We did self-certify. What the blog post effectively means is we filed with the CFTC, it’s two [contracts], a daily and a monthly and what happens is after 10 days, they can self-certify.”
In the blog post, Loeffler wrote that “we’ll be working with our customers over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody, which we expect to start in July.”
“We expect to use UAT to ensure that customers have time to onboard and can test the trading and custody model we’ve built to their satisfaction,” she wrote, adding that future details will be shared in upcoming posts.
Still, Loeffler shared some new information about Bakkt’s upcoming products.
For one thing, the firm will list two different futures contracts: a daily settlement bitcoin future, “which will enable customers to transact in a same-day market,” and a monthly futures contract. This is different from the one-day futures contract that the platform originally announced.
Specifically, the firm’s new products will be:
A daily settlement bitcoin future, “which will enable customers to transact in a same-day market;”
And a monthly futures contract, which is different from the one-day futures contract that the platform originally announced.
Bakkt will also place $35 million of its own funding into the clearinghouse risk waterfall, which “puts our own ‘skin in the game’ and aligns our interests for market integrity and safety with market participants,” Loeffler wrote.
In addition, Bakkt plans to use its own qualified custodian to provide custody services, though this remains subject to regulatory approval.
The individual told CoinDesk that part of this effort revolved around Bakkt’s efforts to secure a trust company license with the New York Department of Financial Services (NYDFS), rather than secure a federal license.
Securitize Open-Sources Its Protocol, Partners With tZERO Token Exchange
Securitize is partnering with one of the blockchain industry’s largest security token exchange companies as it open-sources the code behind its in-house protocol.
Carlos Domingo, Securitize’s co-founder and CEO, said that he believes the technology created by his team has “proven itself in the marketplace.” With the code open-sourced, developers will be able to create dapps on top of the protocol, creating new opportunities for the market, according to Domingo.
“It was important to us that developers had a viable venue to actually make a difference with their code, instead of developing on something that may never see actual use,” he told CoinDesk.
Securitize is also launching a new version of its platform, featuring a control panel, which will allow users easier issue and manage the lifecycle of their tokens, the company announced.
The news came on the wheels of another announcement: last week, it became public that Securitize had partnered with tZERO, the tokenization and trading platform for security tokens by the blockchain subsidiary of Overstock. Now tZERO will list some tokens by Securitize on its alternative trading system (ATS).
Commenting the partnership, the CEO of tZERO Saum Noursalehi told CoinDesk that Securitize seemed a good match as it had been “executing well in the space and providing good quality assets.”
tZERO became the third secondary trading platform for Securitize, after SharesPost, OpenFinance and AirSwap, where it got listed last year. However, for the Overstock’s subsidiary, is will be the first case of outside tokens listed on the platform — now the only one traded on tZERO is its own private equity token tZERO Preferred (issued on ethereum).
Microsoft Launches Decentralized Identity Tool on Bitcoin Blockchain
Microsoft is launching the first decentralized infrastructure implementation by a major tech company that is built directly on the bitcoin blockchain.
The open source project, called Ion, deals with the underlying mechanics of how networks talk to each other. For example, if you log onto Airbnb using Facebook, a protocol deals with the software that sends the personal information from your social profile to that external service provider. In this case, Ion handles the decentralized identifiers, which control the ability to prove you own the keys to this data.
Christopher Allen, a crypto veteran and the co-founder of the World Wide Web Consortium (W3C) working group for decentralized identity (DID) solutions, told CoinDesk that Microsoft’s move could impact the entire tech industry.
“A lot of enterprise infrastructures use Microsoft products,” Allen said. “So if they integrate this into any of their infrastructure products, they’ll have access to DID.”
Indeed, Yorke Rhodes, a program manager on Microsoft’s blockchain engineering team, told CoinDesk that Microsoft’s team has been working for a year on a key signing and validation software that relies on public networks, like bitcoin or ethereum, yet can handle far greater throughput than the underlying blockchain itself.
Underscoring the fact that Microsoft was a founding member of the Decentralized Identity Foundation, Rhodes said:
“There are systems that we have at Microsoft that give you permissions in an enterprise context, a product called Active Directory, that we think need to be able to recognize these DIDs as well.”
He added such infrastructure products and services related to Azure are among the Microsoft’s most popular offerings. This tiny piece in a giant machine, then, could have far-reaching impacts.
Meanwhile, an anonymous source with knowledge of Microsoft’s project told CoinDesk that Ion will shift from using bitcoin’s testnet to the bitcoin mainnet later this year. As such, any tech-savvy observer could run a node and contribute to this project.
Said W3C’s Allen:
“To have Microsoft say they are not scared of bitcoin, and in fact, it has some very good properties and we are willing to take advantage of those properties, is, I think, a step in the right direction.”
Stepping back, the difference between a DID under the hood, versus current infrastructure, speaks to the heart of users owning their own content and access. In the example of Facebook and Airbnb, with a DID, Facebook might be able to shut down your social media account but could not revoke access to all the tools that relied on the Facebook ID to log in. Plus, all those personal photos on Facebook would belong to the user, the holder of the DID.
Yet Facebook, in particular, may not align with Microsoft’s approach.
Another anonymous source told CoinDesk that although Facebook has been invited to participate in Microsoft’s DID projects and community efforts, so far the social media company has declined and instead continued to follow its historic approach to user data.
“They’re going in a different direction that’s not as decentralized,” the source said of Facebook.
The Wall Street Journal and others have reported that Facebook is looking to build a stablecoin-based payments platform for the social network. Yet Allen said he hasn’t seen any effort from Facebook to support DID standards or community efforts such as W3C, which may create a rift with corporations like Microsoft that are making such standards a core pillar of their business model.
Rouven Heck, head of DID at ConsenSys and active member of the W3C, told CoinDesk that Facebook is noticeably absent from community discussions across the tech industry about DIDs.
And although Rhodes said he was not aware of any dealings with Facebook, there was clearly a misalignment between the two company’s goals for using blockchain technology.
“Facebook is the complete antithesis of consumer privacy,” he said. “Their business model is based on the fact they can monetize data about you.”
What’s more, U.S. Senate Banking Committee last week wrote a letter to Facebook that voiced concerns about how the social media company will handle financial data with its crypto project, which is codenamed Libra. Few details about Libra have been shared to date outside of press reports.
In the past, Allen said that Facebook only implemented parts of protocols that enabled data sharing “in a proprietary way that only benefited” Facebook.
With regards to what approach the social media giant will take to blockchain systems, a Facebook spokesperson told CoinDesk:
“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
In contrast to the allegations that Facebook is taking a different direction with its project, both ConsenSys and Microsoft are opting to make open source initiatives core pillars of their respective business models.
“If we can create certain standards it will help the system to build up faster, and that’s good for all of us,” Heck said. “The different products we have are all useful across the space and not built into some proprietary niche.”
Rhodes agrees with this approach, saying that engaging with the open source ecosystem serves Microsoft’s business objectives. He said the “philosophy of consumer ownership and consumer centricity” are core principles for designing Microsoft’s software going forward.
Allen said he hopes a sense of public responsibility will continue to be viewed as a competitive advantage – especially as Microsoft Azure goes head-to-head with Amazon Web Services for cloud market share.
“You could have a service that is in the cloud hosted by Microsoft Azure, but is absolutely secure because everything in it is encrypted with your keys that you control and everything that run under your authority, even though it’s in the cloud,” Allen said.
In Rhodes’ opinion, current experiments with blockchain technology are comparable to Microsoft releasing Windows 95 in decades past, which helped boost mainstream internet usage through a consumer-oriented operating system.
“Networking stacks were very tied to logins to existing networks,” Rhodes said of the pre-Windows 95 internet. “Like that, I think [Ion] is pretty significant.”
Santander, LeasePlan Testing Nivaura’s Blockchain-Based Floating Rate Bond
Capital markets startup Nivaura has developed what it’s calling “the first commercially viable floating rate bond using blockchain technology,” and the new instrument is now being tested by banking giant Santander and LeasePlan, the vehicle leasing company
Announced to coincide with CoinDesk’s Consensus 2019 in New York, Nivaura said other clients working on its floating rate notes (FRNs) include the London Stock Exchange Group (LSEG) and Premfina, a growth-stage premium financing service provider in the insurance industry.
Avtar Sehra, CEO of Nivaura, told CoinDesk:
“Some of the key clients that we are working with on the novel aspects around FRNs and tokenized registers are LSEG, Santander and LeasePlan.”
Nivaura, which recently closed a $20 million seed round led by LSEG, has participated in all five “sandbox” cohorts of the U.K. Financial Conduct Authority. The regulator’s program explores ways to issue digital assets in a compliant fashion and use public blockchains like bitcoin and ethereum as a settlement layer.
Back in 2016, Nivaura executed a reinsurance instrument which managed a register of noteholders using an on-chain token allocation system (sometime before the popularity of this approach took hold in the ICO explosion), while also creating a “calculation and paying agent” smart contract on ethereum.
The firm is now applying the same approach to FRNs, using a money market data feed to trigger a calculation. FRNs are calculated according to current market rates, such as the federal funds rate or the London Inter-bank Offered Rate (LIBOR), plus a quoted spread (a typical coupon would look like “3 months USD LIBOR +0.20%”).
Sehra said the FRN project is a useful extension of the work his team has done to tokenize equity, and for that to then be transferable on a regulated exchange.
“We are extending the simple tokenized equity and bond models to include more interesting hybrid and structured instruments that would be more useful for our clients and partners,” Sehra said. “A natural extension of this is to ensure that the interest is not just simple fixed-rate coupons, but has the flexibility to be a floating value depending on some external reference rate.”
There are really two parts to tokenized securities, Sehra explained. The first is the token register (or the smart contract) that creates the financial instrument on a blockchain like ethereum, and allows for the transfer of tokens from one party to another, in accordance with a KYC/AML whitelisting process.
The second is the events manager. Different securities have different types of events – consider bonds and their coupons, redemptions and defaults, or equities and their voting and dividend rights. However, as instruments become more complex the number of events and information required to manage the events becomes more nuanced and complex, too.
Managing and programming all the complex events into a smart contract is not commercially viable at this time and not well understood from a regulatory perspective for tokenized securities, said Sehra.
“However, some of the tools to manage the key information flows in the events can be standardized and automated,” he said.
In the case of FRNs, it involves managing the data feeds, making a calculation, generating payment amounts and then executing those payments through a smart contract on a blockchain.
“Just like the token register model requires whitelisting and accountable end-points to ensure decentralized registers can be used for securities, event management on a blockchain will also require endpoint checks and sign off by trusted parties before capital markets participants will even contemplate using it.”
PRESS RELEASE Bitpanda digitizes physical gold and silver
Vienna-based fintech Bitpanda launches gold and silver trading for its 1 million users. The new product Bitpanda Metals allows users to securely and conveniently invest in gold and silver and benefit from ultra-low fees. The assets are 100% physically backed, fully insured and stored in a high-security vault in Switzerland.
Users can buy gold and silver to diversify their portfolio
Gold and silver are asset-backed by physical gold and silver bars
Transparent and low fees
Duty-free, 100% insured and safely stored in Switzerland
Swap gold and silver with any digital asset on Bitpanda
Set up savings plans for regular invests
Bitpanda, the Viennese fintech with around 1 million users and more than 100 employees is adding gold and silver as a new asset class to their trading platform. With Bitpanda Metals the company is introducing the user experience and convenience of buying digital assets to the world of precious metals trading.
Bitpanda partnered with precious metals brokers pro aurum and philoro to securely store the physical underlying of the gold and silver tokens offered by Bitpanda. The physically-backed digitized gold and silver can be traded with the same ease as with other digital assets on the Bitpanda platform. Users can buy small amounts beginning from €1 using a wide variety of payment methods and pay in Euro, Swiss Franc, British Pound or US Dollar.
Gold can be bought for no fees no matter the amount (after the launch promo for a low fee of just 0,5%) and stored for a transparent and industry-wide unique storage fee of just 0,0125% per week. Gold and silver holdings are 100% insured. Users can sell anytime they see fit, and they are also able to instantly swap any amount of their gold or silver holdings with Bitcoin and any other available digital asset available on Bitpanda.
Bitpanda CEO Eric Demuth stated,
“Gold and silver stood the test of time as an asset class, and we are now bringing it to the 21st century. With high transparency, very low fees and the same convenience as for other assets on our platform, we are disrupting the gold trading business. With Bitpanda Metals we allow small investors to buy without having to pay horrendous fees. This is a real game changer.”
To celebrate the launch of Bitpanda Metals, Bitpanda charges no fees on buying gold until 15 June 2019, plus users receive 5 to €200 worth of digitized gold or silver when they invest at least €25 gold or silver on the Bitpanda platform.
BitOasis Clears Hurdle in Bid to Launch Regulated Crypto Asset Exchange
Dubai-based crypto exchange BitOasis is one step closer to launching a regulated custodian and trading platform in United Arab Emirates after receiving an in-principle approval (IPA) from the nation’s financial regulator.
The bitcoin startup announced Monday that the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) had granted it the IPA, clearing a regulatory hurdle for the company. It now has to satisfy specific requirements for the IPA in order to receive a license before it can begin offering services.
Still, BitOasis contends that the IPA is still significant, and may help it become the first regulated exchange and custodian for crypto assets in the Middle East.
The exchange, which described itself as “the largest crypto asset platform and exchange” in the region already, said it had been working with regulators since 2018, with a particular focus on the UAE, though it has interacted with regulators across the region.
The company said in a press statement:
“The IPA serves as an important milestone and achievement for the company in its journey as it aims to become the first licensed and regulated crypto asset exchange and custodian in the Middle East, and among a group of few regulated exchanges in the space globally.”
Ola Doudin, BitOasis’ co-founder and CEO, said in a statement that the exchange plans to relaunch its platform — this time as a regulated entity — over the next year. The startup also plans to add new crypto asset products and try to expand into new markets such as Saudi Arabia.
“The company will also continue actively working with regulators to accelerate the adoption of crypto assets across the region,” BitOasis said.
The exchange, which launched in 2015, was the first Middle Eastern crypto platform to raise venture funding, and offers localized services in the region as well as North Africa.
Joseph Lubin on Ethereum 2.0: ETH to Become 1,000 Times More Scalable Within 24 Months
Ethereum (ETH) co-founder Joseph Lubin said that the Ethereum blockchain will become about 1,000 times more scalable in 18 to 24 months. Lubin made his remarks during an interview with Cointelegraph on May 11.
Lubin specified that the development which will bring such a drastic scalability increase to the ecosystem will be Ethereum 2.0, also called Serenity. He explained that the development is divided into four phases and that eight groups are already developing clients for the new chain. Lubin also promised:
“In a small number of months, we should have a fully operational testnet and possibly, by the end of this year we’ll have a fully operational phase 0 Ethereum 2.0.”
Lubin explained that there are multiple ways in which the new chain could be connected with the old one, noting that ether tokens will be able to move from the old chain to the new one and that “there may be bidirectional mechanisms.”
Lubin also addressed concerns over proof-of-stake (PoS), stating that it has been thoroughly researched to assure its viability before the teams started working on its implementation. He said that new features are being added to the chain to make it compatible with more use cases, citing private transactions as an example.
As Cointelegraph reported earlier last week, the CEO of crypto analytics firm Messari had predicted that the Ethereum 2.0 transition will not take place until 2021.
ICE Pushes for Bakkt Bitcoin Custody License — CFTC Approval Imminent?
The Intercontinental Exchange (ICE) is reportedly taking steps to ensure approval from the United States Commodity Futures Trading Commission (CFTC) for its bitcoin futures contracts platform — Bakkt. ICE, the operator of the New York Stock Exchange (NYSE), recently acquired a cryptocurrency custodial service and are mulling plans to register Bakkt as a licensed trust in the state of New York.
If successful, these latest moves would see Bakkt become a registered bitcoin (BTC) custody platform. Recent reports also indicate that the company is in partnership with Bank of New York (BNY) Mellon for the storage of cryptocurrency security keys.
DACC acquisition and bitcoin custody plans
As reported by Cointelegraph on Monday, April 29, 2018, Bakkt’s parent company, ICE, acquiredDigital Asset Custody Company (DACC) — a cryptocurrency custodial platform. Adam White, chief operating officer of Bakkt, said the acquisition was an important cog in the wheel of the company’s plans to launch its physically backed bitcoin futures contracts.
DACC offers native support for 13 blockchains, as well as more than 100 assets. According to the announcement, the DACC CEO and other team members will be assimilated into the Bakkt operational structure.
The DACC purchase is the second such acquisition by Bakkt. Back in January 2019, the ICE subsidiary acquired back office assets belonging to the Rosenthal Collins Group (RCG) — an independent futures commissions merchant.
Announcing the DACC acquisition via Bakkt’s Medium account, White explained:
“DACC shares our security-first mindset and brings extensive experience offering secure, scalable custody solutions to institutional clients. The team’s experience integrating multiple blockchains and operating cutting-edge consensus mechanisms is a valuable addition to our team and future product line.”
By acquiring DACC, it appears Bakkt is pushing even further with its goal of becoming the foremost institutional-grade cryptocurrency platform far beyond offering physically backed bitcoin futures. The purchase sees the ICE subsidiary positioning itself for cryptocurrency custodial status.
Many commentators in the industry have consistently identified the emergence of trusted cryptocurrency custodial platforms as an important requirement for a more broad-based institutional adoption of the asset class. Cryptocurrency companies like Coinbase and Goldman Sachs-backed Circle have launched custody platforms for digital assets.
Bakkt’s DACC purchase is part of a grander ambition to become a certified cryptocurrency custodian. ICE is reportedly looking to have the company registered as a trust in the state of New York.
If successful, Bakkt would have the legal authority to act as a qualified custodian for bitcoin and other digital assets. Such a move, the company hopes, would smoothen the CFTC approval process.
As part of its plan to offer robust cryptocurrency custody solutions, Bakkt is partnering with BNY Mellon to establish private key storage in multiple geographic locations. Back in 2018, the global banking behemoth announced plans to begin offering cryptocurrency custodial services.
Warehousing vs. physical custody
However, the change from “warehousing” digital assets to physical custody brings up questions about whether Bakkt is employing a change in its strategy. In response, Loeffler speaking to Fortune, said:
“There is no pivot. From the ground up what ICE has been building for two years is the safest version of a custody solution for digital assets.”
Loeffler’s comments aside, the original Bakkt application filing shows the company offering physically settled bitcoin futures contract with the physical delivery carried out via “warehousing,” as opposed to physical storage of the underlying asset.
