IMF Head Makes Case for Central Bank Digital Currencies In Recent Speech

imf central bank cryptocurrency

With contributing reporting from Jimmy Aki.

Christine Lagarde, head of the International Monetary Fund (IMF), suggested a new course of action for central banks around the world: turn their fiat currencies digital.

The IMF chair gave a speech at the Singapore Fintech Festival on November 14, 2018, titled “Winds of Change: The New Case for Digital Currency.” In it, Lagarde stated, “I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy.”

She continued to laud the benefits of cryptocurrency payments, calling them “immediate, safe, cheap and potentially semi-autonomous” and saying that central banks should consider issuing digital assets so they can “retain a sure footing in payments.”

Her speech comes two days after the IMF released a research paper that highlights many of the talking points Lagarde hits on. Titled “Casting Light on Central Bank Digital Currencies,” it details some of the benefits a state may see if it decides to issue digital currencies, including financial inclusion, consumer protection and privacy in payments.

State sponsored digital currencies is not a new idea. Lagarde herself pointed out that the central banking authorities of Canada, China, Sweden and Uruguay were already considering the notion. However, she urged central banks to support digital currencies as a premise of the future, stating such currencies “could satisfy public policy goals, such as (i) financial inclusion, and (ii) security and consumer protection; and to provide what the private sector cannot: (iii) privacy in payments.”

It should be noted that the IMF Chair referred to cryptocurrencies throughout her speech. The Chair espoused a nuanced view of crypto that, while not wholly supportive, showed the advancements of the industry were part of the IMF’s new outlook.

“For their part, cryptocurrencies seek to anchor trust in technology. So long as they are transparent — and if you are tech savvy — you might trust their services. Still, I am not entirely convinced,” Lagarde stated.

For Lagarde, cryptocurrencies still require “[proper] regulation of these entities” so that they “will remain a pillar of trust.”

While the IMF’s view at this time is clearly for digitization of fiat currencies by central banks rather than through cryptocurrencies (it put out a paper to that effect), Lagarde asked these fundamental questions of central banking authorities: “Should we go further? Beyond regulation, should the state remain an active player in the market for money? Should it fill the void left by the retreat of cash?”

The positive aspects of Lagarde’s speech is in contrast with the IMF’s opposition to the Marshall Islands‘ plan to float a sovereign digital currency.

Criticizing the island’s decision, the IMF stated that it feared the island’s currency could be used by crime syndicates or businesses running illegitimate operations.

This article originally appeared on Bitcoin Magazine.

Canadian Court Takes Custody of Crypto Exchange’s Frozen Funds

Canada

The Ontario Superior Court of Justice has recently moved to take custody of a large sum of assets from a crypto exchange currently frozen in accounts at the Canadian Imperial Bank of Commerce (CIBC).

According to a recent court document, the CIBC had frozen several accounts of some disputed assets at the crypto exchange QuadrigaCX, including $25.7 million CAD and $69,000 USD. The bank was allegedly unable to identify who the exact owner of these accounts was along with millions that were deposited by the exchange’s various clients, so it froze them indefinitely.

This has prompted legal action on behalf of QuadrigaCX which has been trying to reclaim the money that they claimed entitlement to.

With such large sums in limbo, many of this exchange’s customers have been unable to access their money at all, leaving the company’s day-to-day ability to function in jeopardy. Emails sent from representatives of QuadrigaCX to CIBC were submitted as evidence to the court, including concerns that the exchange was “under extreme pressure from many clients to address this ASAP” and that “lawsuits are being filed against us.”

However, the court has evidently decided to take neither party’s side in this juncture. Judge Glenn Hainey has instead ruled that CIBC transfer custody and liability of these frozen assets to the courts themselves, so that they may more thoroughly inspect them to determine their specific ownership.

Even a ruling in QuadrigaCX’s favor could still spell trouble for the exchange, however. According to the court documents, it was CIBC that originally made the application to make the court the final authority on these funds’ ownership, and the court specifically decided to grant CIBC’s request.

The exchange may eventually see its funds returned, but Judge Hainey stated, “I am not in a position on this record to make any determination as to CIBC’s possible liability for [freezing the accounts].” Without some sort of damages paid to QuadrigaCX for the inconvenience of losing access to $26 million dollars, the lawsuits filed from the exchange’s depositors may prove a problem down the road.

This article originally appeared on Bitcoin Magazine.

“Bitmain Is Restructuring,” But Jihan Wu Still a Board Director: Source

“Bitmain Is Restructuring,” But Jihan Wu Still a Board Director: Source

Bitmain has denied reports that its CEO Jihan Wu was ousted as the mining firm’s board director while confirming that the board has undergone restructuring.

Setting the record straight, Nishant Sharma, international marketing manager of Bitmain Technologies Limited, told Bitcoin Magazine that, instead of losing his position, Wu will continue on as a co-director of the board amidst a wider reorganization.

“As is standard listing practice, Bitmain is restructuring its board and group structure, to ensure it meets regulatory requirements on its road to IPO. This is to simplify the board structure to facilitate its management. There have been no board departures and co-founder Jihan Wu will continue to lead the company as co-chair, together with co-chief executive officer, Micree Zhan,” Sharma wrote in an email correspondence.

This clarification comes after numerous erroneous reports indicated that Wu had been demoted from director to supervisor, a relegation that would have neutralized the CEO’s clout and decision-making power in the company.

The restructuring caps off a tumultuous year for the mining monolith. Mid-year, news broke that Bitmain has been planning an initial public offering (IPO), but this strategic move has since been shrouded in doubt regarding the company’s solvency and financial well-being. The firm, for instance, omitted information for Q2 in its 2018 financial report, and Blockstream CEO Samson Mow has claimed that this opacity points to multi-million dollar losses that were partly incurred from the firm holding over 1,000,000 bitcoin cash. To make matters worse, a handful of reported pre-IPO investors came out and denied reports that they had committed funding to the mining firm.

Meanwhile, Bitcoin Cash is undergoing problems of its own, as a fork led by Craig S. Wright has splintered the community, threatening the Bitcoin Cash main chain as a result.

This article originally appeared on Bitcoin Magazine.

When the Fork Forks: What You Need to Know as Bitcoin Cash Goes to War

When the Fork Forks: What You Need to Know as Bitcoin Cash Goes to War

Around 16:40 UTC tomorrow, November 15, 2018, the Bitcoin Cash network is set to undergo another hard fork upgrade. But contention about this upgrade has left the Bitcoin Cash ecosystem divided, which could once again lead to a split into multiple projects and coins.

Here’s what you need to know to get up to speed.

As a quick reminder, what is Bitcoin Cash again?

Bitcoin Cash (sometimes referred to as “Bcash” or “BCH”) is a cryptocurrency that split off from the main Bitcoin blockchain in August 2017. Culminating from Bitcoin’s years-long scaling dispute, the spinoff project most notably increased its block size limit through a contentious hard fork upgrade, “forking off” to become its own coin — though some of its proponents see it as the “real Bitcoin.” While currently trading at a fraction of bitcoin’s value — around $480 at the time of writing — Bitcoin Cash is the fourth biggest cryptocurrency by market cap and has garnered support from big names in the cryptocurrency space like bitcoin.com CEO Roger Ver and Bitmain co-founder Jihan Wu.

What is this dispute about?

The Bitcoin Cash dispute is really between two competing factions, represented by their respective software implementations.

In one corner stands Bitcoin ABC, the “original” Bitcoin Cash client that caused the split away from the Bitcoin blockchain a little over a year ago. Led by Amaury Séchet, and with close (though unofficial) ties to major mining hardware producer Bitmain, Bitcoin ABC has a policy of hard forking about once every six months to upgrade the protocol.

This time, Bitcoin ABC will introduce several changes. The first and probably main one is called “Canonical Transaction Ordering” (CTOR). While transactions can currently be included in a block in almost any order, under CTOR, transactions must be included in a specific order. The Bitcoin ABC development team believes this offers a couple of technical benefits, in part related to (future) scaling improvements.

A second change is a new piece of script (an “OP code”) called OP_CHECKDATASIG (DSV). This extends Bitcoin Cash’s features, most notably by enabling oracles (which allow for a class of smart contracts). Bitcoin ABC also introduced some smaller technical fixes, like a minimum size for transactions.

In the other corner stands nChain and its chief scientist Craig Steven Wright, who claims to be the man behind the monicker Satoshi Nakamoto, but has publicly only been able to produce fake evidence. Having released a relatively new software implementation named “Bitcoin Satoshi’s Vision” (Bitcoin SV), Wright says he wants to restore Bitcoin to its original protocol: the 0.1.0 version launched in 2009. After that, he’d take a rather conservative approach with few or no further protocol upgrades.

To achieve this, Bitcoin SV makes a few changes relative to Bitcoin ABC right now. First, it rejects CTOR, as nChain believes the potential benefits are insufficiently proven and the risks are too high. Second, it increases the default block size limit to 128 megabytes (versus Bitcoin ABC’s 32 megabytes). And third, it reinstalls several old OP codes (with names as OP_MUL, OP_LSHIFT, OP_RSHIFT and OP_INVERT). It also removes the size limit on scripts.

Down the road, Wright promises to make more changes to bring Bitcoin SV closer to the 0.1.0 version of the Bitcoin protocol. The block size limit will eventually be increased a lot more or even removed entirely. DSV will be dismantled. (Wright goes so far as to claim DSV would make Bitcoin ABC and its miners illegal. On Bitcoin SV, coins held in “DSV addresses” will likely be turned into donations to miners.) P2SH transactions (which allows for much transaction flexibility and was introduced in 2012) will be depreciated. More old OP codes will be restored. And the nChain chief scientist alluded to bringing “lost” coins back into circulation. (Where “lost” presumably refers to coins that haven’t moved in a long time.)

Who supports what?

With Bitcoin ABC and Bitcoin SV as the two main competing factions, most of the Bitcoin Cash ecosystem has, by now, picked a side in the dispute.

Though in some cases reluctantly, most other Bitcoin Cash implementations have sided with Bitcoin ABC. The biggest of these, Bitcoin Unlimited, has made its latest release compatible with the Bitcoin ABC hard fork by default — though users can configure their software to be compatible with Bitcoin SV instead. Other Bitcoin Cash implementations, such as Bitprim and Bcash, are also compatible with Bitcoin ABC.

Most of the biggest Bitcoin Cash service providers have indicated that they will support the Bitcoin ABC hard fork as well. Besides Bitmain’s wallet and block explorer BTC.com, this includes cryptocurrency exchanges Coinbase, Binance and Kraken, payment processor Bitpay and API-provider BitGo. Besides nChain, the companies that expressed support for the Bitcoin SV hard fork are generally smaller. Of those, media outlet CoinGeek is probably the best-known example.

CoinGeek owner (and online gambling tycoon) Calvin Ayre is probably also the most well-known individual supporting the Bitcoin SV hard fork — besides Craig Steven Wright, of course. Most “big name” Bitcoin Cash proponents instead appear supportive of the Bitcoin ABC hard fork — or at least dismissive of Wright and Bitcoin SV. This includes bitcoin.com CEO Roger Ver, Bitmain co-founder Jihan Wu, Pirate Party founder Rick Falkvinge, Cornell professor Emin Gün Sirer, but also Ethereum founder Vitalik Buterin and others.

At the time of writing, most users seem to favor Bitcoin ABC as well. On futures markets, such as those offered by cryptocurrency exchange Poloniex, BCH ABC futures are trading at around $260, while BCH SV futures are trading at around $220. (Though the difference was much bigger only few days ago.) General sentiment on social media like Reddit and Twitter also appears to favor the Bitcoin ABC hard fork — though this is considered irrelevant “proof of social media” by Bitcoin SV proponents. What matters, they say, is proof of work.

Which brings us to Bitcoin SV’s main weapon — perhaps literally. At the time of writing, all the biggest Bitcoin Cash mining pools are supportive of Bitcoin SV. Calvin Ayre’s private CoinGeek pool, Wright and nChain’s public SVPool, nChain’s private BMG Pool as well as Okminer and Mempool all favor Bitcoin SV, representing up to 60 or 70 percent of hash power. The rest of the pools — a minority — are either neutral (for example planning to follow majority hash power) or in favor of Bitcoin ABC.

Does this mean the chain will split? And what is all this talk about a “hash war”?

It’s complicated.

Technically, Bitcoin Cash will indeed experience another coin-split as soon as either Bitcoin ABC or Bitcoin SV mines a block that’s invalid on the opposing chain (for example, because transactions in the block are ordered incompatibly). This also means that all BCH holders get coins on both sides of the split. In principle, all users should be able to mine, send and receive both coins.

If this were a “clean split,” the two coins would be separated through a technical trick called “replay protection.” Transactions on one chain are invalid on the other, so (regular) users would be affected as little as possible.

But this will not be a clean split. While Bitcoin ABC implemented replay protection, Bitcoin SV copied this “protection” to cancel it out.

As such, transactions will look identical on both chains. This means that a Bitcoin ABC transaction can be re-transmitted (“replayed”) on the Bitcoin SV chain, having users accidentally spend both. And the other way around: Bitcoin SV transactions can be replayed on Bitcoin ABC. When Ethereum Classic and Ethereum split without replay protection in 2016, this caused significant losses to unprepared exchanges, like Coinbase. Therefore, this time many exchanges and other service providers will halt withdrawals and/or deposits for some time.

But that’s not all. The split could unleash what has by now come to be known as a “hash war.”

Craig Steven Wright has explicitly stated that, in an attempt to ensure only “his” chain survives, he and others will use any hash power under their control to 51%-attack the Bitcoin ABC chain. Such attacks, first speculated about during Bitcoin’s scaling dispute in 2017, could, for example, consist of mining only empty blocks on Bitcoin ABC and “orphaning” (rejecting) any blocks mined by “honest” Bitcoin ABC miners. This would have the effect that no transactions will confirm on the Bitcoin ABC chain at all, and that “honest” miners will be strongly discouraged from mining on it: their hash power would go to waste. If Wright and others successfully take this (rather unprecedented) step, there would not be a meaningful chain-split after all: only the Bitcoin SV chain would survive.

While all this is very speculative, Bitcoin ABC could defend itself against such an attack in several ways, too. For one, Bitcoin ABC users could simply wait out the attack, as it costs the attackers money every hour, and this cannot last forever. Alternatively, (Bitcoin) miners could opt to draw more hash power from the Bitcoin blockchain to mine on the Bitcoin ABC chain, or deploy more hash power altogether. (Some news sources claim Bitmain is indeed doing this.) Or, in what is typically considered the “nuclear option,” Bitcoin ABC could choose to deploy another hard fork to change the proof-of-work algorithm, rendering the attacking mining hardware incompatible with its blockchain. (Bitcoin ABC lead developer Amaury Séchet has already acknowledged this option is on the table.) There may be other countermeasures too, like less radical protocol changes.

Or, perhaps all this talk of a hash war will soon prove to have been nothing but a bluff. Bitcoin Unlimited chief scientist Peter Rizun, for example, doubts that the Bitcoin SV development team will be capable of pulling off a successful attack in the first place.

Do I need to do anything? Will I get both coins in case of a split?

Once again, it’s complicated. But here’s the important part: If you own BCH, control your private keys and don’t transact during the fork, you’ll own any post-split coins.

With that out of the way, there are roughly three scenarios to take into account.

Maybe only one coin survives the split. In that case, wallets and other service providers will presumably support this coin, either right away or later on. If you hold your private keys and your wallet supports the coin, you will be able to transact. If your wallet does not, you’ll need to extract your wallet seed or private keys and insert them in a wallet that does. (There’s no rush to do any of this.)

Second, two coins could survive the split, both with their own name and ticker. (In this case Bitcoin ABC seems most likely to get the name “Bitcoin Cash” and “BCH,” but this could differ from one service to the next.) This is where you need to be particularly careful, as there’s no replay protection. When you send one coin you may unintentionally send the other along with it — or vice versa. To avoid this, you need to first split your coins by using a splitting tool, for example, or by sending your coins to an exchange or other type of service that will split the coins and send both back independently. (Again, there’s no rush to do any of this. Until you know what you’re doing, it’s best to do nothing at all.)

Third, we can’t ignore the possibility that a hash war could escalate to the point that no coin is left standing — at least, not in a meaningful way. Whether it will be due to the 51%-attacks themselves or a loss of confidence or otherwise, cryptocurrencies can fail, and given the circumstances described in this article, Bitcoin Cash is certainly no exception.

There are more potential scenarios, some of which would result in even more coins. This includes a coin that ignores both Bitcoin ABC and Bitcoin SV’s upgrades or a “coin” that is compatible with both. But these scenarios seem quite unlikely or temporary at best and are probably not something worth worrying about right now.

Finally, and obviously, none of this affects users of bitcoin or any other cryptocurrency right now. (Though if hash power does move over from Bitcoin to Bitcoin Cash, it could slightly slow down transaction confirmation times on the Bitcoin network.)

This article will be updated throughout the day on Thursday as the events of the fork unfold.

This article originally appeared on Bitcoin Magazine.

Op Ed: Anatomy of the Tether Attack: Are Stablecoins Vulnerable?

Op Ed: Anatomy of the Tether Attack

Go for the Jugular” is the advice George Soros gave to his team during his famous attack on the British pound for a profit of $1 billion on so-called Black Wednesday in 1992. On October 15, 2018, tether, the market dominating stablecoin with a market cap of $2 billion, was attacked, breaking tether’s peg to USD, dropping its value by 7 percent but simultaneously driving up bitcoin and the whole crypto market by more than 10 percent. Even though nobody has claimed the attack yet, entrepreneurs, investors and customers of stablecoins should all carefully analyze existing and potential attacks and act accordingly.

Stablecoins, cryptocurrencies with stable value, are considered the “holy grail” of crypto since they could displace all the fiat money in the world which is about $90 trillion. As one might expect, investors have poured out hundreds of millions of dollars chasing stablecoin dreams, and, following the money, new stablecoin projects have come out left and right in 2018, which many have called the year of the stablecoin.

While there are many good articles on stablecoins, almost all of them focus on topics related to stablecoin design or why stablecoins are doomed to fail, and all analyses assume normal crypto market conditions rather than taking into account the volatile conditions we have experienced.

However, during an attack, the market movement is massive and sudden. Assuming these attacks are legal and highly profitable, just like Soros’ attack, they will come back again and again. Only the stablecoins that can survive these attacks can eventually become the “holy grail.”

Analysis of the Tether Attack

As of the writing of this article, there is not much information or data regarding the Tether attack on October 15, 2018. Who were the attackers? What was the method to profit from the attack? How profitable was the attack? What resources were required to execute the attack? Was there any attempt to defend against it? However, just by analyzing some limited public data from CoinMarketCap, we can gain valuable insights around these questions that are important in understanding such an attack.

First, the attack is a classical speculative attack: a massive and sudden selling of a currency during a relatively short period of time. Such an attack is usually executed by financial speculators; in this case, it is rumored that the recent Tether attack was mounted by IMMO.

As shown in Figure 1, the whole attack was very short: only about three hours from start to finish. It started around Sunday, October 14, 2018, 10 p.m. PST (UTC-7:00) and finished around Monday, October 15, 2018, 1 a.m. PST (UTC-7:00). It took about 100 minutes to drive the tether price to the bottom at $0.925284. Then, about 65 minutes later, the price went back to $0.973513 and started to stabilize. The transaction volume during these three hours was about $2 billion, which was the average 24-hour trading volume around that period.

usdt1

Figure 1: Tether’s 24-hour price from October 14, 2018, to October 15, 2018 (Source: CoinMarketCap)

Second, the method to profit from the Tether attack is actually different from the method used in Soros’ attack on the British pound. In Soros’ attack, shorting currency was used to generate profit: 1) First, Soros’ team built up a huge short position of pound sterling; 2) they executed a massive and sudden selling of the pound; and 3) they finally bought back the pound after breaking the peg, returned their borrowed pound and generated $1 billion in profit from the price difference.

In the Tether attack, it seems that the attacker(s) 1) first built up a big position in tether (either short or non-short position) and a big position in bitcoin or other crypto assets; 2) then executed a massive and sudden selling of tether, which drove the tether price down to the bottom and caused the bitcoin price to go up by about 10 percent; 3) finally sold the big bitcoin position to generate profit; and 4) possibly bought back tether at a lower price to reduce the loss from dumping tether.

I believe the attackers leveraged the fact that bitcoin and other crypto assets are perfectly negatively correlated with stablecoins. As shown in Figure 2, with about 15 minutes delay (CoinMarketCap only provided data in 5-minute intervals), the bitcoin price started to climb when the attack started, reached its peak when the tether price reached its bottom, and dropped as the tether price recovered.

usdt2

Figure 2: Bitcoin’s 24-hour price from October 14, 2018, to October 15, 2018 (Source: CoinMarketCap)

Third, it is extremely hard to figure out exactly how profitable the attack was, given the limited data available. However, it is safe to say the attack was very profitable. Even though it does not let us determine the profitability of the attack, the whole crypto market went up 10 percent, adding $20 billion in value, while at the same time, tether dropped by about 7 percent, removing only about $210 million in value. That difference represents a tremendous opportunity for profit-taking.

Fourth, the effort to successfully execute the attack was huge but many people have the resources to mount such an attack. As a comparison, it took $10 billion short selling of the pound to break the peg; only Soros and a few others could have accumulated the resources needed in that attack.

As shown in Figure 3, if we assume the “Total Sell” volume was the capital required to break the tether peg to the bottom price of $0.925284 in ONLY 100 minutes, then it took more than $1 billion to achieve that. If we believe that there is a leverage in the market and that controlling 10 percent of the trading volume will move the market, then only about $100 million was required to start the attack and cause the market to follow.

usdt3

Figure 3: Analysis of trading history during the Tether attack period (Source: CoinMarketCap)

Lastly, just as the British government tried to defend but eventually gave up defending against Soros’ attack, there was definitely an effort to defend Tether but it failed. As shown in Figure 3, if we assume the “Total Buy” volume was the effort to defend Tether, then the defender(s) spent at least $200 million, a huge amount that not many people can mobilize in a short 100 minutes.  

What Are the Economic Incentives? Can a Project Defend?

Understanding the economic incentives for both attackers and defenders is critical to understand why attackers want to attack and how they attack, as well as whether defenders can actually defend the peg and whether they should even try.

The ultimate motivation for attackers to mount an attack on fiat currencies is economic gain. Who wouldn’t want to legitimately make $1 billion in profit as Soros did? The same motivation also holds true for attacking stablecoins. Stablecoin projects should recognize that breaking the peg is not the ultimate goal for speculators in mounting an attack. It is only a means to cause the expected market movements during the short attack period and profit from them accordingly, even though the stablecoins can return to the pegged price after the attack.

The key questions are whether attackers can design certain attacks that can generate financial profits or not, what resources are required to successfully execute the attack, whether the defender(s) have the capabilities to defend and whether they would be willing to defend or not. If there is a type of attack that is profitable, requires low effort to attack and cannot be defended, such a type of attack will come back again and again. Based on the above analysis on the recent Tether attack, the bad news for all stablecoin projects is that there is a profitable attack that requires low effort to execute successfully.

Some projects have argued that their designs can defend speculative attacks like Soros’ attack because there exists a large pool of “anti-Soros” speculators who can profit from defending the peg. But these arguments make the assumption that the attack will use the “shorting currency method” that Soros used.

This assumption will not hold if attackers use the method used in the recent Tether attack. During that type of attack, from a game theory point of view, speculators will generate more profit by joining the attack to further drive down the stablecoin price while at the same time driving up the price of bitcoin or other crypto assets, which will increase the spread when they return to sell the bitcoin at a higher price and buy back stablecoins at a lower price.

It seems the only party that has incentives to defend the peg is the project. Based on the analysis of the recent Tether attack, it requires a huge amount of capital in a short period of time to defend the peg. Unfortunately, none of the stablecoin projects today has the capital necessary to defend such an attack.

None of the stablecoin projects today can defend against a speculative attack!

Whether people like Tether or not, it should get some credit for attempting to defend the peg against the recent speculative attack. It spent at least $200 million to do so. It probably needs $500 million more to succeed in future attempts. More importantly, since these attacks happen during a very short period of time, there is no time to move money from the bank or issue bonds; therefore, the stabilization capital will need to be on hand, moving forward.

Some people argue that Tether is exiting the stablecoin business by retiring and burning tether. I would argue that Tether is actually moving capital from bank reserves to cash-on-hand (or at least attempting to reduce the reserve liability) so they can have a chance at defeating future attacks.

There Will Be More Attacks Than You Might Think

Fiat currency attacks are rare, even though a few of them have grabbed the headlines. Things are more complicated in the stablecoin market than in the fiat currency market. I expect there will be many more stablecoin attacks because there are more targets to attack, more types of attackers, more ways to profit, and more (and easier) ways to attack.

First, there are so many stablecoins projects — 60+ and increasing — and the majority of these stablecoins are competing for the USD-pegged market. Granted, most of these stablecoins have not reached the point where they are able to affect the market — many have not even launched yet. It won’t be a stretch to expect these will become targets for attacks sooner or later, especially since they all have some sort of design flaws.

Second, the attackers of fiat currencies are financial speculators who mount the attacks purely for financial profits. In the end, Soros cannot issue a new currency to replace the British pound as the fiat currency for England. In stablecoins, a project has strong incentives to attack and kill another project. Again, it is rumored that the recent Tether attack was mounted by IMMO which is developing a competing stablecoin. Likewise, an exchange has strong incentives to mount a stablecoin attack to steal traders from other competing exchanges, as we saw during the recent Tether attack when traders switched from tether-based exchanges to non-tether-based exchanges.  

Third, there are limited ways to profit from a speculative attack on fiat currency. In addition to profiting from killing stablecoin competitors and stealing traders from other exchanges, financial speculators could profit from the sudden price rise of bitcoin and other crypto assets which are negatively correlated with stablecoins. And there could be more ways to profit that people haven’t even thought of yet.

Fourth, it requires a lot of capital to mount an attack on fiat currency and only a few speculators can secure that large amount. Soros amassed $10 billion for the famous British pound attack. The market cap of any stablecoin is still small and the ratio between fiat-inflow and crypto market cap is 1:50. Hence, it seems that a relative small amount of capital is enough to mount a successful attack. Due to some stablecoin designs, stablecoins can be attacked in ways that did not exist in fiat currency attacks, such as an oracle attack, which might even be easier.

Conclusion

As the recent Tether attack is written into history, I hope this can serve as a wake-up call for all existing and future stablecoin projects. When designing their stablecoins, projects should consider not only how the system will function in normal market movement environments but also the response strategy in extreme market movement situations when their stablecoins are being attacked. Only the stablecoins that can survive all attacks can become the “holy grail” of the crypto.

This is a guest post by Henry He. Opinions expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

This article originally appeared on Bitcoin Magazine.

Another crypto exchange goes old school as KuCoin raises $20M from VCs

I’ve said it before but I’ll say it again: one of the biggest trends in crypto this year is companies raising money the old fashioned way through venture capitalists.