On the technical side, Bakkt’s approach to bitcoin futures bodes well from a price discovery standpoint but runs into issues when it concerns regulations. With Bakkt offering bitcoin futures contracts settled not in cash like CBOE or CME but in the underlying asset, there seem to be issues with balancing the various regulatory hurdles that need to be surmounted.
The typical regulatory paradigm for derivatives trading in the U.S. involves a two-pronged approach of federal and state laws. The CFTC oversees exchange entities, clearing houses and the commodity being traded, while state regulators are in charge of the institutions that have custody of the underlying asset or other financial instruments.
Thus, within this bifurcated regulatory paradigm, Bakkt’s plan of warehousing bitcoin via its parent company’s clearing house runs into a few regulatory snaps, chief of which is the fact that ICE isn’t a bank. The usual state-regulated custodian as recognized by the 1936 Commodity Exchange Act is a registered trust or a bank.
Section 5b, clauses vi and vii of the Commodity Exchange Act: Settlement Procedures states:
“(vi) Regarding physical settlement, establish rules that clearly state each obligation of the derivatives clearing organizations with respect to physical deliveries; and (vii) ensure that each risk arising from an obligation described in clause (vi) is identified and managed.”
Usually, when such a regulatory gray area emerges, an agreement could be reached to grant an exemption, allowing Bakkt to use ICE’s clearing house infrastructure for its bitcoin contract. However, there is a major hindrance that could theoretically stand in the way of such an arrangement.
To understand this hindrance, it is important to briefly describe how clearing houses work. As third-party intermediaries, clearing houses stand in the gap between buyer and seller to ensure the completion of the derivatives transaction, while keeping both parties in line with their respective part in the deal.
The various constituent firms of the clearing house divvy up the risk involved in the transaction in a process called “risk mutualization.” In this arrangement if “constituent A” of the “XYZ clearing house” were to hold bitcoin, the other member firms would be open to the mutualized risk of BTC price fluctuation.
There is a plausible scenario in which constituent firms of the ICE clearing house might not be open to one of its members holding BTC as part of the settlement process for Bakkt’s bitcoin futures contracts. A significant swing in the price of bitcoin during the transaction process could see these members firms incur negative interest rates on their own “custodied" commodity futures.
Getting over the CFTC approval finish line
Originally earmarked for launch in December 2018, concerns over proper customer onboarding and warehousing for the bitcoin futures contracts caused the plans to be shifted to 2019. ICE released a press statement in November 2018 announcing the shifting of the launch date to January 2019.
However, Bakkt failed to obtain the CFTC approval, which led to another postponement. According to reports, the major concern for the U.S. regulator was the company’s plan to settle bitcoin futures contracts via the ICE Clear US (ICUS) — a CFTC-regulated exchange and clearing house.
Recently, the CFTC has increased its oversight on clearing houses as part of its efforts to protect investors in the derivatives market.
On Wednesday, May 1, 2019, CFTC Chairman J. Christopher Giancarlo, testifying before the House Committee on Agriculture Subcommittee on Commodity Exchanges, Energy and Credit, said:
“In addition, examinations of clearinghouses help the Commission identify issues that may affect a clearinghouse’s ability to control and monitor its risks. These are among the most important examinations that the Commission conducts, as clearinghouses have become critical single points of risk in the global financial system. Furthermore, the number of clearinghouses, the scope, and complexity of the examination issues and the importance of these examinations to overall financial stability are all increasing.”
Given the novel nature of cryptocurrencies as an asset class, the CFTC likely feels that such plans fall into a gray area from a regulatory standpoint. Thus, the commission has been consistent in its insistence that Bakkt develop a more robust infrastructure for holding bitcoin and settling bitcoin futures contracts.
While not directly referencing Bakkt or ICE, the CFTC chairman also commented about cryptocurrency-related companies applying for licenses to operate clearing houses. Speaking on the matter, the CFTC chair declared:
“In addition to U.S. clearinghouses, the Commission has six registered clearinghouses located overseas and exempted four foreign clearinghouses. The Commission anticipates new applications for clearinghouse registration resulting from the explosion of interest in cryptocurrencies; an area in which protection of the cryptocurrencies will be one of the highest risks.”
While stating the commission’s commitment to upholding robust regulatory standards, Chairman Giancarlo reiterated the CFTC’s aim of promoting innovation. The CFTC chairman, did, however, admit that regulators face numerous challenges in trying to adapt decades-old laws to novel digital asset classes.
Cointelegraph reached out to both Bakkt and the CFTC for comments on the matter. Damon Leavell, the senior director of communications and marketing at ICE Americas, told Cointelegraph that the Bakkt team remains focused on building the business but declined to provide further comments. The CFTC has yet to provide any response to Cointelegraph’s request for comments.
Despite the absence of official comments from both Bakkt and the CFTC, it appears the company’s initial custody plans have played a major part in the delays and postponements. Given the recent announcements and acquisitions, it appears Bakkt is trying to rectify these issues by pushing for self-certification as a cryptocurrency custodian.
Bakkt will launch bitcoin futures product in July 2019
In a blog post published on Monday (May 13, 2019), Loeffler announced that Bakkt is moving forward with the launch of the bitcoin futures contract in July 2019. According to Loeffler, following continued consultations between the company and the CFTC, Bakkt plans to begin user acceptance testing (UAT) for its offerings by the middle of the year.
The announcement still confirmed Bakkt’s plans of pursuing self-custody approval while implementing settlements via ICUS. However, there was no mention of any green light from the CFTC to that effect.
Bakkt did not give a definite date for when the UAT will begin, but an excerpt from the announcement reads:
“We’ll provide more details in upcoming posts, but we expect to use UAT to ensure that customers have time to onboard and can test the trading and custody model we’ve built to their satisfaction.”
The Bakkt CEO did, however, provide some clarity on the structure of Bakkt’s proposed bitcoin futures contracts. The company plans to offer both daily and monthly physically settled BTC futures contracts.
On Monday, ICE submitted two separate filings with the CFTC that contained the listing and certification details for both derivative offerings. Loeffler also announced that Bakkt would be putting up $35 million of its own money as a hedge against any clearing house risk.
Ethereum’s Reddit Moderators Resign Amid Controversy
Taylor Monahan, the CEO of crypto wallet startup MyCrypto, has been moderator for the ethereum subreddit channel since 2016.
That year, the ethereum Reddit channel was just breaking over the 10,000 subscribers mark, according to SubRedditStats. Today, the same channel boasts over 400,000 subscribers and is ranked within the top 600 most popular channels on Reddit.
However, what may have started as a relatively low-commitment and low-visibility responsibility became a flash point of controversy in the ethereum community (though tensions have died down in recent days).
“Back then, there weren’t any guidelines or rules.” Monahan told CoinDesk. “We [the moderators] were all cut from the same cloth. We all had the same natural philosophy about what we should and shouldn’t do…We were pretty light-handed and mostly just removed scams and spams and stuff.”
Those duties include: approving posts that were incorrectly removed by the automoderator, removing posts that break the subreddit’s stated rules, bringing posts that require subjective decision-making to the attention of the entire moderation team, and other responsibilities that, in sum, seek to halt the spread of spammy or scammy content.
But the nature of the gig has changed, according to Monahan.
“One of the biggest differences between the early days and now is that in the early days we really did look at this as an administrative task…The larger community doesn’t look at it like that and that’s where I think the disagreement and the anger and the yelling came from,” said Monahan to CoinDesk.
The anger and the yelling Monahan refers to has been explicitly targeted at former ethereum core developer Afri Schoedon and director of the Web3Foundation Ryan Zurrer. As a result of community requests for their removal as moderators, both individuals in recent weeks have resigned from the role.
Most recently, Nick Johnson – developer for ethereum domain service ENS – also resigned, quoting a lack of time to “meaningfully contribute” and “an unhealthy streak of paranoia, conspiracy mongering and insularity” on the subreddit.
The remaining ten moderators of the ethereum subreddit have voiced varying degrees of concern about their role given that their responsibilities on the social media forum are now more heavily scrutinized by the public.
“The more people are on the sub, the higher the chance is one of your actions does not resonate well and in the worst case resonates so badly that the result is a full blown shit storm,” ethereum Reddit moderator “Ligi” told CoinDesk.
A way forward?
Internet communities are rarely immune from controversy, and ethereum’s Reddit-centric users are no exception.
And in cases where a situation intensifies and a moderator’s role is called into question, Monahan maintains that the best course of action is a self-resignation approach, as has been previously seen.
“As a group of moderators, we don’t want to ever hold a vote to cast another moderator out. That’s just terrible.” Monahan told CoinDesk. “If there is a large amount of drama surrounding a certain mod or if there is a call for that mod to leave, instead of coming up with a mechanism where everyone votes, it would be on that moderator to remove themselves and step down.”
For the most part, this is exactly how the most recent bout of controversy over subreddit moderation in the ethereum community has been diffused.
Earlier this month a tweet by Ameen Soleimani, the CEO of adult entertainment blockchain platform Spankchain, accused Schoedon of working on a competitor platform to ethereum known as Dothereum.
“I can’t actually prove that he wrote the code yet because it isn’t public, but I have heard from credible sources that he is contributing,” tweeted Soleimani. “There’s nothing wrong with anyone working on whatever they want…but we should also realize that ethereum defectors are highly incentivised to try and divide our community.”
The situation was further enflamed by user “McDongger” who called for the removal of Schoedon as a result of his engagement with other blockchain projects. Zurrer faced similar resignation calls for his involvement in creating the blockchain interoperability platform that Dothereum is built on.
In his resignation post, Zurrer put forward his belief that “the line between ‘working on ethereum’ and working on other things will blur as we move forward.”
“However, in the interest of focusing the conversation around the technology, let’s have some other community members take a turn at mod-ing so that this isn’t a debate topic,” he went on to write.
Additionally, Monahan has also offered up a 3,000 word document codifying expectations moving forward for both users and moderators on the subreddit. As stated in the post, its aim is to “provide transparency into the role of /r/ethereum moderators and define what is expected of those moderators.”
“One way to prevent conflict now or in the future is by making sure everyone is all on the same page and communicates and is transparent and the expectations are aligned,” Monahan told CoinDesk, adding:
“If you can do that then I think most the issues with not just moderation but just in general can be resolved.”
Bitcoin [BTC] is a ‘speculative vehicle for gambling’, says broker Peter Schiff
The recent meteoric sprint in Bitcoin’s valuation has ignited debate among analysts, with opinions pouring in from both crypto enthusiasts as well as critics. One such critic was the CEO of Euro Pacific Capital, Peter Schiff, who has always been critical of Bitcoin even during the coin’s bull run. The recent Bitcoin storm failed to impress the critic asthe CEO claimed that the cryptocurrency was just a “speculative vehicle for gambling” in a recent Keiser Report’s talk session.
The veteran stockbroker said that he did not believe that Bitcoin had anything in common with gold and claimed that Bitcoin was a “fool’s gold”, despite admitting that the cryptocurrency has few similar “monetary properties” to that of the gold. Schiff added,
“I mean it pretends to be gold.”
He further said that Bitcoin had no intrinsic value other than what people were willing to buy it for, because “they think they can sell to somebody else at a high price”. He went on to rant about Bitcoin being a Ponzi scheme.
The CEO also criticized the new Greyscale’s #DropGold commercial, which called digital currencies like the Bitcoin a future.
The financial commentator is of the opinion that unlike gold, Bitcoin does not have any utility. The only use case for the cryptocurrency is in theory as a speculative “trading vehicle” for gambling. He further claimed that BTC, as a medium of exchange, is crippled with the major drawbacks. According to Schiff, BTC is expensive and cumbersome.
1week ago, 12 May, Sunday
Codename ‘TRUEngine’: GE Aviation, Microsoft Reveal Aircraft Parts Blockchain
GE Aviation, which supplies jet engines to about 60 percent of the global airline industry, has built a supply chain track-and-trace blockchain with the help of Microsoft Azure.
GE Aviation Digital Group aims to share the blockchain, a self-built derivative of ethereum, across an industry-wide consortium of partners. The ledger’s use case, which is about monitoring and collating data tied to the manufacture and life cycle of critical aircraft engine parts, could scarcely be more pertinent given the recent travails of Boeing.
David Havera, blockchain CTO of the GE Aviation Digital Group told CoinDesk:
“Our vision is being able to trace parts as they are manufactured and the engine when it’s shipped. Then how that engine performs in the field, when to repair it and then re-enter it into the field.”
While GE Aviation sells aircraft engines to commercial airlines and the military, GE Aviation Digital Group is a business unit within that which employs some 700 staff globally and sells software externally to the industry. As well as blockchain, the group turns out a range of 3D printing, IoT and data science solutions.
Havara said his team had been working for more than two years with partners like MTU Maintenance to build the blockchain, a permissioned fork of ethereum.
“What we are calling it, kind of internally, is TRUEngine,” said Havera.
Having a blockchain will structure data that’s critical to this ecosystem in a single format and bring it to users’ fingertips; typically the process of data analysis can involve threading back through multiple vendors and ERP systems, noted Havera, adding:
“If you think about it, a quality event in the aircraft engine industry is catastrophic. And to research that takes months of manual time. Driving efficiencies, accountability and visibility into the process of making an engine will make us all safer.”
Mike Walker, the senior director of applied innovation and digital transformation at Microsoft, likened the ledger to a “tapestry.”
He said it has had the effect of “stitching together [GE Aviation’s] entire supply chain into one view – so you’ve got a full understanding of all the partners; you’ve got one ecosystem repository instead of hundreds, if not thousands.”
Aircraft engines are liquid assets: over a five-year period, some 60 percent of them change hands, Havera said, making documentation and certifications important.
Part of the process involves customers like Delta or British Airways, for example, maintaining flight history records of how many cycles they have flown on each part, data which are then returned to GE Aviation so that the appropriate parts are replaced in a timely manner. This has led to a paper-based conundrum, said Havera.
“We can’t sell those used parts back into the open market without the proper paperwork,” he said. “Which is really a crisis in the industry at the moment. At our warehouse facility in Texas, there are tens of millions worth of dollars of inventory orphaned, because over the last 20 years we didn’t have a digital solution to get that paperwork to sell those parts back into the market.”
Walker of Microsoft added:
“So what we have done brings cost optimization and significant safety improvement, but now we are exposing a new business model. We are creating a profit center for what I lovingly referred to as ‘the boneyard’ in Texas, where essentially they put all these parts where they don’t have the GE Aviation genuine paperwork – and you can do that for all the other boneyards out there, too.”
Although he could not mention the names of the industry players who have been invited to join the TRUEngine consortium at this time, Havera said:
“We are targeting companies who have already bought our engines – so it could be Delta or Southwest or BA – and they have a maintenance contract with us. We have a kind of ‘razor and blades’ business model where we sell you the engine and then you will sign a maintenance agreement to be TRUEngine-certified and we will maintain that. So, we are rolling this out to our maintenance agreement base.”
Walker defined the blockchain as “a production pilot” using live data and business processes with real customers. “So we have a controlled rollout, a trickle effect,” he said. “We will have three or four airlines and then another trickle out to reach five or six.”
Havera said the pricing model for the service has not yet been formalized but added:
“We are ready to sell this service. We are actively engaging with customers now and more airlines are asking about it every day.”
Bitmain: Jihan Wu rumored to have established FinTech platform Matrix with no inclusion of Bitcoin Cash
Jihan Wu, the former CEO of Bitcoin [BTC] mining equipment manufacturer Bitmain and massive Bitcoin Cash [BCH] proponent has decided to call it quits with the crypto-camps, opting to make his way into the institutional fray. In a stark turn of events, Wu has reportedly established a FinTech start-up Matrix that will veer away from the retail space.
BTCKING555, a popular figure within the online cryptocurrency community tweeted that they received a “pitch deck” from an “insider” for the aforementioned start-up. The tweet detailed that Matrix, its touted name, would cater specifically to institutions; this follows Wu’s ousting from Bitmain’s upper echelons, which occurred earlier this year.
The tweet read:
The latter half of BTCKING555’s tweet references another one of the Twitter handle’s accusations against Bitmain. Back in March 2019, the handle stated that Wu “duped” the mining giant’s “Asian investors” amounting to “$12-$14 bn” on the basis of a “promise of IPO”.
Furthermore, the thread continued stating:
BTCKING555 added that this warning was mentioned earlier in August 2018, with the handle pleading with investors not to pledge their funds with Bitmain. Citing unconfirmed sources, the handle also added that a “class action” was “in works in Hong Kong”.
In light of Wu backing Bitcoin Cash and Roger Ver, the CEO of Bitcoin.com and ardent BCH proponent, BTCKING555 finds it curious that BCH was not mentioned in “the deck”.
The handle added:
This follows the January exodus of Jihan Wu from the position of CEO of Bitmain following his siding with Bitcoin Cash, which proved to be fatal for the company. When the BCH hardfork ensued in November 2018, the poor performance led to Wu being demoted from director to supervisor with further speculation that Wu and Ketuan Zhan, another co-founder would be removed in December 2018.
Jihan Wu’s Matrix news follows the failed prospects of the Bitmain IPO by the hands of the Hong Kong Stock Exchange (HKEx). Bitmain’s IPO with HKEx surpassed its six-month expiration date in late-March, based on the exchange’s listing rules citing lack of confirmed reports of a Committee hearing.
BTCKING555 also added the below picture:
2weeks ago, 9 May, Thursday
There’s a New Medici Bank After 500 Years, And This Time It’s Crypto-Friendly
Prince Lorenzo de’ Medici – a descendant of the famed Renaissance-era Italian banking family, the House of Medici – has opened a bank in Puerto Rico.
Medici Bank, “born out of frustration with the current financial services landscape,” aims to offer faster, cheaper and more transparent services, according to an announcement Wednesday. Notably, the new institution will serve cryptocurrency firms, as well as other more traditional clients such as family offices.
Lorenzo de’ Medici founded the bank alongside Ed Boyle, who was previously managing director of Americas at Fidor Bank and vice president and general manager of American Express’ prepaid card business before that. Boyle is now serving as the CEO of Medici Bank, while de’ Medici takes the role of director.
Speaking to CoinDesk, Boyle said the bank has obtained an International Financial Entity (IFE) license from Puerto Rico’s Office of the Commission of Financial Institutions. He added that the bank is not seeking a Federal Deposit Insurance Corporation (FDIC) charter in the U.S. since that is “not highly relevant for corporate or family office customers with very large deposits.”
Although Medici Bank is willing to serve cryptocurrency businesses that comply with due diligence and know-your-customer processes, it is not an exclusive focus of the bank, according to Boyle.
De’ Medici said in the announcement:
“The original Medici Bank of Florence, founded by my family in the 14th century, revolutionized the world’s economy. Many of their innovations that drove the development of international commerce — like holding companies, double-entry bookkeeping, and letters of credit — are still in use.”
“The Medici Bank of today will be a reawakening of that innovative spirit; we are re-imagining modern-day banking by leveraging technology that creates seamless, digital customer experiences and expands financial opportunity across global markets,” he added.
Galaxy Digital CEO Michael Novogratz: Bitcoin Should Cross $20,000 Within 18 Months
Galaxy Digital CEO Michael Novogratz said that he expects bitcoin (BTC) to beat its all-time-high price within 18 months. Novogratz made his remarks during an interview with mainstream media CNN published on May 9.
During the interview, Novogratz also said that he believes that $6,000 is probably a stall point, and the next one will be $10,000. Moreover, he expressed the belief that this time, other cryptocurrencies “aren’t going to go up nearly as quickly.” He explained:
“The other coins, Ethereum being the next biggest, Ripple...they have to prove use case, right?”
Novogratz pointed out that out of the 118 elements present on the periodic table, only “gold has store of value just because.” This is in line with what he said in February, when he argued that bitcoin occupies a unique place in the cryptocurrency landscape, and that it “is going to be digital gold, a place where you have sovereign money.”
Novogratz then stated that there are other elements, such as copper, that we value because we use them. According to Novogratz, just like copper, altcoins need to prove their use case in a similar way, “and that means getting people in their community, getting developers, and programmers, and being worthy of something.”
When asked about how concerned the public should be about breaches such as yesterday’s hackof cryptocurrency exchange Binance, he said that “they should be somewhat concerned.” Still, he pointed out that “even the most aggressive exchanges only keep a certain amount of their coins on what’s called a hot wallet,” and that because of the reserves, no investor has lost his money.
Furthermore, Novogratz said that he expects regulators to take action and added:
“We think all the exchanges should go to a process where they almost self regulate, right? They do what the regulators want beforehand.”
When asked why the prices did not react negatively to the hack, Novogratz expressed the idea that bitcoin is currently in a bull market, stating “in bull markets, markets can digest bad news. We’re in a bull market.”
“The debate is over, bitcoin won. It is now seen by people all around the world as a legitimate place to [store] their value.”
Hong Kong Fund’s Projected $400 Million Overstock Investment Ends With $5 Million Close
GSR Capital has finally closed on its investment in tZERO, Overstock.com’s security token trading platform, after months of delays and revisions to the deal.
Instead of buying $30 million of tZERO tokens, as previously agreed, the Hong Kong private equity fund invested just $5 million in tZERO equity, in the traditional form. The finalized transaction valued tZERO’s at $1 billion, less than the $1.5 billion in the initial agreement.
Patrick Byrne, Overstock’s CEO, announced the news Thursday morning during the company’s Q1 earnings call, adding:
“We’re letting them [GSR] out of all previous contracts.”
Makara Capital, a Singapore fund brought into the deal by GSR, is still conducting its due diligence of tZERO, and may yet invest the money it pledged earlier, Overstock said. “We are still working with Makara and feel optimistic (but not certain) that something can be consummated with them (and GSR may join in again at that point),” the company’s Q1 earnings report said.
Despite the sharp reduction in proceeds, tZERO CEO Saum Noursalehi told CoinDesk that the $5 million investment was “a decent offer.” The investment consists of $1 million in U.S. dollars, $1 million worth of Chinese Renminbi, and $3 million worth of “certain securities,” according to Overstock.
The original deal with GSR, announced last summer, was expected to bring $404 million to tZERO, but was postponed several times and downsized to $100 million in March, and then to $30 million in April.
In March, when the deal was postponed for the second time, GSR brought in Makara. The two firms were supposed to co-lead the $100 million investment in tZERO.
As tZERO has not obtained as much external investment as it hoped for, it will for the time being rely on cash from the parent company: earlier plans to sell the Overstock.com online retail business were postponed, too.
“The retail business have quite a bit of capital, they are starting to be cash flow-positive,” Noursalehi told CoinDesk.
To raise additional capital, Overstock sold some of its stock recently, he said — not that it all will go to tZERO, but if it needs money those funds can get “pushed down” to it from the parent company, according to Noursalehi.
This funding served as a “kind of hedge” against the uncertainty in the GSR-Macara deal, he said.
On the bright side, tZERO seems to have found a new big client to issue security tokens on its platform.
According to Noursalehi, Dubai-based real estate giant Emaar has signed a letter of intent to issue tokens on tZERO. Emaar owns luxury residential and commercial high-rises, including the world’s tallest building, the Burj Khalifa in Dubai.
Emaar announced plans to do an initial coin offering (ICO) in March in a partnership with the Swiss startup Lykke AG. Neither Emaar’s media representative nor Lykke responded CoinDesk’s requests by press time.
At first, Emaar will do “some initial small, proof-of-concept issuance to prove it out,” Noursalehi said, although the company is looking into launching a token issuance project as big as $2 billion in the next couple of years. No timeline or other details of the future deal are set now, tZERO’s CEO said, but “we want to get a definitive contract in the next week or two.”
Elio Motors, a car manufacturer that Byrne has previously said was working on a token issuance with tZERO, will not be among the first issuers on the platform, Noursalehi said. Elio wants to code a more complicated functionality into their tokens, like allowing token holders to get their ordered cars faster, and working on that will take more time, he explained. By the end of this year, tZERO hopes to get up to 10 tokens traded on its alternative trading system (ATS).
Another partnership was announced during the earnings call: this month, tZERO is planning to complete an integration with another tokenization platform, Securitize. According to Noursalehi, tZERO’s team will conduct due diligence of the tokens issued on Securitize and pick some of them to trade on the ATS.
“Securitize seems to be executing well in the space and providing good quality assets,” Noursalehi said.
Also on Thursday’s earnings call, Overstock gave a demonstration of the previously announced tZERO crypto trading app, scheduled to go live in June. The app will initially list only bitcoin, ether and, possibly, ravencoin. (The ravencoin blockchain was used by Overstock’s venture arm, Medici Ventures, in a pilotearlier.)
As for the other subsidiaries of Medici, Byrne announced that Medici Land Governance, a startup aiming to put land registries on a blockchain, has signed a contract with the government of Zambia, where it’s already been working on a pilot covering 50,000 houses. The new contract adds “250,000 additional homes (and potentially a million or more) in Lusaka over 10 years,” the Q1 report says.
Going full blockchain?
In the meantime, Overstock is moving some of its own shares to tZERO, a plan it recently notified shareholders about.
These shares, known as “Blockchain Voting Series A Preferred Stock,” were issued in 2016 as the initial proof-of-concept for the future token trading platform.
A new ERC-20 token named OSTK.0 already exists on the ethereum blockchain, but no transactions have been recorded yet.
The shares will be live on tZERO in June, the company said on the earnings call.
In the long term, Overstock is planning to issue more tokenized shares. Ultimately the company could go full blockchain, Noursalehi said, concluding:
“Long term down the road, we may ultimately delist from NASDAQ and have all our stock on tZERO. But [before that can happen] it obviously will have to be a much more liquid market than it is today.”
Indian cryptocurrency exchange Coinome to shut down operations on May 15
The Indian Supreme Court adjourned the last hearing of the ‘Crypto Vs. RBI’ case, postponing it to July 2019. While many crypto-enthusiasts were left disappointed, some Indian crypto-exchanges shut shop. After Coindelta quit in the adjournment’s wake, another cryptocurrency exchange is now calling it quits.
Coinome exchange informed its community about the decision, stating that all operations will shut down on May 15. The exchange requested its customers to withdraw their funds. Coinome announced,
“All crypto markets on Coinome will be suspended and any pending/open orders will be canceled, effective 2pm on May 15th, 2019. Customers are requested to withdraw all their crypto assets from Coinome at the earliest.”
Twitter user, @TheCryptoDost, noted that the exchange had suggested the shut down of operations over a month back, with the exchange now making an official announcement. This raised concerns among other many crypto enthusiasts about other exchanges. Twitter user, @NagPnr, asked,
“Will it be similar situation with other Indian exchanges in near future?”
Another user, @coinguy21, stated that exchanges which have switched to P2P system will not shut as long as they have volume. However, the reason for customers to be perturbed were the rumors about the government of India banning cryptocurrencies on the whole, which also led many exchanges to take drastic steps in fear of being tagged “illegal”.
Prominent crypto influencers in the country have asked people to be patient until the Supreme Court hearing in July and not make rash decisions about their cryptos.
BitGo Hires Former Wall Street Forex Trading Exec
Crypto custody provider BitGo has hired Nick Carmi, former head of forex trading at a number of Wall Street banks.
Carmi became BitGo’s head of financial services, joining the company after working at Tower Research Capital, an asset management firm where he was a global head of the fixed income instruments, currencies, and commodities business. It was there he moved into cryptocurrency trading.
“When we got into trading crypto we quickly realized there is a big gap in the market,” he said.
The gap, he found, was that was impossible to trade cryptocurrencies between different venues with the same speed as in traditional markets.
“If you look at the current equity market, you can buy IBM stock from Goldman Sacks, then hang up the phone and immediately sell it to J.P. Morgan,” he said.
He believes the same functionality is needed on the crypto market.
“Being able to buy BTC on one venue, and immediately — could be 100 or 200 milliseconds — sell the same BTC on Gemini, or with Genesis [would be idea],” he said.
He wouldn’t go into details of his future work at BitGo but he does want to try to fix the trading problem.
“The plan is to build a solution that will allow the institutional clients to get into the crypto space and participate in it as easily as it is for them trading other financial products like equity, fixed income and foreign exchange,” he said.
“Forex exchange is getting boring”
Working at an asset management firm, Carmi saw demand for crypto trading from many institutional investors, including pension funds and family offices, but found there was no infrastructure in place that help get them comfortable with this market.
Talking about his own interest in the crypto space, he said:
“Foreign exchange is becoming very boring, it’s very oversaturated. Equities can’t get any more boring. The institutional investors are looking for new outlets to trade and invest.”
Prior to Tower Research Capital, Carmi worked for five years at Deutsche Bank as a head of the foreign exchange prime brokerage. Before that, he spent years on various leading positions at Barclays, Lehman Brothers, UBS and Credit Suisse.
“Nick brings the right type of experience for BitGo to bridge between the complex technology of digital assets and the traditional financial markets,” said Mike Belshe, CEO of BitGo. “Nick will be critical to our future progress, helping us meet the existing needs of traditional clients while also helping us build a better financial market of the future in ways that can only be done with digital assets.”
INLOCK Launches Peer-to-Peer Crypto Lending Platform
Blockchain company INLOCK has announced on Thursday the launch of a peer-to-peer crypto lending platform to allow retail investors to utilize their crypto holdings.
According to the company, the platform will boost the purchasing power of digital currencies as anyone with some amount of crypto, willing to keep his holdings, can loan out without spending the digital assets. This will also increase the market liquidity as long term crypto investors can utilize their holdings.
Commenting on this development, Csaba Csabai, founder and chief executive of INLOCK, said: “We have seen far too many examples of people selling Bitcoins to finance their short or mid-term investment goals only to witness the price skyrocket in the following days – especially during 2017. Of course, nobody is able to predict the future, but the next best thing is to keep your options open.”
Massive demand for crypto loans
The crypto startup revealed that, within the first 24 hours of the launch of the peer-to-peer platform, 1220 lending contracts were signed involving cryptos worth over $350,000. INLOCK also saw an average annual percentage rate (APR) of 5.8 percent, while the most favorable APR remained at 8 percent.
“We receive an overwhelming amount of loan requests from entrepreneurs, business owners, and traders for this very problem on a daily basis,” Csabai added.
To minimize any centralized interference, interest rates on the Budapest-based lending platform is completely dependent on demand and supply on the market.
“Market competition creates the balance between the Lenders profit requirements and the Borrower’s demand for reasonable interest rates. It beats all artificially steered models – it’s all the control we’ll ever need,” David Sabo, business development strategist at the company, added.
Though the value of cryptocurrencies went down substantially since early 2018, digital asset lending businesses are thriving. Last month, New York-based Genesis Capital revealed that it wrote $425 million worth of loans to clients in the first quarter of 2019, the total number for a year was recorded at $1.53 billion.
JPMorgan Quietly Reboots the Blockchain Behind Its JPM Coin Cryptocurrency
JPMorgan’s technology teams spread across three continents have been busy updating the bank’s Quorum blockchain platform over the past six months, replacing key parts of its privacy-enhancing components.
Like JPMorgan’s recently announced partnership with Microsoft Azure, the updates were meant to make Quorum usable by a larger universe of firms.
According to JPMorgan Quorum lead Oli Harris, the Microsoft partnership is also a potential stepping stone to a long-contemplated spin-out of the open source software project.
Harris also talked about some possible applications of the bank’s prototype cryptocurrency, JPM Coin, in an interview with CoinDesk.
JPMorgan Chase has quietly replaced the guts of its blockchain.
Over the last six months, technologists spread across London, Singapore and the U.S. have “rebooted” Quorum, the megabank’s private version of the ethereum blockchain, said Oli Harris, JPM’s head of Quorum and crypto-assets strategy.
Specifically, the team replaced Constellation, Quorum’s privacy layer written in the Haskell computer language, with Tessera, which has a similar design, but is built in Java to make it easier for businesses to use and deploy.
This nitty-gritty effort was happening behind the scenes while the bank was out grabbing headlines with JPM Coin. But the work on Quorum’s privacy architecture is arguably as important as that internal prototype of a private cryptocurrency for clients.
For, like JPMorgan’s partnership with the Microsoft Azure Blockchain service announced last week, the reboot was designed to make Quorum usable by a larger universe of firms. And that broadening of the platform’s appeal, in turn, is helping to get Quorum ready for a possible life beyond the bank, which has been considering a spin-off of the project since early 2018.
Referring specifically to the Microsoft tie-up, Harris told CoinDesk:
“I would think of this as a stepping stone to a potential spin-out.”
“It’s open source software, available on Github and maintained by JPMorgan on behalf of everyone using Quorum,” Harris went on to explain. “The more users of Quorum, the better it is for everyone, because we can help with standardization and creating even more robust tech suite.”
Stepping back, Quorum was launched in early 2017, whereby the tech created an instant frisson of excitement by officially connecting the bank with ethereum (albeit a private version) and also adding an ambitious dose of blockchain privacy via zero-knowledge proofs (ZKPs).
Following blockchain program lead Amber Baldet’s departure from the bank in April 2018, there was a brief period when Quorum’s future looked uncertain. A victim of its own success to some degree, questions arose over how the bank was going to carry out its new and unplanned role as maintainer of a growing open source project running nascent technology.
While Harris and two other sources at JPMorgan said the bank continues to mull a spin-out, it seems these concerns are now being addressed regardless.
In addition to “all the go-to-market support, which is about getting new customers using Quorum” that JPMorgan and Microsoft are working on together, Harris said the two firms’ engineers are now collaborating, streamlining node deployment and abstracting away raw complexity.
This is being done “so that companies like JPMorgan can actually focus on the business applications and unlocking value from the technology, whereas Quorum powered by Microsoft will be dealing with a lot of the heavy lifting,” he said.
Further to that end, Harris said that in the same way a user can currently pick and choose which consensus mechanism to deploy with Quorum (Istanbul, Raft etc), an easy to apply, modular “menu” of privacy solutions will be available.
As such, JPMorgan is looking at a wide range of privacy tech with different use cases in mind, noted Harris, mentioning the likes of ZKP specialists like U.K.-based Aztec, which uses a more efficient variety of zero-knowledge proofs called range proofs and has a focus on bridging the gap between public and private blockchains.
JPM Coin and beyond
A number of interesting projects are running on Quorum today, such as energy commodity trading platform Vakt; trade finance blockchain Komgo; and the super-cool provenance tracking system Aura for luxury brand conglomerate LVMA.
However, the news of late has all been about stuff inside the bank. Foremost among them is JPM Coin, which is essentially tokenized cash on the Quorum ledger.
In addition to that, JPMorgan has also attracted some 220 banks to join its Interbank Information Network, which also uses Quorum to eradicate pain points in the way information circulates within foreign correspondent banking.
An obvious question concerns potential cross-pollination between the bank’s internal projects and other applications on Quorum. For example, where and when might JPM Coin begin to settle the cash part of securities transactions, or potentially be used for interbank payments and so on.
Harris, a former Accenture consultant who previously ran JPMorgan’s fintech and InResidence incubator program, said part of his job is “to look at this whole ecosystem holistically” and identify where projects within the bank that run on Quorum can intermingle.
“If you think through JPM Coin as the ability to tokenize fiat currency, with the support and all the discipline and rigor and legal and compliance behind one of the world’s largest banks, I think you can see us using JPM Coin in certain use cases,” he said.
Harris pointed to Dromaius, a debt issuance platform on Quorum, launched by Christine Moy, head of JPMorgan’s Blockchain Centre of Excellence at Consensus last year.
“I think Dromaius is a good one,” said Harris. “So if you are doing delivery versus payment, ie you issue the debt on the blockchain and then you also exchange the cash on the same chain, then you are just getting further benefits of the blockchain technology, because you can actually do things on the same chain, and you don’t need to settle the asset in the traditional rails.”
The same applies where you can exchange one currency for another simultaneously on the same chain, said Harris, “or anywhere you need to have tokenized fiat, like a dollar on the blockchain.”
Ahead in the cloud
The combination of blockchain and cloud computing, known as blockchain-as-a-service (BaaS), has become a competitive space, with Amazon Web Service recently announcing its Managed Blockchain service, IBM pushing its Bluemix cloud platform alongside its Hyperledger Fabric blockchain.
Harris said Quorum will naturally be multi-cloud, meaning not Azure-exclusive, though obviously the expectation is Quorum customers will opt for Azure given all the integration work that’s been done. Still, the tech can be supported on-premises in banks as well as on every public cloud provider and in hybrid situations.
Indeed, he said cloud computing provides a good analogy with blockchain. The way cloud in general is playing out, is how Harris envisages the evolution of permissioned ledgers versus public blockchains and interoperability between them.
His prediction is that “mesh of blockchains” will co-exist together for different use cases and companies will then be able to decide what they want to use for the specific problem they are trying to solve.
“I don’t feel it’s going to be a binary outcome where we are just waiting for people to solve certain technical issues, whether that’s performance in public ethereum, and then everyone is going to move over to the public space.”
In the meantime, being a pillar of enterprise ethereum comes with some responsibility to help in establishing standards, specifications and interoperability further down the road. This is shown in Quorum’s commitment to the Enterprise Ethereum Alliance and, in a recent example, the Microsoft-led token taxonomy initiative, Harris pointed out.