Hot on the heels of Binance raising money from Singapore’s Vertex Ventures, so KuCoin, a relatively new crypto exchange, has pulled in $20 million. The money comes from two big name investors — IDG Capital and Matrix Partners — and the venture capital arm of Chinese crypto organization Neo, and it’ll be used to expand KuCoin’s global reach, develop technology and launch an investment arm of its own.

We’ve confirmed that the deal is based on equity not a sale of tokens as is often the case with crypto investments.

Binance took its investment as part of its plan to introduce a fiat currency exchange in Singapore, and likewise KuCoin — which relocated from Hong Kong to Singapore this year — is turning to investors to help advance its business by tapping into networks and connections.

The deal will “open new doors” for the company, KuCoin CEO Michael Gan told TechCrunch in an interview.

KuCoin started trading in September 2017 following an ICO that raised 5,500 Bitcoin, then worth around $27.5 million. Still, the company is unlikely to be short of money. The exchange business is the most lucrative perch in the crypto space and while it hasn’t reached the size of Binance, KuCoin is ranked as the 49th largest exchange according to Coinmarketcap.com, which puts its daily trading at around $25 million.

Gan — who previously spent time with Alibaba’s Ant Financial affiliate — said that the capital will go towards hiring, both on new developers and doubling its 50-person support team. In particular, KuCoin is developing features for serious traders, including faster transactions, stop-loss features and more.

Decentralized exchanges — which remove the middleman to connect buyer and seller directly — are the big buzzword right now in the exchange world with figures like Binance making progress on offerings. Gan said that KuCoin will need “a little more time” to develop its ‘Dex.’ He declined to provide a timeframe. KuCoin, he explained, is focused on ensuring that it will offer a quality user experience and on a stable platform.

Elsewhere, the firm said it plans to offer its service in more languages. It claims that it is working closely with regulators in Europe to gain a license to offer its services in the region, although the company did not comment on whether it plans to adhere to regulations in New York where authorities are investigating a number of other exchanges for doing business unlawfully.

First up, KuCoin aims to launch ‘communities’ in Vietnam, Turkey, Italy, Russia and Spanish-speaking countries before the end of this year using online marketing and ads. It aims to grow its reach to 10 markets within the next six months while it is doubling down on in-house research to identify promising projects.

Linked to that last point, KuCoin is also getting into the investment game.

As I wrote earlier this year, cash-rich crypto companies are turning provider with investments in smaller organizations to build out platforms, establish relationships and more. Binance is perhaps the most notable mover — with a fund that it claims is worth $1 billion and an ambitious early-stage accelerator program. Gan confirmed the plan to launch a “VC arm” but he declined to detail its size or investment strategy at this point.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life

Singapore Crypto Exchange KuCoin Raises US$20 Million Series A

KuCoin, a Singapore-based cryptocurrency exchange, has announced that IDG Capital, Matrix Partners and Neo Global Capital have agreed to invest a total of US$20 million in the startup’s Series A funding round. KuCoin is a cryptocurrency spot-trading platform which claims over five million registered users. The platform supports more than 350 trading pairs and claims […]

The post Singapore Crypto Exchange KuCoin Raises US$20 Million Series A appeared first on Coinjournal.

Tinder’s head of product has left

Tinder’s chief product officer Brian Norgard wants to get back to his entrepreneurial roots, citing former PayPal executive-turned-venture capitalist Keith Rabois as inspiration.

Norgard, who joined Tinder as part of the acquisition of his Kleiner Perkins-backed ephemeral messaging startup Tappy in 2014, has confirmed to TechCrunch that he’s left the app-based dating company to focus on building products and investing in early-stage businesses. Tinder has not yet identified his successor, but Norgard says “it’s all positive vibes” between him and the company.

Norgard began as Tinder’s head of revenue before being promoted to the chief product role in late 2016. Prior to joining Tinder via Tappy, he co-founded two other successful startups: Chill, a Facebook application that garnered 30 million users, and adtech startup Newroo, which was acquired by FOX Interactive in 2006.

“It’s been a great ride but my strength has always been in the early-stage game,” Norgard told TechCrunch. “What I’m trying to do now is take all the learnings from that wonderful experience and bring them into my investing.”

Though he’s yet to sign on in any official capacity, Norgard said he is in talks with several different entities about investing roles.

Brian Norgard has invested in Coinmine, a developer of a sleek cryptocurrency mining device.

Norgard said he’s invested in one company so far, a cryptocurrency mining startup called Coinmine founded by Justin Lambert, who helped design the second iteration of the Pebble watch, and Farb Nivi, the former chief product officer at Learnist. Coinmine is selling a crypto mining device, similar in size and look to an Xbox, that’s controlled by a mobile app. The device is meant to help anyone, crypto enthusiasts and otherwise, mine crypto easily. Nivi told TechCrunch the internet-connected device uses less energy than a PlayStation.

The Los Angeles-based startup is officially launching today with Norgard signed on as an active advisor.

“There are a lot of parallels I draw from Coinmine and Tinder,” Norgard said. “Online dating was very complicated six years ago. It was an arduous process and so is mining. You have to be pretty sophisticated, but this takes it down to the studs. A normal consumer with no technical knowledge can get into the crypto game.”

Coinmine, which raised a total of $2 million, is also backed by Coinbase Ventures, Social Leverage, Arrington Capital, Wonder VC and angel investors like Coinbase’s chief technology officer Balaji Srinivasan.

New Mining Approaches Provide Hedge Against Centralization As Hash War Looms

Zcash recently announced their new protocol upgrade, Blossom, which among many new developments will include “Harmony Mining”, which will enabling the network to utilize two proof-of-work algorithms.

The forum post described the feature as “a dual-proof-of-work scheme, where one algorithm is backwards compatible with current mining equipment, and another is designed to work well with GPUs on a temporary time scale”. The post went on to describe how the upgrade will allow the network to attract both ASIC and GPU miners “to make the Zcash ecosystem more resilient by spreading issuance and political influence among distinct kinds of stakeholders”. Currently, most GPU miners are crowded out by the more powerful ASIC miners.

The upgrade is scheduled to be release around October 28th, 2019, which would be about a year after the sapling release, which was the last upgrade.

Importance of decentralized and robust validation

The potential hash war that nChain and CoinGeek are threatening with their Bitcoin SV code against the Bitcoin ABC code supported by Bitcoin.com, Coinbase, Binance, and others highlights the need for decentralized mining and transaction validation methods. nChain chief scientist Craig Wright has been speaking heavily on twitter and other media outlets that he will destroy the Bitcoin ABC chain through a hash war. However, Craig Wright has also hinted at his plans to attack other proof-of-work cryptocurrencies and there has been the suspicious emergence of Shark Pool, which is claiming it will maliciously mine empty altcoin blocks.

The concerns highlight the importance of cryptocurrencies having a robust and decentralized validation system, such as the one Zcash is exploring. PIVX provides a potential alternative with its proof-of-stake system to validate and secure its blockchain, however, it has created a centralization problem since the top 10 and 100 wallet addresses contain over 25% and 46%, respectively, of the network’s wealth. Another potential solution to create a robust and decentralized cryptocurrency is to employ multiple algorithms. This is what Digibyte has done by harnessing 5 different hash algorithms; Sha256 and scrypt optimized for ASIC miners, while skein and groestl are optimized for GPU miners, and qubit is good for multiple types of hardware. The diversity of these validation methods can help mitigate the risks of centralization and a 51% attack by increasing the capital requirements needed to gain enough computing power or coins to attack the network.

Dash pursuing its own form of decentralized and robust validation

Dash employs its own unique form of validation and consensus building mechanisms by splitting power between miners and masternodes, whom must stake 1,000 Dash to have a vested financial interest. This then makes it much more difficult and cost prohibitive to attack the Dash network since a would-be-attacker must buy 51% of mining power and 51% of masternodes to reverse transactions. This is thanks to Spork 3, InstantSend Block Filtering, which causes masternodes to reject blocks that conflict with InstantSend transactions that are already locked by the masternode network. Furthermore, the concept of collateralize mining has been discussed to better align miners’ incentives to protect the network through a vested financial interest since it then becomes less likely that a miner will want to destroy the coin that they had to invest in to mine.

This unique hybrid has also allowed Dash’s to be one of the better distributed coins with its top 10 and 100 addresses being just above 5% and 14%, respectively, of the network’s wealth. This helps indicate that Dash not only has better wealth distribution, but also provides some evidence of robustness in that Dash is being used for everyday transactions since it is not being concentrated in a few addresses that are miners or stakeholders. Further evidence to support this hypothesis can also be seen via the over 4,000 merchants that currently accept Dash around the world. This pursuit of decentralization and robustness will help strengthen the network in general and hopefully provide resistance against the idea of a large scale attack currently being floated around.

Thailand Uses Blockchain-Supported Electronic Voting System in Primaries

Thailand Blockchain Voting System

Thailand’s Democrat Party has become the first political party to use blockchain technology to elect its leaders in a primary election, which was held from November 1–9, 2018. In a live e-voting system, more than 120,000 party faithful cast their votes in a transparent way that saw former Thai Prime Minister Abhisit Vejjajiva winning his party nomination with 67,505 votes.

Party members were able to vote using two methods. The first method was through voting stations that utilized a Raspberry Pi-based system. Voters were also able to vote via a blockchain-based mobile app that asked voters to submit their photo ID.

The identification documents used to verify party members and the voting tallies were both encrypted and stored on the InterPlanetary File System (IPFS), a decentralized and distributed file system for storing large volumes of data. IPFS uses a peer-to-peer protocol where nodes store a collection of hashed files on a network.

For this election, the IPFS hashes were stored on the Zcoin blockchain, which acted as an “immutable database and provided auditability to the Thai Election Commission and the Democrat Party candidates.”

“I am very proud that Zcoin played a role in making Thailand’s first large-scale e-vote, a reality, which saw greater voter participation and transparency,” Poramin Insom, founder & lead developer of Zcoin, noted in a public statement.

To keep the voting data and documents safe, the encryption keys were split using the Shamir’s Secret Sharing Scheme, which works similarly to a multi-sig key used for crypto wallets. With a multi-sig key, multiple private keys are required to access the funds.

With the Shamir Scheme, multiple custodians are required to decrypt the voting data. At the recently concluded primary election, five individuals were needed to decrypt the voting data; representatives of each candidate, an official from the Thai Election Commission and a representative from the Democrat Party.

“I believe we’ve achieved a huge milestone in our country’s political history and hope that other political parties or even the government, not just in Thailand but the region, can look to using blockchain technology in enabling large-scale e-voting or polling,” Insom stated.

Earlier this month, West Virginia ran a blockchain trial in the federal general election for military and other Americans living abroad. The state used the mobile app developed by blockchain startup Voatz to verify voters’ identities using facial recognition technology by comparing it to other photo ID that might have been uploaded on it during voter’s registration. Swiss city Zug ran a similar trial using a different app from uPort, which issued digital identities to residents who cast their votes using their smartphones.

Blockchain voting has its skeptics; however, a report from the Brookings Institution think tank, sees blockchain voting as a “beneficial tool for the election commission to maintain transparency in the electoral process, minimize the cost of conducting elections, streamline the process of counting votes and ensure that all votes are counted.”

This article originally appeared on Bitcoin Magazine.

Ripple Files to Move Securities Lawsuit from State to Federal Court

Ripple Lawsuit Federal Court

Ripple’s legal team in their ongoing securities suit is attempting a new tack: to have the claim proceed at the federal level.

In a move that legal commentator Jake Chervinsky described as “seriously crafty,” Ripple has filed a formal notice-of-removal motion to have their most recent securities suit, Zakinov et al v. Ripple, tried in a federal court rather than at the state level.  

In the notice of removal, the defendants, which include Ripple and its CEO Brad Garlinghouse, among others, request that the court “remove the … civil action, and all claims and causes of action therein, from the Superior Court of the State of California, County of San Mateo, to the United States District Court for the Northern District of California.”

The class action is a consolidation of three separate suits filed by Vladi Zakinov, David Oconer and Avner Greenwald “on behalf of all California citizens who purchased or otherwise acquired XRP from January 1, 2013 to the present.” It claims that since Ripple has failed to register with the U.S. Securities and Exchange Commission (SEC), XRP has been sold as an unregistered security, and the combined class action is seeking nearly $17 million in damages.

Swamped with legal troubles, Ripple has sustained several legal challenges to their sale of XRP tokens, with many alleging that these token sales constitute securities fraud. Although Ripple has yet to face any serious consequences as a result of these battles, facing three securities suits in a single year could prove to be a serious strain on Ripple’s resources.

This latest attempt to plead their case at the federal level may set vital precedent, if successful. A federal clarification on the interaction of securities laws and token sales could shut down future cases before they even begin.

This appears to be the pretext for attempting to move this suit to a different court system, at least. As Chervinsky went on to elaborate, a suit argued on Ripple’s behalf in the state of California could also serve as a precedent to stop the tide of frivolous securities lawsuits levied at Ripple.

At this early stage in the fight, Ripple’s legal team could also believe “they have better odds of winning in federal court than in state court (or else they wouldn’t be trying so hard to remove the case),” Chervinsky continued.

To be clear, the notice of removal still needs to be approved by the Superior Court of the State of California, County of San Mateo, before it is bumped up to the federal circuit. Following the notice, the plaintiffs submitted a filing to request that the case persist at the state level.

This article originally appeared on Bitcoin Magazine.

Bitfury Acquires Minority Stake in Final Frontier, Aims To Expand Services

bitfury frontier

The Bitfury Group has acquired a minority stake in blockchain services firm Final Frontier. Both organizations are looking to utilize each other’s knowledge and experience in the traditional and digital finance spaces to potentially release a new line of financial products and services designed to assist professional investors in getting their hands on digital assets.

“Our mission is to be the bridge for institutions from traditional finance to enter this innovative asset class,” said Final Frontier co-founder Imraan Moola in a public statement. “Bitfury’s technological expertise, combined with our financial markets know-how and track record will allow us to create unique and differentiated financial products and solutions to service our sophisticated investor base.”

Bitfury is a full-service blockchain technology company that started out with a focus on cryptocurrency mining. Among the company’s latest hardware releases are semiconductor chips and mobile data centers.

Bitfury is also the developer behind other blockchain projects including Exonum, a private blockchain framework; Crystal Blockchain, an advanced analytics platform; and LightningPeach, an open-source Lightning Nnetwork project.

Based out of Switzerland’s renowned Crypto Valley, Final Frontier is a cryptocurrency and blockchain investment firm. Among the venture’s main goals are helping professional traders and investors enter the crypto space.

Bitfury CEO Valery Vavilov states, “This is a ground-breaking partnership between a blockchain technology firm and an experienced team from traditional finance. With the blockchain space institutionalizing, we consider it an important step forward for the entire ecosystem and for our own mission to be the world’s leading full-service blockchain company.”

News of the partnership comes only days after Bitfury closed a Series C, $80 million funding round led by Korelya Capital. Funds will be used to further develop the company’s exploration of emerging technology and boost its software and hardware equipment. Its partnership with Final Frontier raises questions about whether Bitfury may be trying to expand its reach into investment services.  

Bitcoin Magazine reached out to Bitfury for comment. The company said that it was unable to “provide more details at this time,” but it was “looking forward to sharing more details in the future.”

Final Frontier also did not respond to our request for comment.

This article originally appeared on Bitcoin Magazine.

Dash Stress Test Passes 3 Million Transactions, Smashes Bitcoin Cash Record by Nearly 50%

Dash’s network processed a historic number of transactions during a recent stress test, far surpassing the previous record for a Bitcoin-based network held by Bitcoin Cash.

On the 11th of November, a pre-planned stress test was launched on the Dash network, run by Delta Engine, the company behind MyDashWallet. The stress test broke previous records by reaching over 3 million in a 24-hour period, passing the previous Dash high of 464,000 during an impromptu stress test in July of this year, and exceeding the previous record for a Bitcoin-based blockchain set by Bitcoin Cash in September, 2.1 million, by nearly 50%.

Scaling research was previously conducted by Arizona State University, concluding that Dash could easily scale to near-PayPal levels with relative ease. This new stress test shows that even with 2mb blocks, Dash can process nearly ten times the transaction load that strained the Bitcoin network in late 2017.

Dash’s network handled the load with some minimal disruption

The Dash network processed the sudden and unprecedented transaction load with relative ease. According to data from BitInfoCharts, the median transaction fee during the event remained largely the same at 0.03 cents, while the average fee dropped to approximately the same due to the very high number of low-fee transactions dragging down the average. The mempool backlog of unconfirmed transactions, usually empty, climbed to a peak of nearly 31,000 pending transactions during the test.

A few interruptions transpired, though the network largely ran very well, according to DeltaEngine CEO Benjamin Nitschke:

“Based on our six nodes we had running for services, etc., none of them went above 2%, and they all downloaded 500mb extra block data during the 24-hour stress test without a hitch. But several masternodes and some explorers crashed, probably due to memory issues or running out of space. Some users reported 100% CPU usage, but we didn’t see that for any node ourselves.”

During the test, the rate of orphaned blocks rose to six. This is marginally up from the usual, which typically has a day with around two orphans ever 1-2 weeks, though significantly lower than the most recent spike of 54 orphans on the 28th of December of last year, and the all-time orphan high of 286 in August of 2016. Both of these occurred before Dash had implemented compact blocks. During this time, while the vast majority of the masternode network ran smoothly, approximately 68 masternodes, or about 1.4% of the network, went offline, unable to keep up with the transaction load.

The masternode network is incentivized with 45% of the block reward, as well as some fees, to stay online and keep Dash running smoothly. Nodes that go down for any reason are kicked to the back of the payment queue and therefore loose income, incentivizing as much of the network as possible to stay online and functioning at all times.

On-chain scaling has been proven viable to support upcoming wide adoption

Significant stress tests such as this demonstrate in practice the previously theoretical ability of the Dash network to handle a very high number of users, far beyond the previous user base of Bitcoin. By demonstrating how much traffic the network can handle, potential users and businesses can see that Dash is a viable payment network, and will not succumb to the same scaling issues of other cryptocurrencies.

At present date, DiscoverDash lists 4,045 Dash-accepting merchants around the world. Without increasing the block size or network capacity otherwise, the present Dash network could easily handle ten times this number of merchants with each business receiving an average of 75 Dash purchases per day. This demonstrates the Dash network’s ability to easily handle a wide scale of adoption.

Bitmain Sues Anonymous Hacker Over $5.5 Million Theft

Bitmain Sues Anonymous Hacker Over $5.5 Million Theft

Chinese mining giant Bitmain is suing an anonymous hacker that allegedly stole $5.5 million in cryptocurrency last April from the company’s account on the digital exchange Binance.

The hacker’s identity is still unknown, and he’s described only as “John Doe” in official court documents, which were filed in accordance with the lawsuit on November 7, 2018, with the U.S. District Court for the Western District of Washington in Seattle. The documents state that the hacker managed to take over the company’s Binance account, then use bitcoin stored in the account to purchase ether tokens. These tokens were utilized to buy and manipulate the price of an altcoin known as MANA coin (MANA).

John Doe then transferred the MANA into a separate Binance account they controlled. The documents explain, “Upon further information and belief, John Doe took his/her market manipulating and theft scam a step further by essentially reversing the same orchestrated trades between Bitmain’s wallet and John Doe’s wallet using a deflated MANA price. While accessing Bitmain’s digital wallet without authority, John Doe placed an order to sell MANA out of Bitmain’s digital wallet at a deflated price. At the same time, John Doe placed a purchase order for MANA at that deflated price from John Doe’s Binance wallet.”

They continue to say, “Binance’s automated system matched the deflated MANA sell order with the deflated MANA purchase order and executed the trade, and John Doe obtained significant gains at the expense of Bitmain. As a result, John Doe benefitted twice from transferring MANA into and out of Bitmain’s digital wallet.”

Once these steps were completed, the court filing reports that the hacker transferred all the crypto funds from the theft into a wallet on Bittrex, a competing digital asset exchange. John Doe then cashed in on the profits and disappeared.

The documents say the hacker willingly and knowingly accessed a protected computer without appropriate permission with the intention of defrauding Bitmain.

“By means of such conduct, John Doe furthered the intended fraud and obtained things of value, specifically bitcoin and other digital assets, causing a loss to Bitmain exceeding $5,500,000,” the filing states.

Specifically, the documents assert that the defendant’s actions are a violation of the Computer Fraud and Abuse Act (CFAA), and that Bitmain is entitled to specific damages under the Act’s provisions.

It was reported last month that losses incurred by hacks on digital exchanges during the first nine months of 2018 exceed the total losses of 2017 by roughly 250 percent and that approximately $950 million has been stolen this year.

To view the court filing in full, click here.

This article originally appeared on Bitcoin Magazine.

OKEx Adds Support for the Vietnamese Dong on Its Fiat-to-Crypto Platform

OKEx Adds Support for the Vietnamese Dong on Its Fiat-to-Crypto Platform

Malta-based cryptocurrency exchange OKEx has added the Vietnamese Dong (VND) on its Customer-to-Customer (C2C) trading system, enabling Vietnamese customers to exchange their fiat currency for tokens on the platform.

The C2C platform was created by OKEx in 2017 as a peer-to-peer platform where users can buy and sell cryptocurrencies using fiat currencies. OKEx’s Head of Operations Andy Cheung noted that the addition of the VND on the company’s fiat-to-token platform would drive the adoption of cryptocurrencies in Vietnam.

“Vietnam is one of the most important blockchain hubs in Southeast Asia. We see a significant growth in the use of cryptocurrencies in this market,” Cheung added.

Trades made on the C2C platforms won’t incur any transaction fees, according to the release. The exchange also plans to introduce market makers (merchants) in the future.

Merchants are verified traders who have enough reserves to facilitate transactions on the platform. The digital asset platform requires a security deposit from qualified merchants before they can be accepted on the platform.

According to the company’s website:

“Market makers help serve a larger number of crypto enthusiasts and hence support a high trading volume. OKEx examines every merchant on the C2C platform. Every merchant on the platform needs to declare their digital assets which must exceed OKEx’s internal requirements to get qualified and to trade.”

OKEx, which recently dislodged Binance as the largest crypto exchange by trade volume, added four stablecoins to the list of assets available for trading on its token-to-token platform in October 2018. The exchange also announced its expansion to the U.S., having secured money transmittal licenses (MTLs) from 20 states across the U.S., excluding New York and Washington, D.C.

This article originally appeared on Bitcoin Magazine.

How to use a Blockchain to Prevent Election Rigging

Last Wednesday, after a mid-term election that saw more voters than any previous mid-term in more than 50 years, defeated independent candidate Tim Canova posted a video to his Twitter account. The video, shot by a concerned citizen, appears to show election officials driving up in their personal vehicles and putting provisional paper ballots into […]

The post How to use a Blockchain to Prevent Election Rigging appeared first on Coinjournal.

How to use a Blockchain to Prevent Election Rigging

Last Wednesday, after a mid-term election that saw more voters than any previous mid-term in more than 50 years, defeated independent candidate Tim Canova posted a video to his Twitter account. The video, shot by a concerned citizen, appears to show election officials driving up in their personal vehicles and putting provisional paper ballots into […]

The post How to use a Blockchain to Prevent Election Rigging appeared first on Coinjournal.

Venezuelan Push for Petro Adoption Provides Opportunities and Drawbacks for Cryptocurrency

The Venezuelan government is planning to offer the Petro, their oil- and commodity-backed cryptocurrency to OPEC (Organization of Petroleum Exporting Countries) as a unit of account for oil, however, many have called the Petro’s legitimacy into question.

The country’s petroleum minister and president of state-run oil and natural gas company PDVSA, Manuel Quevedo, announced via tweet that Petro transactions will begin in 2019.

“We will use Petro in OPEC as a solid and reliable currency to market our crude in the world… We are going for growth and economic prosperity of our country giving a hand to the future since the Petro is a currency that is backed by mineral resources.”

Quevedo made that statement at a speech at the National Superintendence of Cryptoassets and Related Activities (Sunacrip), which was created to “regulate the activities that are executed by natural and/or legal persons connect to cryptoasset”. He also called on all companies interested in the idea to “join his platform”.

This move also follows announcements of a Petro savings plan that will be available for 18 million Venezuelans. There has also been reports of Venezuelan bank accounts being denominated in Petros. Nevertheless, these expansions of the Petro come as there continues to be controversy around the government created cryptocurrency.

Petro offers mixed bag of opportunity for cryptocurrency

With Venezuela’s annual inflation rate now above 830,000%, the Bolivar is increasingly worthless, while the government continues to institute capital controls. The push by the Venezuelan government to use the Petro in banking account denominations and international oil markets could provide a relief opportunity for the Venezuelan people through wider cryptocurrency adoption. The government’s use of the Petro has already created a cryptocurrency friendly environment in the country when compared to other countries that have instituted harsh regulations. The Petro being pushed by the government could also serve as a transitional bridge for many to enter the cryptocurrency sector from fiat currencies by exchanging the Petro for other open-source cryptocurrencies. However, many have called into question the Petro’s legitimacy including a non-existent wallet, constantly changing whitepaper, changing the Petro’s backing from oil only to multiple commodities, and other concerns.

Another question surrounding the Petro is how it will work since it was first said to be based off of Ethereum, which then changed to NEM, but once released, it was revealed to be a near copy of Dash. The imitation of Dash can be interpreted as a sign of the success and popularity that Dash has seen in the country, but also brings some risks. Since the Petro is clouded in mystery as to whether or not it will become a legitimate currency brings the risk of consumers associating Dash with the success or failure of the Petro even if Dash is more open-sourced and has completely different development outlooks and communities.

How Dash is already succeeding in Venezuela

Dash has already demonstrated its competitive advantages over its peers in Venezuela with its record cheap fees, extremely fast confirmation times, InstantSend, PrivateSend, DAO and Treasury system, which all makes Dash very usable in everyday transactions. The ability of Dash to fund community outreach groups has enabled groups like Dash Venezuela, Dash Maracay, Dash Merchant, and Dash Text to get over 2,200 merchants to accept Dash and countless users to set up wallets. Then Dash Help makes Dash more consumer friendly by providing consumers with a central point of troubleshooting for any issues they have, which tends to occur when people switch to new technology.

These Dash attributes have also enabled Dash to succeed in many other countries around the world. Since Dash is decentralized, many of the groups contributing to the Dash code and community building are independent from one another and implement their own successful strategies. This enables Dash to succeed in counties that each have their own social norms and respond to different forms of incentives. It also enables Dash to evolve and adapt to consumer desires, which is not necessarily true for the Petro since it is largely believed to have been created to serve the government’s interests.

Circle Launches Crypto Reward Program to Attract New Customers

Crypto finance startup Circle has announced the launch of a new reward program in a bid to attract new customers to its Circle Invest platform. The reward program, which will run through the end of the year, will reward new Circle Invest customers with one of the crypto assets supported by the platform, which currently […]

The post Circle Launches Crypto Reward Program to Attract New Customers appeared first on Coinjournal.