“This is all about network effects. We see Quorum as this evolving technology suite and are extremely lucky to have one leg in public ethereum and also one leg in large enterprises, now powered by JPMorgan and Microsoft in a coherent way.”
Blockchain Firm Raises $6 Mln From Major Energy Companies, Saudi Aramco Subsidiary
American blockchain startup Data Gumbo Corp. has raised $6 million from major energycompanies, including the venture wing of Saudi Arabian national petroleum and natural gas company Saudi Aramco. The news was published by energy-focused news outlet Worldoil on May 8.
In a Series A equity funding round, Data Gumbo ostensibly raised $6 million from companies such as Saudi Aramco Energy Ventures, the venture subsidiary of Saudi Aramco, and Equinor Technology Ventures, the venture subsidiary of Equinor, a Norwegian multinational energy operator. The new investment purportedly brings Data Gumbo’s total funding up to $9.3 million.
The funds will be used for developing Data Gumbo’s commercial blockchain network and adding to the company’s technical, sales, and marketing teams. The investors purportedly expect Data Gumbo’s blockchain-as-a-service platform to improve oil and gas supply chains by eliminating disputes and enabling automated payments, as well decreasing reconciliation times between supply chain counterparts.
Daniel Carter, Senior Investment Director at Saudi Aramco Energy Ventures, said that “distributed ledger technologies have the potential to bring win-win efficiencies between industrial companies and their suppliers.”
Recently, the Russian prime minister welcomed an initiative to use blockchain in agreements over gas supplies by the country’s state-owned gas giant Gazprom. The blockchain-based platform reportedly intends to allow data sharing between all the participants of a certain contract, as well as to improve the security of data.
In March, seven global oil and gas firms, including American industry giants ExxonMobil and Chevron, partnered to form the Oil & Gas Blockchain Consortium. The initiative intends to conduct proofs of concept in order to explore and apply the benefits of blockchain, as well as contribute to global adoption of the tech.
US: SEC and CFTC Aim for Literacy in Digital Assets, Blockchain Analysis
The hearings before the Senate Committee on Appropriations served to inform the Senate on the agencies’ budgetary needs while outlining various objectives and initiatives.
In their respective testimonies, SEC Chairman Jay Clayton and CFTC Chairman J. Christopher Giancarlo noted the importance of the agencies becoming literate in digital assets and blockchaintechnology.
As per the Clayton, the Office of Compliance Inspections and Examinations at the SEC has named “digital assets, including cryptocurrencies, coins and tokens” as high-risk investments.
Further, the SEC has requested the addition of four new positions in the Division of Trading and Markets — which is responsible for the regulation of “major securities market participants” — partially in order to increase their expertise regarding digital asset markets.
In the CFTC budget hearing, Giancarlo recalls that he has previously listed “the extraordinary pace of exponential technological change, the disintermediation of traditional actors and business models, and the need for technological literacy and big data capability” as areas that are currently challenging for regulators.
Giancarlo went on to say that CFTC is striving to adapt to this environment and become a “quantitative regulator.” He added that the CFTC should “be able to conduct independent market data analysis across different data sources, including decentralized blockchains and networks, without being reliant on self-regulatory organizations and market intermediaries.”
The CFTC chairman went on to say that the commission’s budget proposal would allow it to “expand its core economic expertise in order to conduct in-depth analytical and empirical studies” in areas it deems important.
As previously reported on Cointelegraph, there is no single federal classification for cryptocurrencies. One consequence of this is that the SEC and CFTC do not have the same regulations, although both agencies’ standards are legally valid and enforceable.
Ethereum Founder: EOS and Tron (TRX) Raise a Bunch of Money and Then “Fake it Till They Make it’
Ethereum Cofounder and ConsenSYS CEO Joe Lubin shared his views on some very popular blockchains in the ecosystem, making it very clear that his expectations are quite demanding and he is not carried away by promises or by the marketcap.
In an interview with Tom Shaughnessy, host of the Podcast “51%,” Lubin explained that while he acknowledges that Tron (TRX) and EOS have proven to be successful in getting the support of investors, from his point of view, they cannot meet the expectations of their users.
Tron (TRX) and EOS are Ethereum’s main competitors when it comes to use cases. The 3 platforms are focused on dApps and although Ethereum has a greater number of developments, the growth rate of Tron and EOS is much faster than that of Ethereum.
This is a clear sign that in the medium term, statistics can change, however, Lubin explains that the philosophy behind these two blockchains (as well as others) is simply based on raising as much money as possible with promises and improvisations.
“Some projects are certainly intending to be competitive with Ethereum, some projects are focusing on marketing to be competitive with Ethereum – Tron and EOS in that basket – and both of them have kind of taken an approach of ‘raise a bunch of money and fake it till you make it’ basically, and we’ll see how that goes.
Lubin, however, clarified that Ethereum is not an exclusive club where competition is not welcome. In fact, he explained that they have collaborated with other “rival” projects that provide useful technology and serious developments:
There are other good projects in the space, many of which have had close ties to Ethereum right from the start… It’s an amazingly collaborative ecosystem. There’s certainly lots of competition going on a daily basis, but we all are very friendly.
Joe Lubin and Vitalik Buterin: The Men Behind Ethereum Share The Same Opinions About Some “Rival” Projects
Lubin’s words show a similar vision to that of Vitalik Buterin, founder of Ethereum. The well-known programmer has supported important initiatives in the ecosystem, although he has not hesitated to criticize those projects and leaders he considers toxic to the community.
Tron is one of the developments that Buterin seems to dislike the most. The well-known crypto influencer once blamed Sun for copying other whitepapers in order to create his own document, and the constant fuzz between the two is common in crypto twitter.
Similarly, during the Blockchain Connect Conference: Academic 2019 on Jan. 11 in San Francisco, Buterin strongly criticized the consensus algorithms of Tron, EOS, and similar projects which he called “centralized pieces of trash”.
“A lot of the time when a blockchain project claims we can do 3,500 TPS because we have a different algorithm what we really mean is we are a centralized pile of trash that only works because we have seven nodes running the entire thing”
FBI Seizes Popular Dark Market Search Site DeepDotWeb for Money Laundering
The FBI has seized DeepDotWeb, a comparison search system and news site about dark web markets, accusing the outfit of money laundering.
Police in five countries arrested the alleged operators – including two Israelis and moderators in France, Germany, and the Netherlands – in a sweeping international raid disclosed Tuesday and took down the .com and .onion sites, replacing them with notices of seizure.
The site rose in prominence after larger dark web sites like Silk Road fell to government crackdowns. DeepDotWeb offered a number of services including cryptocurrency news related to privacy and dark web selling. The site also listed dark web markets for buying and selling cryptocurrency.
Archived image of the DeepDotWeb Crypto Market
TechCrunch reports that police arrested the alleged administrator of the site in Brazil.
It’s unclear what the suspects are charged with at this time aside from 18 U.S.C. § 1956, a U.S. anti-money-laundering statute that could carry a sentence of up to 20 years in prison.
CONFIRMED: @DeepDotWeb's all domains seized. (.com and .onion links)
– 2 suspects have been arrested in Ashdod & Tel Aviv (34 & 35 years old).
– Arrests also made in France, Germany, & the Netherlands.
– Another site administrator has been arrested in Brazil. (1/2) pic.twitter.com/CxzJcxyQoG
— Suprateek Bose (@SupraBo_) May 7, 2019
The site was up until May 7 at 5:28 UTC and abruptly shut down as police closed in on the site operators.
The seizure follows the recent arrest of two German nationals who ran Wall Street Markets, which despite the name dealt in illicit goods rather than stocks and bonds.
Belarussian Exchange to Offer Tokenized Government Bonds
According to the press release, users can now use fiat money or cryptocurrencies bitcoin (BTC) and ether (ETH) to invest in and trade Belarussian government bonds. Belarussian-based company Currency Com Bel LLC is reportedly the first organization to tokenize government bonds.
As is the case with other cryptocurrencies such as bitcoin, investors will be able to purchase fractional amounts of the new token. Initially, these tokens are being offered on the exchange at $1,000 per token; a token will represent one bond, and there will initially be 252 bonds with a 4.2% per anuum yield introduced to the exchange.
“All this was made possible by the progressive Decree No. 8 ‘On the Development of a Digital Economy’ that was ratified in Belarus in 2018, affirming the country’s commitment to playing a big role in the next chapter of the technological revolution.”
In a previous report by Cointelegraph, the national bank Oesterreichische Kontrollbank (OeKB) issued $1.35 billion worth of government bonds on behalf of the Austrian Treasury on the Ethereum public blockchain in an auction during September 2018.
Malta’s Registry of Companies Set to Run on Blockchain-Based System
The Registry of Companies is a public registry holding official information and documentation pertaining to new and existing companies. The agency demerged from the Malta Financial Services Authority’s (MFSA) and established itself as a separate entity at the end of last year. According to the Malta Independent, the new agency will be run on a blockchain-based system.
The establishment of a standalone agency aims to strengthen the internal management structure of the Registry. Parliamentary Secretary for Financial Services, Digital Economy and Innovation Silvio Schembri reportedly said:
“Through an extensive investment in IT, the Registry of Companies will be more efficient and will lessen unnecessary bureaucratic procedures. It will be run by a system which will handle all of the processes performed by the Registry of Companies. The new system will make possible the provision of new services which with the present system are not being provided bringing the agency the first in the world to be run on a blockchain based system."
Last December, seven southern European Union member states, including Malta, released a declaration promoting the use of Distributed Ledger Technology’s (DLT) the region. Namely, the document cites “education, transport, mobility, shipping, Land Registry, customs, company registry, and healthcare” as services which can be improved with the technology.
Later in January, a mission from the International Monetary Fund (IMF) judged that the growth of blockchain in Malta had created significant risks of money laundering and terrorism financing in the island’s economy. Among its recommendations, the IMF said the authorities would need to apply more sanctions and sharpen their understanding of possible risks and regulatory breaches.
As previously reported, the Prime Minister of Malta argued that DLT will transform the gamut of political, civic, and corporate systems. Their potential to solve “decades-old problems” drove the country to “launch itself as a ‘Blockchain Island,’” he said, claiming the island was “the first jurisdiction worldwide to regulate [the] technology.”
Samsung’s ‘Digital Transformation Framework’ Includes Blockchain Tech
At Samsung’s Real 2019 event in Seoul, Samsung SDS CEO Hong Won-pyo described the company’s plans to add blockchain tech to its entrprise IT solution packages.
Samsung SDS, formerly known as Samsung Data Systems, is the company’s IT consulting arm and it has been exploring blockchain tech for some time. The newly announced package of tools, called “Digital Transformation Framework,” will feature a number of updates including:
Intelligent enterprise and next generation ERP / SCM / IPA, intelligent factory (manufacturing / logistics / plant intelligence), cloud security, and innovative technology platforms (AI / block chain / IoT)
Image courtesy of Park Moon-mo
“Blockchain is a technology that is used in all areas of business including finance, manufacturing, logistics, and distribution,” said Hong Hyeong-jin, CEO of Samsung SDS’ Nexledger project. “We are upgrading the company’s blockchain platform at Nexledger to meet the demand.”
Samsung has been working in the blockchain space for months and recently released Nexledger Universal which can use its own consensus algorithm – Samsung SDS Nexledger Consensus Algorithm (NCA) – or the Hyperledger Fabric and ethereum blockchains.
“As digital convergence is accelerating, convergence services are expanding across industries,” said Hyeong-jin, “Blockchain technology is also being used in financials where payments are made through manufacturing, distribution, and distribution. We will upgrade Nexledger to meet customer needs.”
Ethereum-Powered Social Network Cent Launches Payments via Chat
Blogging platform Cent has launched a new feature that allows users to send each other the cryptocurrency ether via chat.
Announced Wednesday, the feature enables such payments even without downloading a crypto wallet like MetaMask. “You can just log on with an email, password and phone number,” Cent CEO Max Brody told CoinDesk.
Cent offers a built-in custodial wallet, comparable to the payments feature in Facebook messenger, and the ability to sync up with MetaMask. The team aims to offer a familiar social media experience while “still utilizing the best parts of Web3,” said Steven McKie, an investor in Cent via Amentum Capital, using the term for the decentralized web.
Indeed, Cent investor Jake Brukhman of CoinFund framed the startup’s mission in grand terms, telling CoinDesk:
“What Cent is doing long-term isn’t focused on tipping as much as the idea that people should be able to earn money online from their creativity, their art, their content.”
Stepping back, several publishing platforms are working to attract mainstream audiences with crypto payment features, from the journalism network Civil to the XRP-powered platform Coil. Beyond offering private chats with the ether payments feature, Cent also distinguishes itself from the pack with a unique tipping model.
Cent users “seed” content they like, basically speculating on its popularity. If, for example, a reader publicly tips $1 worth of ether to a blogger for a specific post, a quarter of the crypto goes to the content creator while the rest is divided among early readers who also “seeded” the post.
Earlier contributors who give larger amounts get a proportional fraction of the tip, which theoretically incentivizes fans to share and promote content because the more tips it attracts the more they also earn.
“The amount that you get depends on how much they gave,” Cent CTO Cameron Hejazi told CoinDesk.
Even before enabling this messaging feature, Cent was already gaining traction among ethereum fans. Up to 3,000 users transacted with ether through Cent over the past 30 days. During that time the top 10 bloggers, of which McKie is himself the leader, earned between $128–$399 each. Overall, Brody said, there is nearly $31,000 worth of ether loaded onto the platform.
“We get a lot of users from these other countries where they’ll have a family farm where they make their own food and they’ll have internet, but they won’t necessarily have big sources of income,” Brody said. “For those type of users, Cent can have a pretty significant impact.”
In conclusion, Hejazi added:
“Think of Cent more as a generalized transaction platform around any type of content. It could be that we’ll move into verticals like podcasts, photos, or video blogging. We just want to be the network that connects them, not just content-wise but socially and financially.”
2weeks ago, 8 May, Wednesday
Major Austrian Bank Raiffeisen Joins R3 Corda-Powered Global Trade Finance Network
As previously reported, Marco Polo — which is powered by R3’s Corda enterprise blockchain platform — counts major international banks such as BNP Paribas, ING and Sumitomo Mitsui Banking Corporation as members. Other prominent bank members include Standard Chartered Bank and NatWest, according to today’s press release.
As the release notes, Marco Polo leverages a distributed trade finance platform from TradeIX alongside Corda and aims to bring greater cost and time efficiency, as well as transparency, to commercial banks’ traditional and structured trade finance solutions.
In a statement, Daniel Cotti — managing director at the RBI Center of Excellence, Banking & Trade — said that the bank is looking to considerably expand its geographic coverage and help to drive Marco Polo as the main trade finance network in Europe and the fasting growing globally.
R3 CEO David E. Rutter underscored that “the current infrastructure that underlies trade finance is outdated and in need of investment and modernisation.” The blockchain-powered platform offers technological solutions such as APIs and an ERP-embedded application to innovate working capital offerings, the press release states.
Bitstamp Hires Ex-Coinbase Trading Head to Court Wall Street Money
Bitstamp, one of the longest-running cryptocurrency exchanges, has hired a former Coinbase executive and Wall Street veteran as its new head of U.S. operations.
Announced Wednesday, Hunter Merghart joined Bitstamp six months after quitting his job as the head of trading at San Francisco-based Coinbase in October. He will lead the opening of the Luxembourg-based exchange’s New York office — the company received a BitLicense from the state last month — and focus on serving institutional clients.
Merghart is “the perfect person to lead our U.S. operations, which includes making sure our retail and institutional investors have a platform and service that is equal to what they would find at any traditional exchange anywhere in the world,” Nejc Kodrič, CEO of Bitstamp, said in a press release.
Bitstamp became the 19th company to obtain a BitLicense, allowing it to serve New York residents. Now it’s planning to expand its business in the U.S., which until now had been in a “passive” phase, as Kodrič told CoinDesk earlier.
Merghart told CoinDesk he “really believes in the strategy that the team has put in place and can’t wait to help execute it.” He added:
“This is an amazing opportunity for me to take what I’ve learned in both traditional finance and crypto to a larger role where I can help grow the U.S. business of the largest European crypto exchange.”
In addition to licensing, Bitstamp has recently gone through some tech upgrades to gear up for serving institutional clients; in particular, it got a new matching engine and a surveillance platform from Cinnober, an IT provider for mainstream financial markets.
Meghart worked only six months at Coinbase, and reportedly left out of frustration over the lack of resources and clarity on the roadmap to building Coinbase’s institutional business, which he was in charge of.
Prior to Coinbase, he worked as a cash equity trader at Credit Suisse, vice president at RBC Capital Markets (part of the Royal Bank of Canada), and then as a director of trading at Barclays.
Turkish University Opens Blockchain Center at Boston's Northeastern University
Turkish Bahçeşehir University (BAU) has reportedly opened a blockchain center at Boston's Northeastern University (NEU) to provide informational support on blockchain technology, Daily Sabah reports on May 7.
Apart from informational support, the BAU–NEU Blockchain Laboratory's objective is to apply for funds in the United States, the European Union and Turkey, thus boosting Turkey's presence in the blockchain market and attract specialists in the field.
Commenting on the cooperation, Chair of the BAU Board of Trustees Enver Yücel said that he would also like to start blockchain-related master and doctoral education programs in partnership with the Turkish Exporter's Assembly. Bora Erdamar, director of BAU’s BlockchainIST Center, added:
"[Blockchain] will directly change all sectors from logistics to trade, from education to health, from energy to agriculture where we need to keep our products and people's information in a safe environment."
Blockchain technology has been gaining traction in the educational space. Recently, two South Korean universities, Yonsei University and Pohang University of Science and Technology, collaborated to develop an entire Blockchain Campus with its own cryptocurrency. Within the initiative, a student-centered project aims to increase day-to-day cryptocurrency usage.
The Indian Institute of Management (IIM) Calcutta and training platform TalentSpirit began jointly offering an advanced program in fintech and blockchain technology in February. The program is reportedly targeted at management and finance professionals aiming to educate participants on financial technology growth and its potential impact on the banking and financial ecosystem.
Former Investor Sues OneCoin Scheme, Seeks Class Action
Grablis is seeking damages and a class action suit to represent other investors purportedly defrauded by OneCoin.
The full list of defendants in this lawsuit — Grablis v. OneCoin Ltd. — includes OneCoin Ltd, Ruja Ignatova, Konstantin Ignatov, Sebastian Greenwood, Mark Scott, along with other potential parties who have yet to be named.