My Big Takeaways from Dash Core Team Q3 2018 Conference Call

Every quarter, the Dash Core team releases a quarterly conference call to inform the community and masternodes of progress and field a few questions. These calls are often hours long, however, and not everyone has the time or attention span to glean all relevant information from the call. In the interest of helping the community get the relevant information, I have listened to the call and included the most important developments/announcements that I noticed.

The call is linked below, along with my four key takewaways:

1: New Intermediary Version 0.14 Introduced, Added to Roadmap

Probably the biggest, and least touted, announcement from the call is the introduction of a new Dash version between version 0.13 and 1.0’s main Evolution release: 0.14. This intermediary version will mainly include the introduction of long-living masternode quorums (LLMQs). This addition was originally intended for the 0.13 release, however due to the complexity and significance of this improvement it could not be included without delaying the rest of the release a whole additional month. As such, 0.13 is now released for testnet, while, 0.14 will likely follow next month.

In addition to the addition of the new version, Core released a roadmap of sorts for versions up to 1.0, outlining the parallel developments of three key elements: DashPay, Platform, and Core. The Core element includes the base protocol for Dash, while Platform includes background and supporting structure, and DashPay encompasses the most consumer-facing elements for the most publicly visible parts of Evolution. Of these three, only Core includes releases before version 1.0, at which point all three sync up.

Based on the aforementioned release details, it may be reasonable to assume that version 1.0 will not see public release in 2018.

2: Name Registration, New Details on Evolution/Other Development Progress

The Core team is still finalizing username registration process, including whether or not (or how) users may be required to pay to register their usernames. A rating system, used for flagging harmful content in Evolution, is still being worked on, and will likely not be included in the initial 1.0 release. What will likely be included is a new MemoDash DApp, which will be similar to the MyDashWallet chat function or Bitcoin Cash’s Memo.Cash by allowing messages such as tweets to be posted permanently to the blockchain.

In future releases, Evolution’s features will also be added to old Dash wallets such as the current mobile wallets, while DashPay will naturally include these features but remain extremely streamlined and simple. The thought process is, DashPay should be as simple and “idiot-proof” as possible for new users, while those already familiar with cryptocurrency may want the greater flexibility and “old school” capabilities of the other wallets.

There are several Evolution whitepapers in existence, though all are outdated and no longer accurate towards to goals and scope of the platform. However, Bob Carroll sees them as historically significant and may publicly release them soon.

Finally, clarification on Dash CoPay, which was completed to public beta but likely will not be worked on further, unless the community wants to take it up. Demand hasn’t been high enough to warrant consideration from the Core team to dedicate resources any further.

3: Core’s New Update Format and Financial Situation

In addition to the regular quarterly calls, the Core team mentioned further updates on operations to the community to fill the void left after the discontinuation of the “What’s Going On At Dash” posts. To this goal, with the release of the quarterly call presentation slides, the attached appendices included several additional slides of information about Dash Core operations and metrics.

During this period of a protracted bear market, many employees have been working for reduced or no salary. Dash Core Group has succeeded in significantly reducing budget expenditures. As a result, however, assets are up to $1.79 million, up from $1.31 at the end of Q2. Core remains committed to staying under 60% of the budget barring further catastrophic occurrences.

4: Priorities, Integrations, SEC, etc.

Dash Ventures’s legal entity structure to be published this week, with a month or two more until it’s ready for use in order to provide the Dash network with equity in exchange for investing in certain projects. There is ongoing engagement and communication with the Security and Exchanges Commission (SEC) regarding the pursuit of a no-action letter, however no news on this front has yet been made public.

The redesign of the overhauled Dash.org website is expected for late November/early December.

Dash-based cannabis-focused business solution Alt36, long-anticipated but seemingly well behind schedule for public launch, will reportedly demonstrate live transactions at MJBizCon later this week.

Finally, Core reiterated its focus on four key areas for optimal growth: Venezuela, cannabis, US-Mexico remittances, online gaming, and crypto traders.

New Exchange Security Scoring Model Offers Insurance Rates for Coin Holders

New Exchange Security Scoring Model Offers Insurance Rates for Coin Holders

International cybersecurity solutions provider Group-IB has come up with a scoring model to grade crypto exchanges based on their level of security.

The scoring model was created by Group-IB in conjunction with Swiss-based Cryptolns (which is operated by Swiss insurance broker APIS AS), and the grading is intrinsic to CryptoIns’ new cryptocurrency exchange insurance, which will allow exchange users to cover up to 15 BTC worth of digital assets held in their exchange accounts. With the scoring model’s data, CryptoIns has calculated rates for their coverage depending on an exchange’s level of security and asset-protection measures.

This insurance will be available for assets held on leading exchanges like Binance, OKEx, Kraken and Huobi, while a full list can be found on CryptoIns’ website.

“Currently, approximately 3,600,000 BTC are stored in user accounts on cryptocurrency exchanges, making this market highly attractive for hackers,” Timofey Volkov, CEO of CryptoIns, explained.

Per a recent Forbes article, crypto exchanges are attractive to hackers due to their design: They have a centralized single point of failure, making them prone to the same problems faced by millions of web applications globally. This is where the assessment from Group-IB gets interesting for the investor.

The grading from Group-IB took the exchanges’ architecture and infrastructure into consideration to better understand the mechanisms used in countering potential threats.

While developing the framework for its insurance policy, Cryptolns revealed that it assessed a number of exchanges using various parameters, including “the level of technical security [and] the reliability of key storage, password, and personal data of customers provided by each exchange.”

Explaining the challenges faced by insurers in the crypto industry, Volkov stated that:

“Collaboration with one of the leading international cybersecurity companies will help us organize and conduct pre-insurance evaluations of the exchanges in order to assess their security, as well as the potential for fraudulent activities on the part of the founders and management.”

Risk Groups

The scoring by CryptoIns also sorted exchanges into four risk groups based on aggregated information which includes “assessment of traded volume, traders’ activity, internal fees and other characteristics.” Exchanges categorized in the first group were graded as being the least vulnerable, second and third were “rated satisfactory and low in security risk,” while those in the fourth group were deemed to be overly risky, with the company saying it won’t provide insurance for such exchanges.

Base insurance rates are put at 2.5 percent per quarter. Each of the groups was entitled to different discounts with the maximum being a 50 percent discount, the report states.

According to CryptoIns’ insurance calculator on its website, U.S.-based cryptocurrency exchange Kraken ranks as the safest digital asset platform with a lower cost of insuring assets. It costs users 0.0125 BTC for every 1 BTC stored on Kraken at a 1.25 percent insurance rate. The same 1 BTC will be insured on Binance and Bibox for 0.019 BTC and 0.025 BTC, respectively.

Falling under the overly risky group were exchanges like Yobit which emerged as the least secure. Other less-secure exchanges, according to the list, were Zaif, Bitstamp, Bit-Z and TopBTC.

Cyber threats on crypto exchanges have become a recurring event. In September 2018, Japanese digital assets platform Zaif reportedly lost $59 million due to a security breach on its system. Bithumb, CoinGrail and BitGrail all lost $30 million, $40 million and $195 million, respectively, earlier in the year.

This article originally appeared on Bitcoin Magazine.

Trader Jailed and Fined Over $1 Million for Bitcoin and Litecoin Fraud Scheme

Trader Jailed and Fined Over $1 Million for Bitcoin and Litecoin Fraud Scheme

The U.S. Commodity Futures Trading Commission (CFTC) issued a press release on Friday, November 9, 2018, stating that it had fined Arizona resident Joseph Kim for perpetrating a fraudulent cryptocurrency trading scheme against his former employer and other investors. The same day, a District Court in the Northern District of Illinois sentenced Kim to 15 months on wire fraud charges.

Misappropriating Employer’s Funds

According to the release, Kim had misappropriated his employer’s funds between September and November 2017. Kim, who was employed by a Chicago-based trading firm at the time, had transferred the company’s tokens from the cryptocurrency exchange where they were kept into his wallet address.

When questioned about the illegal transfers, Kim falsely stated that the platform’s security issues were the reason why the tokens were moved. The firm discovered the misappropriation of funds in November 2017; by then, Kim had lost approximately $601,000 of the company’s funds. The company subsequently fired him.

Defrauding Investors

Kim then went out to solicit investment funds from unsuspecting investors, telling them he had left his former employer willingly to start a company of his own. After falsely informing investors he had a “low-risk virtual currency arbitrage strategy,” he got at least five investors, who gave him approximately $545,000 to invest in the crypto market.

Kim made poor investment decisions, leading to a total wipeout of his clients’ investments. Again, he concealed the losses, going so far as to falsify account statements sent to investors, which reflected profits where there were none.

Fines

The CFTC fined Kim $1.146 million, to be paid as restitution to his former employer and his investors. The agency has also imposed on Kim a permanent trading and registration ban for crypto trading and for soliciting of funds.

Director of Enforcement James McDonald calls the order issued against Kim evidence of the agency’s “commitment to actively police the virtual currency markets and protect the public interest.”

The U.S. Securities and Exchange Commission (SEC) has also been busy ramping up its enforcement against fraudulent schemes in the industry.

Just last week, the SEC charged crypto exchange EtherDelta with running an “unregistered national securities exchange.”

The agency also went after TokenLot LLC and Crypto Asset Management LP for registration failures in September 2018.

Its brokerage arm, the Financial Industry Regulatory Authority (FINRA), had a taste of the crypto industry, when it went after publicly traded company Rocky Mountain Ayre Inc. (RMTN) and its CEO, Timothy Tilton Ayre, charging him with the “unlawful distribution of an unregistered security.”

This article originally appeared on Bitcoin Magazine.

Twitter, those ‘verified’ bitcoin-pushing pillocks are pissing everyone off

Elon Musk’s tweets piss me off for two reasons.

When he’s not accusing actual heroes of sex crimes or trolling the federal government, it’s what comes after that drives me batshit. The top reply to most of his tweets is some asshat impersonating him to try to trick his followers into falling for a bitcoin scam.

These “get rich quick” scams are fairly simple. A hacker hijacks a verified Twitter account using stolen or leaked passwords. Then, the hacker swaps the account’s name, bio and photo — almost always to mirror Elon Musk — and drops a reply with “here’s where to send your bitcoin,” or something similar.

The end result appears as though Musk is responding to his own tweet, and nudging hapless bitcoin owners to drop their coins into the scammer’s coffers.

One of the latest “victims” was @FarahMenswear. The clothing retailer — with some 15,500 followers — was hacked this morning to promote a “bitcoin giveaway.” In the short time the scam began, the bitcoin address already had more than 100 transactions and over 5.84 bitcoins — that’s $37,000 in just a few hours’ work. Many Twitter users said that the scammers “promoted” the tweet — amplifying the scam to reach many more people.

On one hand, this scam is depressingly easy to pull off that even I could’ve done it. Depressing on the other, because that’s half a year’s wages for the average reporter.

Still, that $37,000 is a drop in the ocean to some of the other successful scam artists out there. One scammer last week, this time using @PantheonBooks, made $180,000 in a single day by tricking people into turning over their bitcoin and promising great returns.

Another day, another Elon Musk-themed bitcoin scam. (Image: screenshot)

Why is the scam so easy?

Granted, it’s clever. But it’s a widespread problem that can be largely attributed to Twitter’s nonchalant, “laissez-faire” approach to account security.

The common thread to all of these cryptocurrency scams involve hijacking accounts. Often, hackers use credential stuffing — that’s using the same passwords stolen from other breaches on other sites and services — to break into Twitter accounts. In nearly all successful cases, the hacked Twitter accounts aren’t protected with two-factor authentication. Brand accounts shared by multiple social media users almost never use two-factor, because it’s hard to share access tokens.

For its part, a Twitter spokesperson said it’s improved how it handles cryptocurrency scams and has seen a significant reduction in the amount of users who see scammy tweets. The company also said that scammers are constantly changing their methods and Twitter is trying to stay one step ahead. In many cases, these scams are nuked from the site before they’re even reported.

And, Twitter said it regularly reminds account owners to switch on stronger security settings, like two-factor authentication.

Well, enough’s enough, Twitter. You can lead a horse to water but you can’t make it drink. So maybe it’s about time you bring the water a little closer.

Until something better comes along, Twitter should make two-factor authentication mandatory for verified accounts, especially high-profile accounts — like politicians. It’s no more of an inconvenience than switching on two-factor for your email inbox or other social networking account. The settings are already there — it even rolled out the more secure app-based authentication a year ago to give users the option of switching from the less-secure text message system.

If the only other option is to stop Elon Musk from tweeting…

Cleveland’s Great Lakes Science Center Now Accepts Bitcoin Payments

The Great Lakes Science Center (GLSC) is now accepting bitcoin in various transactions.

According to a recent news story from a Cleveland-based newspaper, the local Great Lakes Science Center has announced their adoption of bitcoin in a variety of transactions.

Not only will bitcoin be accepted as a fully valid form of monetary exchange for the daily cost of admission to the museum, but there will also be a four-day sister event, titled the Blockland Solutions Conference, which will accept bitcoin as well.

The Blockland Solutions Conference has the larger aim “to grow a blockchain ecosystem in Cleveland,” and the museum saw the event as an opportunity to “also underscore the museum’s own innovative efforts as it supports the disciplines of science, technology, engineering and math,” according to GLSC President Kirsten Ellenbogen.

This move makes the GLSC the third museum in the U.S. to accept bitcoin, not counting museums that are specifically dedicated to Bitcoin. The Museum of the Coastal Bend in Texas and St. Petersburg Museum of History in Florida make up the other two, but the GLSC is by far the most popular of the three.

This article originally appeared on Bitcoin Magazine.

Dash 0.13.0 Update Hits Testnet, Historic Release Imminent

Dash version 0.13.0, the update formerly known as version 0.12.4, is ready to be tested by the community and will be the last update before version 1.0.0, which is the first of a series of updates known as Evolution.

According to the Dash Forum post by Dash Core Group developer, codablock, “this release deploys DIP2/3/4, so we’ll have to ensure all existing and new functionality works as expected in multiple stages of the deployment”. He then expanded on the stages of deployment for getting version 0.13.0 ready for full release.

1. Full nodes, Masternodes and Miners upgrade their nodes to the latest release
2. Miners will start voting on the BIP9 deployment for DIP3, but only if they see enough MNs upgraded (this is automated)
3. After enough blocks with the proper BIP9 bits have been mined, DIP3 will activate but stay in “compatibility mode”
4. In this “compatibility mode”, the existing non-deterministic masternodes should continue to work as expected
5. Now MNs can start registering their MNs as deterministic masternodes. Detailed instructions on how to do this will follow when the time arises.
6. Even the registered MNs will continue operating in the “compatibility mode” and will appear in “masternode list” as expected. InstantSend, PrivateSend, Governance, MN payment logic and so on should continue working as usual.
7. We will watch the progress of MNs upgrading to DIP3. When we see enough of these, we’ll turn on spork15 (SPORK_15_DETERMINISTIC_MNS_ENABLED)
8. This is the point were all of us will be silent for a minute…as we say goodbye to all the non-deterministic masternodes. We’ll see the output of “masternode list” immediately switch to the deterministic list (dropping all others). We’ll also see the network go kind of silent, as all the bloat of masternode list synchronization disappears from the network…no more MNB, MNP, MNW, … messages.

Codablock specified that the network is currently at stage 1 and he will update the post every time the network moves forward to the next stage. He also added that full testing will have to be conducted at stage 1, 3, 5, and 8 so 3 more times in total and he went on to detail what and how testing can be conducted.

What/how to test:
– Check if normal transactions are still working, perform some automated load testing if you want
– Check if creating and voting on proposals work. Also check if winning proposals get paid and other don’t.
– There were improvements in PrivateSend, please test if mixing still works for you. It is very likely that mixing will not be working as expected in deployment stage 1. and 2.
– Check if InstantSend is still working (it might fail in the beginning as not enough MNs are available/upgraded atm)
– Starting with stage 3., test if automatic InstantSend locks for simple transactions are working as expected.
– Run a masternode or two, make sure it is paid. We’re happy for everyone that also participates in the whole upgrade process from normal/old MNs to the deterministic MNs. Instructions on how to upgrade will follow when we reach stage 5.

Impacts of version 0.13.0 upgrade

One of the biggest impacts of the 0.13.0 upgrade will be the introduction of Deterministic Masternode Lists, which will allow Masternodes to delegate their roles between owner, operator, and voter without having to give away their single key that has access to the 1000 Dash collateral. This will greatly allow the mitigation of risks while also enabling the specialization of tasks, which as economic theory details, leads to more efficient services. Liz Robuck, Dash Core Group Chief Product Owner, also previously discussed how “the Deterministic Masternode List system will essentially guarantee that all nodes in the network can agree on the masternode list via on-chain data, avoiding the risks associated with inability to reach consensus”. She added that “this has not historically been an issue for the small quorums used for InstantSend, but limits uses of the system that require larger quorums”, which will be required as InstantSend scales.

PrivateSend will also see major overhauls with the 0.13.0 upgrade. One of the improvements will include increasing the rounds of mixing, which will increase obscurity of the transaction for users.  An extra denomination of 0.001 Dash will also be added, which should lower fees for consumers seeking optional privacy. Overall, the speed of PrivateSend is also anticipated to see an improvement. These improvements are helping Dash set itself apart from its fiat and cryptocurrency peers.

Dash setting new precedents

Dash is endeavoring to become a global payments network used in everyday transactions, while also offering extremely easy user experience and user interface. Update 0.13.0 is taking the network one step closer to that goal by preparing Dash for the introduction of version 1.0.0, also known as Evolution, which will introduce revolutionary features such as Blockchain Usernames with DIP-5. These feature stand to differentiate Dash from its peers by taking steps to make Dash a cryptocurrency that not only handles record numbers of transactions, as demonstrated by this past weekend’s stress test, but also be a cryptocurrency that is easy and intuitive to use. This will help Dash achieve wider adoption since it will be able to appeal to a larger consumer base.

Bitcoin News Summary – November 12, 2018

The post Bitcoin News Summary – November 12, 2018 appeared first on 99 Bitcoins.

Here’s what happened this week in Bitcoin in 99 seconds.    A strong move in Bitcoin Cash price comes in the run-up to the Bitcoin Cash SV hard fork, scheduled this week. On this date, Bitcoin Cash will split into Bitcoin Cash ABC, backed by Jihan Wu, Amaury Sechet, and Roger Ver, and Bitcoin […]

An Open Letter to Bitcoin Cash Fans: The Lost Years

Bitcoin is fast approaching a civil war. Oh wait, that was last year. This time, one of the factions in the last war, Bitcoin Cash, is split between two camps of its own. Only this time, instead of a relatively smooth split, we may witness a hash war starting on the 15th of November, which could seriously disrupt the entire chain. A chain formulated on the premise of not being disrupted.

If you’re a fan of Bitcoin Cash, I have something to tell you. It won’t be gentle, those days are over. But it needs to be said. We’ve lost years at this already, maybe some of us can avoid losing a few more.

The entire point of the chain split was to get back to adoption

If the original point of Bitcoin was to be peer-to-peer electronic cash, the entire reason for the Bitcoin Cash split was to return to this mission of decentralized money for the whole world: not in a year, not in a decade, but right now. Bitcoin shocked the world in its captivation of a global audience and its firestorm of adoption it provoked, and the point of its spiritual successor was to recapture, and expand on, this success: get mass adoption, as soon as possible.

In the long decade since the legendary whitepaper, however, many other cryptocurrencies have been spawned. Blessed with the foundation of its ancestor, several have since improved on the original design in the areas of governance, scalability, privacy, and more. Say what you will about viability as a currency, Bitcoin is clearly far from the most modern or advanced of its kind. The entire selling point of Bitcoin Cash, a much newer project than many of these other coins, was never to compete in terms of features, but to use the original network effects and add to them to make the first widely-adopted cryptocurrency. Without mass adoption, there is no point.

For adoption as currency, Bitcoin Cash has been an absolute mess so far

Unfortunately, as far as the one prime selling point, Bitcoin Cash has had a bumpy road. To begin with, a new cryptocurrency offering nothing new in terms of tech coming on to the scene late 2017 is a rough prospect, especially having to be integrated into all the various exchanges and services from scratch. Adding to that challenge is the differentiation issue, where both candidates for “one true Bitcoin” have been confused with each other. Ignoring the hyperbole of droves of users buying the wrong coin, I know first-hand situations where this has happened, and it’s been exacerbated by misleading statements such as claiming Bitcoin Cash has been around since 2009, dropping the “Cash” part of the name entirely, and using Bitcoin.com, @Bitcoin on Twitter, and the /r/BTC subreddit to refer to BCH. What’s more, the new address format made to prevent accidentally sending the wrong Bitcoin has still not been implemented universally, and the predominant payment processor, BitPay, required a certain type of payment protocol that was not supported by many wallets, and still is not universally accepted. And, finally, the struggle for dominance between ABV and SV will render the whole chain risky to use for who knows how long. From the beginning to the present, it’s been a right mess.

The best illustration of the problem was something that happened at a Dash meetup recently. Someone had set the waitress up with a Bitcoin.com wallet, so the one person at the meetup with Bitcoin Cash tipped her for the rest of us. Later she was unsuccessfully attempting to pay an invoice at the same restaurant. When I went to help her, I saw she was trying to use Bitcoin Cash to pay a Bitcoin invoice. I helped her switch the payment method to Bitcoin Cash, and yet again we were unsuccessful, since the processor used the old address format that the new wallet couldn’t send to. How long would it take to explain all that? And now, with the impending hash war drama, she may not be able to use her coins at all for a while. No one may. Whichever user or merchant has stuck around past the name confusion, address differences and compatibility, may finally give up after whatever happens in the hash war. This is not a recipe for mass adoption, and certainly no reason to go with a more primitive cryptocurrency.

Satoshi’s revolution has been far beyond Bitcoin for years now

I understand nostalgia for the hope Bitcoin originally provided, but in the long decade since, a whole lot has happened. Thousands of cryptocurrencies have been created, worth billions of dollars to date, implementing dozens of tweaks, extra features, improvements, models, and more. Even starting from the premise that Bitcoin is the most important and will persist and dominate long-term, there’s no denying that the scope of cryptocurrency has expanded radically beyond that single chain, and will likely to continue to do so exponentially. Whether Bitcoin itself, or whatever we call by that name, is going to keep leading the way or be the one that’s adopted as near-universal money, it doesn’t have to be. Bitcoin can go away and its legacy is still immortal. Without this central point of failure, the value of preserving something called Bitcoin has fallen significantly.

How many more lost years before we finally get to focusing on what matters?

Let’s face a hard truth: the desire to re-establish Bitcoin as peer-to-peer electronic cash was never about adoption first and foremost. Obviously without being able to speak for every single user out there, at its best, it was about achieving mass adoption through a belief that protecting the Bitcoin branding and network effect had to come first. More commonly, it was a scramble to try to save Bitcoin from failing. In a vacuum, that’s a very noble cause. In context, and measured against opportunity cost, it’s a purely unnecessary nostalgia move that casts aside what should have been the number one goal from the beginning: freeing the world from financial and economic slavery. If trying to prop up the Bitcoin brand diverts from this main goal, then those two goals are antithetical.

In late 2016, Bitcoin ceased to work as digital cash. After waiting around for a whole year of stalled adoption, Bitcoiners forked off and convinced themselves they weren’t starting from zero. A year after that, we’ve dealt with name confusions, crossed addresses and payment protocols, and now a hash war that threatens the viability of the whole chain. Dash, and many others, were around, and growing, the whole time the big block contingent of Bitcoin has been stalling or flailing around. Just imagine where we’d be today if only they had jumped on the Dash train when I did over two years ago.

How many more lost adoption years will we have to endure before the rest of the crypto faithful get their priorities straight? Or rather, how many more years until we collectively call out the camp chasing whatever Bitcoin-branded fork persists at that time for being disingenuous? The clock is ticking.

This Week In Dash: November 5-10

This week has been another fabulous week for Dash with some awesome news developments! Continue reading to get a summary of the week!

Dash Announcements of the Week:

  • Dash Stress Test: On Sunday, November 11 (UTC Time) Dash will be undergoing a network stress test of around 4-5 million transactions within 24 hours. This will be setting a cryptocurrency record and demonstrating the power of the Dash network. You do not want to miss this!
  • Dash Core Group’s Chief Architect Departing to Work on Evolution DApps: Andy Freer, the Chief Architect for DCG, has said that he now feels confident enough in the team’s development progress and near completion of Evolution to leave his role with DCG. After a break, he will start work on developing DApps built on top of Evolution once it is released. Andy will be one of the first to contribute to an emerging platform for independent and cooperative development to create decentralized applications for consumers.

Dash Integration of the Week:

  • Spondoolies Create New Dash Miners: The new SPx36 ASIC miners are drastically increasing the Dash network’s hashrate and security since being released a couple months ago. The larger hashrate creates a more secure network, while also signaling bullish confidence of the network. Since the new miners cost much more upfront, it will now take miners 2-3 years to breakeven at current prices or exchange price will have to increase 2x-3x to recover their costs within a year, based on calculations done by community members. This indicates that miners and investors are confident in Dash’s longevity.

Dash Community Outreach of the Week:

  • Dash Embassy D-A-CH Spreading Awareness with Roadshow and ATMs: The Dash Embassy D-A-CH team has been operating the roadshow for a few months and has had over 200 attendees across 5 tour stops at universities, industry organizations and co-working spaces. They are also partnering up with a crypto ATM provider to enhance their distribution and advertisement of 40 multi-coin ATMs, including Dash. The team’s presence is influencing the opinions of individuals about Dash across German-speaking Europe.

General News of the Week:

  • Bitcoin Cash Hard Fork Threatens Hash War: The debate between Bitcoin Cash ABC and Bitcoin Cash SV threaten a chain split and a possible hash war in vying for control. ABC is backed by Bitcoin.com, Coinbase, Binance, and others, while SV is mostly backed by nChain and CoinGeek. The exact outcome is still not clear, but many fear potentially devastating effects from slow transactions to alienating cryptocurrency adopters. The debate highlights the importance of having solid governance, such as Dash’s DAO, to achieve consensus more easily and prevent nasty community splits and forks like Bitcoin has seen.
  • Geopolitical Tensions Create Demand for SWIFT Alternatives: New US sanctions on Iran are causing international actors to explore the possibility of creating an alternative to SWIFT, the global financial messaging service, since the US is strong-arming SWIFT into blockading any institutions that deal with Iran. Only a few years ago, Russia created an alternative due to the same reasons. The actions signal a need to move away from global, centralized financial processors so individuals around the world can remain free and independent from the actions of a few world leaders.
  • Taiwan to Crack Down on Anonymous Cryptocurrency Transactions: Taiwan is now requiring AML/KYC compliance systems on cryptocurrency exchanges, including ‘real-name systems’ requiring users to register with their real names. Failing to comply could result in fines of around $144,507 USD value. The actions demonstrate the usefulness of decentralized, peer-to-peer exchanges, such as bisq, to prevent demands from government agencies. Nevertheless, the most private way to receive funds is in direct compensation for goods and services, which Dash has been prioritizing with its acceptance at over 4,000 merchants around the world and fast and inexpensive transaction fees.
  • Cardano Structural Dispute Highlights Necessity of Self-Operating DAOs: Charles Hoskinson, creator of Cardano recently discussed how the Cardano Foundation, which is tasked with the community needs has been slaking on its responsibilities and left IHOK and Emurgo taking on extra responsibilities. The Cardano Foundation was suppose to kick-start events and then DAO-ify itself, but this has yet to occur, which illustrates the difficulty of creating a well-functioning DAO. Dash is one of the first and longest running DAOs showing just how revolutionary Dash is and how Dash is able to achieve functions and consensus building that other coins are unable to achieve.

Dash Media of the Week:

  • Three Amigos Chat with Benjamin Nitschke, CEO of DeltaEngine: The creator of MyDashWallet.org sat down with the guys to talk about the features that MyDashWallet offers, the upcoming stress test on Sunday, November 11th (UTC Time), and what it means for the network. Make sure to check this out to get some detailed knowledge!

Dashvember is dashing off to the races with fantastic announcements, outreach, integrations, and overall developments! Stay tuned into our site and social media networks to see all the upcoming Dash News! We hope that our content and coverage was very informative and enjoyable this week and we cannot wait to see what awesome Dash News awaits us next week!

Again, make sure to watch the stress test this Sunday, November 11 (UTC Time) and participate by spending some Dash that day to really help show just how much traffic the Dash network can handle!

Dash Podcast 77 – Feat. Benjamin Nitschke, CEO of DeltaEngine, creator of MyDashWallet.org

Video re-post of episode 77 of the three amigos podcast with special guest Benjamin Nitschke of MyDashWallet.org.

The 3 amigos podcast takes place every Friday at 3pm EST / 8pm UTC.

The Dash Force News 3 amigos podcast is now available to listen to on the following platforms:

🎙 Itunes
🎙 Tunein
🎙 Stitcher
🎙 Google Play
🎙 Overcast
🎙 Podbean

If you haven’t done so by now, can you please make sure you like and subscribe to the Dash Force News YouTube channel. Thank you to the Dash community for your continued support.

Investor Lawsuit Brought Against AT&T, T-Mobile for SIM Swapping Hacks

Swim Swap Lawsuit

Leading cryptocurrency investor law firm Silver Miller Law has filed suit against cell phone giants AT&T and T-Mobile on behalf of several digital asset investors who were victims of the identity-theft tactic known as “SIM swapping.” The suit alleges that both companies possessed flaws in their security systems and failed to properly train their employees to work against hackers seeking to gain access to users’ smartphones.

SIM swapping occurs when a hacker gathers information on a potential victim, such as their phone password, answers to their security questions and their financial holdings. Once they have the data they need, the hacker will contact the person’s cell phone provider and claim that their SIM card has been lost or damaged and request that a new one be activated, with the end goal of accessing the victim’s finances — in this case, cryptocurrency.

The lawyers at Silver Miller Law claim that many of their clients had their crypto wallets drained via SIM swapping techniques, including one individual — an AT&T holder — who had roughly $621,000 stolen despite the phone company’s assurances that security had been beefed up following an earlier hack attempt on his account. Two other instances involved T-Mobile clients, who were ultimately robbed of $400,000 and $250,000 respectively.

This is not the only SIM jacking case brought against AT&T; the mobile carrier is also the subject of a separate $224 million lawsuit brought on by Michael Terpin, the founder of angel investment group BitAngels. Terpin claims that the company’s weak security protocols led to his loss of roughly $24 million in crypto funds through two separate SIM swap attacks.

In a deposition filed in August, Terpin claims that the hackers obtained access to his phone number with the help of an AT&T customer service representative. The hackers were then able to access his cryptocurrency wallet and steal funds.

Terpin states, “What AT&T did was like a hotel giving a thief with a fake ID a room key and a key to the room safe to steal jewelry in the safe from the rightful owner.” He is now seeking roughly $200 million in damages.

Silver Miller Law has developed a reputation in the space for bringing investor-led lawsuits to court. Notable judgments and settlements in the firm’s history include Liu v. the Florida-based cryptocurrency exchange Cryptsy, in which roughly $50 million (approximately 11,300 BTC) was ordered returned to the company’s many traders and investors. It has also filed suits against Coinbase for its alleged mishandling of December 2017’s bitcoin cash listing.

This article originally appeared on Bitcoin Magazine.

Early Win for Shrem: Judge Unfreezes Assets in Winklevoss Lawsuit

shrem winklevoss

In a short-term win for bitcoin advocate Charlie Shrem, a federal judge has lifted the freeze on Shrem’s financial accounts in an ongoing legal battle against the Winklevoss twins.

Shrem’s financial accounts and assets were temporarily frozen via an attachment order following the suit’s initial filing. The order allowed the U.S. Marshall for the Southern District to freeze Shrem’s assets, instructing cryptocurrency companies like Coinbase and Xapo and legacy financial institutions to freeze Shrem’s assets up to $30 million, the amount the Winklevosses are seeking in damages.

However, following a hearing on Thursday, November 8, 2019, presiding Judge Jed S. Rakoff issued a court order lifting the freeze. 

“After careful consideration, the Court denies plaintiff’s motion to confirm the order of attachment and therefore lifts the attachment currently in place effective immediately,” the order reads.

The document concludes by saying that an opinion will be issued “in due course” explaining why a freeze was unnecessary for the initial proceedings to continue.

Earlier this month, Tyler and Cameron Winklevoss of the Gemini Exchange in New York filed a suit against Charlie Shrem for 5,000 BTC after Shrem reportedly made several high-value purchases following his release from prison.

Shrem has claimed he went to prison penniless, reportedly working as a dishwasher for several months after his release before returning to the bitcoin space. Shrem’s self-reported poverty has lead the community to question where he dug up the funds for his luxury shopping spree.

The Winklevosses believe that these purchases were made with bitcoin Shrem stole from the twins when they hired him to manage their initial cryptocurrency investments in 2012.

The working relationship was troubled when Shrem allegedly mismanaged roughly $60,000 of bitcoin. At the time, bitcoin was worth approximately $12.50, so the $60,000 would be equal to about 5,000 BTC. The twins say they’ve hired a private investigator who states that, in 2013, the missing bitcoins were traced to several wallet addresses owned by Shrem before being redirected to other accounts.

Shrem’s lawyer Brian Klein asserts that the Winklevoss twins’ claims are baseless, and he’s confident in Shrem’s innocence. In a recently filed motion of defense, Klein writes:

“Plaintiff Winklevoss Capital Fund, LLC’s (“WCF’s”) prejudgment attachment and underlying lawsuit are predicated and built on the demonstrably false premise that defendant Charlie Shrem (“Shrem”) misappropriated $61,000 of WCF’s money in 2012, purchased 5,000 bitcoins with those funds, moved those bitcoins around on December 31, 2012 (and subsequently), and then years later after his release from prison went on a spending spree with them, but WCF’s case collapses on itself because those 5,000 bitcoins were not owned by Shrem. The scandalous and fantastical story WCF is advancing is nonsense.”

The document explains that the 5,000 BTC in question were owned by a separate party, who for privacy purposes, Klein refers to as “Mr. X.” It further states that Mr. X is “identified in email communications between him and Shrem (and others)” discussing the 5,000 bitcoins. Copies of the emails were filed with the motion that allegedly suggest Mr. X transferred the coins to a cold storage wallet account in Shrem’s name on December 31, 2012.

The document goes on to say, “This lawsuit and application for prejudgment attachment can only be characterized as an ambush money-grab designed to cripple Shrem financially.” It further explains that the Winklevoss twins have failed to provide any substantial evidence showing that Shrem attempted to defraud them purposely.

While the judge has freed up Shrem’s funds, the case is ongoing, and it will have an official trial by jury on April 8, 2019.

This article originally appeared on Bitcoin Magazine.

Amazon and ConsenSys-Built Kaleido Launches Full-Stack Marketplace

kaleido

Blockchain software-as-a-service (SAS) project Kaleido has launched a marketplace to provide its users with a “full-stack enterprise platform.”

Their “Blockchain Business Cloud” now features a “new marketplace [of] trusted tools and services from Kaleido, AWS, and members of the new partnership program, all offered as plug-and-play.” The suite of services will feature oracles, wallet and ID services, supply chain tools and even legal contract software.

According to a company statement, “Clients now have access to native AWS integrations, popular services such as HD wallets for privacy and ID registries for organizational identity, as well as industry products such as Chainlink for smart contract oracles, Viant for supply chain management, OpenLaw and Clause.io for real-time legal contracts, and many others—all at the click of a button.”

Kaleido, which went live in May 2018, is one of many managed by ConsenSys. Built on Ethereum, the platform is a hybrid blockchain that allows enterprises to manage a private chain that can sync with the Ethereum mainnet, housing “several consensus algorithms (RAFT, POA, and IBFT) that its users can toggle between.” The software-as-a-service is available on Amazon Web Services (AWS), and it runs on AWS’ cloud framework.

Since its launch, the press release claims that “Kaleido has helped organizations create over 1,000 blockchain networks with its Blockchain Business Cloud.”

“The reality is only about 10 percent of an enterprise blockchain project is the blockchain itself. There are many other application, data and infrastructure components required to go into production. I’m very excited that we have a whole cloud of blockchain technologies pre-integrated for our clients to use. The Kaleido Marketplace is a one-stop shop for all things enterprise blockchain,” founder and CEO of Kaleido, Steve Cerveny, said in light of the announcement.

Kaleido is also launching a partnership program integrated with the marketplace, inviting third-party developers “to join the ecosystem by promoting their offerings in the Kaleido Marketplace, embedding Kaleido in their own blockchain solutions, or accelerating client engagements by using Kaleido.”

This article originally appeared on Bitcoin Magazine.

Blockchain Healthcare Platform MediBloc Partners with Massachusetts General Hospital

Blockchain startup MediBloc has announced a three-year project with Massachusetts General Hospital (MGH), the original and largest teaching hospital of Harvard Medical School, to help it become one of the first healthcare institutions in the world to leverage blockchain technology for secure and accessible data storage. The partnership will focus on building a standardized data […]

The post Blockchain Healthcare Platform MediBloc Partners with Massachusetts General Hospital appeared first on Coinjournal.

Analysts: Crypto Set to Take Off, But Not Because of Bitcoin

Cryptocurrency has been caught in a bear market for a few months, but many predict adoption and price appreciation to soon take off due to a multitude of reason.

Recently, Patrick Byrne, CEO of Overstock and cryptocurrency advocate, was interviewed by Naomi Brockwell at Porcfest to discuss Bitcoin and it’s future growth.

“When people start getting into it Bitcoin, is when their own financial systems collapses. Whether bitcoin is the one, whether bitcoin has solved its speed problem, or it’s another cryptocurrency, only time will tell.”

Mild confidence is seen in the sector by 10 analysts for November’s Finder Cryptocurrency Predictions Survey, which concluded that Bitcoin “will experience steady growth over the next year, though the upcoming months remain uncertain”. Uncertainty is added when different experts are consulted about different coins, such as Blockchain CEO Peter Smith speaking highly of Stellar, while technology expert Ian McLeod of Thomas Crown Art said Ethereum is close to a “monumental, defining global breakout”.

Some major upcoming factors include the SEC’s (US Securities Exchange Commission) ruling on another potential Bitcoin ETF along with the CFTC (US Commodities and Futures Trading Commission) decision on whether or not to accept ICE-backed cryptocurrency exchange, Bakkt. Both decisions are expected before December 1st of this year and could have potentially big impacts on the cryptocurrency market.

Diversity in the cryptocurrency space

According to coinmarketcap there are currently over 2,000 coins across more than 15,700 markets, which illustrates a very diverse ecosystem. However, a previous report buy CryptoCompare did a detailed taxonomy of the sector and discovered that decentralized cryptocurrencies are losing market share to centralized coins. Bitcoin was originally founded to be a decentralized, peer-to-peer, digital currency to improve the lives of individuals suffering from the structure of the current monetary and financial system. Other coins soon started to emerge and issuance rapidly increased in the last couple years. Each coin is attempting to bring their own unique solutions to the table, but while some are trying to improve upon Bitcoin, others are simply security or utility tokens through ICOs.

Economic theory says that increased competition will provide better products and services for consumers. This became necessary when Bitcoin’s fees and confirmation times increased relatively dramatically last year and the solution still has not been completely solved. This leaves room for other coins to gain adoption, especially since Bitcoin’s market share has decreased from over 80% in early 2017 to just above 50%, currently. Thus, the cryptocurrencies that stand the best chance of adoption, based on economic theories, are the ones that provide the best combination of services for consumers in terms of technology, ease of use, understanding, stability, reliability, privacy, speed, usability, overall awareness, confidence, and more.

Dash focuses on the consumer

Dash has grown significantly from its creation in 2014 to now serving consumers at over 4,000 merchants, worldwide, with speed, savings, and security. Dash has achieved this success in such a short period of time thanks to its focus on consumer user experience and user interface so consumers not only have sound money, but also sound money that is easy to use and understand. Ryan Taylor, CEO of Dash Core Group, recently discussed this in a talk at Web Summit.

Ryan touched on how over 2,200 Dash-accepting merchants are currently in Venezuela, which is growing around a rate of 200 merchants a week. He also mentioned Dash’s partnership with Kripto Mobile to launch a new line of cryptocurrency-enabled mobile phones in Venezuela. Ryan added how the problems that Venezuelans are facing go beyond direct hyperinflation, such as POS systems running out screen space to display zeros, families spending all their cash during a dinner night out, banks withholding cash, and more. Ryan highlighted how Dash is leading the market in these developing nations because Dash “has a great product, because it works at the point-of-sale, and it’s instant”.

“When you solve actual, practical uses for people and make their lives better in some way, that’s when they will change behavior and adopt something new”.

Of the many cryptocurrencies that exist today, Dash has a favorable probability of seeing greater adoption because it has already demonstrated its value proposition, is seeing adoption, and is constantly improving on its features. As adoption and demand increases, exchange price will follow based on economic laws.

Fraudulent South Korean Exchange Pure Bit Nabs $2.8M in ICO Exit Scam

Pure Bit

A South Korean ICO has defrauded its private sale investors out of roughly 13,500 ETH ($2.8 million) before disappearing from the internet entirely.

Pure Bit, which has already pulled the plug on its website, has apparently conducted a fairly routine exit scam for its Pure Coin token sale. The cryptocurrency was pitched as an exchange token for Pure Bit, an exchange that was supposed to launch by the end of the month. The Coin  promised to give investors shares of the exchange’s trading revenue as well as discounted fees for trading, and its anonymous team claimed that it would burn 90% of token supply over a three year period.

A block explorer for the ICO’s Ethereum wallet displays several in-bound transactions from investors beginning on November 4, 2018. On November 9, 2018, however, an initial 500 ether was transferred out, with the remaining 13,178 withdrawn 20 minutes later.

Not all of the evidence of this company’s very existence was destroyed immediately, however. A thread on Reddit captured some of the last moments of the exchange and took several screenshots with translations from the original Korean.

According to Reddit user u/Tbid, who evidently watched the saga unfold, Pure Bit was a crypto exchange that announced an ICO launch of an exchange token. Almost immediately after the ICO ended, however, all of the funds were spirited away to another single wallet address.

As depicted in the attached screenshots, the community admin quickly kicked out every participant in their Kakao chat thread, before sending a final message of “Thank You.” This information was corroborated by a Twitter thread, which added that the admin’s message on their now-defunct Kakao profile was a terse but excessively formal apology.

Between the wallet transfers, suspicious website activity and the admin’s explicit apology, this exit scam is about as by-the-book as they come. Duplicitous activities such as this are a recurring threat in the world of ICO launches, which forms a large part of the reasoning why South Korea banned ICOs altogether.

Having committed a crime even before stealing such vast sums of money, the anonymous administrators of Pure Bit are likely in for some extensive legal troubles. As one commenter in the Reddit thread remarked, the South Korean government is likely to be “hot on their tails.”

Even without the threat of exit scams, South Korean law enforcement is well-used to dealing with routine cybersecurity threats, as the world’s largest crypto hacking syndicate, which is literally sponsored by the North Korean government, has targeted South Korean cryptocurrency exchanges on a number of occasions. 

This article originally appeared on Bitcoin Magazine.

Study: Shorting Difficulties and Heterogeneous Beliefs Drive Speculative Cryptocurrency Prices

Wang Chun Wei, Ph.D. and a finance lecturer at the University of Queensland in Australia, argues in a new working paper that a significant portion of cryptocurrency values come from the heterogeneous belief that investors can sell a coin to another individual at a higher price.

Wei describes the ability to sell to another party at a higher price as the resell option hypothesis and describes how this could lead to mispricing of cryptocurrencies. To better discern between intrinsic and speculative value, Wei focuses on ‘joke’ and ‘scam’ coins as a natural experiment since they “cannot be directly used as a medium of exchange, and nor do they provide the holder with any claims to future cashflows”. He then examined the “empirical relationship between turnover, mispricing and volatility” for mainstream, joke, and scam coins.

“From Virtual Coin Squad, which tracks cryptocurrency acceptance, only Bitcoin, Litecoin and Dash are widely accepted”

Due to the lack of most coins seeing everyday usage, the paper does finds “empirical evidence in support of the resale option hypothesis in cryptocurrency markets”. Wei also finds “ample empirical evidence in support of anecdotal claims that cryptocurrency prices are supported by the hope of selling it to somebody else at a higher price”. One reason suggested for prices not counterbalancing lower is the lack of easy ways to short coins in the cryptocurrency market.

Importance of usability features

While the study had mixed statistics in certain areas, it nevertheless discovered relatively strong relationships between trading turnover and mispricing, which does highlight the need for everyday usability. The fact that many coins see price increases only from speculative trading to others at a higher price is the definition of a bubble, but the good news is that this is not absolutely true for every coin in the cryptocurrency sector. The study conducted a weighted average of coins in the sector to discover overall trends, but as Wei mentioned, coins like Bitcoin, Litecoin, and Dash are seeing wider usage adoption. The adoption creates real usability, and thus, real demand for these coins other than just trading value with the hopes that its future exchange price will increase.

The complication of not having real uses is that no consumer or merchant problems are being solved, which was the reason cryptocurrency was created in the first place; provide a decentralized and peer-to-peer alternative to the current monetary and financial infrastructure. Vitalik summarized this dynamic earlier in the year by tweeting that the cryptocurrency community “[n]eed[ed] to differentiate between getting hundreds of billions of dollars of digital paper wealth sloshing around and actually achieving something meaningful for society”. Thus, those cryptocurrencies that focus on creating real value for consumers by solving market inefficiencies stand to have their overall price be composed more of real prices and less of speculative prices.

Dash prioritizes everyday usability

Dash has focused on being a consumer friendly currency for everyday transactions no matter how large or small. Dash is partially able to achieve this because of its record low transaction fees, extremely fast confirmation times, and great security. Dash then supplements these attributes with its DAO Treasury to fund other network developments and community outreach to make using Dash as easy as possible for consumers. Dash is planning further enhancements with the coming series of Evolution upgrades, but is already providing real payment solutions for individuals in Venezuela, Colombia, and other individuals around the world. These features allow Dash to be a decentralized, peer-to-peer, digital currency without sacrificing too much ease of use that consumers are accustomed to with the old financial system and have come to expect from their money.

This emphasis on usability has enabled Dash to be accepted at over 4,000 merchants, globally, which has greatly expanded consumers’ ability to use Dash. CoinFairValue displays just how strong Dash usability is compared to its peers since Dash is shown to be one of the top coins when evaluated on fair value, which takes into account consumer usability. Moving forward, Dash has outlined an emphasis to continue its growth with a focus on usability, which will solidify its real price portion of its total exchange price and will contribute to increasing its sustainability and decreasing its volatility.

Qiibee CEO: Blockchain is the Perfect Technology for Loyalty Programs

Blockchain is the perfect technology to connect the loyalty program industry as it delivers more options and value to customers. That’s according to the CEO and co-founder of Qiibee, a Swiss-based loyalty token protocol that helps brands run their loyalty programs on the blockchain. Speaking in an interview with Coinjournal, Gabriele Giancola spoke about how the […]

The post Qiibee CEO: Blockchain is the Perfect Technology for Loyalty Programs appeared first on Coinjournal.

Crypto POS Maker Pundi X Partners with HARA to Bring Blockchain to Farmers

Pundi Labs (Pundi X), a point-of-sale (POS) terminal maker, has announced a partnership with blockchain startup HARA to bring its blockchain-based POS devices to farmers. The company said the partnership will seek to facilitate data collection and financial inclusion across Indonesia’s rural areas and agricultural sector. HARA, a blockchain startup incorporated in Singapore, is developing […]

The post Crypto POS Maker Pundi X Partners with HARA to Bring Blockchain to Farmers appeared first on Coinjournal.

Craig Wright Threatens to Crash Bitcoin Cash in Email to Ver

The Bitcoin Cash Civil War just got a lot more heated. Roger Ver, the owner of Bitcoin.com and one of the largest figures in Bitcoin Cash has shown an email allegedly from Craig Wright. In the email, Wright threatens to break Bitcoin Cash, preventing all trading for two years bringing its value down to zero. […]

The post Craig Wright Threatens to Crash Bitcoin Cash in Email to Ver appeared first on Coinjournal.

University of Guelph Joins Left to Build Mesh Networks in Canadian North

Guelph Left Mesh

The School of Computer Science at the University of Guelph has partnered with an award-winning startup to revolutionize connectivity across Northern Canada.

The Maple Ridge-based tech company Left has teamed up with the University of Guelph to launch a $2.1 million project with Mitacs to spread Mitacs’ patented mobile mesh network to a wide range of remote communities in Canada.

This is the largest partnership the School of Computer Science has ever undertaken, incorporating “120 graduate student internships over five years, from universities across Canada.” Left and Mitacs are providing the majority of the funding for this project, while the cooperation of universities across Canada will lay the groundwork for an ambitious connectivity project.

Mitacs’ platform, RightMesh, operates as a traditional mesh network for internet connectivity. As University of Guelph Professor Jason Ernst put it, mesh networking “allows people to connect with each other using the Bluetooth, Wi-Fi or Wi-Fi Direct capabilities built into smartphones, even if those phones are currently offline.”

Essentially, devices which are physically able to connect to the internet are able to act as nodes in an ad hoc network, so that individual devices can connect to these nodes, and these nodes can in turn connect to the internet. As long as the Wi-Fi or Bluetooth-enabled devices are connected to a device that is itself connected to the internet, these devices can tap into the internet off of this connection.

Such an ambitious project was made possible through the combined efforts of these tech companies and the participating universities of Canada. As the press report stated, places like “the Inuit community of Rigolet, Nunatsiavut, where climate change has negatively affected food security, health and wellness, and personal safety” will reap some of the largest benefits.

Rigolet was a testing ground for this project in 2017, and Ernst claimed that it showed great promise in “providing life-saving data without dependence on traditional internet.” Even as traditional infrastructure has been wholly unable to provide this community with reliable access to many comforts of life, hooking into RightMesh has enabled free and decentralized internet access without additional costs. Now, this new partnership will improve access in Rigolet and bring access to many other communities in Northern Canada as well.

Dan Ruimy, a member of the Canadian Parliament, believes it is a good sign that Vancouver-based companies are partnering with companies like Left from elsewhere in Western Canada to bring about such wide innovation. “For many years, Vancouver has been the lone driving force of tech innovation in the area,” said MP Ruimy, adding that this is “a project that helps bridge Canada’s digital divide.” With projects like this, tech innovation and tech access can spread across the nation in multiple ways.

This article originally appeared on Bitcoin Magazine.

Binance Launches Research Arm For “Institutional-Grade Research Reports”

Binance research

Popular cryptocurrency exchange Binance announced today that it has launched a new division dedicated specifically to industry analysis.

In a November 8, 2018, announcement, Binance described some of the responsibilities of this new division, which has been dubbed Binance Research. The research is “focused on the creation of institutional-grade research reports” and has “the aim of increasing transparency and improving the quality of information available within the crypto space.”

To this end, Binance has paired the official public announcement of this new division with some of the research that it has already been doing before going public. The articles that have gone live concurrently are examples of the kind of content that this new division will generate in the future.

Research first dropped a report on the development of the Loom Network, assessing its capabilities by a wide number of metrics. Not only does the report list the accomplishments and milestones of the projects, but it also provides data and graphs on its historical price data, key features, token sale data and even the specific wallet addresses that hold more than 90 percent of said tokens.

The report on GoChain has a similar level of depth in its findings, providing everything from short biographies on lead developers to snippets of the actual code, as well as including all of the previously mentioned metrics of sales history and more.

For a first-day release of this new division, the existing research and analysis appear to be comprehensive in depth and scope.

Binance Research has promised to release a third set of analytics on Pundi X “with more set to be regularly released over the coming weeks.”

This article originally appeared on Bitcoin Magazine.

In the Race for a Bitcoin ETF, Wall Street Has Plenty of Hurdles to Clear

Bitcoin ETFs: Where the Industry Stands Right Now (and Where It Going)

In the latter half of 2018, few developments have occupied crypto investors’ headspaces like the industry’s indefatigable pursuit of a bitcoin exchange traded fund (ETF).

This conversation lay largely dormant since the two brothers’ first attempt was rejected by the U.S. securities regulator in March of 2017. But the Winklevosses reignited the conversation when their second attempt at an ETF was shot down by the U.S. Securities and Exchange Commission (SEC) in July of this year. 

With the buzz back, the prospect (or failing prospects) of a bitcoin ETF have crowded the headlines of mainstream and crypto media alike. Following the Winklevosses’ failure to secure the coveted first-in-the-industry fund, the ensuing months would see a flurry of decision delays for existing applications, more rejections and revisions of said rejections.

The sheer volume of news surrounding ETFs — and the general complexity of the asset when compared to the simplicity of trading on the bitcoin spot market — makes the industry’s pursuit of one a rich and even abstruse topic.

So let’s see if we can set the record straight.

What an ETF Is and What It Means for Bitcoin

To start, a short explanation: an ETF is a fund that holds an underlying asset or assets, be they stocks, commodities, bonds, etc., which are then divided into shares for investors to buy. In structure, an ETF functions like a hedge fund, the primary difference being that an ETF is traded on a public market like shares of a stock, while a hedge fund is not.

With that primer in mind, we can now unpack the processes and jargon that constitute an ETF’s many working parts.

Typically, an ETF features four primary stakeholders:

  • a sponsor (the entity who creates the ETF)
  • a custodian (the entity who stores and manages the underlying asset/s)
  • authorized participants (financial institutions or accredited individuals who create and redeem a block of the ETF’s shares)
  • shareholders/investors (those who purchase the shares on the open market)

More or less, authorized participants and sponsors are in charge of the ETF’s supply. The participants create or redeem blocks of shares (called creation units) directly from the sponsor; typically, these creation units are settled in-kind, meaning they are purchased for or redeemed in the underlying asset. Once participants have purchased creation units, these units are then divided into shares and traded on public exchanges.