According to a Bloomberg report on May 7, OneCoin founder Ruja Ignatova has been charged with wire fraud, securities fraud and money laundering; Konstantin Ignatova, Ruja’s younger brother and purported executive at OneCoin, was charged with wire fraud, securities fraud and money laundering in March.
As noted in the class action complaint, Greenwood is the co-founder and “public face” of OneCoin. Scott, on the other hand, is listed as a licensed attorney, who stands accused of using his legal knowledge to help the firm launder money via hedge funds.
Silver Miller, a law firm which purportedly specializes in representing cryptocurrency investors, has issued a press release instructing potentially affected investors on how they can participate in the class action suit.
As previously reported by Cointelegraph, OneCoin was a global Ponzi Scheme that has used smoke and mirrors tactics to maintain an air of legitimacy. The scam used a multi-level marketing scheme to sell education materials for trading that came with tokens that could purportedly be used to mine onecoins.
Sprott CEO Predicts Bullish Future for Blockchain-Based Digital Gold
Regarding the day-to-day usability of gold — and how blockchain improves the situation — Grosskopf remarks:
“I think it was quite realistic to criticize gold because you weren’t gonna go to a gas station and pay for your fill-up with gold coins. But now, when gold can be digitized, put on the blockchain — moved around very easily, quickly, low cost between financial accounts, and it will even be used as a payment metric. There’s gonna be cards coming out where you can use your gold to pay for things, including foreign purchases when you’re traveling.”
He added that, in order for gold to be effective as a form of “monetary replacement” it needs to be used by a wider base of people. The ability to use gold as an everyday payment method would purportedly help realize this goal.
Grosskopf also distinguishes “digital gold” from bitcoin (BTC) due to the fact that the former — unlike the latter — is pegged to a physical asset (gold); essentially, he argues that digital gold is a type of stablecoin.
However, both bitcoin and Grosskopf’s hypothetical digital gold are similar in that they use blockchain technology to provide a secure means of tracking online transactions. Grosskopf goes so far as to say that, due to operating on a tracked ledger, digital gold “can’t be hacked.”
Bitcoin itself has been called a form of “digital gold” in that it will purportedly provide a stable store of value at some point in future. In February, Mike Novogratz, the founder of crypto merchant bank Galaxy Digital, argued that bitcoin provides a sort of “sovereign money,” independent from government controls.
Bitmain Discloses 88% Reduction In Own Bitcoin Mining Power
Bitmain’s internal bitcoin mining operations are generating 88 percent less computing power than a month ago, suggesting that the industry giant has cut back on capacity.
According to the hashing power disclosure that the company releases each month, as of May 7, the hash rate of all Bitmain-owned hardware running the SHA265 algorithm – which the bitcoin and bitcoin cash networks are based on – had dropped to just 237.29 quadrillion hashes per second (PH/s). Just a month ago, it was at 2,072 PH/s.
Bitmain, based in Beijing, manufactures mining equipment that it sells to others and also mines coins for itself. The firm started disclosing the hashrate of the machines it owns on a monthly basis in July of last year. Archived pages available online show that the hash rate was 1,692 PH/s that month, and then increased to 2,339 PH/s in October.
This figure then dropped below 1,700 PH/s in March, in line with the overall decline of the bitcoin network’s total computing power since November of last year as bitcoin’s price plunged below $4,000 during the same period. It then climbed slightly in early April before the latest steep drop.
Partly as a result of that drop, Bitmain’s share of the bitcoin network’s total computing power has also shrunk from four percent to now just 0.4 percent.
Assuming all the hashing power comes from the more widely used AntMiner S9, each with a hash rate of 14 tera hashes per second (TH/s), Bitmain may have ceased using more than 130,000 machines to mine for itself.
The cutback is notable since many miners in China have been gearing up to take advantage of cheap hydroelectric power during the coming rainy season. As recently as March, Bitmain was said to be planning to deploy $80 million worth of its own machines this summer.
Smaller slice, bigger pie
To be clear: none of this should be taken to mean Bitmain has shut down all its mining equipment.
Even as the company’s share of computing power on the network has declined, the denominator has grown: bitcoin’s total hash power just reached a six-month high over 58,000 PH/s on May 2, according to data from blockchain.info.
Meanwhile, the hash rate of the bitcoin cash network – which Bitmain has vocally supported – has been steady around 2,000 to 2,500 PH/s since early this year, data shows.
When contacted by CoinDesk, a Bitmain spokesperson would not say what exactly led to the decrease in the firm’s hash rate.
“It is [in the] natural course of the mining business where the hash rate owned by one body at one instant may be owned by someone else at another instant,” the spokesperson said.
Also, Bitmain has been advertising a contract cloud mining service for retail customers called BitDeer that uses the company’s flagship AntMiner S15, S17 and S11 equipment, with many plans marked on the website as sold-out.
Bitcoin [BTC] may have a royal fan; Prince Charles tips his hat to blockchain and cryptocurrency
Bitcoin may be the best performing financial asset in 2018, Bitcoin may have seen a massive 50 percent growth in 2019 alone, Bitcoin may have broken multiple resistance levels, entered the Golden Cross and initiated its bull run, but it certainly doesn’t compare to this.
Prince Charles, the heir apparent to the British monarchy and eldest son to Queen Elizabeth II tipped his hat to Bitcoin and its underlying technology, the blockchain. While greeting a buoyant crowd in Germany, the Prince of Wales, in the unlikeliest of events, responded to a question about Bitcoin.
According to this video from @coindorado, the Prince was asked about Bitcoin and cryptocurrencies whilst in Berlin. He initially shrugged the question, stating “Don’t know about that one,” amid possible confusion, however, the mention of the underlying technology of “Blockchain,” made him gather his thoughts. The second in line to the 1,200-year-old monarchy stated about the currency that aims to replace the pound:
“Very interesting development,”
Despite the passer-by nature of the comment, the semblance of appreciation for cryptocurrency and blockchain by a 70-year old prince of the most prominent royal family in the world is a testament to the growth of the industry beyond its regular crowd. When Satoshi Nakamoto drew up the Bitcoin whitepaper, he didn’t quite picture Prince Charles to be a fan.
Could be the start of monarchies adopting cryptocurrencies and launching their own token sales to boost their standing amongst their citizens? Maybe royal baby names could be voted on via lottery sales based on the royal tokens held.
I hope Binance is taking note and is looking to list a VICTORIA [VIC] token in the coming months.
Brave Browser rises in popularity on Android; closes in on Google Chrome on Play Store
Following its well-anticipated launch, the new Brave Browser seems to have had a strong impact on the community due to its unique reward system. Brave, with the help of its token BAT, has been trying to revolutionize the digital space using its ad-blocking feature.
The Brave browser, which was launched in June 2018, had announced that there would also be a partial ad-blocking feature in the future. This ad-revenue platform was only launched recently and is speculated by many as the reason for the increase in Brave Browser’s popularity.
According to reports, Google Play Store saw a huge number of Brave Browser downloads following the launch of the ad-revenue program. Over the past three months, Brave crossed Chrome to become the second-most-popular app. However in May, it lost its position and settled for the third position. Following Brave Browser on the fourth position, was the Opera browser with an inbuilt VPN.
Further, Brave Browser is only two positions below Google Chrome on Play Store’s communication section. While Google Chrome is ranked #49 on the list, Brave Browser was listed at #51. Brave Browser’s BAT rewards are touted as the reason for its dramatic increase in visibility since all major publications had previously covered the development.
In terms of search volume, Google Chrome led the charts, holding over 70 percent of the volume owing to its vast existing user base. However, Brave made it to the second position, a few notches above Mozilla Firefox and Opera.
The rewards program was launched on April 24 and the official announcement had stated,
“These users will receive 70% of the ad revenue share as a reward for their attention, which they can auto-contribute to publishers under default settings. Brave’s platform is a new path toward a better Internet, where users can browse the web, earn rewards, and support their favorite content creators while preserving their privacy.”
Within a couple of hours of the announcement, BAT surged by 8%, before falling victim to market correction. At press time, BAT was valued at $0.344 after rising by a meager 1.08% over the past day.
Colombia: Newly Formed Blockchain Association Aims for Dialogue With Government
Six public and private Colombian companies have joined forces to launch the Colombia Blockchain Association, Spanish news agency EFE reported May 17. The Association describes itself as aiming to support the country’s crypto and blockchain ecosystems and to advise the national government on matters concerning regulation of the crypto sphere.
The companies involved are Buda Colombia, Bitcoin Colombia, Cajero.co, IntiColombia, Panda Group and RSK. Representatives from each, as well as Mauricio Toro – Green party member of the Colombian House of Representatives – reportedly attended an event this Wednesday in Bogota to discuss the agenda of the new organization.
As Diario Bitcoin reports, Toro spoke out at the event against an “abusive” traditional financial sector that encumbers Colombians with unnecessary costs. Citizens “distrust” the current system, he suggested. He said the new association should act as an interlocutor to the state in order to encourage the “informed” adoption of new financial technologies, without compromising the decentralized principles of blockchain, as well as to prevent stifling overregulation.
Buda CEO Alejandro Beltrán contributed his perspective on the potential future of crypto across Latin America, noting that there are estimated to be over 200 mln unbanked citizens in the continent who could be served by a crypto economy. He also noted how complicated it currently is for migrants to send remittances back to their countries of origin using fiat money.
Beyond financial applications, event participants reportedly discussed the use of blockchain in other fields, including information security, intellectual property, the energy sector, electoral systems and real estate registers.
Last year, the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) released a report stating that blockchain technology could help address problems facing the ailing banking sector across the continent. Countries in the region with underbanked populations, such as Venezuela, have been encouraging their citizens to educate themselves about crypto. Under pressure from international sanctions, Venezuela launched an oil-backed national cryptocurrency, the Petro, earlier this year.
FTC Sues Smart Backpack Crowdfunder Who Spent Proceeds On Bitcoin
The Federal Trade Commission (FTC) is suing a startup that promised its crowdfunding backers a smart backpack but instead spent its proceeds on bitcoin and credit card bills.
The complaint states that Douglas Monahan and his company iBackPack of Texas, LLC, raised $800,000 from consumers to “develop a handful of products” including a smart backpack that contained batteries to charge phones and laptops.
Instead of supplying the iBackpack, the FTC said that Monahan allegedly spent the money on “personal purposes.” The FTC then claimed that Monahan threatened complainers online:
“Despite Defendants’ repeated assurances, Defendants have not used contributions to produce and distribute completed products. Instead, Defendants have used a large share of contributions for Defendant Monahan’s own personal purposes, such as making bitcoin purchases and ATM withdrawals and paying off personal credit cards; for marketing efforts to raise additional funds from consumers; and for other business ventures.
Hundreds of consumers have complained about Defendants’ failure to produce the products. Some consumers have also complained that Defendant Monahan sent threats to try to silence their criticism, including by telling one consumer that he knew where the consumer lived and had other personal information about the consumer, and by threatening to sue another consumer and his employer for libel and slander.”
“If you raise money by crowdfunding, you don’t have to guarantee that your idea will work,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “But you do have to use the money to work on your idea — or expect to hear from the FTC.”
The FTC is asking Monahan to “for permanent injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies.” In other words, he’d better cash in his BTC.
Privacy Cryptocurrency Grin Receives Mysterious $300K Bitcoin Donation
The developers behind the cryptocurrency project Grin have reportedly received an anonymous donation of 50 BTC – worth an estimated $300,000.
The news, shared during a weekly meeting of developers, is notable, as Grin came to market touting what it called a “fair launch,” meaning project leaders did not raise any funds via an initial coin offering (ICO) or a private sale of the tokens that would power the technology.
This means development of the Grin protocol has been entirely reliant on voluntary donations and crowd-funding. A relatively new cryptocurrency launched back in January, Grin leverages novel technology to obfuscate transaction information.
One developer, Daniel Lehnberg, said about the large monetary gift:
“A really big and heartfelt thanks. We’ll ensure [we] put that to good use.”
Users can donate funds at any point in time to five different public addresses accepting Grin, bitcoin, ethereum and zcash. The most recent donation of 50 BTC was placed in the Grin bitcoin SegWit address and mined on the bitcoin blockchain Sunday.
Still, the donation is also a sign that Grin’s funding model may be working.
According to a recently released financial report, funding for the project has increased almost two-fold over the past four months from an estimated $65,237.35 to $123,423.73. Now, with the additional 50 BTC donation, the project holds roughly six times the amount of funds it started out with at the top of 2019.
Going forward, funds are expected to be put towards project needs including building and deploying key infrastructure, website design and marketing development, mining hardware design and more.
Litecoin’s [LTC] Charlie Lee has zero understanding of the economics of why Bitcoin became popular, claims Roger Ver
In an interesting interview with Sirtoshi, Roger Ver opened up about the most controversial people in the cryptospace. When asked about his thoughts on Litecoin’s Charlie Lee, Ver said,
“His whole goal, from day one, was to be right there ready to pick up the (BTC’s) slack.”
He further claimed that Lee was waiting for Bitcoin’s transaction fees rising and a reduction in reliability, which would place Litecoin as the best alternative for the cryptocurrency. He also noted,
“If it wasn’t for the crippling of BTC, Litecoin would be completely pointless and worthless.”
Ver also admitted that the only time he bought altcoins was owing to his preconceived doubts about Bitcoin’s ability to scale. Although the prominent Bitcoin supporter never owned Litecoins, he stated that, “having a diverse portfolio is the smart thing to do.”
Roger Ver wasn’t done talking about Lee, stating that,
“I don’t know how much Charlie is in it for the money or not, but I do know that he has zero understanding of the economics of why Bitcoin became popular to begin with.”
Ver also argued that he believes that Lee has been paid by some influential people to promote negative publicity for Bitcoin.
Ver also expressed his personal view about government organizations, stating,
“If you want to get back at government, the best way to do it is to hold them accountable to their own laws.”
Further, Ver supported this claim by stating that governments decide legality based on their personal interests, while giving examples of Jewish concentration camps and the legal status of marijuana across the globe. Roger Ver concluded the topic by supporting a ‘voluntary approach’ to conduct life (and cryptocurrency), since it marks the “difference between working for a living or being a slave.”
2weeks ago, 7 May, Tuesday
Liquid.com Unveils Liquid Pro, a Mobile App For Pro Crypto Traders
SINGAPORE, 7th May 2019 – Global cryptocurrency platform Liquid.com (“Liquid”) today announced the launch of the company’s new mobile app, Liquid Pro, available on Android and iOS. The mobile app is free to download globally, subject to country or region availability by Google Play Store and App Store. In Japan, Liquid users are able to use a Japan-only mobile app version called Liquid Lite.
Liquid Pro features a first-of-its-kind complete set of tools for margin traders, who can open and manage positions all within the app, trading with up to 25x leverage on markets such as BTC/USD and BTC/JPY.
With the Liquid Pro mobile app, users are able to place and execute trades with full charting capabilities optimized for mobile devices. Indicators and tools available include RSI, Bollinger bands, SMA and EMA. Users can also manage their portfolios more efficiently on their smartphone by tracking their positions on Liquid Pro, enabling quicker reactions to market movements while on the go.
Liquid reaffirms its commitment to the security of customer assets with the Liquid Pro app biometric unlock feature, complementing Liquid’s existing security features, including storage of 100% of customer assets in multisig cold wallets.
Liquid CEO Mike Kayamori said: “Liquid Pro was developed based on customer feedback from a broad cross-section of professional traders, who helped us identify what would be most important for them to have in a crypto trading app. Our market research highlighted a need for pro traders to be able to more effectively, conveniently make trades and manage positions while away from a computer Crypto traders today want to be able to take full control of their trades no matter where they are. This includes margin trading and being able to properly manage positions on a smartphone. Our product team worked tirelessly to build an app that would help enhance our customers’ trading experience, from receiving alerts to making market moves, anytime, anywhere.”
For more information on Liquid Pro, visit: https://www.liquid.com/mobile-app/
Founded in 2014, we are a leading global fintech company that operates Liquid.com (“Liquid”), a global cryptocurrency platform that provides trading, exchange, and next generation financial services powered by blockchain technology. With offices in Japan, Singapore and Vietnam, Liquid combines a strong network of local partners with extensive team experience in banking and financial products to deliver best in class financial services for its customers.
Today, Liquid is the world’s largest crypto-fiat platform by transaction volume, regulated in Japan. Powered by the World book, which provides customers enhanced price matching and deeper liquidity for various fiat and cryptocurrency pairs, Liquid offers trading services for major cryptocurrencies such as Bitcoin and Ethereum against fiat currency pairs in Japanese yen, US, Singapore and Australian dollar, and Euro.
As part of the Liquid roadmap, we are developing a range of new features and services including a distributed ledger, which will allow other fintech companies to build their products and services on distributed ledger technology.
In the span of two years:
September 2017 – We became the first global cryptocurrency exchange to be officially licensed by the Japan Financial Services Agency.
October 2017 – We became the first licensed global cryptocurrency exchange in Japan to launch a global Initial Coin Offering (ICO), also known as the Qash Token Sale.
November 2017 – We successfully raised 350m Qash (the equivalent of 350K ETH or ~USD105m) in an oversubscribed ICO, to fund the growth of the Liquid platform.
September 2018 – Our historical trading platforms, Quoinex and Qryptos, were merged and relaunched as Liquid.
July 2018 – Our trading platforms exceeded USD50 billion in transaction volume in the past 12 months.
More than just a cryptocurrency exchange, Liquid offers powerful trading features which include:
Margin trading of up to 100x leverage for select crypto-fiat pairings
A sophisticated user dashboard for pro traders
Secure cold wallet storage and KYC compliance for individual and corporate customers
Proprietary World Book technology that matches orders across global order books, providing access to liquidity pools sourced by a unified platform, Liquid.com
Liquid Infinity, a Bitcoin Contracts For Difference (CFD) product that provides up to 100x leverage
ConsenSys Announces Major Restructuring as Longtime Executive Kavita Gupta Steps Down
In a move which will also see the departure of a founding executive, ConsenSys will consolidate ConsenSys Labs, accelerator Tachyon and VC operation, ConsenSys Ventures, under one umbrella investment arm.
“To continue to scale our investment activities, we need to consolidate systems and operations to improve our efficiency and portfolio management, while providing the best possible experience for founders in every phase of the company building lifecycle,'' ConsenSys founder Joseph Lubin commented in the press release. He added:
“As the market matures and grows, we are redesigning our investment activities to reflect our learnings and established best practices.”
Gupta, who has been with ConsenSys since its inception, will stay on in an advisory role.