For bitcoin, an ETF would function similarly to ETFs for other commodities like gold and silver. Its sponsor, most likely a trust of sorts, would employ the help of a custodian to store the physical bitcoins backing the ETFs (or, in the case of futures, the futures contracts) and related cash flow, and it would also rely on eager financial institutions to jumpstart circulation by purchasing shares to trade on a regulated, legacy exchange like the NYSE, CME or Cboe.

Many investors see the bitcoin ETF as the hitherto undiscovered holy grail of institutional-grade bitcoin investments, something that could push the market to new heights. In the broader market, ETFs are considered to be a low-barrier, low-cost alternative to other investment vehicles like hedge funds, and per this rationale, community members in favor of a bitcoin ETF say it would finally give institutional investors easy, reliable access to the crypto market. Supporting this thesis, proponents often point to the impacts ETFs had on the underlying gold market, noting that bitcoin would likely experience a similar price stimulation.

Detractors don’t think this is a good thing. They believe that, by encouraging a flood of institutional money, a bitcoin ETF would drown the market in inflated valuations, an argument critics in other markets have made by insisting that ETFs distort prices and liquidity. So the argument goes: Why would we create an investment vessel that could leave bitcoin susceptible to the same inflationary threats that it was created to avoid?

The Playing Field

The merits of either argument are for another article entirely, but the perspectives are helpful for understanding why so many players are pursuing an ETF and why there’s so much noise surrounding it.

The following list looks at all past and current applications, some of which were refiled or restructured after the initial applications were rejected by the SEC or pulled by their sponsors.

In chronological order:

Winklevoss Bitcoin Trust

File date: July 2013

Status: Rejected March 2017

Sponsor: Winklevoss Bitcoin Trust

Custodian: Gemini Exchange

Listed Exchange: Bats BZX Exchange

Price Data Source: Gemini Exchange

Creation Unit Size: Basket of 100,000 shares

SolidX Bitcoin Trust

File Date: July 2016

Status: Rejected March 2017

Sponsor: SolidX Management LLC

Custodian: SolidX Management

Other Custodians: The Bank of New York Mellon (cash funds)

Listed Exchange: NYSE Arca

Price Data Source: TradeBlock XBX Index

Creation Unit Size: Basket of 100,000 shares

The Bitcoin Investment Trust

File Date: January 2017

Status: Withdrawn September 2017

Sponsor: Grayscale Investments LLC

Custodian: Xapo Inc.

Listed Exchange: NYSE Arca

Price Data Source: N/A

Creation Unit Size: Basket of 100 shares

VanEck Vectors Bitcoin Strategy

File Date: August 2017 (refiled in December 2017)

Status: Withdrawn September 2017 (and again in January 2017)

Sponsor: VanEck

Custodian: The Bank of New York Mellon

Listed Exchange: NASDAQ

Price Data Source: N/A

Creation Unit Size: N/A

ProShares Bitcoin ETF and ProShares Short Bitcoin ETF

File Date: December 2017

Status: Rejected at staff level but appealed for review by the Commission in August 2018

Sponsor: ProShares Capital Management LLC

Custodian: Brown Brothers Harriman and Co.

Listed Exchange: NYSE Arca

Price Data Source: Cboe and/or CME bitcoin futures

Creation Unit Size: N/A

GraniteShares Bitcoin ETF and GraniteShares Short Bitcoin ETF

File Date: January 2018

Status: Rejected at staff level but appealed for review by the Commission in August 2018

Sponsor: GraniteShares Advisors LLC

Custodian: Bank of New York Mellon

Listed Exchange: Cboe BZX Exchange

Price Data Source: Cboe bitcoin futures

Creation Unit Size: N/A

Direxion Daily Bitcoin Bear 1X Shares, Direxion Daily Bitcoin 1.25X Bull Shares, Direxion Daily Bitcoin 1.5X Bull Shares, Direxion Daily Bitcoin 2X Bull Shares, and Direxion Daily Bitcoin 2X Bear Shares

File Date: February 2018

Status: Rejected at staff level but appealed for review by the Commission in August 2018

Sponsor: Direxion Asset Management LLC

Custodian: Bank of New York Mellon

Listed Exchange: NYSE Arca

Price Data Source: Cboe and CME bitcoin futures exchange

Creation Unite Size: Basket of 50,000 shares

Other Info: Direxion’s ETFs would give investors the option to short bitcoin as well as giving them a 200% short leveraging option and a 125%, 150% and 200% long leverage option — they are the only ETF filing that accommodates leveraged shares.

VanEck SolidX Bitcoin Strategy (refiling)

File Date: June 2018

Status: Pending

Sponsor: SolidX Management LLC

Custodian: The Bank of New York Mellon

Listed Exchange: Cboe BZX Exchange

Price Data: MVIS CryptoCompare Bitcoin Index (MVBTC)

Creation Unit Size: Basket of 25 shares

Other Info: ETF is backed by physical bitcoin, but they will be redeemed in cash

Winklevoss Bitcoin Trust (refiling)

File Date: June 2018

Status: Rejected July 2018

Sponsor: Winklevoss Bitcoin Trust

Custodian: Gemini Exchange

Listed Exchange: Cboe BZX Exchange

Price Data Source: Gemini Exchange

Creation Unit Size: Basket of 100,000 shares

Bitwise HOLD 10 Cryptocurrency Index Fund

File Date: July 2018

Status: Pending

https://www.sec.gov/Archives/edgar/data/1746379/000149315218010390/forms-1.htm

Sponsor: Bitwise Investment Advisers, LLC

Custodian: N/A

Listed Exchange: TBD

Price Data Source: Bitwise’s HOLD 10 Cryptocurrency Index

Creation Unit Size: Basket of 25,000 shares

Other Info: Unlike other ETFs, Bitwise’s would be based on the 10 cryptocurrencies in its index fund, not just bitcoin.

The Winklevoss Standard and the Rationale for Rejection

The Winklevosses were the first to try and first to fail at filing a bitcoin ETF. Naturally, they set a precedent for other contenders to follow, as subsequent filings were submitted with the frontrunner’s shortcomings in mind. For the SEC, the Winklevosses’ first attempt has become something of a touchstone to evaluate the worth of those that came after it, as the first rejection order is cited in every rejection order the SEC has issued since.

And that’s because the SEC keeps running into the same problems.

In sum, these problems are few and simple. You could boil them down to three interconnected areas of concern: risk of fraud/manipulation, market size and lack of regulation.

To create an ETF for a new asset, applicants must propose a rule change to accommodate that asset in the SEC’s legal framework, and this places the onus on the applicant to prove that the asset and its underlying market are consistent with regulations laid out in the Security and Exchange Act of 1933.

As the rejection would indicate, the Winklevosses’ preliminary attempt wasn’t convincing enough to the SEC.

“[The] Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

“The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated,” the order reads.

SolidX’s first crack at an ETF would be scrapped with the same verbiage, word for word, nearly three weeks following the Winklevosses’ rejection.

In 2013, when the Winklevosses’ ETF was filed — and in 2017 when it was summarily rejected — there were no federally regulated markets for bitcoin. Of course, the Winklevosses’ own Gemini Exchange is regulated via the New York State Department of Financial Services through one of the much-coveted BitLicenses. But the scale of this regulation is inconsequential to the SEC, so the twins’ first application was fighting a losing battle from the start.

Though by June 2017, they found an opening. The Cboe and CME exchanges launched the world’s first institutional bitcoin futures in December of 2017. By proxy, these were also the first fully federally regulated bitcoin products to trade in the United States.

So the Winklevosses took another stab at it, submitting a revised proposal and petition for review. This time around, the twins’ Gemini Exchange entered into a surveillance-sharing agreement with Cboe’s bitcoin futures market to appease the SEC’s request in the former rejection. As the name suggests, a surveillance-sharing agreement is a self-regulatory accord struck between two or more marketplaces in the same market to police fraud and manipulation. Sharing data and monitoring practices between Gemini and Cboe, then, would seemingly satisfy the SEC’s major concern with the prior application.

Still, the SEC was not impressed. In their filing, the Winklevosses et al. argue that the bitcoin market’s global nature makes bitcoin resistant to conventional mark manipulation tactics. Ironically, this argument backfired, as the SEC found that because of this global market, the Winklevoss Bitcoin Trust couldn’t possibly shield their potential investors from fraud, especially when you consider that the Gemini Exchange (which would source the ETF’s price data) accounts for a sliver of bitcoin’s daily transaction volume.

“BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices,” the rejection reads.

Looking Toward the “Futures”

The rejection rationale detailed above would be copy-pasted practically verbatim into the nine rejection orders that would come in the following month, August 2018.

These filings by Direxion, ProShares and GraniteShares, however, didn’t source their price data from the underlying spot market. In fact, the contracts weren’t for physical bitcoin at all — they would be ETFs for bitcoin futures themselves.

The logic here is pragmatic if not a little obvious. Seeing as the Winklevosses were rejected a second time even if they entered into a surveillance-sharing agreement with a regulated exchange, they must have not gone far enough. If the SEC is worried about the regulation status and integrity of the market, then the ETF (and its pricing data) must be based on a regulated market, not just surveillance-share with it.

So Direxion, ProShares and GraniteShares followed in VanEck’s footsteps, which was the first to file for an ETF based on bitcoin futures, bizarrely, before a mainstream futures market even existed (this is why its proposal was initially withdrawn at the SEC’s request).

Unlike its counterpart in physical bitcoin ETFs, these products would divide shares of the Cboe’s and/or CME’s futures contracts, while naturally sourcing pricing data from these markets as well.

These ETFs all claim to have established a surveillance-sharing agreement with the CME’s and Cboe’s regulated futures markets. Even so, these agreements must be with a “market of significant size related to bitcoin,” and in the eyes of the SEC, the CME and Cboe aren’t there yet.

“While CME and [Cboe’s CFE] are regulated markets for bitcoin derivatives, there is no basis in the record for the Commission to conclude that these markets are of significant size,” the rejection notices read.

“Publicly available data show that the median daily notional trading volume, from inception through August 10, 2018, has been 14,185 bitcoins on CME and 5,184 bitcoins on CFE, and that the median daily notional value of open interest on CME and CFE during the same period has been 10,145 bitcoins and 5,601 bitcoins, respectively,” it continues.

With this data in mind, the SEC then says that extrapolating any “meaningful analysis” from this market volume is difficult “because reliable data about the spot market, including its overall size, are unavailable.”

Of course, these rejections were made at the staffing level and are pending review by the Commission itself, so while the staff’s decision doesn’t exactly inspire confidence, it could still be overturned by the SEC’s senior decision makers.

Precedents and Disappointments

Almost all arguments against these ETFs make their way back to the spot market.

If the ETF prices its data from spot exchanges like Gemini, these markets are too small in the scope of bitcoin’s global trading to definitively defend against fraud. If the ETF prices its data from a regulated derivatives market, there’s no reliable way to measure the significance of this future’s volume against the overall market.

The SEC’s gravest concern when deliberating bitcoin ETF approvals has been related to fraud and manipulation; market size, asset liquidity and reliability of pricing data are also wrapped up in this primary concern. And these concerns don’t even touch on the custody and settlement difficulties offerings would have to hurdle if they redeemed shares “in-kind” with bitcoin itself (there’s a reason most (if not all) of the filings since the Winklevosses’ own have opted to settle contracts in cash, instead).

Ironically, the biggest obstacle to regulating an ETF into existence, then, is the current dearth of regulated entities and structures in the bitcoin market at large. In an interview with Bitcoin Magazine, SEC Commissioner Hester Peirce hit on the catch-22 that the SEC’s rejection creates, as well as explaining that she feels their rejections set a disconcerting precedent for the SEC’s power to vet or denounce the quality of an investment.

“If you really want this market to be more orderly,” she said, “then you’ve got to let some of these forces in that are going to bring order to it,” like an institution-grade product such as an ETF.

Peirce suggested that the rejection of the Winklevoss ETF in particular set a poor precedent. “It plays into a bit of a thread in securities regulations — at the federal and at the state level — which is that there’s an inclination among regulators to almost step into the shoes of the investor and say whether or not the investor should be making that particular decision, based on our assessment of the actual product — in this case, the actual asset. So yes, that is a disturbing precedent, because I can’t make assessments about those things,” she said in the interview.

So far, ETF news has been punctuated by overarching disappointment, but a number of decision-pending files are still crowding the SEC’s desk. As we mentioned earlier, currently, the ETFs pitched by Direxion, ProShares and GraniteShares are up for review by the Commission; VanEck and SolidX’s joint effort, as well as Bitwise’s sweeping ETF of popular coins, are still being reviewed.

This September, Abra’s CEO Bill Barhydt told CNBC that he would bet on an ETF being approved “in the next year,” and Peirce said she was “a bit optimistic” that one is coming. Barhydt believes the right suitor hasn’t called on the SEC yet, but that once it does, the ETF is inevitable, while Peirce thinks that there’s enough interest in the product for an eventual approval.

Until this eventually becomes reality, though, the industry is stuck waiting on what the SEC will do next — something that’s become a constant for 2018 and isn’t likely to change anytime soon.

This article originally appeared on Bitcoin Magazine.

Cardano Structural Dispute Highlights Necessity of Self-Operating DAOs

Charles Hoskinson, Cardano creator, wrote a public letter last month that discussed the problems he had with the Cardano Foundation and recently did an interview with Crypto Insider to elaborate on his letter.

Cardano is currently a “triumvirate group” that oversees the “development of the Cardano blockchain project”. They created this system, according to Charles, because the problem with putting all cryptocurrency development “into one bucket is that their is a tendency to leave it that way, continue building it that way, and never end up decentralized – you end up with too much power in one place”. Charles explained in the video that Emurgo focuses on the “business side, adoption, and DApps”, IHOK worries about the “science and engineering”, and the Cardano Foundation worries about the “needs of the community like meetup groups, exchange listings, special events, education, and regulatory lobbying”. Charles admitted that separating tasks is always a little shaky at the beginning, but things have become more difficult recently.

Charles discussed how the lower levels of the Foundation board is working well, but it is the top level that is causing the strategic issues. Michael Parsons, Chair of the Foundation “was supposed to appoint a diverse board, but he let the board dwindle to 2 members … there’s just no oversight at the top”, Charles discussed.

“For 15 months, the foundation has just been Micheal Parsons and the legally required Swiss actor and they haven’t published any KPIs, any strategy, any notation or how they’re going to spend their capital and what they’re going to do with it. We kept trying to work with them and say ‘hey let’s come up with a joint plan and let’s go ahead and get it on the right direction’. It just never felt to me that they ever had the intention to look into a long arc. So, out of frustration, IHOK and Emurgo, what we started doing was just taking over things that we thought the foundation should do.”

Charles added that “this doesn’t actually slow down or stop Cardano since they have been working with this situation for the past two years”, but now “Emurgo and IOHK have just formally given up on the existing leadership structure of the Foundation” and they “will move without them”. He also made the comparison that the foundation “is no more useful to them than the Bitcoin Foundation is to Bitcoin” since different people will just pick up where others left off.

Importance of achieving a self-sustaining DAO

Charles later elaborated that “the Foundation was never intended to be a permanent entity in the ecosystem” and “its goal was to get an injection of capital, spend all that money, decentralized the ecosystem, get the treasury rolling, get the CIP process rolling, DAO-ify itself, and then disappear.” Overall, Charles’ discussion highlighted how the situation slowly devolved as the Foundation became less responsive and did not take on the roles it was responsible for administering until it became a fully functioning DAO. The issue highlights the difficulty, but nevertheless, importance of setting up a self-functioning DAO to facilitate network operations.

Decentralized Autonomous Organizations within the cryptocurrency space have a notorious history of being difficult to set up and make last for a significant amount of time. When most people hear DAO, they think of the infamous Ethereum “The DAO” hack that left many with lost funds and bitter to the concept. Since then, there have been numerous attempts to set up proper DAOs, self-governance, and/or treasury organizations within the cryptocurrency ecosystem to allow cryptocurrencies to better achieve consensus and fund their own development. This goal is sought since it better enables a network to work on behalf of its users without falling victim to either malicious actors, or in Cardano’s case, what appears to be apathetic actors without the best interests of the network in mind.

Dash enables adoption with one of the first and longest running DAOs

Dash was one of the first and is one of the longest running DAOs, to our knowledge, and introduced the Masternode system to the cryptocurrency community. These features enable Dash to achieve consensus much easier and less contentiously than other coins, and thus, every upgrade of Dash has gone smoothly without a chain split. Furthermore, the Dash DAO allows its Treasury to fund its own network developments and community outreach groups to enable better growth. While debates occur within the Dash community about the best way to upgrade or the best proposals to fund with the Treasury, the debates end with a solution and community members moving onto the next objective.

This further enhances consumer and merchant appeal of Dash since most consumers simply want money that works and not have to worry about the technical details. Thus, constantly having to hear about chain splits and the correct vision tends to alienate mainstream adopters. Dash focuses on providing digital cash in an easily consumable way that can be used in everyday transactions.

EtherDelta Founder Charged by SEC For Operating an Unregistered Exchange

EtherDelta SEC

In an apparent first, the U.S. Securities and Exchange Commission (SEC) has charged the founder of EtherDelta, Zachary Coburn, with running an “unregistered national securities exchange,” according to a press release from the regulator.

“EtherDelta provided a marketplace for bringing together buyers and sellers for digital asset securities through the combined use of an order book, a website that displayed orders, and a ‘smart contract’ run on the Ethereum blockchain,” the agency noted.

EtherDelta’s users have processed over 3.6 million orders for ERC20 tokens during an 18-month period, including those that are defined as securities under the federal securities law, the SEC explained. It went further to argue that a large majority of the orders placed on the platforms “were traded after the Commission issued its 2017 DAO Report,” which stipulated that certain assets like the DAO tokens were securities, placing any platform that offered trading of such “digital asset securities” under the “SEC’s requirement that exchanges register or operate pursuant to an exemption.”

EtherDelta, which operates a trustless exchange where it only provides a platform for users to trade, failed to register with the regulator or file for an exemption, the agency stated.

The release also noted that the SEC had taken enforcement actions against a handful of tokens that had once traded on the exchange.

Stephanie Avakian, co-director of the SEC’s Enforcement Division, spoke on the charges against EtherDelta, arguing that it was mandatory for the platform to register with the SEC as it had “both the user interface and underlying functionality of an online national securities exchange.”

Coburn, who has neither admitted or denied the findings of the agency, had cooperated with the agency by agreeing to pay over $300,000 in disgorgement, as well as $13,000 in prejudgment interest and an additional $75,000 fine.

This article originally appeared on Bitcoin Magazine.

Blockstream Releases Full Node Access, Wallet, Block Explorer for Liquid

Liquid Full Node Release

Blockstream has released a full node and wallet client for its newly released Liquid, along with a fresh-out-the-box block explorer to monitor transactions and other data on the sidechain.

With a mission to establish “an inter-exchange settlement network,” Liquid was launched last month. The platform is a sidechain built out of Bitcoin’s mainnet that allows its users to swap bitcoin 1:1 for a token on Liquid’s sidechain (L-BTC).

“Liquid is mostly for traders to move assets between exchanges or store in trading wallets ready to quickly deposit to exchanges.  The advantage of Liquid is it is faster to deposit and move assets, and time is very much money for cross-exchange trading,” Blockstream CEO Adam Back told Bitcoin Magazine.

Now, in what Back called “the next step” of Liquid’s development, anyone can participate in the sidechain’s network. Running a Liquid full node will let any user “trustlessly self-validate the chain just like they can with the Bitcoin network,” the official announcement reads. The release also comes with a wallet client for holding Liquid assets like L-BTC.

With the full node, the command line utilities give full-node operators free range to issue assets on Liquid, send and receive assets and broadcast information about the state of the sidechain.

In addition to these baseline features, Liquid also leverages anonymity features that Bitcoin does not support. The sidechain’s confidential transactions give users the option to obscure their transaction amounts, and confidential assets hide transacted assets from everyone on the network except the recipient and sender.

To coincide with the new releases, Blockstream has also launched its own block explorer to accommodate Liquid. This extended functionality lets users search data on the Bitcoin mainnet, testnet and the Liquid sidechain, and it also includes a search function to track peg-ins and peg-outs between the Bitcoin and Liquid networks.  

“Overall we are very pleased with the level of interest in liquid both from the technical developer and power user community and exchanges, and institutional traders, but there is much more to do so it will be a busy time for blockstream over the next period,” Back said to Bitcoin Magazine.

Staying busy, Blockstream’s forthcoming additions to Liquid’s ecosystem include new assets, a GUI wallet release, further exchange integrations and hardware wallet support for Liquid assets on Trezor and Ledger devices. With these additions, Back believes Liquid “will become more accessible.”

This article originally appeared on Bitcoin Magazine.

Bitmain’s New 7nm Chip Miners Are Available for Purchase Today

Bitmain;s new miner

Chinese mining giant Bitmain’s 7nm Bitcoin miners go on sale today, November 8, 2018.

Announced in September of 2018, the miners allegedly offer considerably faster hash rates (though Bitmain didn’t disclose any specifications) and come in two separate Antminer models: the S15 and T15.

The company first provided the news on Twitter, writing, “We are officially announcing the release of our new 7nm miners which possess industry-leading hash rates designed to mine with the SHA256 algorithm. Two models will be offered, the Antminer S15 and T15. Available for purchase on 11/8.”

Bitmain’s new ASIC chips will operate via 7nm Finfet, which Bitmain refers to as “one of the world’s most advanced semiconductor manufacturing technologies.” The chips utilize more than a billion transistors each.

In addition, 7nm technology enables the chips to consume less power and mine at much faster paces. In a keynote lecture two months ago, Bitmain CEO and co-founder Jihan Wu said that the chips would “achieve a ratio of energy consumption to the mining capacity that is as low as 42J/T.”

Mining companies everywhere are now seeking to compete with Bitmain and strengthen their spots in the industry. Just 24 hours before Bitmain made its September announcement, the Bitfury Group unveiled its own 14nm ASIC chip called the Bitfury Clarke, which is also customized for SHA256 Bitcoin mining and built to compete with Bitmain’s upcoming model. Bitfury stated that the chip could execute a hash rate of up to 120 gigahashes per second, and a power efficiency rate of roughly 55 millijoules per gigahash.

Another competitor working to up the ante is U.S.-based semiconductor manufacturer AMD. In October, the venture reported that crypto-mining sales were “negligible” in quarter three of 2018, yet the company is now partnering with several major technology companies to produce eight new cryptocurrency mining rigs that are being marketed as “blockchain compute solutions.” Among these companies are Sapphire, ASRock, ASUS, MSI, TUL and Biostar.

In August 2018, mining manufacturing company Pangolin announced it would be releasing a 16nm miner designed to compete with the likes of 7nm. Known as the Whatsminer M10, the miner was alleged to possess speeds of up to 33 trillion hashes per second. While not as up-to-date as 7nm technology, the company is still putting its money on 16nm and claims that SHA256 mining rigs with 7nm technology will sell out very fast and can thus be very difficult to acquire as many companies are struggling to keep up with growing demands. Some mining developers, such as GlobalFoundries, have already stopped producing 7nm chips as a result.

Innosilicon’s forthcoming Terminator3 ASIC miner will sport either an 8nm or 10nm chip, though an Innosilicon representative who spoke to Bitcoin Magazine wouldn’t disclose the exact chip size.

Bitmain also said two weeks ago that it would be offering a firmware update for (overt) AsicBoost to all its Antminer machines, which will increase overall mining efficiency.

This article originally appeared on Bitcoin Magazine.

Spondoolies New Miner Signals Rising Confidence in Dash Longevity

A couple months ago, Spondoolies released their new SPx36 ASIC miner for Dash’s X11 algorithm, which its sheer power of 540 GH/s at 4400Watts per Miner and cost of $15,500.00 USD signals rising consumer and investor confidence in Dash.

Dash Force News chatted with Dash community member @DarkWater who did some very in-depth analysis of the new miner, its power, and what it means for the Dash network. Overall, the new miner creates a higher probability of Dash exchange price appreciation as miners will want to sell at a higher price to remain profitable and the already seen increase in hashrate creates a more secure network for consumers. @DarkWater conducted the following analysis to illustrate how the power of the SPx36 compares to top miners on other networks and how this translates to profitability based on current exchange prices.

Source: @DarkWater on Dash Talk discord and @StayDashy twitter

Basically what this excel sheet is showing is a rough calculation based upon information that can be obtained publicly. We can observe the total network hash rate, which is the “Net Hash rate” (Dash is roughly 4PH at the moment). Dividing 4000TH by .540TH. If we were to assume every machine on the network was an SPx36, that would be equal to roughly 7400 Units. Take that theoretical total units and multiply that by the watts per miner, that gives us what an estimated level of power consumption would be if the entire network were mined by SPx36s.

At 15,500 USD per miner, each unit currently at this time of writing after paying 10 c/kW in hosting costs would generate 18.50 USD per day. That would currently be a 837 Day Return on Investment (We were used to 3-12 months for a long time). If Spondoolies successfully sells enough miners to displace previous generation equipment (7400 to equal current net hashrate), then you will have 114 Million USD competing for 51 Million USD worth of Dash rewards at $153/Dash.

@DarkWater further explained that producing and buying the new miners can be “considered an institutional grade investment given the risk exposure of new equipment coming to market within that 2+ year window of payback”. He added that this is a “big bet on future price appreciation for Dash to help make the ROI back if the miner was to hold their production till a future date”. He also compared this upgrade in miners to the previous leap from GPUs to ASICs illustrated by detailing how “one 384MH/800W Ibelink in 2016 was the equivalent of 128 R9 280X GPUs” and “to put this into perspective with the SPx36, 180,000 R9 280x’s = 1 SPx36”.

Impact on the Dash network

This major technical jump has significant impacts on the Dash network in multiple areas including mining pools, security, energy consumption, and exchange price. One of the most immediate impacts is the hashrate, which will and already has increased dramatically, and can also draw power away from large pools like AntPool. @xkcd, another Dash community member following the SPx36 miner development, carefully detailed how “Antpool’s mining dominance drop from almost 50% to 13% currently since the new mining pool(s) came online in early September”.

Source: @xkcd

Source: @DarkWater

Now when this much hash power emerges all at once, a natural inclination is to worry about a 51% attack since it is conceivable that one person or a group could buy enough spondoolies before everyone else to quickly gain control of the network’s hashrate. The good news is that potential threat of 51% control appears to have quickly happened and then quickly dissipated thanks to the economic incentives of the Dash network.

Source @DarkWater and @xkcd from https://chainz.cryptoid.info/dash/extraction.dws?17692334.htm

@DarkWater explained how “50%+ was extracted between blocks 963,200 to 963,299” and @xkcd explained how this potential threat was actual not a threat at all.

“When Xhus4Yv5kAyj2JwwL1EZmmSHfoRKR2yRCD hit 51% it made the network vulnerable to the possibility that if this pool was also malicious they could tamper with transactions or provide ‘fake confirmations’ to try and get extra coins. Recognizing this risk and not being malicious in intent the pool, then split into three others avoiding this situation. A telltale sign of tampering with the blockchain would be long orphan chains and during this time there were none, so the network was never under any actual threat.”

@xkcd also added that this “means the pools operators are not malicious in intent and wish to play fairly and abide by the network consensus”. @xkcd also detailed how “Xhus4Yv5kAyj2JwwL1EZmmSHfoRKR2yRCD started mining on the 19th of September”, but “after reaching just over 50% of the DASH hashrate, the hashrate quickly fell and on Nov 1st these new mining pools appeared; XakyHr1BMvijuN3yMK9Zzj6d8eEKxqzUTk and XrLG7YxovHbWv2atsyWovotiMyN2Rbio2u“. @xkcd also analyzed that “the mined coins in pool Xhus4Yv5kAyj2JwwL1EZmmSHfoRKR2yRCD are sent to XtQrVu9AJWBdk7PAGYEYekwRwCzVNQVcLM and as of yet not spent”, along with the other two addresses. @xkcd then explain what this means for the Dash exchange price.

“This suggests they are not public pools, as in a public pool the funds would occasionally be distributed to the many participants. Instead this suggests a private pool and since the date of the creation of the first pool is so close to the announcement of the new SP miners and the rate of increase in hashrate is so steep, one can assume it may be Spondoolie themselves. Hoarding these funds is bullish for the price of DASH in the short term, it means this new player is not looking to sell at these prices, but mostly likely will sell at price levels at which mining is profitable (DarkWater did the calculations). By holding onto almost 50% of all newly mined DASH coins, supply on exchanges is restricted.”

Another additional benefit to the Dash network is that “the increased efficiency of these new mining devices means the energy use of the Dash network can be expected to further decouple from the hashrate, which helps alleviate environmental concerns”, according to @strophy who is also monitoring the situation. Overall, @DarkWater highlighted that these addresses and developments will require monitoring, which him, @xkcd, @strophy, and others will be tracking in the #markets channel of the Dash Talk discord server.

Dash poised for future growth

This development illustrates the significant investment that is going into the Dash network to not only mine Dash, but to develop technology around Dash and the great minds inside the Dash community monitoring the network. As the hashrate increases among more parties, the Dash network will become stronger and more secure, which will help instill even further confidence among users. Then, as @DarkWater and @xkcd pointed out, the now larger expense required to mine Dash, which causes miners to hold Dash and sell at higher prices, will further limit the supply of Dash on exchanges and will contribute to higher fiat exchange prices.

This development contributes to the other calculations by CoinFairValue that have found Dash to be significantly undervalued by the current market exchange price when evaluating based on core coin metrics and everyday usability. As more individuals invest more resources into the Dash network, this will signal rising confidence in the longevity of the network, and will enable consumer demand to rise.

JRR Crypto Hosts Token Design Competition in Berlin – [BTC Media Sponsor]

JRR Crypto Thumb

In a collaboration with LongHash and BTC Inc, JRR Crypto has launched an international token design competition in Berlin.

Beginning on October 26, 2018, JRR Crypto launched this design competition at a multiday festival in Berlin. According to the group, it’s designed to address one of the fundamental issues that the development of decentralized projects faces today.

“JRR observed that most blockchain projects that design a pass-through mechanism are too focused on fundraising rather than actual economic model building and the landing of business models,” according to a translated description of the competition. “JRR Crypto, BTC [Inc] and LongHash jointly launched a competition to explore new applications for blockchain technology development and jointly discuss new trends in digital economy development.”

The description also noted that registration will remain open until November 24. Registration is available through various channels for competitors from many different nations.

JRR’s token projects will be graded by a panel of international, mostly Chinese, judges. There are six awards up for grabs between competitors, including “Best Creative Design” and “Best Creative Scheme Design.”

The grading will be determined largely by the criteria of the specific award in question, but 40 percent of the score will also be determined by several generalized factors, such as token distribution, functionality, utilities, complexity and appreciation logic.

Finally, in early December, the finalists and judges will travel to Shanghai for an award ceremony presentation. From there, the winners will receive several nonmonetary prizes, such as mentorship from competition judges and media support from partnering organizations. JRR has also promised to facilitate future meetups and activities within the People’s Republic of China.

This promoted article originally appeared on Bitcoin Magazine.

IBM and Seagate Partner to Tackle Counterfeit Hard Drives Using Blockchain Technology

Seagate Technology Plc and IBM have today announced that they are working together to reduce global hard drive counterfeiting using blockchain technology. Figures from the International Anti-Counterfeiting Coalition (IACC) estimates that global trade in counterfeit and pirated goods amounts to $1.77 trillion. With such a prevalent problem impacting manufacturers, integrators, and businesses, such as data […]

The post IBM and Seagate Partner to Tackle Counterfeit Hard Drives Using Blockchain Technology appeared first on Coinjournal.

Free Cryptocurrency Given Away at Web Summit 2018

The 2018 Web Summit event will witness the distribution of free digital assets from a number of blockchain companies. The yearly event brings together an A-list cast of panelists, including the CEO of Medium Ev Williams, Pinterest co-founder Ben Silbermann and a host of executives from the tech sector, investors, startups and media. Blockchain, the […]

The post Free Cryptocurrency Given Away at Web Summit 2018 appeared first on Coinjournal.

Taiwan to Crack Down on Anonymous Cryptocurrency Transactions

Taiwan has reportedly enacted increased regulations on the anonymous use of cryptocurrency.

As reported by Focus Taiwan, the national legislature passed amendments last week to the Money Laundering Control Act and the Terrorism Financing Prevention Act regarding cryptocurrency transactions without identified users. The new changes would give the Financial Supervisory Commission (FSC) authority to crack down on activity not associated with a real name:

“The FSC can now demand that operators of virtual currency platforms, including bitcoin, implement ‘real-name systems’ that require users to register their real names, according to the new provisions.”

This means that exchanges and other similar services would need to implement full AML/KYC checks on customers, requiring financial identities to be linked to customers wishing to deposit and withdraw. Violations of identity requirements could result in fines of up to a $144,507 USD value.

Regulatory increases make peer-to-peer exchanges more attractive

The advent of increasing regulations on the acquisition of cryptocurrency privately makes peer-to-peer exchanges and methods of buying and selling more attractive. Services such as CoinCola allow for over-the-counter trading for cryptocurrency for various payment methods with limited identifying information for smaller amounts. However, many of these platforms still require some sort of identification at certain levels, and any platform run by a central company will inherently have vulnerabilities to future regulations, as evidenced by ShapeShift, which previously allowed users to transact without setting up an account, but recently announced that it had been compelled to introduce some customer control requirements.

As such, truly peer-to-peer clients such as Bisq, as well as buying and selling in person at meetups or other similar situations, remain the most reliable private way of trading cryptocurrency, as there is no central service or website to target. Many of these options remain underdeveloped and difficult to use, but with increasing demand they promise to offer a smoother experience.

A thriving digital cash economy removes identity barriers for acquiring cryptocurrency

While buying and selling cryptocurrency remains the primary form of acquisition at present, the most private method remains to receive it as payment for goods and services in peer-to-peer transactions. Doing so removes the need to interact with the fiat currency world and relevant restrictions/regulations which may become more stringent as an increasing number of countries attempt to phase out of cash-based systems. As such, wide adoption of cryptocurrency promises to greatly facilitate its use and acquisition privately.

Dash has made significant inroads in cryptocurrency adoption, with over 4,000 known merchants recently passed on merchant listing site DiscoverDash. Over half of these are in Venezuela, a country with a much more acute need for alternative currencies due to its present economic struggles and hyperinflation issues.

Colorado and California Just Elected Pro-Bitcoin Governors

Polis Newsom

Following the 2018 midterm elections, the U.S. will see two new pro-Bitcoin governors sworn into office.

Jared Polis (D-CO) and Gavin Newsom (D-CA) both won out against their respective Republican contenders last night, November 6, 2018. While their campaign points and platforms were capitalized by a progressive agenda, their favorable attitudes toward cryptocurrencies and blockchain technology have caught the crypto community’s attention.

For Gavin Newsom, this support comes from a simple yet pioneering decision to accept bitcoin as a campaign donation in 2014 when running as an incumbent candidate for California’s Lieutenant Governor seat. One of the first politicians to do so at the time, Newsom signaled the donation option as an understated endorsement of the technology.

“I should promote the technology ever so subtly by saying I’ll accept bitcoin in the campaign. I’m ready for it. But how the hell do I explain it to anybody?”

An Industry Advocate

Polis, who claims to have been the first Congressman in America to accept bitcoin as a campaign donation in 2014, has embraced bitcoin and its underlying industry with a bit more gusto.

His website even has an entire page dedicated to blockchain policy. On this page, he explores blockchain technology’s potential to improve voter protection/cybersecurity, energy management and government transparency, while also proposing a Council for the Advancement of Blockchain Technology Use and a sandbox “to create a statewide safe harbor” for industry companies.

“My goal is to establish Colorado as a national hub for blockchain innovation in business and government. I believe strong leadership will put Colorado at the forefront of innovation in this sector — encouraging companies to flock to the state and establishing government applications that save taxpayers money and create value for Colorado residents,” the page concludes.

During his time in the House of Representatives, Polis had a long-standing track record as one of the industry’s most vocal defenders in Washington. In 2014, he sent a satirical letter to federal regulators that called for a ban on the USD, a parodical and caustic response to Senator Joe Manchin’s (D-WV) own letter to federal regulators that requested a ban on bitcoin.

In league with Representative David Schweikert (R-AZ), he also proposed the Cryptocurrency Tax Fairness Act in 2017. “Similar to foreign currency transactions,” a summary reads, “it allows consumers to make small purchases with cryptocurrency up to $600 without burdensome reporting requirements.”

This article originally appeared on Bitcoin Magazine.

Revolutions and Counter Revolutions: Andreas Antonopoulos Reflects on 10 Years of Bitcoin

Andreas Antonopoulos

As Bitcoin approaches its 10th anniversary, its community, old and new, has begun taking stock of how a decade has come to alter or define the cryptocurrency — and what Bitcoin has done to alter or define the decade.

Ten years has invited room for undeniable change. Bitcoin has seen roughly half a dozen market cycles, spawned a secondary market of more than 2,000 altcoins and laid the foundations for a surging blockchain industry. It has evolved from the obscure interest of cypherpunks and crypto anarchists to a viable, private currency that has provided a financial lifeline to underbanked, underprivileged populations in floundering economies.

There are few voices so well equipped to reflect on the changes as Andreas Antonopoulos. One of Bitcoin’s chief evangelists and arguably its most vocal educator, Antonopoulos has spent the years following his industry entrance in 2012 traveling around the world to share his knowledge on the subject. His books, which include Mastering Bitcoin, The Internet of Money, Vol. 1 and 2 and the forthcoming Mastering Ethereum, are praised as some of the space’s most thorough and informative reads.

His impact on the space is something of a widely-recognized truth, one that has made him one of the industry’s most-respected and definitive thought leaders. While others were getting rich, he was enriching the community, reminding others that bitcoin is about much more than lambos and moon memes. A testament to his influence, the community rewarded him with donations amounting to about $1.6 million during the last bull run upon learning that he held little — if any — bitcoin.

In the following interview with Bitcoin Magazine, Antonopoulos reflects on the metamorphosis the ecosystem has undergone, the lessons learned from these myriad changes and why, after 10 years of challenge, the ethos of Bitcoin itself has doggedly persisted.

This interview is part of Bitcoin Magazine’s retrospective series for Bitcoin’s 10th anniversary. Starting from the white paper’s birthday on October 31, 2018, to Bitcoin’s launch on January 3, 2019, we’ll be publishing a series of interviews, op-eds and think pieces that reflect on where we’ve come from, where we are and where we’re going.

Bitcoin Magazine: Just going straight into it, what has changed?

Antonopoulos: So many things have changed. Where do I start?

Back in the day, when I first got involved, this was a very small community, a very tight-knit community, a very focused community. There was a lot of commonality of purpose, and it felt very tight-knit. And I remember at the time, the main thing I wanted to explain and persuade people about was that this was bigger than payments. This isn’t just PayPal; this is bigger than that. It’s not just a payment network.

And so, in order to express that, I said that it’s a platform. You’ve got to think of this not just as bitcoin but broader: the blockchain. That backfired badly. I wanted to broaden it a bit to give people vision, but what happened then, over the next three years, was that people took hold of the word “blockchain,” rammed it right over, and threw everything and the kitchen sink in there — a lot of things that have nothing to do with it. So, in four years, I came full circle and released a talk called “Blockchain vs. Bullshit,” which is my number one talk.

So are you talking about the altcoin ecosystem?

And even broader than that. The distributed ledger technology, private blockchain, bank-chain, business-as-usual, slap a word on it, “pretend it’s decentralized when it’s not” type of ecosystem. Trying to embrace, extend and diverge — derail even — this industry by hijacking it. Subsuming it completely.

At the first conferences — even the first 2013 conference I went to — the suits had shown up and it was beginning to get that vibe. By the end of 2013, when the fourth or fifth bubble happened and the price hit $1,000, that’s when the suits really descended.

So it felt like a tight-knit community and then the sharks started circling around, and they were all trying to grab a bit of this grand phenomenon and monetize your influence. And there was all of this shilly, shitty, disengenuous, fake “Hey! I’ve got a project. We’re going to revolutionize real estate, we’re going to revolutionize exchanges, we’re going to revolutionize medicine.” And most of it’s bullshit. Most of it is completely naked profiteering.

So I had to turn it around and refocus it, try to figure out what is real, what is the real “killer app,” what are the real things that are happening.

And did you come to the conclusion that it’s bitcoin?

It’s not necessarily bitcoin. It’s about decentralized money and other decentralized things. But, of course, the core is decentralization. And money is a killer app in itself, if it’s decentralized.

So that changed.

The other thing that changed was that one of the things that attracts people to this space is the fact that it gives them the feeling of belonging to this kind of adventure — that goes against the grain, that is outside the mainstream, that is niche, and a bit of feeling that we’re the underdog fighting the great forces.

But as always happens in movements like that, eventually, you get divisions within, and then you have people who are fighting as the “underdogs” against “the establishment bitcoiners.” Like suddenly, Bitcoin is establishment and people will say, “Hey, this is Bitcoin 2. This is better than Bitcoin. This is an alternative chain that solves all the problems in Bitcoin.” So then you have a fragmentation, a splitting within the Bitcoin community.

So you think the space is cannibalizing itself?

Because some people feel the need to be the underdog and to always be fighting something. That drives their personalities. So it’s funny because when what you’re fighting for is suddenly getting recognition and IBM is doing it and whatever, the people who are insiders are now a part of it.

You have to find a new machine to rage against.

Exactly. And that’s what’s happened in the crypto space. So now there’s all this fragmentation, all these internal battles, both within Bitcoin but also between Bitcoin and other systems and between themselves.

No sooner had Ethereum raised its fist, like, “We will replace Bitcoin and the flippening will happen,” then, before you know it, they were looking over their shoulder because there are five wannabe-Ethereums that are like, “Ethereum’s the old guard and we want to be the solution.”

So it’s the Trotsky phenomenon. The counterrevolution starts within weeks of the revolution. Some revolutionaries can never settle down. And that’s not bad: having principles, being ideological, having political conviction. A lot of people see this as aggression, kind of disingenuous behavior. But, honestly, I see a lot of these people who I’ve known for the past four years who are raging against the new machine. I think they’re acting mostly in good faith.

To play on these dualities you’ve been talking about: It’s fighting a two-front war, in some regards. It’s fighting against a front of outsiders and it’s kind of fighting a war against itself.

Yes, which is typical; it’s human behavior. Ironically, to the outsiders, we’re all one bunch of weirdos. They don’t differentiate between the more business-friendly weirdos or the less business-friendly weirdos. We’re all weirdos. Because the system exists, it’s been running for hundreds of years and you’re not going to come and change it.

Of course, that’s what every system that got changed says. There is a simple way out of this: At some point, there is going to be a massive backlash. At some point, “the system” that we’re disrupting is going to fight back hard, but it hasn’t happened yet.

The funny thing is that, the day the system starts fighting back, those people will not differentiate between bitcoin cash and bitcoin, bitcoin and ethereum, ethereum and ripple, monero and zcash — as far as they’re concerned, we’re all a bunch of weirdo anarchists who are trying to help terrorists and drug lords defeat the financial order. They’re not going to differentiate. They’re going to backlash against all of us, and that’s going to be the great uniting moment.

As soon as we get attacked from the outside, everyone will circle the wagons and everyone will be friends again. You see this in divided countries, where all they need is an external enemy to refocus, and suddenly they’re all on the same side.

Talking about these forces from without, how have you seen governments respond to the space, especially in North America? Are we seeing any growth in the right direction or is it just pomp and pageantry?

I don’t think it matters. It’s all pomp and pageantry. They want to appear hip and relevant and “of the time” and be pro-business or pro-innovation — and it’s all bullshit. Because, first of all, these systems are not yet having an effect that’s big enough to start disrupting established industries, at which point we’re going to start seeing governments realign, knowing where their bread is buttered, knowing who is paying the bills. And we’re not the ones paying the bills, right?

At that point, we’re going to see some overt hostility and disinformation against us. For the time being, they’re just playing the part of magnanimous regulators who are sober and considerate, but not hostile to innovation because they want the jobs. It’s all pageantry. It doesn’t mean anything.

And so, in the U.S., you’ve got an incredible amount of fragmentation — because you’ve got 15 federal regulators and then 50 state regulators and half of them are screaming, “I don’t want this, you regulate it!” and the other half are screaming, “It’s our domain! Step out!” And the same thing is happening across the world.

Is there any government that you think is doing a good job?

Does it really matter in the end? This isn’t the domain of government. The fundamental invention of governance by algorithm in a decentralized system, the first thing it disrupts, is regulatory compliance.

It disrupts regulators before anyone else because it says, “We’re regulating this way, so we don’t need to be regulated by institution, by committee, by whatever.” And people think that when I say things like that I’m questioning their authority. I’m not questioning their authority; they have all the authority in the world. I’m questioning their ability to enforce their authority.

And you’re questioning whether or not there’s even a place to enforce that authority.

Right. Exactly.

So, in your opinion, the space would be better off left alone to its own devices. You don’t need to try to find something to regulate with this.

Exactly. It’s already regulated; it’s regulated by math. It’s regulated in the most deterministic, predictable and highly-defined manner. This is a system in which the fact that it doesn’t have rulers doesn’t mean it doesn’t have rules. It has a lot of rules, and those rules are very specific.

What it doesn’t have is the ambiguity of human regulation. And people need to realize that the reason we don’t need to regulate cryptocurrencies is not because they don’t need regulation; it’s because they’re already regulated — regulated by algorithm.

If you want algorithmic regulation, this is the space to play. If you want human regulation, we already have that. That’s not new, and, in fact, that’s what we’re trying to fix.

I look at it in a very simple way: Most of the institutions we have for governance today are fundamentally creations of the industrialized era, the industrial revolution. That means they’re creations of the late 18th and 19th centuries. And they don’t scale anymore for a planet in which the shit that was spewing in the atmosphere in one place causes a hurricane across the ocean in another place.

We’re too interconnected to govern as little fiefdoms in separate jurisdictions with human governance and decision making. If you try to take the industrial era governance models and you try to simply scale them up and make bigger agglomerations — the European Union, the Russian Federation, the United States — very soon they become either corrupted, indifferent, incompetent or too slow to make decisions because they can’t scale to that size.

But the problems we’re facing require them not only to scale to that size but to scale to a transnational size. Which is horrifying because then it’d be one world government, and if my national government is not already working, then how bad is a transnational government going to be? We need a different model for governance. The industrial revolution will no longer fit our planet. So, that’s how I look at these systems.

Now, once governments realize that’s the game, that this is about changing the way we do governance and offering alternatives, I think we’re going to have some very different responses, some pushback, some resistance.

One more thing: I think we overestimate how much interest governments have in any of this. Their problems are so big and they’re so not related to what we’re doing. The dollar has its own problems, which are enormous.

That’s a good transition into another question. A lot of people — and they’re mainly retail investors, mind you — are looking for the next spark for the next bull run. People point to the ETF and say “Once we get that, we’ll get institutional investors and this will flood capital into the market.”

Be careful what you wish for.

This is exactly my point. You know, the majority of gold traded on the market today isn’t actual gold — it’s certificates. It’s fractional reserve lending. And with ETFs and bitcoin futures, you’re inviting the same thing.

You’re diluting the value.

Right. You’re trading contracts. So, is something like an ETF or bitcoin futures too antithetical to Bitcoin’s ethos?

It’s completely antithetical. Because what you’re talking about is centralized custodian holders who give you a fraction of the rights that having your own keys gives you. You have exposure to the monetary fluctuation. You don’t have any of the autonomy, empowerment, voting ability, participation ability, authority, and independent validation of transactions that you have as someone who holds the keys and uses bitcoin or any other cryptocurrency directly. This is a direct participation system.

When you’re investing in a secondary market like an ETF, you’re not a direct participant in this very direct participation system. You’re a second-hand citizen. You’re a second or third class citizen. You’re only getting one part of the rainbow of attributes of this system and capabilities.

And who has the rest? The custodian has the rest. The custodian now gets to decide which fork is the real fork — not you. The custodian gets to decide how to vote on the next soft fork decision — not you. The custodian gets to decide whether you want to switch to a different cryptocurrency or not or how to disperse them. All of these things dilute the value proposition.

Now, that doesn’t mean they damage cryptocurrency.

If this was about investment, then the idea of bringing in more investors would make the thing better. But this isn’t about investment. This isn’t an investment; it’s a technology. And bringing more people into a technology, especially when that technology isn’t ready for another influx of people, it doesn’t make it better; it makes it worse (temporarily). Because all of the problems are magnified by a whole influx of newbies.

When AOL joined the internet, AOL called it a “golden moment.” The internet called it “Black Monday,” because they dumped 3 million noobs right into the middle of our nicely defined internet, which had “netiquette” and common standards of behavior and useful applications — all of which broke because it wasn’t ready for the scale of people or for the new culture of people who are not trained in the culture.

In a recent talk, you say the idea of a “personal bank” looks ridiculous right now (in hindsight) because of gaps in user experience, usability and technical gaps. And you said complexity is the greatest user vulnerability. But once we have more intuitive designs and secure applications, then we will see the adoption we’ve been asking for.

It’s not so much that we’ll see adoption. At that point, it’ll be possible to help the people who actually need this technology. We have to remember: Not everyone needs this. There is 5-10 percent of the human population that already has representative democracy, working institutions and working banks. We’re the privileged ones — we’re not the primary focus. We need it long term because our democracy is eroding faster than we can save it, but we don’t need it in the short term to buy coffee.

So, in the long term, what do developers and educators need to do? What does the community need to do to guide cryptocurrency through this growth spurt?

First, recognize that not everybody needs it and don’t try to sell to people who don’t need it. Not everybody is ready or should be part of this, right? I mean, I know I’ve evangelized a whole bunch of people. My friends got involved. And maybe they made some investments. Maybe they’re happy today, maybe they’re not happy today with me. That’s a double-edged sword.

But the real impact of this technology is on the other 6 billion: the unbanked, the underbanked, the politically oppressed. And it’s using this as a tool that magnifies personal power, especially defensive power, to help people defend themselves against large, corrupt institutions, whether state institutions or private institutions. That’s the power: It’s giving people freedom.

Now, not everybody needs that right now, and we’re not ready to just bring a billion people on board a system that isn’t ready to scale.

You said that not everyone needs it. Do you think that there will be a time when everyone is using cryptocurrency?

Absolutely.

Do you think that will come in the form of private currencies or nationally backed currencies?

All of the above. Every form you can imagine: nationally backed, private-backed, government-issued, privately issued. I think that, fundamentally, nationally issued cryptocurrencies are business-as-usual. They don’t change the fundamental problem. The fundamental problem is centralized control and no government is going to issue a cryptocurrency that is not centralized. So they are just moving around the deck chairs.

And they’re certainly not going to release one that has a cap on supply.

Right. Exactly. Or one where they can’t censor or control borders and do verification of identity. Because surveillance is more important.

So those things will happen. They’re just not particularly interesting. The thing that is interesting is the open, borderless, neutral, censorship-resistant, global system or systems that give people choices even if their own government doesn’t want them to happen.

The whole borderless thing always takes me back to Marxism, this idea that Bitcoin is borderless, it denies centralized control, and it gives purchasing power and voting power back to the people.

I think people tend to reflect onto Bitcoin their preconceived politics. And that’s because it has this mirror-like capability to be what you want it to be or look like what you want it to be. In the end, it’s not Marxist or capitalist. It’s crypto. And that’s interesting because both Marxism and capitalism and all of the systems we have today were invented in the late 19th century. They are systems that are fundamentally born of the industrial revolution.

Bitcoin is post-modern. This is something that doesn’t fit into any of the existing buckets because we’re making new buckets. Because this is redefining governance and political systems. So the fact that to some people it looks Marxist, to some people it looks capitalist, to some people it looks Libertarian, to some people it looks anarchist is because they are trying to slap one of their traditional labels on it.

Your frame of reference has to be reinvented in order to label this thing. Is it an asset, is it a bond, is it a currency, is it stock? It’s a cryptocurrency. And what is that? It’s the new thing that isn’t any of those but all of those simultaneously. It has characteristics of precious metals, bonds, stocks, currencies, contracts — it has all of those characteristics. But it’s not any one of those things.

This article originally appeared on Bitcoin Magazine.

Snark.art Brings Blockchain to Visual Art with New Collaboration with Eve Sussman

Snark.art, a digital laboratory for blockchain-based art, has unveiled its first artistic collaboration with artist Eve Sussman. The new art piece, called 89 Seconds Atomized is an attempt to introduce and illustrate the concept of collective ownership, the company said on Wednesday. 89 Seconds Atomized is a re-invention of Sussman’s acclaimed video artwork, 89 Seconds […]

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Snark.art Brings Blockchain to Visual Art with New Collaboration with Eve Sussman

Snark.art, a digital laboratory for blockchain-based art, has unveiled its first artistic collaboration with artist Eve Sussman. The new art piece, called 89 Seconds Atomized is an attempt to introduce and illustrate the concept of collective ownership, the company said on Wednesday. 89 Seconds Atomized is a re-invention of Sussman’s acclaimed video artwork, 89 Seconds […]

The post Snark.art Brings Blockchain to Visual Art with New Collaboration with Eve Sussman appeared first on Coinjournal.

Geopolitical Tensions Create Demand for Systems to Replace SWIFT

US Treasury Secretary Steven Mnuchin recently threatened SWIFT, the global financial messaging service, with penalties if it does not comply with new US sanctions and cut off entities doing business with Iran, which has created a demand for alternatives to SWIFT.