Other executives remain upbeat about the future, as 2019 looks set to reverse some of the losses seen throughout the previous year, including with ConsenSys’ lifeline, ether (ETH).
“We are at an incredibly exciting inflection point in our ecosystem; we are seeing many successful founders from the Web 2.0 era turning to Ethereum and choosing to partner with ConsenSys as they look to build their next ventures,” ConsenSys Labs managing partner, Ron Garrett, added. He continued:
“ConsenSys is committed to pushing the limits of what venture capital means in an industry redefining decades-old investment norms.”
‘One-Stop Shop’ for Crypto Mining and Trading to Launch Spot Market May 23
Cryptocurrency exchange and mining startup Bcause LLC is a few weeks away from launching its spot market.
The Chicago-based company has tentatively set May 23 as the go-live date for bitcoin, bitcoin cash, ether, and litecoin, co-founder and chief marketing officer Thomas Flake told CoinDesk. In anticipation of the launch, it has obtained money transmitter licenses in eight states, with 20 more applications pending, Flake said.
Among the first states where Bcause will be available are Illinois, Virginia, Washington and Texas. Bcause has also applied for New York’s BitLicense, but the team doesn’t expect to launch in the state any time soon as the process can take up to two years, Flake said.
Bcause also registered as a money services business with the Financial Crimes Enforcement Network (FinCEN). And earlier this year, the firm announced that it would be using Nasdaq’s matching engine, clearing and market surveillance tech when it launches trading.
Ultimately, Bcause aims to be a one-stop shop for crypto mining and trading, including derivative contracts, and it’s applied to the Commodity Futures Trading Commission (CFTC) to become a registered designated contracts market and a designated clearing organization. This is going to take some time, too, so the futures market will be launched later.
The company is served by a “bank in Illinois,” Flake said, declining to name it.
Bcause also took advantage of the Prairie State’s “substantial history in the derivatives market and a good pool of talent,” he said; in December it quietly hired George Sladoje, a former executive vice president of the Chicago Board of Trade and Chicago Stock Exchange, and later a COO of a Nasdaq subsidiary, OMX Commodities Clearing Company. Sladoje is now Bcause’s chief financial officer.
More certainty for miners
Currently, Bcause operates a data center in Virginia Beach, Virginia where it hosts miners for clients. It believes combining this service with spot and eventually derivatives trading will give customers more confidence: they will be able to sell the crypto they mined on Bcause’s facility easily on the spot market or secure futures contracts to sell them later at a comfortable price.
“You get rid of some of the uncertainty, which makes investors much happier. If you go from saying, ‘I don’t know what the price of bitcoin will be in nine months,’ to saying, ‘I’ll be able to liquidate it because I have options at $6,500 in December next year,’ suddenly, a lot of uncertainty is off the table.”
This model will help make the mining business more attractive for financial institutions, Flake said.
Bcause is not mining crypto for itself at this initial stage; it’s only hosting customers’ miners. However, it’s investigating possible proprietary mining in the future, Flake said.
Right now, the data center in Virginia has miners with a joint capacity of 50 megawatts, mostly Antminer S9 machines manufactured by Bitmain. The demand for mining power is low now, Flake admitted, especially compared with a year ago:
“In the first quarter of 2018, we had to turn away $250,000 of contracts — we just didn’t have capacity. In the last quarter of 2018, that demand dried out completely. But in the last six weeks, we started seeing one or two inquiries a week.”
When the bitcoin price eventually rebounds to $7,000, demand for miners “will take off again,” Flake said.
In January 2018, Bcause struck a deal with the city of Virginia Beach, which granted $500,000 to the company for building the mining facility in town and creating new jobs there.
Bitcoin [BTC] performed better than crude oil and tech stocks in 2019, claims Binance Research
Bitcoin [BTC], the world’s largest cryptocurrency, has had an exciting new year as a rise in its prices proved its naysayers and critics wrong. The latest report compiled by Binance Research gave more evidence to support this fact, with numbers suggesting that Bitcoin has outperformed most traditional asset classes in 2019.
BTC’s Year-to-Date [YTD] returns were compared to that of crude oil, tech stocks, United States’ real estate market and other commodities like global stocks and natural resources. Statistics showed that Bitcoin’s YTD was 53 percent, when compared to crude oil’s 33 percent and the 24 percent generated by tech stocks. The research further stated that assets like gold and agriculture generated a negative YTD of 1 percent and 5 percent, respectively.
Bitcoin generating more YTD than gold was a key highlight because of the conflict between gold as a standard store of value and Bitcoin’s claim to that title. This competition was also highlighted by a report presented by the World Gold Council [WGC] recently, where it stated,
“Physical gold can be bought for a small percentage above spot price, and purchasing gold via allocated, physically-backed gold ETFs can cost less than a basis point over spot As an example, Bitcoin charges many percentage points (we’ve seen as high as 9% on some exchanges) via the process of the bid/ask spreads and entering and exiting positions.”
Binance’s research was conducted to prove that the bear market that had taken hold of the cryptocurrency market last year, had not had any long-lasting effects on the world’s largest cryptocurrency. Many users queried whether the charts would retain the same look if the parameters were risk adjusted. However, Binance Research was yet to respond, at press time.
Despite positive developments in the Bitcoin universe, many critics remain adamant in their opinion that Bitcoin has no place in the world of finance. This was elucidated by Nobel Prize winner, Joseph Stiglitz, who stated,
“It disturbs me a great deal the attention that was given to cryptocurrencies because those were moving things off of a transparent platform into a dark platform.”
Alibaba’s Ant Financial Backs $10 Million Round for Blockchain Privacy Startup
QEDIT, a developer of privacy technology for enterprise blockchains, has closed a $10 million Series A round from investors including Ant Financial, the payments affiliate of Chinese e-commerce giant Alibaba.
Ant Financial will also be incorporating QEDIT’s zero-knowledge proof (ZKP) tech into its blockchain projects, the companies announced Tuesday. Other high-profile partnerships applying QEDIT’s ZKPs include software giant VMWare and RGAX, a subsidiary of Reinsurance Group of America.
QEDIT’s investment round was led by MizMaa Ventures, with participation from Ant Financial and RGAX as well as Meron Capital, Collider Ventures, Jovono and Target Global. QEDIT has received a total of $14 million in funding to date, comprising the A round, a previous $3 million seed round and $1 million in grants.
Geoff Jiang, a vice president and the general manager of Ant Financial’s technology and business innovation group, said in a statement:
“Ant Financial shares a common vision with QEDIT to protect data privacy and security. Robust privacy measures are critical to the ongoing development of the wider finance sector. Together with QEDIT, Ant Financial is committed to providing such capabilities as part of our blockchain services.”
Jonathan Rouach, CEO and co-founder of QEDIT, said the ZKP schemes his Tel Aviv-based company builds are compatible with most varieties of enterprise blockchain, and this has led to the company gaining traction in Asia.
Rouach told CoinDesk:
“We have been getting our product out to large providers in Asia and one of them is Ant Financial, the largest fintech in the world. So our product is compatible with the Ant Financial blockchain offering.”
He pointed out that Ant Financial has launched production blockchain efforts and is very familiar with the need for privacy when moving assets around. (The company, formerly known as Alipay, has applied blockchain to remittances between Hong Kong and the Phillippines and tracking the provenance of rice grown in China.)
“We hear about it less in the West, but there is a lot of progress happening between companies and countries in East Asia,” he added.
Stepping back, zero knowledge schemes provide a way of proving possession of a secret without revealing the secret itself. Many have tried to apply this technology to restore privacy on blockchains, which in their default state err on the side of broadcasting data.
For instance, QEDIT has demonstrated on the public ethereum blockchain how to prove an individual falls within a certain tax bracket without access to the fundamental data, Rouach said. A later proof of concept (PoC) with BNP Paribas around collateral management for trade finance prevented fraud which can occur when a trader uses the same collateral to get financing twice from two different banks.
“The banks have no way of knowing whether collateral has already been accounted towards other finance because the banks cannot collaborate on private information,” Rouach said. “We worked out a mechanism on a blockchain where the banks can check collateral has only been used once without having to share client information.”
Outlining how QEDIT’s zero knowledge tech could be used by the likes of Ant Financial and VMware, Rouach said when a network operates across multiple cloud environments, ZKP solutions allow cloud deployment of blockchain without revealing any sensitive information outside of your chosen cloud provider.
“We are increasingly seeing industries employing enterprise blockchain as their collaboration backbone, where competitors are joining the same network. Our integration to enterprise blockchain stacks from Ant Financial and VMware lets clients pick a Blockchain-as-a-Service provider and have QEDIT’s privacy layer solution included by default,” he said.
When applied to the insurance industry, ZKPs help fight claim fraud, where claimants have been able to exploit information asymmetries between insurers to make more than one claim on the same loss or event (insurers have been unable to combat this due to restrictions over data-sharing between one another), Rouach said.
“Using ZKPs, insurers can prove an event took place without revealing the underlying secure information. QEDIT enables reliable use of each insurer’s claim event data without handing over the data itself to anyone, thus making claim fraud impossible,” he said.
A practical impediment when it comes to using ZKPs is the amount of computation these proving schemes can consume, which can hamper a blockchain’s performance. Like many of the projects in the space, QEDIT is working hard on solving scaling and performance challenges around zero-knowledge schemes.
To this end, Rouach and his team have devised a scaling mechanism called “proof chaining” which can generate proofs in parallel. “This lets us take a proof and cut it into smaller pieces and then parallelize those pieces on different machines and to do this in a way that scales,” he said.
In addition to making the technology more practical, QEDIT backs efforts to standardize ZKPs so they can be sold to the enterprise world, said Rouche, concluding:
This is what will move blockchain from a test PoC to actually deployable network; it’s what allows competitors to be part of the same network without having to rely on some central authority.”
Andreas Antonopoulos says credibility of key performance indicators [KPIs] depends heavily on choice of metrics
The cryptocurrency industry maintains its position as the most volatile and unpredictable market for investors. As a result, the market is home to a huge number of people trying to accurately predict market changes, in order to reduce investment risks.
Andrea Antonopoulos, a prominent Bitcoin, and open blockchain expert, conducted a live session discussing the alternative uses of blockchain, accompanied by various follow-up questions. Antonopoulos also addressed some of the questions that were asked by the viewers of his previous live session.
One of the questions highlighted was,
“Should we consider code commits, blockchain activity, number of DApps, or number of peers as key performance indicators (KPIs)? What are the metrics for success?”
Antonopoulos suggested that the answer “depends on you’re trying to achieve”. Supporting this statement, he explained how the selection of performance indicators reflected the end goal of an individual. He further persuaded his viewers to ask themselves,
“Are you looking at performance metrics that tell you whether a blockchain is sufficiently decentralized or actively developed or showing a lot of innovation in the community? Is it something where you’re looking for future increases in value?”
Coming back to the main question, Antonopoulos stated that the credibility of KPIs depends heavily on choosing the metrics that suit their specific needs. However, he conceded that it’s difficult in many cases to measure these things accurately. Antonopoulos also told his viewers to avoid seeing KPIs as an investment zero-sum game where one system wins and another system loses.
Antonopoulos added that many people in the crypto-ecosystem try to attach themselves to certain metrics based on biased ideas.
“What really matters is, which of these systems solves a problem for you better than any of the other systems that you’ve used,” Antonopoulos concluded.
NY Judge Orders Narrowing of “Amorphous” Bitfinex Injunction
Earlier this week, a New York judge has demanded that controversial cryptocurrency exchange Bitfinex turn over documents relevant to the exchange’s purported cover-up of an $850 million loss with a loan from Tether, a stablecoin issuer that some have deemed as too close to the exchange for comfort.
However, the judge, Joel M. Cohen of the New York Supreme Court, wants to sort out a few things before the demands must be met.
”Amorphous and Endless”
During a hearing on Monday afternoon, Cohen said that he took issue with the “substantive and temporal” scope of the preliminary injunction that was secured by the New York Attorney General’s office at the end of April.
“The preliminary injunction that we have right now is vague, open-ended and not sufficiently tailored to precisely what the AG has shown will cause imminent harm,” he explained. “I think it’s both amorphous and endless.”
Therefore, a week was granted for the attorneys of NYAG, Bitfinex, and Tether to agree on what the scope of the injunction will be. “What I would suggest you both do is meet and talk about it, you seem like a reasonable group, in let’s say a week either with a single or proposed revision that accomplishes what we’re trying to accomplish here, and if you can’t, with individual proposals,” he said.
The injunction at the center of the judge’s demands was originally filed on April 25th, the same day that the NYAG revealed the discovery that Bitfinex had taken a $1 billion loan from Tether’s reserves after losing $850 million to Crypto Capital, one of the exchange’s payment processors.Federal prosecutors eventually revealed that Crypto Capital’s operators had its accounts frozen after its operators were indicted for bank fraud.
Last week, attorneys for Bitfinex and Tether filed to either vacate or modify the preliminary injunction, arguing that barring Btifinex from accessing the funds that Tether had loaned to it “would not protect anyone but would instead cause great disruption to Bitfinex and Tether — ultimately to the detriment of market participants on whose behalf the Attorney General purports to be acting.”
Since the injunction was filed, Bitfinex’ customers have withdrawn over 30,000 Bitcoins and 1 million Ether tokens. In the filing to vacate or modify, it was said that the market caps of “dozens of cryptocurrencies” collectively lost more than $10 billion within the hour that the injunction was made on April 24th.
The news also coincides with Bitfinex’ effort to launch a $1 billion dollar token sale, money that the exchange plans to use to cover its losses.
Bitcoin Miners Send Message at Fidelity: We Run on Clean Energy, Not Dirty Coal
Bitcoin miners made the case for their industry as a driver of clean energy adoption, rather than the ecological disaster depicted by critics, at Fidelity’s Mining Summit Friday.
The venue for the daylong event was as notable as the talks. The Fidelity Center for Applied Technology, an R&D division that has dabbled in bitcoin mining, hosted the conference at the financial services giant’s global headquarters in Boston. Fidelity has embraced the crypto markets more than most incumbents; this year it launched Fidelity Digital Asset Services, which handles custody of bitcoin for institutional clients and is expected to roll out trading in the coming weeks.
But aside from welcoming the 300 or so attendees and a brief overview of mining history by Jurica Bulovic, innovation manager at Fidelity Labs (a different R&D unit), Fidelity mostly ceded the stage to guest speakers. In their presentations, these miners and others sought to disprove the popular perception that the copious amount of electricity devoted to securing the bitcoin network – 0.26% of world consumption, according to Digiconomist – is an environmental threat.
Miners are constantly searching for cheaper energy, and this is why they will be a catalyst for renewable power development in the near future, said John Belizaire, CEO of Soluna. His company is building a large wind power generating farm in Morocco: the primary consumer of that energy will be Soluna’s miners, but the rest will go to the country’s electricity grid, Belizaire said.
“Bitcoin is at the center of the next great infrastructure that we’ve never seen before. We’re going to go to places that have incredible renewable energy sites,” he said, predicting that the industry’s image will change as a result:
“In a decade we will start referring to bitcoin completely [differently].”
Mining will help monetize the building of global computation networks around the globe, as well as new renewable power sites, he said, and, unlike in the past, it will not require government subsidies.
Rivers, not coal
The widespread notion that “bitcoin is mainly mined with dirty Chinese coal” is not true, said Chris Bendiksen, the head of CoinShares research department. His team has recently conducted research on the main regions and energy sources for mining.
Miners are located mostly in mountainous regions with big rivers and a high share of renewable power in the overall energy mix, CoinShares found: 48 percent of all global mining happens in the Chinese province of Sichuan where renewable energy is prevalent (90 percent of the overall energy mix), and 12 percent takes in other parts of China that together get around half of their energy from renewables.
CoinShares’ presentation on mining in different regions of the world
Another 35 percent of mining is done in various parts of the Western world including British Columbia and Quebec in Canada, Washington State in the U.S., and Iceland. The rest of the world is producing the remaining 5 percent, the report says. Most of these places have high shares of renewable, especially hydro-generated energy in their power generation mix.
Share of renewable energy in different parts of the world with the active mining industry
In addition, a lot of hydropower in the world is “heavily underutilized,” Bendiksen says, as hydropower dams are built the regions that have suitable landscapes and big rivers, but are not necessarily heavily populated. Miners can put this capacity to good use, he said.
Asked how the data about miners’ concentration was gathered, Bendiksen acknowledged that it mostly comes from miners themselves.
“We just trawled the entire internet, including forums of miners, we talked to miners themselves, read news articles,” he told CoinDesk.
While miners’ communities, for example, in China, might be very “insular” and uninterested in what the West thinks and knows of them, they still willingly answered questions, Bendiksen said.
Catching the waste
Another source of readily available, cheap energy can be the natural gas released during oil mining (so-called associated gas), said Stephen Barbour, president of Upstream Data. Oil companies need to get rid of the gas, which they aren’t using, so they burn it. As a result, 140 billion cubic meters of gas are wasted every year, according to General Electric’s data.
Barbour said his company developed a system that captures gas at an oil drilling site, transforms it into energy and then uses it for bitcoin mining. According to him, a prototype set up on one such site in Canada, has already helped to reduce carbon emissions there by over 10,000 tons in a year.
“It’s been mining since 2017 and it’s been running on vent gas,” Barbour told CoinDesk. In the prototype phase, using a 45-kilowatt power plant and Antminer S9 mining machines manufactured by Bitmain, the system mined around 20 bitcoins over two years.
Upstream focuses mostly on oil producers in the Canadian provinces of Alberta and Saskatchewan, which are rich in oil. There are also plans for Texas, Barbour said: a small oil drilling company, the name of which he said he couldn’t disclose, purchased a mining data center for an unfruitful drilling site.
“A company was searching for oil, it didn’t find any. They did find a lot of gas, but the gas is worthless, you can’t sell it to anyone in Texas right now. So they can either abandon the well and lose money or they can invest in bitcoin mining,” Barbour said.
But more often, “oil companies are a bit shy of buying bitcoin mining facilities,” he added. However, associated gas is a liability for them, so helping them get rid of it by mining is actually a service, for which oil companies might let miners on their territory for free, he said.
None of this is to say protecting the environment is bitcoin miners’ top motivation. “They probably don’t care at all,” Bendiksen said. However, mining bitcoin on fossil fuels is just too expensive, he added, concluding:
“Mining is a relentless driver to lowest global energy prices.”
2weeks ago, 6 May, Monday
Single Address Behind More Than 50% of Bitcoin Cash Transactions: Report
According to the Bitcoin Cash Block Explorer, the mystery account has made more than 587,000 transactions since it became operational on April 8 of this year.