The Belgium-based institution, SWIFT (Society for Worldwide Interbank Financial Telecommunication), supports over 11,000 financial institutions in over 200 countries and territories with messaging services to facilitate interbank transfers. The action would inhibit Iranian businesses from receiving funds for its exports and paying for imports. This occurred previously in 2012 when the US and EU pressured SWIFT to “cut financial transactions with at least 30 of Iran’s financial institutions, including the central bank”. The financial blockade was lifted in 2016 with the Iranian nuclear deal, but that has since fallen apart under the current US presidential administration.

The recent developments have forced many leaders in Europe to push for an alternative to SWIFT, including German Foreign Minister Heiko Maas and EU Foreign Affairs Chief Federica Mogherini. Russia has already built an alternative, System for Transfer of Financial Messages (SPFS), that now handles the financial transfer data for more than half of Russian’s institutions, according to an RT report. The SPFS was built in the wake of sanctions from the US and Europe for the Crimea issue. Both issues signal a demand for solutions to the monopoly that is SWIFT.

Cryptocurrencies provide censorship resistance and independence

Discussion of international sanctions and economic blockades often leaves out the fact that the penalties will harm thousands of businesses and millions of individuals directly and indirectly. The creation of alternatives to SWIFT mitigates risks for businesses and individuals so they do not have to suffer lower economic well-being for the actions and opinions of government leaders. This trend of searching for alternatives is further exemplified by China’s creation of the Asia Infrastructure Investment Bank to counter the lending power of the World Bank, International Monetary Fund, and Asian Development Bank. Then the BRICS also pursued a similar strategy to break international monopoly power of the G8 by attempting to form more intimate and cooperative relations between Brazil, Russia, India, China, and South Africa. Nevertheless, this diffusion of power can only go so far since these institutions simply turn a monopoly into a duopoly or an oligopoly into a slightly larger oligopoly.

Cryptocurrencies, however, can diffuse power right down to the individual since anyone can be their own bank by opening their own wallet and make transfers to anywhere in the world for a tiny fraction of what it costs through SWIFT and competitors. Additionally, cryptocurrencies are increasingly difficult to shut down since nodes operate all over the world and if a chain ever does become compromised by a monopoly, users can easily fork the chain or move their funds over to another coin in minutes for a tiny amount of money. This protects individuals and businesses from the domestic and international actions of their government as well as outside influence. Cryptocurrencies grant more rights to the individual and separates them from the actions of state leaders.

Dash endeavors to enable everyday censorship resistance

To enable the benefits of censorship resistance and independence of cryptocurrencies, consumers have to use cryptocurrencies as much as possible in everyday life and not use fiat or digital fiat. Other cryptocurrencies have demonstrated issues with everyday operations, whether it is long confirmation times, high transaction costs, or uncertain chain future. Dash, on the other hand, has remained consistent with record low transaction costs, extremely fast confirmation times, great security, and a promising future of chain continuity and additional features. Additionally, Dash offers consumers and merchants optional privacy through PrivateSend, which can become very important for individuals and merchants that are located within countries where they have to worry about being a political target for defying sanctions and/or bad government policy. The combination of these features enables Dash to be a top-tier alternative financial payment service for individuals and merchants that need to mitigate risks created by having a monopoly or oligopoly of international payment facilitators.

eToro Launches Crypto-Based Universal Basic Income Project GoodDollar

eToro, a European social trading and multi asset brokerage company, has announced the launch of the GoodDollar experiment, an open source community project that seeks to reduce wealth inequality by introducing a new cryptocurrency and blockchain platform. eToro is initially injecting US$1 million into the project and is calling for more “brains, ambassador and funders” […]

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Blockchain Announces US$125M Stellar Lumens Airdrop

Blockchain, the Luxembourg-based crypto startup, has announced its first ever airdrop. The company has partnered with the Stellar Development Foundation to distribute US$125 million worth of Stellar lumens (XLM) to its users in what is said to be the the largest airdrop in the history of crypto, and potentially the largest consumer giveaway ever. Stellar […]

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Bitfury Secures $80M in Private Funding Round

Bitfury funding round

Cryptocurrency mining firm Bitfury Group has closed a Series C, $80 million funding round led by EU-based Korelya Capital. The round also included crypto merchant bank Galaxy Digital, Lian and Jabre Group, Dentsu Inc., Armat Group and others.

Bitfury is a diversified blockchain company known for its expertise in developing high-performance computing technologies, processing capabilities and advanced blockchain-based solutions for companies and governments, including the development of a blockchain-based land registry in Ukraine.

The funding round will be used by the company to enrich its software and hardware development, as well as explore other technologies that are emerging alongside the blockchain.

“This private placement enables Bitfury to expand our existing areas of focus, including securing the Bitcoin Blockchain, as well as hardware and software development – and broaden our financial strategic options. It also enables us to concentrate on adjacents such as high-performance computing, including emerging technologies like artificial intelligence (AI),” CCO John Mercurio told Bitcoin Magazine.

Valery Vavilov, CEO and co-founder of Bitfury, said the success of the round was a reflection of the company’s achievements and its ability to meet the needs of “adjacent market segments in high-performance computing.”

In correspondence with Bitcoin Magazine, Vavilov stated:

“We are very pleased with our successful private placement, which enables us to expand our work designing ground-breaking blockchain solutions to governments, businesses, and institutions around the world. Strong support from the investor community also allows us to concentrate on adjacent businesses such as high-performance computing, including emerging technologies like artificial intelligence.

Bitfury made headlines last week when word broke out that the company may be considering going public. When Bitcoin Magazine asked if this private funding changes the prospect of an IPO, Mercurio responded with the following:

“Bitfury is continuously evaluating financing options to support its development strategy, and the IPO is one alternative. But no decision has been made and ultimately it will depend on a number of factors, including the capital markets environment.”

At a time when cryptocurrency miners are being criticized for the energy consumption required to secure public blockchains with high security requirements, Bitfury has made a commitment to using renewable energy. It has also created standard processes for reducing the consumption of energy in its data centers by using immersion cooling technology.

In September 2018, Bitfury announced a bitcoin mining chip called the “Clarke” ASIC chip, which it claims offers the “strongest performance among bitcoin mining chips and is unparalleled in efficiency,” via a Medium post. The company also has plans to integrate Clarke into its range of existing mining products and on its mining farms across the world.

In addition to the Clarke chips, the company also launched its latest computing servers dubbed the Bitfury Tardis. Both the chip and the server will be included in the company’s product offering, the Bitfury BlockBox, per reports on its release.

Founded in 2011 and recognized as the largest, non-Chinese company that provides hardware for bitcoin mining, Bitfury is also known for pioneering the hybrid algorithm Flare on the Lightning Network, which ensures that payment routes can be found as quickly as possible.

This article originally appeared on Bitcoin Magazine.

Blockchain is Airdropping $125M in Stellar Lumens to Its Wallet Users

Stellar airdrop

Blockchain will be airdropping approximately $125 million worth of Stellar lumens to its users, in conjunction with the Stellar Development Foundation. This marks the largest airdrop in cryptocurrency history.

Those interested in taking part must possess a Blockchain wallet and be willing to verify their identity. The first group of customers is set to receive their lumens sometime this week at no charge. Stellar is Blockchain’s first airdrop partner since it launched its official “Airdrops Guiding Principles” framework last month.

Jed McCaleb, co-founder of the Stellar Development Foundation, believes airdrops can be powerful tools when it comes to building the crypto ecosystem and boosting mainstream adoption.

“We believe airdrops are central to creating a more inclusive digital economy,” he said. “Giving away lumens [XLM] for free is an invitation to communities to design the services they need. Our hope is to eventually have global citizens own and use lumens in both developing and developed economies. By working with Blockchain to increase the availability and active use of lumens on the network and leveraging their almost 30 million wallets, we will increase the network’s utility by many orders of magnitude.”

CEO of Blockchain Peter Smith explained what attracted his company to Stellar. “We were looking for a protocol and network built for scalability with an active and rapidly growing ecosystem,” he said. “Stellar was a clear frontrunner, and we’re excited to be working with their world-class team.”

As part of the airdrop, Blockchain is looking to partner with several additional enterprises including the non-profit fundraising software Network for Good, Stanford’s emerging tech initiative and the online computer science education system Code.org. Blockchain says it will release the details of these partnerships in the coming weeks.

Blockchain has aided millions of companies and individuals in both developed and third world nations to get their hands on digital assets. Recently, the company raised over $70 million in a funding round led by Lightspeed Venture Partners and Google Ventures.

Stellar is a distributed ledger network that permits multiple assets and currencies to be digitally transferred, issued or exchanged online. The system boasts a built-in order book, network token and pathfinding algorithm, allowing assets to move more easily between sending and receiving parties.

This article originally appeared on Bitcoin Magazine.

BTCC Announces the “Indefinite” Closure of Its Mining Pool

BTCC Mining Pool

BTCC will be shutting down its mining pool by the end of the month.

According to a recent notice made by the Hong Kong-based exchange, BTCC will deactivate its mining pool servers on November 15, 2018, and cease all operations entirely come November 30.

Citing “business adjustments,” the notice was generally vague about the exact reason for this particular closure. Having started operations in 2014, the mining pool is one of the oldest in the space, while BTCC itself is China’s oldest crypto exchange.

BTCC’s mining pool was one of the world’s more prominent mining pools as recently as June of 2018, but, in the latter half of the year, its hashrate has steadily decreased. BTCC has requested that all current miners “complete the power switch by November 15th” and has stated that they will eventually “release the profits of all miners in time.”

It is unclear at this time what impact this shutdown will have on the regular operations of BTCC’s exchange. The announcement did not go into any specific detail on their other functions, and they have not made any similar announcements about the functionality of the company.

Still, the notice for the shutdown did end on a hopeful note, as the exchange proclaimed, “We firmly believe that the digital encryption assets and blockchain industry represented by Bitcoin will continue to develop and improve!” The announcement even concluded with an optimistic final farewell to the BTCC community that said, “We will see you again!”

At the time of publication, BTCC has not responded to Bitcoin Magazine’s request for comment.

This article originally appeared on Bitcoin Magazine.

Upcoming Bitcoin Cash Hard Fork Threatens Hash War

Bitcoin Cash is facing a potential hash war between backers of the ABC and SV implementations, possibly resulting in disruption or even a chain split.

The contention lies between two competing implementations of Bitcoin Cash: Bitcoin ABC, which intends to implement a variety of improvements to the network, and Bitcoin SV, which focuses on a more streamlined approach and a significantly increased block size. SV is mainly backed by nChain and CoinGeek, while ABC counts support from Bitcoin.com, Coinbase, Binance, and variety of others. The community remains split, and according to Coin Dance’s tally of company support, the ABC roadmap appears to be ahead. OpenBazaar lead backend developer Chris Pacia sees the user support clearly on the ABC side, indicating that value will follow the chain with the most users:

In terms of mining hashpower, however, outcome is less certain, with CoinGeek and SVPool comprising nearly 30% of the last 24 hours’ blocks.

An eerie warning of total destruction

The coming hashpower contest could prove ugly and destructive if parties involved are taken at their word. In a series of tweets, nChain chief scientist Craig Wright issued a strongly-worded threat against the competing ABC client, intimating that he would see to its permanent and total failure:

“A note. Many like to treat me like Casandra. Well, here is your warning to ignore at your peril. We will win this fast, or we will win this slow, but, we will win this. Others would like this to be “nicer”, I would prefer a lesson. I want to have people understand Bitcoin. If it means we spend a year or more slowly bleeding every satoshi of value one by one from the ABC chain, we will. Without exception.

If ABC stays on SHA256d and does not add replay protection, we will hound it. Not until it is weak, not until it is unlisted on every miner and major and home level exchange globally, but until the last CPU running it anywhere globally burns out. If this means chasing a lone dev with a CPU to burn that last vestige of hope, and you think I will not, then, you do not know me! But, you will learn. This is not vengeance. It is a lesson. And I intend to burn it into the hearts and souls of all the socialists in ABC so their great grand children do not forget it!

Have a nice day.”

While the outcome of the hard fork is not clear, and not all parties involved may see Wright’s threats as credible, CoinText CTO Vin Armani expressed belief that the hashpower accrued by CoinGeek and nChain would be sufficient to cause significant damage. Armani released a video on Twitter calling for the hash war to be averted:

Notably, Armani called attention to the potential threat of affiliated miners also conducting similar attacks on other proof-of-work chains, disrupting those networks until their market value and viability significantly decreased.

Hash wars highlight need for governance, need for security model improvements

The emergence of increasingly contentious internal community struggles draws attention to the need for improved governance and consensus systems. Dash has yet to have experienced a similar disruption because controversial decisions can largely be resolved with a masternode vote. The issue of on-chain scaling was voted on in early 2016, with a big-block approach approved by a near-unanimous majority. Earlier this year, a proposal seeking to remove Dash Core leadership over a series of disagreements failed with a nearly 10-1 ratio of approval vs. disapproval. Similar functions in other coins could help resolve community splits before the threat of a hash battle becomes a relevant or necessary option.

The Bitcoin Cash hash war does, however, demonstrate a potential fragility of proof-of-work for security. A recently launched mining pool service promises to maliciously mine empty blocks of other cryptocurrencies to hamper other chains:

Whether or not the threat is credible, it does draw attention to the potential for large mining operations and manufacturers to attack and disrupt proof-of-work cryptocurrencies. Dash’s founder Evan Duffield previously hinted at introducing some manner of collateral requirement for miners in the future, though no public plans to introduce such a requirement have been announced at this time.

eToro Launches Its Crypto Wallet, Key to Opening Up the Market for Investors

eToro, a global trading and investment platform, has announced the unveiling of its crypto wallet, enabling, for the first time, its users to transfer their crypto assets from the platform to store them. According to an announcement, the multi-crypto, on-chain wallet, with multi-signature security – which requires more than one key to make a Bitcoin […]

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Bringing Lumens to Millions

We’re thrilled to announce SDF’s largest lumen distribution to date: an up-to-500 million XLM distribution to users of leading digital asset wallet provider, Blockchain. This airdrop will put the Stellar name and technology in front of Blockchain’s 30 million account holders, and will bring many new users into our ecosystem. Stellar will be only the fourth currency supported by Blockchain; we’re joining Ethereum, Bitcoin, and Bitcoin Cash as top-line options in one of the most popular digital wallets in the world.

Lumen distribution has always been core to SDF’s vision and strategy, and the network has grown enough for mass distributions to make sense. Financial institutions have begun to take advantage of Stellar’s simple asset-issuance protocols, and Stellar now has fiat endpoints all over the world. We offer a cheaper and faster financial system to users with real local impact via a variety of asset-backed fiat tokens. No other blockchain can match our combination of global reach and local usability. Our vision of a world where all assets–from currencies to carbon credits–can move over the internet with ease, is coming to fruition.

Blockchain has created a secure and user-friendly way to hold, send, and receive digital assets. Giving away lumens to their broad, multinational userbase will grow Stellar where we most want to see growth: at the frontier of crypto adoption. Blockchain’s intuitive wallet is ideal for getting lumens into the hands of the first-time, crypto-curious user as well as more experienced users looking for access to the next generation of cryptoassets. We look forward to supporting them over the next few months as they distribute lumens to their new and existing community members.

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Andrew Fleming, Former Dow Jones Executive, Joins BTC Inc as Head of Media

Andrew Fleming, Former Dow Jones Executive, Joins BTC Inc as Head of Media

BTC Inc, the parent company of Bitcoin Magazine, is excited to announce the hiring of Andrew Fleming to be the new head of its media division. The addition of Fleming to BTC Inc’s management roster is the latest example of an emerging trend of big-name talent leaving institutions in order to join the crypto and blockchain industry.

Before coming to BTC Inc, Fleming was the Head of Content Platforms at Dow Jones, parent company of the Wall Street Journal, MarketWatch, Barron’s and many other leading publications. Prior to Dow Jones, Fleming was the VP of Product at Business Insider, where he was instrumental in building the company from a 13-person startup to a global media powerhouse. This move comes a few months after BTC Inc’s hiring of Jarrod Dicker, former VP of Innovation at the Washington Post, to be CEO of Po.et, a media blockchain initiative seeking to recapture value for content creators.

Fleming’s new role will encompass all parts of the BTC Inc media division: Bitcoin Magazine, Distributed.com, Distributed events, The Let’s Talk Bitcoin network of podcasts, and print properties.

“There’s lots of excitement in crypto, of course, and it’s something I’m really interested in,” said Fleming. “At Dow Jones we look at what’s happening and report on what we see, but to really understand the space, however, you have to be in it. That’s what landed me in a crypto media company.”

He added: “I come from a science background. The scientific method is a framework that produces new information, so I’ve always tried to apply that to what I’m doing — understand the landscape, collect the data, do the experiment and learn from it.”

“Hiring Andrew puts our media business in a position to better serve the growing audiences in the blockchain and crypto space, to deliver more value to our advertisers and to expand the mindshare of distributed technologies,” said David Bailey, CEO of BTC Inc. “He’s been a pioneer in the traditional media landscape, and with our team and audience he’s poised to take our media business to the next level.”

A veteran of both the print and online news worlds, Fleming notes that both Business Insider and BTC Inc share similar objectives:

“Both are saying, ‘Media as it is today isn’t working; how can we make it better?’ Both are also coming from an outside perspective on how media should work, which enables fresh and new-flowing ideas. It’s the new ideas for products and vision that can help catapult us to the forefront of both the crypto space and the media industry in general.

“BTC Inc, in particular, really sits at the heart of that world. Bitcoin Magazine has the cache of being one of the first publications, the company is widely connected and the people here know the people who have built this industry and who are building it.”

For Fleming, one of his top priorities for Bitcoin Magazine, in particular, will be to help the team understand and focus in on how to get the best information to the widest audience, with an emphasis on quality over quantity.

“That’s key for Bitcoin Magazine, in particular, because of its age and establishment in the space,” said Fleming. “It needs to be the authoritative voice on what’s happening and it needs to be accurate and well-investigated. We know that’s true already; we have to prove that to the rest of the world.”

This article originally appeared on Bitcoin Magazine.

J.P. Morgan Now Supports Blockchain Tech, Highlights Importance of Open-Access Code

J.P. Morgan, who’s CEO Jamie Dimon previously called Bitcoin “a fraud” and would “fire a trader in a second” for dealing in Bitcoin will now be pursuing Quorum, an enterprise version of Ethereum.

Quorum’s chief goal is to enable the operation of smart contracts and will start with “tokenised gold bars to allow sustainable miners to earn a premium on global markets”. J.P. Morgan’s head of blockchain initiatives, Umar Farooq, said that they “are the only financial player that owns the entire stack, from the application to the protocol”.

The article cited that “JP Morgan and Credit Suisse are members of the Enterprise Ethereum Alliance, which is developing standards for the technology”. Umar Farooq also highlighted that since they are apart of the Ethereum network, they can benefit from upgrades and tap the development community.

“We are all building private networks but there is a long-term thought process of what happens when you get to a point where you need to do private-public convergence – a connection –and at that point, if you are in some ways a derivative of a public platform, it could become easier”.

Growing interest in blockchains highlights importance of open-source access

Even though this is a 180 degree turn for J.P. Morgan from earlier statements, it is not the first time that a large institutional bank has signaled interest in blockchain technology. Fidelity has launched its own custody account and has taken a 15% stake in Neptune Dash, the publicly traded fractional Dash Masternode ownership company. Then HSBC India and ING Bank Belgium reportedly made one of the first blockchain-based trade transaction platforms. Banks are increasingly finding security and cost advantages to integrating blockchain technology into their operations.

However, this growing interest is also a warning to the importance of open-source access and decentralization. While it can be difficult for any system to be trustless since most people are not an expert in every field and must eventually default to trained expertise, open-source access and decentralization mitigates risks of trusting different systems. Allowing anyone to audit and edit code instills confidence in users that the system they are using could withstand the scrutiny. However, banking blockchains are increasingly becoming private and enterprise versions, which become closed off from the public versions available on github. This introduces an extra degree of risk since the consumer is less aware if the bank implemented various changes that made the private version less secure, more expensive, or other violations of peer-to-peer, decentralized, digital currency.

Dash focusing on building open-access and decentralized applications

Dash has been focused on becoming an easy to use cryptocurrency in everyday life, which requires certain modifications to make it easy to use for the average non-tech consumer. Dash is working towards that with Evolution by implementing a series of upgrades to make Dash’s user interface and user experience much more friendly. However, equally important as usability is the ability for anyone to develop decentralized applications (DApps) on top of the Evolution platform to provide consumers with necessary services. Andy Freer, Dash Core Group’s chief architect, just left the team because he was confident in Evolution’s near completion and wanted to focus on developing DApps and helping teach new developers how to create DApps on top of Dash.

This platform will allow consumers and merchants to have access to more applications and data, but will still remain open so either they or other developers can verify and check the code and data. Dash’s strategy allows for banks and other entities to develop useful applications on Dash without closing off their ecosystem from consumers and merchants and their ability to check code and data. Even if banks still create their own networks, Dash will provide a playground for developers to be incentivized by the Treasury to easily create open-source competitors.

BancorX Becomes the First dApp Across Blockchains

BancorX has become the first dApp to work across blockchains, now supporting both the Ethereum Network and EOS. This allows users of either system to swap ETH Tokens for EOS Tokens and vice versa, without losing control of their tokens. Previously, users would have to use a centralized service, like an exchange, to make cross […]

The post BancorX Becomes the First dApp Across Blockchains appeared first on Coinjournal.

BitMEX Launches New Fork Monitoring Website to Keep Track of Bitcoin Forks

Bitmex Fork Monitoring

BitMEX just launched a website to make it easier to keep tabs on hard and soft forks on the Bitcoin blockchain.

According to a recent blog post, the research arm of BitMEX is sponsoring a new website, ForkMonitor.info, which is connected to 13 nodes of Bitcoin and its hard forks, most notably Bitcoin Cash.

The website will monitor many different aspects of the networks and their associated blockchains, with the ultimate goal of keeping track of these variables during forks to be “potentially useful in helping to detect unintentional consensus bugs.”

The article says that BitMEX is launching this new website in anticipation of an upcoming hard fork for Bitcoin Cash, which is expected to take place on November 15, 2018.

BitMEX Research took to Twitter to announce its new tool. In the comment section, the company continued to take shots at Craig Wright, whose infamous claiming of Satoshi Nakamoto’s identity has made him a pariah in the industry, for his part in the November 15 fork.

“[Craig Wright’s] (AKA “Fake Satoshi”) node, Bitcoin SV, is expected to fork off from the network onto a new chain,” the thread reads.

The Twitter thread went on to explicitly state that the focus of Fork Monitor will be to examine Bitcoin’s network, insinuating that the website’s highest priority isn’t necessarily looking to keep precise notes on Bitcoin Cash and its own forks.

Still, the planned date of the BCH hard fork has given BitMEX ample time to build a functional monitoring website that will eventually gather more hard data. At its current stage, Fork Monitor is something of a pilot project, albeit one that “will hopefully provide useful information to some stakeholders” in the future.

This article originally appeared on Bitcoin Magazine.

Dash Core Chief Architect Announces Departure to Work on Decentralized Dash Applications

The Dash Core team’s chief architect, Andy Freer, has announced his departure from the team to work on decentralized applications (DApps) for Dash.

In an announcement today, Freer indicated that he would be leaving the Dash Core team now that he feels design and development of the Evolution platform is sufficiently complete:

“Now that the Evo[lution] protocol design is pretty much complete and implementations are running on DevNet I feel my main work in Core is done and I met my commitment to Evan that I made back in 2016 to help move Dash beyond raw, hard to use payments to solve a mainstream, usable, scalable and economical cryptocurrency for the future.”

A key developer since Dash’s early days, Freer worked closely with Evan Duffield, Dash’s founder, on designing the network’s architecture for years. Freer believes that the current Dash Core development team is one of the best in the world, and can deliver tools to achieving real freedom for the world’s benefit:

“It’s been a pleasure and I feel privileged to have worked with so many smart and talented developers, I believe the dev team is the best in the space and provided they can appreciate and stay focused on Evan’s vision which is embodied in the current Evo[lution] design, I believe we have the potential to grow a usage and use case base much bigger than is imagined today with the current crypto space through which increased decentralization and personal independence in all aspects of people’s lives can only be a good thing, and I remain fully committed to that larger goal.”

Following Duffield’s departure from the Core team and Ryan Taylor’s transition from a finance role to CEO, Freer previously served as the team’s CTO. He transitioned to a role as chief architect when Bob Carroll took over as CTO this summer.

Dash Evolution platform will introduce a rich DApp ecosystem

In addition to announcing his departure from the Core team, Freer indicated that he would remain busy working in the Dash ecosystem, specifically with the development of DApps, decentralized applications built on top of the Evolution platform to provide a wide range of additional functionality for the network, which he believes will help lead to mass adoption:

“My main focus now after some downtime will be on creating DAPs for Evolution in some new flexible and creative capacity, i.e. writing DAPs and helping others to write DAPs, as its killer DAPs that will be the key to mainstream adoption of Dash currency by providing new incentives and reasons to signup, integrate, use and monetize with Dash online as a differential to centralized payment alternatives. Once that has traction, it will lead to a critical mass of Dash ownership to then warrant uptake within the larger financial system and commerce markets and actual mainstream payments.”

Originally envisioned purely as a way to provide a smooth and seamless user experience for cryptocurrency while maintaining full decentralization, the scope of Evolution has shifted over the years to include a full decentralized platform for DApps. As outlined in demo videos released this spring, Dash will allow anyone to develop DApps running on the platform, with data stored on the Dash Drive, a distributed storage system based on IPFS (interplanetary file system), with hashes referencing this data stored on the blockchain. This platform promises to enable numerous new use cases for the Dash network from end-to-end encrypted messaging, supply chain management, social networking, genome sequencing, and many more.

Dash development further decentralizes with a growing number of independent projects

Freer’s move to development elsewhere in the Dash ecosystem further continues the trend of decentralization and growth of Dash’s development. Dash’s founder created Dash Labs to work on research and development, and the organization recently released news that it has been working on the Dash Labs Data Collection Protocol, a decentralized platform for submitting academic research for peer review, facilitating access and monetization, using Dash. Arizona State University has also produced Dash-specific research, most notably scaling research showing that Dash’s network can easily grow to handle transaction levels approaching what PayPal currently processes.

Additional key development projects in the ecosystem include Dash Nexus, a platform for facilitating and streamlining the Dash treasury proposal and governance system, and MyDashWallet, a mobile and web wallet enabling additional functionality such as PrivateSend, hardware wallet support, seamless tipping across many platforms, integrated exchange into and out of other cryptocurrencies, and many more planned for the future. MyDashWallet also conducted an impromptu stress test increasing the record number of transactions processed in a single day far beyond that of Bitcoin, with a more extensive stress test planned for this weekend.

China’s Central Bank Wants to Put the Damper Airdrops: Report

airdrop china

The People’s Bank of China (PBoC), China’s central bank, has its eyes on cryptocurrency companies that run airdrop campaigns in the country.

In its most recent financial stability report for 2018, which was published on Friday, November 3, 2018, the bank said there has been a surge in the number of “disguised” Initial Coin Offerings (ICO), including the free distribution of crypto tokens through airdrops, despite its effort to clamp down on their activities.

Based on the report, the bank states that the companies running token giveaways are evading China’s blanket ban on ICOs by issuing free tokens to the investor, while keeping a large chunk of the total supply for speculation on a crypto exchange, where speculation would drive the prices up so they can profit.

Last year, the central bank banned ICOs, calling them “illegal fundraising” that were targeting innocent investors. According to the PBoC report, before the ban took effect, 65 ICOs had been completed up until July 18, 2017, while only five were launched before 2017. This sudden jump also attracted over 105,000 investors who contributed a total of about 2.6 billion yuan ($377.3 million), a figure, the PBoC states, accounted for 20 percent of the total ICO funding raised globally by blockchain startups.

The central bank also made its concerns known about crypto firms who had moved their operations overseas but were using local agents to invest on behalf of domestic investors in China. The vice governor of the PBoC had warned foreign ICOs targeting Chinese investors at a separate event, earlier this year. He had stated at the time:

“Any new financial product or phenomenon that is not authorized under the existing legal framework, we will crush them as soon as they dare to surface.”

Not one to rest on its laurels, the PBoC said it would continue to monitor the crypto industry, coordinating with other agencies to help safeguard and protect the interest of investors.

The bank’s toughened stance with cryptocurrency began in 2013, where it published the “Notice on Precautions Against the Risks of Bitcoin,”where bitcoin was not deemed to be legal tender in China—to the most recent ban on ICOs in 2017.

Since then, there has been an onslaught of anti-crypto measures in the country. Earlier this year, commercial venues were banned from hosting crypto events, WeChat blocked some high profile blockchain related accounts, while Tencent, Baidu and Alibaba issued statements announcing restrictions put in place to limit crypto-related activities on their platforms.

This article originally appeared on Bitcoin Magazine.

Thai Rappers Adds Song on Zcoin’s Blockchain to Fight Censorship

A rap song titled Prathet Ku Mee (Which is My Country), centered on government oppression in Thailand has garnered over 25 million views on YouTube. The viral song, which is topping Thailand’s iTunes download list as at October 27, 2018, was released by Thai rappers who dropped fiery rhymes about government corruptions, censorships, military dictatorship […]

The post Thai Rappers Adds Song on Zcoin’s Blockchain to Fight Censorship appeared first on Coinjournal.

These DApps Don’t Need a Blockchain

Interest in open-source software and decentralization has been on the rise over the past decade with new innovations such as Bitcoin. Through the rise in popularity of Bitcoin came the idea that this blockchain technology could be generalized to create a variety of new, decentralized applications (DApps) that would give internet users alternatives to the […]

The post These DApps Don’t Need a Blockchain appeared first on Coinjournal.

These DApps Don’t Need a Blockchain

Interest in open-source software and decentralization has been on the rise over the past decade with new innovations such as Bitcoin. Through the rise in popularity of Bitcoin came the idea that this blockchain technology could be generalized to create a variety of new, decentralized applications (DApps) that would give internet users alternatives to the […]

The post These DApps Don’t Need a Blockchain appeared first on Coinjournal.

Thai Rappers Adds Song on Zcoin’s Blockchain to Fight Censorship

A rap song titled Prathet Ku Mee (Which is My Country), centered on government oppression in Thailand has garnered over 25 million views on YouTube. The viral song, which is topping Thailand’s iTunes download list as at October 27, 2018, was released by Thai rappers who dropped fiery rhymes about government corruptions, censorships, military dictatorship […]

The post Thai Rappers Adds Song on Zcoin’s Blockchain to Fight Censorship appeared first on Coinjournal.

Dash Embassy D-A-CH Spreads Dash Awareness with Roadshow and ATMs

Dash Embassy D-A-CH recently has been able to increase Dash awareness in German-speaking Europe with continuation of its roadshow and crypto ATMs.

Dash Embassy D-A-CH started their roadshow series on July 23, 2018 and have attracted over 200 attendees across 5 tour stops at universities, industry organizations and coworking spaces and their most recent stop was at the Blockchain Hotel in Essen, Germany. Dash Embassy D-A-CH told DFN that most attendees are more interested in trading than using Dash in everyday life, and thus they find the tax information part to be the most interesting. However, Dash Embassy D-A-CH said that “even though there is not a big problem with the Euro at the moment, people start thinking about the money system and Dash is the eye opener for them”. Dash Embassy D-A-CH then further explains to attendees that the volatility decreases as more merchants and consumers start using Dash in everyday life and how Dash is able to fund its own adoption campaigns.

“One thing every attendee is impressed of is the DAO structure, the treasury system and the projects and DFOs we have all around the globe including the services we offer with Dash Embassy D-A-CH. People like the possibility to get in contact with a cryptocurrency directly without running through all the communities and forums”

Then it was recently announced that 40 multi-coin, including Dash, ATMs will be launched in German-speaking Europe. Dash Embassy D-A-CH emphasized that the ATM provider already intended to integrate Dash so they are not responsible for the integration, but will make “sure that Dash will be promoted on the Top-Screen and are supporting them by finding locations for their ATMs, so they can promote Dash next to the machines”. The current plan is to launch the ATMs by the end of the year and will try to place them “into Dash accepting merchants, so the merchants can handle customer service and support”, Dash Embassy D-A-CH said.

Spreading Dash awareness with strategic information

The team at Dash Embassy D-A-CH have been able to spread awareness of Dash by leveraging these events to find and energize early adopters. They highlighted that while everyday users might be limited, of the merchants that do integrate Dash, they “deliver value to the network by being a platform and educator for their customers so they will help us to succeed on the long run”. They also mentioned that merchants that operate in international markets have been the biggest sector adopters of Dash and the team plans to focus on this sector more in the future. They are also planning to increase adoption with a push for individuals sending remittances back to Turkey, which is seeing increasingly unstable economic conditions. They will start by talking with some of the major cryptocurrency exchanges in Turkey at the Blockchain TR Summit in Ankara in November.

The Dash Embassy D-A-CH then plans to create a “complete Dash ecosystem” located across German-speaking Europe with the ATMs.

“People will be able to get Dash in the way they already know from getting Cash and they will be able to spend it directly at the merchant. We hope this will help people to understand, that Dash can be used as a currency instead of a digital investment vehicle.”

They also added that even if consumers do not buy or use Dash from the ATMs, Dash will still have a greater renaissance than it did previously. The team is working hard to find individuals that will use Dash in almost any capacity to increase Dash usage and awareness.

Finding and educating potential Dash users

Cryptocurrency is still a niche subject since many outside the cryptocurrency ecosystem have very limited knowledge of the topic. Then learning more about cryptocurrency is difficult since consumers have to sift through forums and blogs, which are often cluttered with inside jokes and high-level discussions. Dash helps solve this problem by reaching out to find the marginal consumers likely to adopt Dash and cryptocurrency and gives them all the relevant information that they desire. Dash Documents is one of the best examples of an easily digestible repository of detailed information on how Dash works, which makes the adoption process easier and lowers the switching costs from the old financial system. As the Dash Embassy team mentioned, many in the first world are more interested in trading than spending Dash, but it is nevertheless a step forward as Dash is introduced to more potential users, educates consumers on how Dash is unique, and works towards achieving more adoption by word of mouth.

Bitcoin News Summary – November 5, 2018

The post Bitcoin News Summary – November 5, 2018 appeared first on 99 Bitcoins.

Here’s what happened this week in Bitcoin in 99 seconds.  Former US congressman and famous Libertarian, Ron Paul, advocated for the abolition of all taxation on cryptocurrencies. Paul said such a move may prevent recession. He also supported President Trump’s recent criticism of the Federal Reserve. Venezuela’s state cryptocurrency, the Petro, was officially launched. […]

Popular Ethereum DApp Metamask to Release Mobile Client

A mobile version for MetaMask, the Chrome browser extension for accessing DApps, was revealed at the Developer Conference (Devcon) held from October 30 to November 2 in Prague.  Speaking on the release of the new mobile app, CEO of ConsenSys Joseph Lubin wrote on his twitter handle: “Everyone’s favorite Ethereum browser extension is coming to […]

The post Popular Ethereum DApp Metamask to Release Mobile Client appeared first on Coinjournal.

Moving Cryptocurrency from “Hopium” to the Antidote

Cryptocurrency is coming down from a high.

I remember the high and crazy days of peak bull market from the end of last year, when absolute global domination and riches beyond our wildest dreams were a mere months away. Now, coming back from another cryptocurrency event, I see that the energy has died down, but the approach is the same: when moon? The crypto faithful, legitimately some of the modern age’s greatest pioneers, have largely become hype fiends.

Most crypto conferences run on “hopium” and fandom

Not intending to take too pessimistic of a view, but for the most part, cryptocurrency and blockchain conferences tend to be feeding frenzies of hype. Ever-newer and snazzier projects are presented in slick presentations and demos, while stars and influencers rehash the key tenets of the system. Put more clearly, the cryptoverse revolves around two main products: hope and fandom. The former consists of the happy energy sparked by the beginning of a new idea, before the reality of the challenges and hard work required set in. As for the latter, it describes valuing something for its own sake, in hashing and rehashing basic principles and key tenets, and in sharing a mutual love for something outside of its practical use with other like-minded fans. Conspicuously missing is use in the global economy outside of these two reasons, which makes the above described cocktail a temporary drug.

Plans and potential offer the same “hit,” but the crash comes eventually

While “hopium” may describe the most superficial aspect of the cryptospace, it also encompasses a certain degree of real progress and potential. A “hit” can be taken long after the initial founding idea of a project. This is done through real work, development, forming of partnerships, promotion, and so on, but only to the degree that presents another convincing platform for yet another hype cycle to begin. In this way, a project can continue on with higher and higher valuations, year after year, and yet never deliver anything that will see use by the average business or consumer. Eventually, however, the ability to keep the excitement going without legitimately changing the world dies down, and the crash hits.

We talk about adoption as “someday,” but development without use today will be misguided

Now, of course, the logical argument then is: “Well crypto is still experimental, of course it’s normal to focus more on building things before they’re ready to be used.” Fair point, although I’d like to point out two factors that can break the connection between development and eventual use. First, cryptocurrency is still very much in the new excitement phase. This means that the connection between speculative valuation of development and commercial valuation of product may not be as strong as in more established industries, as the market doesn’t yet know what it’s looking for and is more apt to be forgiving of creation without use cases. Second, the barriers to investing are so low that there need not be any realistic accountability to ever deliver real value. Even well-meaning development may never amount to anything used in the real economy without the pressure to deliver something to investors that is not only tangible, but that is useful and used.

Because of this, it’s imperative that projects be developed for use today. A basic working product, focused and promoted for consumer or industry use, will provide the necessary feedback on if the project is even viable, and if so what next steps development should take. Without it, development is just experimental and only good for flashy demos to get the most basic of investors excited.

The “call-to-action challenge”

In order to better direct efforts towards this mythical real-world use, I propose you do the following when presenting on a cryptocurrency project: turn your audience into permanent users. You’ve just pitched some world-changing thing, now set them up to use it in a recurring way that will make sense in their daily lives, not just a one-off demonstration that the new user will forget. Create the same situation and result as a salesperson in a local store: your customer will accept your pitch, buy (or otherwise receive) your product, enjoy it, and continue to use it. If you can’t do that, then either your pitch or knowledge of the project isn’t good enough yet, or, more likely, the project just isn’t useful today. If you’re a potential user, I would recommend taking a presenter to task on this challenge. If they can’t turn you into a regular user of the product today, whose regular life is in some way facilitated or improved by the technology, then eye the project with heavy skepticism for the time being. Harsh, I know, but necessary to begin moving past the hopium addiction.

The crypto community can only return back to the easy hit for so long before the whole field ends up destitute and broken. The antidote, the cure to the cycle of instant gratification and the ticket to a healthy and dominant ecosystem, is inserting present-day business applications into all high-minded discussions and presentations. It’s just good business.

This Week In Dash: October 29 – November 3

This week has been another fabulous week for Dash with some awesome news developments! Continue reading to get a summary of the week!

Dash Community Outreach of the Week:

  • Dash Colombia Furthers Dash Adoption with Dash Conference: The Dash Colombia team hosted a conference this past weekend to educate current and new Dash users about the ecosystem. The event also allowed merchants to buy and sell locally made goods for Dash. However, the conference was an abnormal activity for Dash Colombia since they typical focus on their Invites (Invita) program that emphasizes getting new individuals setup with and using Dash wallets.
  • Dash Embassy Thailand Focuses on Tourism Industry: The newly launched Dash Embassy Thailand is focusing adoption efforts on the large and rapidly growing tourism sector of Thailand. In their first month of operation, they have hosted 5 meetups, totaling 143 attendees, and got 8 merchants to accept Dash. Their Dash Tuesday events have so far seemed to be the most popular with a diverse selection of attendees, but they have hosted specialized events for different topics such as cryptocurrency legal compliance for businesses.
  • Dash Force Meetup Contest: In October, Dash meetups were held in Austria, Venezuela and Africa and they were posted on meetup.com, Facebook, Twitter, and Evernote. Head on over to see who won some Dash and how you can organize your own meetup and potentially win some Dash!

Dash Integrations of the Week:

  • CoinLogiq Makes Cryptocurrency Access Easier for Latin Americans: CoinLogiq provides two-way ATMs in Latin America to aid the liquidity and remittance issues individuals face in these countries. They currently have ATMs in Colombia and are expanding to Brazil and Venezuela. Dash adoption is booming in Venezuela, Colombia, and Brazil, but there is nevertheless still risks for families that need to pay certain bills that do not currently accept Dash. These ATMs help bridge that adoption gap.
  • Cryptocurrency Debit Cards Help Bridge Adoption Gap: Cryptocurrency debit cards allow consumers to use their cryptocurrency in areas where there is not wide cryptocurrency acceptance. FuzeX made their initial announcement to integrate Dash a couple months ago, but recently celebrated the announcement with a signing ceremony at Money 20/20 with the Dash Core Team. Paycent and PolisPay are some other crypto debit cards that trying to aid Dash consumers by increasing their ability to spend Dash in everyday transactions.

Dash Adoption of the Week:

  • 4,000 Merchants Accept Dash, Dash Hashrate Reaches New Highs: There are now over 4,000 merchants, worldwide, that accept Dash, which is also potentially a conservative number since Dash accepting multi-coin POS providers further add to these numbers. Then the Dash hashrate is now at an incredible 2.89 petahashes, which is higher than the previous high of 2.63 petahashes reached in December and Dash is now only 10% of that previous exchange price. This signals rising confidence in Dash, despite the bear market, as more individuals dedicate more resources to help secure the Dash network.
  • Venezuela Utilizes Social Media To Reach More Consumers: Dash usage in Venezuela recently got a writeup in MarketWatch for its significant role in alleviating financial and monetary pains of Venezuelans. This adoption has been possible due to the on-the-ground work by the Venezuela community outreach groups, such as Dash Venezuela. Dash Merchant, Dash Help, and Dash Text also recently released results from their social media influencer campaign from the first two weeks. Dash Help has seen 624 new Instagram followers, while Dash Merchant received 1,434 new followers on Instagram.

Dash Market Research of the Week:

  • Dash India Survey Reveals Indians Unsatisfied with Remittances: A new survey conducted in India by Dash India (aka Remit Dash) has shed light on just how much Indians are unsatisfied with their current remittance services. The average transaction rate is around 5%-7.5% but can be even higher and can take 3-7 days or even longer to process. When respondents were asked if they were satisfied with their rates and lead times, a majority either ‘disagreed’ or ‘strongly disagreed’. The total Indian remittance industry is $70 billion USD, which provides a huge opportunity for Dash.

General News of the Week:

  • Bitcoin Whitepaper Turns 10: On October 31, it became 10 years since Satoshi Nakamoto introduced the whitepaper of a peer-to-peer, decentralized, digital currency. Bitcoin revolutionized how individuals could transact, save money, and escape the current monetary and financial framework. However, Bitcoin has since become bogged down with scaling issues. Dash was founded in 2014 by Evan Duffield and improved upon the many features of Bitcoin with enhancements such as the X11 algorithm and the Dark Gravity Wave difficulty-adjustment algorithm. Dash soon introduced InstantSend, PrivateSend, Masternodes, Sporks, and one of the first and longest running DAOs in the cryptocurrency space to help achieve the original goals of creating a peer-to-peer, decentralized, and digital currency.
  • Cryptocurrency Businesses Thrive in a Bear Market: Coinbase recently announced Series E funding for $300 million USD, which places its total valuation at $8 billion USD. Coinbase also expects revenue of $1.3 billion USD for 2018 with a profit of $456 million USD, which is a major increase from revenue of $17 million USD in 2016 with a net loss of $16 million USD. Other sector leaders such as Binance is projecting $1 billion USD in profit in 2018 and Bitmain is on target for $10 billion USD in revenue. These numbers reflect that consumer usability brings in revenue and positive potential even if exchange prices are not rapidly increasing, which bodes well for Dash, which is pursuing everyday usability by consumers.
  • Government-backed Cryptocurrencies Highlight Need for Open Source Collaboration: More and more stablecoins are emerging, which are either government funded such as the Petro or are privately funded and attempt to peg to a currency like the USD, such as Tether or USDC. Dash Core Group CEO, Ryan Taylor, recently said how central bank-issued cryptocurrencies are the “inevitable future”, but also highlighted that the majority of the innovation will come from other areas of the cryptocurrency industry. Dash is pursuing that innovation by enabling everyday usability and ease of use, which helps establish a real value and mitigates speculation that contributes to extreme price volatility.

Dash Media of the Week:

  • Three Amigos Interview Karen Hsu & Lorenzo Rey: Karen is head of growth at Blockcypher and Lorenzo is the CTO of Dash Text. Dash Text discussed their recent official launch and how the system harnesses Blockcypher’s API to enable individuals to make Dash transactions via SMS text messages. Dash Text is an integral service for many individuals in developing nations that do not have smartphones. Make sure to check out this video as you do not want to miss this knowledge!

It has been a tremendous week for Dash with awesome community outreach, integrations, adoption stats, and overall developments! Stay tuned into our site and social media networks to see all the upcoming Dash News! We hope that our content and coverage was very informative and enjoyable this week and we cannot wait to see what awesome Dash News awaits us next week!

 

Dash Podcast 76 – Feat. Karen Hsu & Lorenzo Rey (DashText.io)

Video re-post of episode 76 of the three amigos podcast with special guests Karen Hsu & Lorenzo Rey.

The 3 amigos podcast takes place every Friday at 3pm EST / 7pm UTC.

The Dash Force News 3 amigos podcast is now available to listen to on the following platforms:

🎙 Itunes
🎙 Tunein
🎙 Stitcher
🎙 Google Play
🎙 Overcast
🎙 Podbean

If you haven’t done so by now, can you please make sure you like and subscribe to the Dash Force News YouTube channel. Thank you to the Dash community for your continued support.

 

Coinbase Is Officially Adding Support for Basic Attention Token (BAT)

BAT Coinbase

On November 2, 2018, Coinbase announced that it would be integrating support for Basic Attention Token (BAT), an ERC-20 token that is designed to work out-of-the-box with the privacy-centric Brave Browser, on CoinbasePro.

BAT will initially trade against USD Coin (USDC), a stablecoin that Coinbase developed with Circle Ltd. and recently added to its platforms. The new offering is not available on Coinbase’s primary platform, and the company said it would make a separate announcement when this occurs.

The offering is being integrated on Coinbase Pro in the following order of stages: “Transfer-only,” “Post-only,” “Limit-only” and finally a “Full trading” stage.

“If at any point the BAT/USDC order book does not meet our assessment for a healthy and orderly market, we may keep the book in one state for a longer period of time, or suspend trading as per our Trading Rules. Any other BAT order books we launch will also go through the same stages,” according to a Coinbase blog post.

“We will accept deposits for at least 12 hours prior to enabling trading. Once sufficient liquidity is established, trading on the BAT/USDC order book will start … BAT trading will be accessible for users in most jurisdictions, but will not initially be available for residents of the state of New York,” the Coinbase blog post continued.

The newly added token is the latest in a list of cryptocurrencies that Coinbase said it was “exploring” back in July of 2018, and it comes on the heels of Coinbase’s listing ZRX last month.

This article originally appeared on Bitcoin Magazine.

Op-Ed: Why Bitcoin Users Should Ditch Apple and Google for Purism

Major tech companies have received increased scrutiny in 2018, especially when it comes to how they’re handling user data. Internet users are becoming turned off by how much Facebook and Google know about them, and Apple has taken the opportunity to remind everyone they’re more interested in selling hardware than tracking your online activity. Much […]

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Dash Text Launches in Venezuela, Opening SMS Payments

Dash Text launched in Venezuela today, allowing users without smartphones to send and receive Dash using SMS enabled cell phones on the Movistar and Digitel networks. Dash Text was created through a partnership with BlockCypher. Rumors have it that Dash is becoming more popular in Venezuela. I have yet to see convincing proof of that. […]

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SEC’s End-of-Fiscal-Year Report Reveals Heavy Action Against ICO-Related Fraud

SEC ICO report

The U.S. Securities and Exchange Commission (SEC) has released a report detailing actions taken against fraudulent ICOs and financial ventures, and, indeed, the year has been wrought with cases. The report details actions for 2018’s fiscal year, which ended on September 30, and offers insight into the ICO-related fraud that has seemingly come to light over the past several months.

Misconduct actions against ICOs and similar cryptocurrency ventures are led by the organization’s Cyber Unit, which became fully operational this year. The SEC explains in the report, “We believe our approach to enforcement in this space has been thoughtful and consistent. Importantly, it has provided a template for authorities in other countries, where fraud and misconduct targeting U.S. investors often have been based.”

The report regards ICOs as “high-risk investments,” as many “lack viable products or established track records.” The document also says that many contain shady business models or are unable to safeguard digital assets from theft by hackers, while others are completely fraudulent and operate under the guise of garnering business capital.

Since the formation of the Cyber Unit, the SEC’s actions against cyber-related misconduct has increased heavily. In 2018, the organization brought forth 20 standalone cases related to financial fraud, 12 of which had to do with ICOs and digital assets. At the end of the fiscal year, the SEC states that it had roughly 225 cyber-related investigations occurring at once.

One of biggest cases against an ICO involved two individuals who had opened a venture known as TokenLot LLC, which they described as an “ICO superstore.” The SEC filed charges against both figures for operating as an unregistered broker-dealer and for participating in unregistered offerings, though the charges were later settled in mid-September.

The SEC also obtained an emergency order halting an ICO led by Titanium Blockchain Infrastructure Services, Inc. and its president Michael Alan Stollery, a self-described “blockchain evangelist.” That ICO raised roughly $21 million from thousands of investors, both in and out of the U.S., but the SEC became involved after it received complaints that Stollery had lied about Titanium’s business relationships with the Federal Reserve and several other established businesses including Verizon, PayPal and the Walt Disney Company. Additional complaints also claimed that Titanium’s website contained false testimonials from corporate customers.

Other instances involved the cyber intrusion of a broker-dealer and investment advisor in Iowa. The intrusion compromised the personal information of several thousand customers. The SEC charged the firm with violating the Identity Theft Red Flags Rule — also known as Regulation S-ID — which works to help protect investors against the risks of identity theft. The SEC also charged another defendant who had allegedly been manipulating prices of Fitbit securities through false regulatory filings.

The SEC acknowledges that ICOs have become a popular method of raising capital for startups and new businesses. While representatives do not wish to stifle innovation in the financial space, they have worked hard over the past several months to educate investors regarding which fundraising efforts may or may not be legitimate. Methods of informing investors include releasing public statements and enforcing trading suspensions. The SEC has also recommended enforcement actions against companies that seek to violate registration protocols or engage in unlicensed broker-dealer activity.

In addition, the SEC has implemented harder methods of fighting fraud such as the Share Class Selection Disclosure (SCSD) Initiative, which is designed to swiftly identify and remedy widespread financial violations. The SEC is now planning to enforce SCSD standards to ensure the return of substantial funds to retail investors that have been cheated by fraudulent ICOs.

To view the full report, click here.

This article originally appeared on Bitcoin Magazine.

Winklevoss Twins Sue Charlie Shrem For Allegedly Stealing 5,000 Bitcoin

Winklevoss Shrem lawsuit

The Winklevoss twins have filed a lawsuit against bitcoin investor Charlie Shrem, alleging that Shrem “stole” 5,000 bitcoins from them in 2012.

According to a recent report released by the New York Times, Charlie Shrem has made several large purchases over the past year, including multiple real estate properties, luxury cars, powerboats and a $2 million house.

Cameron and Tyler Winklevoss have since filed a civil suit against Shrem, alleging that these recent purchases were made using bitcoins Shrem stole from the pair in 2012.

When Shrem was arrested in 2014, his company BitInstant also collapsed, and he was left with few remaining liquid assets. Since his release in 2016, he publicly claimed to have spent several months as a dishwasher before re-involving himself with crypto-related projects.

Before his troubles with the criminal justice system, however, Shrem was hired by the Winklevoss twins in 2012 to build up a stockpile of cryptocurrencies, being given access to hundreds of thousands of dollars to purchase bitcoin.

Many of these transactions went off without a hitch; however, the twins allege, Shrem came up short for more than $60,000 worth of bitcoin. At the contemporary prices of $12.50 each, this roughly came out to 5,000 bitcoins.

In today’s market, however, such a sum is worth roughly $30 million. What was once a minor point of contention between the two parties amidst a greater tumultuous partnership is now large enough in the Winklevoss’ eyes to warrant recompense.

Not surprisingly, Shrem and his legal team think otherwise.

“Winklevoss Capital Fund has brought an utterly baseless civil lawsuit against Charlie Shrem. The lawsuit erroneously alleges that about six years ago Charlie essentially misappropriated thousands of bitcoins. Nothing could be further from the truth. Charlie plans to vigorously defend himself and quickly clear his name,” Brian Klein, a representative from Shrem’s legal team, told Bitcoin Magazine.

Given the Bitcoin blockchain’s public nature, the truth is likely in the transactions. An investigator hired by the twins, for example, claims that transactions for the missing coins in question can easily be traced on the public ledger. In 2013, he alleged that these bitcoins were sent to addresses controlled by Shrem and then redirected into other wallet services.

It is unclear at this time if this civil suit will see a jury, or if the parties involved will reach a settlement beforehand.

This article originally appeared on Bitcoin Magazine.

Mintshop Makes ERC-1155 Tokens Simple, But is it Simple Enough?

Personally, I am not a huge fan of the blockchain-game craze. I am simply too familiar with both industries to believe they will meld together effectively in their current iterations. But Enjin’s ERC1155 Token Mintshop is bringing that reality one step closer to fruition. First, a quick primer: The ERC1155 Token protocol was announced in […]

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