Many of the transactions are for fractional amounts of BCH and they are made with regularity, with three to four new transactions emerging per second.
Overall, the address has received $22,763.06 (80.981 BCH) at press time and has sent $21,546 (76.654 BCH), leaving it with a balance of $1,216.36 (4.327 BCH).
Over this period of the account’s creation to press time, the whole bitcoin cash blockchain has processed 1.17 million transactions — about half coming from the aforementioned wallet. The frequency of transactions could suggest that someone is attempting to drive up the number of transactions to make the network look a lot busier than it actually is, as one commentator responded.
Another theory is that the miniscule transactions are being performed as a test, potentially for a game, with developers taking advantage of BCH’s low fees.
A hard fork of the altcoin is scheduled for May 15, with a scaling and privacy code change being enforced to improve its privacy and scalability.
One BCH is worth $287 at press time.
Bitcoin Risks Pullback After Rejections at Key 2018 Price Hurdle
The June 2018 low of $5,780 is proving a tough nut to crack, as expected. BTC has failed to close above that level for three days in a row, indicating a price pullback may be needed to fuel a sustained move to $6,000.
BTC looks to be creating a double-top bearish reversal pattern with neckline support at $5,510 on the 4-hour chart. A break lower could yield re-test of the 30-day MA, currently at $5,294.
A strong bounce from the 30-day MA could fuel a sustained rise to $6,000. That looks likely as the long-duration charts are biased bullish.
A UTC close below the 30-day MA would shift risk in favor of a deeper drop below $5,000.
Bitcoin (BTC) could be in for a price pullback, having faced rejection at key price hurdle for three consecutive days.
The cryptocurrency market leader jumped above the April 23 high of $5,627 on Friday, bolstering both the short- and long-term technical setups.
However, despite the odds stacked in favor of a quick rally toward $6,000, the cryptocurrency failed to find acceptance above the June 2018 bottom of $5,780 over the weekend, according to Bitstamp data.
For instance, BTC clocked highs of $5,796 and $5,846 on Friday and Saturday, respectively, but closed below $5,780 on both days. Similar price action unfolded on Sunday, with BTC hitting a high of $5,782 before ending the day at $5,709.
It is worth noting that $5,780 was expected to offer stiff resistance. The level is important because BTC’s sell-off from May 2018 highs near $10,000 run out of steam at $5,780 on June 24. Subsequently, a bounce from that level was followed by an over 40 percent price rise to $8,500 by July 24.
Bitcoin’s recent failures to cross that threshold suggest a pullback and a bounce from the historically strong support level may be needed to recharge the engines for a sustained rise to $6,000.
The case for a price pullback would further strengthen if President Trump’s re-escalation of US-China trade tensions and the resulting slide in equities ends up sending gold higher. This is because the inverse relationship between BTC and gold has recently been its strongest in over 12 months.
So far, however, gold has barely benefited from the flight to safety. The safe haven asset is currently trading at $1,283 per ounce, representing a mere 0.17 percent gain on the day. That’s opposed to futures on the Dow Jones Industrial Average, which is down close to 500 points at press time.
As of writing, BTC is changing hands at $$5,617 on Bitstamp – a 1.48 percent drop on a 24-hour basis.
BTC is currently reporting losses below the former resistance-turned-support of $5,627 (April 23 high), having failed to close (UTC) above the June 2018 bottom of $5,780 for the third straight day on Sunday.
The relative strength index (RSI), which had invalidated a bearish divergence with a move above the falling trendline on Friday, has ended up creating another bearish lower high as opposed to higher high on price.
As a result, a pullback to the historically strong 30-day moving average (MA) support, currently at $5,294, cannot be ruled out.
BTC seems to be creating a double-top pattern with a neckline at $5,510 on the 4-hour chart. A break below that level would create room for a drop to levels below $5,200 (target as per the measured move method).
A drop below $5,510 may happen in the next 24 hours or so, as the repeated failure to find acceptance above $5,870 has been accompanied by the bearish divergence on the RSI.
Bitcoin closed last week above the 50-week moving average (MA), further strengthening the evidence for a long-term bullish reversal.
The weekly chart RSI is also biased bullish, having convincingly scaled the resistance band of 53.00–55.00 last month.
The 5- and 10-week MAs are trending north, also indicating a bullish setup. Notably, both MAs are located at $5,386, so that level could work as strong support this week.
With the long-term chart looking bullish, a pullback to the 30-day MA or lower could be short-lived. A strong bounce from that average would likely yield a rally to $6,000.
That said, the prospects of a deeper slide below $5,000 would improve if prices see back-to-back daily closes below the 30-day MA.
Peru Could Use Blockchain Technology And Fight Against Corruption via Stamping Partnership
Peru could start using blockchain technology in order to fight against corruption at the government level. This comes a few weeks after the former president of the country, Alan García, committed suicide. Latin American countries have been affected by several corruption scandals over the past years.
Blockchain Technology To Fight Against Corruption
Although developed countries are not looking at blockchain technology to reduce corruption in their countries, Latin Americans are starting to implement different distributed ledger technology (DLT) systems to reduce corruption.
According to Decrypt, the government of Pery announced that it has partnered with the blockchain startup Stamping.io and the Inter American Development Bank so as to build a fully transparent, contract-procurement system. This would allow processes to be completely stored and processed through an immutable ledger.
The main goal is to create a verification system that would allow reducing corruption by creating a more transparent and traceable system.
Steve Ghiassi, the CEO of Legal and the president of the Australian Legal Technology Association commented about it:
“A key part to reducing corruption is to create more transparency and traceability. It could reduce some level of internal fraud and tampering, as internal audits could be conducted more accurately with a full, visible trail.”
The startup has already developed a blockchain-based platform that will be registering information about purchases from Peru Compras, a government agency that regulates purchases in its territory. Moreover, the information is going to be registered on the LAC-Chain, a permission blockchain.
During a conversation with Decrypt, the co-founder of Stamping.io, José Zárate Sousa, explained that Decrypt is already showing signs of very fast growth. There are some days in which it registered more than 500 and 1,000 orders. Thus, LAC-Chain could become one of the largest and most active blockchain networks in the region.
There are other positive effects besides reducing corruption. It will be possible to increase efficiency and reduce the costs of the administrative process as a whole. Processing times are expected to be reduced by 80 percent.
The firm is also trying to reach new markets in the region, including Chile, Ecuador, and Colombia. Thus, this technology is expanding all over the region and it could help these countries to improve their processes, efficiency and more.
Meanwhile, in Argentina, blockchain technology has been embraced in the Province of Córdoba so as to increase governmental efficiency and reduce bureaucracy.
PepsiCo Blockchain Trial Brings 28% Boost in Supply Chain Efficiency
Food and beverage giant PepsiCo has conducted a blockchain trial that brought a 28 percent boost in supply chain efficiency.
Dubbed “Project Proton,” the trial set out to examine if blockchain could address “industry challenges” in programmatic advertising.
PepsiCo’s project partner and media agency Mindshare announced the news Monday, saying that it assisted in the trial, which carried out a programmatic end-to-end supply chain reconciliation using Zilliqa’s blockchain platform. The effort compared a control budget with one for the test to gauge the effectiveness of the technology.
Zilliqa’s smart contracts were further used to automate the programmatic supply chain, Mindshare said, explaining:
“These smart contracts reconcile impressions that are delivered from multiple data sources with payments facilitated using an internal Native Alliance Token (NAT) all in near real time, resulting in major efficiency gains and complete transparency for the brand owners.”
The results indicated efficiency increases “in terms of costs for viewable impressions, in running the campaign through smart contracts, versus one without,” according to Mindshare.
Other partners in the project included online advertising company Rubicon, programmatic marketing technology firm MediaMath and media firm Integral Ad Science.
The trial was conducted in March in the Asia Pacific region. The partners now plan to run a second phase with the addition of payments to publishers and more performance metrics.
Farida Shakhshir, PepsiCo’s director of consumer engagement for the Asia, Middle East and North Africa regions, said:
“The results are encouraging, and we plan to run a few more campaigns under different conditions to verify more hypotheses and measure overall impact.”
Ripple’s xCurrent 4.0 goes live; user upgrade currently in progress, says CTO David Schwartz
David Schwartz, CTO of Ripple, confirmed on Twitter that Ripple’s xCurrent 4.0 was live and that user upgrade was in progress.
Ripple’s xCurrent, one of the company’s enterprise software solutions, enables banks to settle cross-border payments with end-to-end tracking. With the help of xCurrent, banks are able to communicate with each other to confirm payments and transaction details.
David Schwartz confirmed the news after being asked on social media about the status of xCurrent 4.0. He tweeted,
David Schwartz added that the upgrade process was going to be a complicated one.
He further stated that the upgraded version on xCurrent would allow users to experience an easier integration process, which was not previously possible on the platform. Customers will be able to access xRapid support, easier peer-to-peer commute, and Multi-hop, among other major new features.
David Schwartz was further asked about the upgrade and whether the process would be a simplified upgrade protocol.
He responded that the upgrade would not be entirely straightforward as the architecture of xCurrent 4.0 was different, requiring important changes in the customer middleware.
The announcement was well received by Twitterati, with the XRP community rejoicing following the current update.
Twitter user, @XRPress stated,
“It’s aliivvvveee! Congrats on 4.0 – the ecosystem is maturing before our very eyes!”
Ripple’s long-term objective has been to create a seamless payments system across the globe, so that cross-border payments are no longer a hassle.
Regulators Ready to Approve Ethereum Futures, CFTC Insider Says
The CFTC is willing to let an ether futures contract go to market after soliciting market feedback last year
A futures contract might bring in fresh institutional funding to the crypto space
This, in turn, might reassure retail traders looking at the cryptocurrency
Futures might also cement the CFTC’s jurisdiction over ether, which at present is limited to enforcement actions
The U.S. Commodity Futures Trading Commission (CFTC) is willing to approve an ether futures contract – provided it ticks all the right boxes, a senior official has told CoinDesk.
The CFTC, which oversees derivatives markets in the U.S., has already allowed bitcoin futures markets to launch, with both CME Group and Cboe Global Exchange offering cash-settled contracts at the end of 2017. Now, the regulator is willing to oversee a similar product for ether, currently the world’s second-largest cryptocurrency by market cap, said the official.
“I think we can get comfortable with an ether derivative being under our jurisdiction,” said the person, who did not want to be identified because the regulator does not typically publicize decisions to adopt new products.
“We don’t do bold pronouncements, what we do is we look at applications before us,” the official said, explaining:
“A derivatives exchange comes to us and says ‘we want to launch this particular product.’ … If they came to us with a particular derivative that met our requirements, I think that there’s a good chance that it would be [allowed to be] self-certified by us.”
However, the CFTC would only respond to a specific application put before the regulator, rather than volunteer an opinion, the individual said.
If proposed and approved, a regulated futures product would open up the ether market to broad institutional investment.
“Many funds have mandates that do not allow them to buy the digital currency underlying,” said John Todaro, director of digital currency research at financial software provider Tradeblock. Further, a cash-settled futures contract, paid out in fiat rather than the underlying crypto, would allow hedge funds and the like “to gain exposure to ether without worrying about custody (which has been a bottleneck to institutional investment),” he said.
In the long run, Todaro added, a CFTC-supervised futures market “could usher in confidence among regulators such as the SEC [Securities and Exchange Commission] which could pave the way for an ETF,” an exchange-traded fund bringing additional liquidity to ether.
An increase in institutional investment would, in turn, bolster retail investors’ confidence in ether, Todaro said.
CME and Cboe’s bitcoin futures, when they first launched, saw an immediate positive response, with enough traders trying to purchase Cboe’s contracts that the firm’s website crashed. The introduction of these futures contracts may also have contributed to bitcoin’s price skyrocketing to its all-time high of nearly $20,000.
To be sure, some have argued that futures may also have hurt bitcoin’s price, though Todaro said that it is more likely that bitcoin’s price had already reached its peak and the approval of futures just happened to coincide with that time.
The CFTC first indicated it was looking at ethereum in December when the regulator published a “Request for Input” (RFI) asking a number of questions about the world’s second-largest cryptocurrency by market cap, the market around it and the underlying technology.
These questions ranged from asking about proof-of-stake (the consensus mechanism that ethereum is expected to eventually adopt to replace bitcoin-style mining) to how ether deposits may be audited.
The agency explicitly asked what impact the introduction of derivatives contracts might have on the cryptocurrency.
George Pullen, a senior economist with the CFTC Division of Market Oversight, told CoinDesk at the end of March that the RFI sought industry and market input on the risks, mechanics and use cases for ether.
In particular, the CFTC was looking to contrast ether with bitcoin, he said, explaining:
“After our initial public white papers, primers, on virtual currencies, bitcoin, and smart contracts it was clear that a one-size fits all approach to crypto was not appropriate and we needed to know more.”
The CFTC’s RFI will help the regulator to understand “the range of issues that might exist” around the ether space, as well as develop better relationships with the crypto community at large, he added.
“It’s critically important for us to engage in outreach to understand the variety in technologies, markets, and the differences in the community; if we’re just listening to our own voices inside the building, the loudest voices in business, or just the voices in D.C. we could miss out on the bigger picture,” Pullen explained at the time.
A total of 35 comments were submitted to the CFTC’s RFI by trade associations like the Chamber of Digital Commerce, think tank Coin Center, startups Blockchains LLC and Circle, exchanges like Coinbaseand self-proclaimed bitcoin creator Craig Wright, among others.
The CFTC, or at least its Chairman, J. Christopher Giancarlo, is already pretty popular within the community, which has dubbed him “Crypto Dad” after he called for light-touch regulation around the space.
In addition to giving investors access to a new derivatives product, approving an ether futures contract may cement the CFTC’s regulatory authority over the underlying spot market.
Notably, ErisX, a digital assets and futures trading platform (which wants to offer bitcoin, bitcoin cash, litecoin and ethereum futures when its derivatives clearing organization license is approved), believes that regulating a futures contract on ethereum would grant the CFTC some additional oversight on the ethereum spot market.
Thomas Chippas, the exchange’s CEO, wrote in his response to the RFI that a futures contract that “includes a settlement price set by a physically settled cash market” in the U.S. may improve the CFTC’s “ability to properly oversee or monitor the cash market for fraud and manipulation.” ErisX declined to comment for this article.
The CFTC likely already has some jurisdiction over the ether cash market, several lawyers CoinDesk spoke to said. However, this authority is limited.
Anne Termine, who leads the futures and derivatives practice group at Covington & Burling LLP and was previously a chief trial attorney with the CFTC’s Division of Enforcement, told CoinDesk that the regulator has already clearly said cryptocurrencies are commodities.
“As such, the CFTC has limited regulatory oversight over cryptocurrency spot markets, namely the ability to take enforcement action whenever there is fraud or manipulation in these spot markets,” Termine said.
Amy Davine Kim, chief policy officer with the Chamber of Digital Commerce, a D.C.-based blockchain advocacy group, noted that the regulator has “after-the-fact” enforcement jurisdiction over crypto spot markets in terms of fraud or manipulation, but no jurisdiction over exchanges simply conducting spot transactions.
Moreover, anything that is not a security is usually broadly defined as a commodity, she said.
The question of whether ether is a security has not been officially resolved, but officials at the SEC seem to believe it isn’t. William Hinman, the agency’s director of corporation finance, said at a conference in 2018 that he does not see ether as a security.
His comments were seemingly affirmed by SEC Chairman Jay Clayton in March, who wrote that he agreed with Hinman’s analysis of when a crypto asset might not be a security, though he did not specifically name ethereum.
Introducing a “futures contract would implicate the CFTC’s jurisdiction beyond anti-fraud and manipulation provisions,” Termine explained. The contract would have to trade on a CFTC-regulated futures exchange, meaning it would be subject to the regulator’s direct oversight.
“The implications for the broader community would be enhanced CFTC oversight over [ether] but potentially a legitimization of the cryptocurrency.”
TWITTER AND GOOGLE TRENDS INTEREST PRECEDES CRYPTOCURRENCY PRICE, STUDY FINDS
The volume of tweets and Google Search Volume Index (SVI) were found to be leading price indicators for Bitcoin and Ethereum, according to a research paper published by the Southern Methodist University.
THE IMPORTANCE OF SENTIMENT
In the paper, researchers gathered data on Twitter mentioning Bitcoin and Ethereum; the same was done using Google trends. Building on the ideas of previous research, the hypothesis was that the number of tweets and their sentiment (positive and negative) can influence prices. In the study, it was uncovered that the number of tweets and Google searches changes first before prices do.
The role of sentiment in technical or market analysis is to uncover people’s attitudes towards an entire market or individual index (in this case Bitcoin and Ethereum). The theory of sentiment analysis is a branch of technical analysis that states that price discounts everything, and that price trends are ultimately a reflection of crowd psychology.
Therefore, in theory, if you could measure how positive or negative the people’s shared views are towards a particular stock or cryptocurrency, you could estimate its price trajectory.
Although in this particular study, tweet volume, and not sentiment, was found to be a leading factor in the price of cryptocurrencies. The lack of sentiment being the leading factor was theorized due to the amount of “noise” there is on Twitter about the currencies compared to actual conversation.
For instance, the researchers found that there 21 million bots on Twitter posting mostly factual information about prices, advertisements, spam etc. Not humans having real discussions about how they feel about either Bitcoin or Ethereum.
The other issue that researchers found with Twitter was that sentiment was mostly positive in nature — even when the prices of Bitcoin and Ethereum were falling.
People who tweet about cryptocurrencies even when their prices drop have an interest in them beyond investment opportunity making the tweets biased towards positive.
Despite their findings, the researchers did not completely rule out sentiment analysis using different modeling techniques.
In the study, researchers used to open source VADER (Valence Aware Dictionary and Sentiment Reasoner) for analyzing tweet data. Tweet data was taken dating back to 2014 using the site bitinfocharts.com. Google trends data (SVI) was taken as far back as 2004 scaled in the terms proportion to all searches on all topics for the terms Bitcoin and Ethereum.
For the Google trends data, the report found that the price was highly correlated with searches for the keyword Bitcoin and Ethereum, and that these search spikes occurred before the actual increase in prices were observed.
Another strong correlation between Twitter and Bitcoin’s price was found, except this time with more compelling results.
Finally, using machine learning, the results from the Google trends and tweet data was also put into a linear model to verify the positive correlations. The data was split between a training model and testing in an 80% and 20% split.
SOCIAL MEDIA HELPS MONITOR INVESTOR ‘CHATTER’
The VADER data could provide some valuable data for investors in gauging market sentiment.
Previously, Bitcoinist has covered the importance of social media chatter on Twitter before with tools such as the ‘Twitter Hype Index.’ But this is the first time that Twitter and SVI data has shown to lead, and not follow, the prices of the most popular cryptocurrencies.
Bitcoin Nation: 22 Million US Crypto Traders Dwarf Global Rivals
By CCN: The overwhelming majority of crypto traders come from the United States, according to surprising new research from DataLight.
The firm analyzed traders using the top 100 Bitcoin exchanges and found that over 22 million users hail from America. The next in line is Japan with 6 million, followed by South Korean’s 5 million users.
US DOMINATES CRYPTO TRADING INDUSTRY
Collectively, it takes almost six other countries to reach the same number of traders as the US.
Notably, Korean exchanges like Bithumb report massive volume, but this volume is likelyalmost entirely fake. Several exchanges also engage in “transaction mining,” where users are rewarded for conducting trades, which means pumped-up volume.
DataLight’s report notes some interesting findings, including the impressive number of Turkish Bitcoin traders.
“Turkey for example, has in the last year seen wild fluctuations in the value of the Turkish Lira, as turbulent political conditions rock the country. Interestingly, on one day in August 2018, a 10% drop in the value of the Lira was accompanied by a marked spike in volumes on bitcoin exchange LocalBitcoins.”
CCN, incidentally, recently reported on problems that people are having with Turkish exchange Sistemkoin.
Turkey sports a population of nearly 80 million people, 2.4 million of whom trade. This is about 3% of their citizens, compared with 7% of the US population trading cryptos. Meanwhile, nearly 6% of all people in the UK trade cryptocurrency. These figures are quite high, but the report also doesn’t account for the frequency of trading. The data would be much more interesting if it were colored in light of how heavily each country trades.
‘CRYPTO NATION’ HITS 68 MILLION CITIZENS AND JUST KEEPS GROWING
The United States remains a regulatory nightmare for crypto traders, however, with several agencies claiming jurisdiction over the trade. Recently, FinCEN, a party rarely heard from in crypto anymore (we hear more from the SEC these days), fined a Bitcoin trader. Law enforcement agencies, the SEC, and CFTC – among others – also take part in regulating cryptocurrencies.
The situation is so confusing that the Token Taxonomy Act has been re-introduced with an eye toward simplifying the whole asset class. Under the proposed law, in-kind exchanges up to $600 would not be considered taxable income, and the SEC would lose jurisdiction over crypto tokens.
America’s largest exchange is Coinbase, which boasts more than 10 million of the 22 million overall users.
Several data points would be helpful to better analyze this research. As stated before, the frequency of trading would be useful. Additionally, we’d love to know the amount of trading, as well as how long these reported users have been trading. For example, how many new users were added during the 2017 bull run, and how many have since left?
According to DataLight, there are a total of around 68 million crypto traders across the world. This is more people than live in the United Kingdom.
Binance CEO Changpeng Zhao believes the number of crypto users in the future will outpace the number of Internet users today.
In a few years, there will be more users in #crypto than there are users for internet today.
— CZ Binance (@cz_binance) April 30, 2019
As the movement grows, one wonders what sort of political power such a population might wield down the line. As for today, it seems a few representatives and some outlandish presidential candidates are the best we can muster. But how long will it be until politicians are forced to court the crypto vote?
Crypto VCs: As Bitcoin (BTC) Eventually Nears $100,000, Altcoins Will “Die Off”
While there have been a number of calls for an altseason and the death of Bitcoin, BTC has begun to outperform its crypto peers yet again, posting gains when altcoins suffer. As of the time of writing this, Bitcoin dominance sits at a hefty 55.8%, up from lows of around ~35% at the peak of 2018’s bubble.
One venture capital group, Heisenberg Capital, led by anti-establishment proponents and (very) early cryptocurrency adopters Max Keiser and Stacy Herbert, says that Bitcoin’s hegemony may continue to grow.
In a recent tweet, the venture capitalists, who have purportedly allocated capital to Kraken, ShapeShift, Abra, Bitfinex, among other prominent industry upstarts, remarked that the market has begun to reject everything, save for BTC. This has seemingly been the case. As explained earlier, the so-called “crypto winter” of 2018 has allowed Bitcoin to claw back market share from altcoins, most of which were dramatically overvalued and overhyped during early-2018.
We see the market rejecting everything, except BTC.
This has been our dominant investing thesis since 2011.
We’re doubling down on Bitcoin Maximalism with new capital.
As BTC climbs toward our 2011 target of $100,000, we believe everything except BTC will die-off.
— Heisenberg Capital (@HeisenbergCap) May 5, 2019
Heisenberg corroborates this, even hinting that it thinks altcoins still have few viable use cases or a lack of a solid value proposition when it wrote: “As BTC climbs toward our 2011 target of $100,000, we believe everything except BTC will die-off.”
History would agree with this analysis.
A majority of 2013’s top 20 crypto assets have all but faded out of existence, with newer projects like Ethereum, Monero, and EOS ousting Namecoin, Peercoin, and Feathercoin, which all used to be the crème de la crop back in their hay day. Not only have these little-known projects faded from public memory, but some have totally abandoned, with their token values dropping off the face of the Earth. While many new blockchain projects have more staying power than their predecessors, many commentators, like Blockstream’s Samson Mow, are sure that history will rhyme… eventually.
What Will Drive Bitcoin Past $100,000
This begs the question — what will drive Bitcoin past $100,000? Well, according to Keiser, it will have much to do with Bitcoin’s underlying characteristics. In an interview conducted with Bitcoinist’s Allen Scott late last year, the investor noted that the Bitcoin protocol itself is “genius,” alluding to the controversial opinion that the nature of the world’s first blockchain supersedes price. Saifedean Ammous, for instance, has incessantly called BTC, the world’s “hardest money,” alluding to its nature as a decentralized, borderless, censorship-resistant, and scarce asset that easily ousts government-issued cash in a variety of facets.
Interestingly, the interviewer went on to draw attention to the fact that a majority of industry participants see BTC as a “risk-on asset,” debasing the sentiment that BTC is essentially the world’s second coming of gold but in a digital form. Yet, Keiser added that this is, in fact, false.
Keiser explained that BTC, like gold and traditional fiat, is a “risk-off” asset. And as such, he exclaimed that once the market at large acknowledges this fact, which has flown under the radar, the world’s first cryptocurrency could surpass its all-time high as capital flight occurs to BTC. He further explains:“Bitcoin is the monetary black hole that will gobble up all fiat and rise to more than $100,000 doing it. But humans themselves may never see that day.”
Bitcoin’s Lightning Comes to Apple Smartwatches With New App
You can now receive bitcoin’s experimental lightning payments with a few taps of an Apple smartwatch.
Launched Sunday by Bluewallet, one of the more popular lightning network wallets, their new app for Apple Watches allows users to receive bitcoin over its new, risky (but nonetheless promising) payment technology: lightning. Transactors can use the smartwatch app to generate a QR code — a square-shaped barcode — that someone else can then scan with their smartphone to send over a payment.
Bluewallet tweeted a sneak peek of the app weeks ago. But as of today, it’s officially downloadable from the iTunes store.
Product and UX engineer Nuno Coelho framed the app as an experiment, telling CoinDesk:
“It’s a small experiment we’re doing to put wallets on the watch. The first releases will be simple, allowing you to receive lightning payments.”
Why might someone want to receive lightning transactions via a smart watch? you might ask. Smart watches aren’t as popular as smartphones, but many use them for the convenience of tracking health and viewing phone notifications without actually pulling out the phone.
Bluewallet, to that end, is testing to see if users might like to use them for bitcoin payments as well.
“Sometimes the convenience of just [receiving bitcoin] with two taps from your wrist can be a relevant user experience, specially on the go or if you need to be fast,” Coehlo said, adding it might be useful if you’re buying bitcoin from someone, but “don’t feel comfortable” taking out your phone, you could just use the watch instead.
But Coehlo stresses that this is an experiment, since lightning technology itself is still very experimental, and they’re not sure how many users will actually want to use the app.
“If feedback is good, we’ll spend more time on the project,” he told CoinDesk. “It’s a very early stage industry so we’re trying to figure out how to build this stuff properly.”
Bluewallet, helmed by a team of three developers, is also working on other features to expand the wallet. “We would also like to move from being a third-party service, minimizing trust. That’s our most important goal at the moment,” Coehlo said.
‘YOU CAN’T BUY BITCOIN’ – IS HOW BANKS PROMOTE BITCOIN, SAYS ECONOMIST
Economist Saifedean Ammous was recently interviewed on Stephan Livera’s Podcast. Ammous explained the best way government can defeat Bitcoin and why banning it actually helps the opposite.
As per the original podcast, Ammous was asked to comment on his most recent research on the potential strategies that could be employed by governments to shut down Bitcoin.
Ammous stated that a government banning Bitcoin could actually be beneficial for the currency, stating:
If your bank tells you, ‘You can’t buy bitcoin with your bank account.’ That’s really just an advertisement for Bitcoin.
GOVERNMENT ‘BAN’ GOOD FOR BITCOIN
Ammous gave two reasons for why such a ban could help, and not terminate Bitcoin’s existence. The first reason the economist gave was the fact came down to the risk and reward factor of using the coin in the first place. If the coin were illegal to use, that would mean there would be a very high risk of using it, thus justifying the coin’s value.
The second reason Ammous gave was that such a restriction on buying bitcoin would be a significant step by the government in restricting people’s freedoms. In both cases, the demand for Bitcoin and other pseudonymous currencies would increase due to public backlash and underground markets, thus leading to a ‘Streisand effect.’
COULD GOVERNMENTS KILL BITCOIN?
Following these arguments given by Ammous, Livera asked what then, were some viable strategies that governments could use to compete with Bitcoin?
Ammous suggested that governments could compete with Bitcoin’s technology, thereby making it obsolete in terms of practical usefulness. Besides offering individuals more monetary privacy and freedoms, his other suggestion was to “return to a classical gold standard.”
Ammous was apparently adamant on his gold standard approach as he stated in the interview:
If you had that kind of monetary system, and if you had it worldwide, I think that would seriously undermine the demand for bitcoin
Bitcoinist recently reported that “Bitcoin has superior physical properties and market utility” to gold. This also includes the Winklevoss twins who believe Bitcoin will surpass the $7 trillion gold market.
Being unconfiscatable and cheaper to store value, being just some of the reasons why.
Meanwhile, a new campaign, started by Grayscale Investments, is embracing this by proclaiming gold an obsolete store of value. The firm has launched a social media campaign using the hashtag #DropGold as its moniker.
sound ON! pic.twitter.com/SEGAmMItsE
— Grayscale (@GrayscaleInvest) May 1, 2019
Specifically, Greyscale Investments compares Bitcoin favorably to gold in terms of its “verifiability, durability, portability, divisibility, fungibility, recognizability, and scarcity.”
Sports World Eyes Crypto and Bitcoin Scandal Embroiling Ex-NFL Owner As Bitfinex Gets Axed From BTC Price on CoinMarketCap
Leading cryptocurrency data tracker CoinMarketCap has excluded Bitfinex from the aggregated price of Bitcoin (BTC). Bitfinex, one of the world’s leading crypto exchanges, is the subject of a host of accusations made by the New York Attorney General’s office. The growing scandal implicates businessman Reginald Fowler, a one-time minority stakeholder in the NFL’s Minnesota Vikings.
While Bitfinex is still listed on CoinMarketCap, its BTC price shows an asterisk, denoting exclusion. Bitcoin is trading for $6,050 on Bitfinex compared to CMC’s aggregate price of $5,768, at time of writing.
Bitfinex Bitcoin (BTC) Price Exclusion
A detailed report from the NYAG’s office alleges that iFinex Inc., which operates both Bitfinex and Tether, has engaged in a series of fraudulent activities, resulting in a multi-million-dollar cover-up involving customers’ funds. Bitfinex, headquartered in Hong Kong and registered in the British Virgin Islands, is a leading cryptocurrency exchange, and Tether (USDT) is the world’s leading stablecoin, used by crypto traders to escape market volatility.
In the immediate aftermath of the AG’s legal filing on April 25, which accuses the exchange of covering up $850 million in losses, traders pulled $175 million in Bitcoin, XRP and Ethereum out of the embattled exchange, with data trackers monitoring movements by large crypto investors, also known as whales. Whale watchers tracked $243 million in withdrawals from Bitfinex by May 1.
News of the cover-up triggered an increase in the “Tether risk premium,” which increased the price of Bitcoin on Bitfinex where there’s a high trading volume of the BTC/USDT pair.
By eliminating the controversial exchange’s higher Bitcoin price, CoinMarketCap reduces the skew, reflecting a more conservative figure for the world’s number one cryptocurrency.
While the revelations about alleged crimes involving Bitfinex have not dampened the crypto market rally, with Bitcoin rising to $5,768 at time of writing, an increase of 11% since the release of the AG’s legal filing, the fall-out from the scandal continues.
Federal prosecutors announced on April 30 that a grand jury has indicted Arizona businessman Reginald Fowler.
According to the legal filing, Fowler is accused of operating an unlicensed money transmitting business with ties to Bitfinex, presumably in conjunction with the third-party company Crypto Capital, alleged to be in possession of the exchange’s $850 million.
“Defendant has been charged with bank fraud, conspiracy to commit bank fraud, operation of an unlicensed money transmitting business, and conspiracy to operate an unlicensed money transmitting business. These crimes all relate to Defendant’s alleged involvement in a scheme to operate a shadow bank on behalf of cryptocurrency exchanges in which hundreds of millions of dollars passed through accounts controlled by Defendant in jurisdictions around the world.”
According to the indictment, email search warrants unearthed a document entitled ‘Master US Workbook.’
“This workbook indicates that the scheme had received over $740 million in 2018 alone. It lists approximately sixty different bank accounts, held at both domestic and international banks, with a combined account balance of over $345 million as of January 2019. Notably, this workbook indicates that approximately $50 million is held in domestic accounts, with the rest located abroad.”
Sports Illustrated reports that Fowler, in a separate business dealing, was involved in funding for the now-defunct Alliance of American Football (AAF), founded in February as a feeder league for the NFL. The businessman had pledged roughly $25 million to the AAF as the league’s primary investor. But the funds were inexplicably held up around Christmas.
According to Sports Illustrated, Tom Dundon, majority owner and chief executive officer of the Carolina Hurricanes, was named chairman of the AAF with Fowler in the wings as a lead investor.
“The email from Ebersol to the entire Alliance went out on Feb. 22, 2019, at 5:34 p.m. ET.
This week, all of your hard work was validated and our company secured the necessary funding to accelerate growth into our next phase as a business. Tom Dundon, [now] our largest institutional investor and the control owner, will serve as chairman of the Alliance Board of Directors. . . . He is excited and fired up about what we’ve created, and ready to propel the league forward for many years to come….”
“Around the same time that Fowler was theoretically engaging in discussions about funding the new football league, authorities allege he was also operating ‘shadow banking services’ on behalf of a crypto currency exchange company that misrepresented money transfers and skirted international ‘anti-money laundering verification services’.”
NBC Sports, reporting on Fowler’s unrelated cryptocurrency operation, asks how Fowler got approved as the main investor for the AAF initiative.
“How did he get approved? Was he just the only guy who was willing to do it? And if this is the best you have, don’t you just say at that point, ‘Maybe we’re not going to go forward with this?'”Fowler was arrested on Tuesday. Under investigation by the FBI since last year, he was accused of “disregarding” the bureau’s efforts and was considered a flight risk. His Israeli co-conspirator, Ravid Yosef, remains at large.
Digital Currency Exchange Bits of Gold Enters European Market
Israel-based digital currency exchange Bits of Gold has just announced plans to enter the European market. The company will also launch a service allowing other international applications and exchanges to buy and sell Bitcoin and Ethereum while relying on the Bits of Gold system to manage compliance, banking, and liquidity infrastructures.
Israeli Bitcoin broker explores new opportunities
Bits of Gold, one of Israel’s largest Bitcoin brokers, currently supports 50,000 Israeli customers, and has reported a turnover of nearly $140 million during the last two years, representing about 180,000 successful transactions.
CEO Youval Rouach explained the move by saying, “In the last six years we have learned with the community how to build this bridge between traditional money and crypto. It is precisely the time to take this knowledge and use it in Europe as well.”
Digital currency exchange adds new services
Rouach noted that the company had updated its website and financial systems to cope with all of the challenges involved in the expansion. “The move has two arms – one focused on the buyers themselves, and the other aimed at different service providers that will enable their customers to buy and sell digital coins through our service.”
Bits of Gold handled nearly $350 million in trades
Bits of Gold released data related to its business activity over the last few years to back the decision to expand into Europe. The exchange’s clients have bought and sold more than 64,000 Bitcoins, with a value of nearly $350 million, which Rouach credits to the company’s “unique ability that accompanies the customer and supports him from the moment of payment until the moment of receipt of the coins and vice versa.”
Company also courting institutional investors
In addition to its expansion into the international market, Bits of Gold has been competing to gain more institutional investors. In February, the exchange joined with the Israeli company Silver Castle, which was the first cryptocurrency investment firm dedicated to institutional and accredited investors. Silver Castle customers can use Bits of Gold to convert fiat currency into Bitcoin, which can then be placed into investment funds.
Ripple Adds SBI President To Its Board of Directors
Blockchain payments startup Ripple has added new director to its board, Yoshitaka Kitao, who is currently president, representative director and CEO of Japanese financial giant SBI Holdings.
Ripple announced the news last week, saying that Kitao will be replacing the CEO of SBI Ripple Asia Takashi Okita.
Kitao has over 40 years of work experience in global financial markets. He established SBI Holdings in 1999 and has previously worked with Softbank Corporation and Nomura Securities, according to the announcement.
Ripple co-founder and executive chairman of the firm’s board of directors, Chris Larsen, said:
“Approximately half of our customers are located in Asia-Pac today, and we’re rapidly expanding our global footprint across the region. Mr. Kitao comes at a perfect time for Ripple as we look to deepen our customer base in Asia and beyond.”
The relationship between Ripple and SBI is not new. Back in 2016, the two firms formed a joint venture called SBI Ripple Asia. The joint venture received a license to launch its blockchain-based payments app for consumers last September, and a month later the app MoneyTap went live.
SBI Ripple Asia also formed a consortium last year to research the use of blockchain technology in securities products, aiming to improve efficiency for customers and reduce operational costs for firms.
In other news, Saudi British Bank (SABB) announced Thursday that is has launched “instant” cross-border money transfer services via Ripple to improve customer experience. SBI, on the other hand, recently established a new subsidiary to manufacture cryptocurrency mining chips and systems.