Why Israel's Banks Will Unite Over Blockchain

October 31, 2016 Harry DeVries 0 Comments

The general consensus is that there is huge potential in blockchain technology. Some say it may be as big as the Internet itself, doing for transactions of value what the former has done for transfers of information.

 

Blockchain could completely alter traditional industries, changing the face of financial transactions, legal contracts, verification mechanisms and even voting procedures. Where consensus is lacking, there possibly lie the future steps of blockchain.

What can we expect to see next? Our hunch: we are entering the phase of the institutionalization of blockchain, and it will be led by the financial system. Yes, by the banks.

The potential advantages to using blockchain are obvious. Most significant is the ability to remove the middleman, and allow for faster, cheaper and more secure transactions. This could prove to be economically beneficial to the financial system which facilitates billions of transactions every day.

 

No less important is the advantage it provides for developing countries, where trust in the authorities is relatively low, and especially for those which suffer from high levels of corruption. There, people are looking for different ways to realize their civil liberties, including voting, identity verification, registering land ownership, etc. Blockchain technology – direct, decentralized, and secure – provides a potentially unprecedented and private alternative to these.

 

Early adoptor

Arguably one of the most vibrant blockchain industries currently is in Israel. A combination of expertise in cryptography and Big Data gained in the world of security and defense, combined with a passionate and talented entrepreneurial ecosystem has led a growing number of companies to lead the way to the next big thing in the blockchain domain.

 

These companies include startups like Synereo (a decentralized communication platform), Simplex (a payments service working on enabling bitcoin purchases with credit cards), Colu (Colored Coins).

Yet, careful observation of the Israeli ecosystem shows that it comprises much more than early-stage startups. Major Israeli financial institutions, perhaps lacking the sheer magnitude and market share of their American and European counterparts, are showing increasing interest in various applications being developed by these younger companies.

 

Several banks (such as Bank Hapoalim, Leumi and Citi Bank) have launched accelerators with infrastructure designated to support early-stage initiatives. They offer much-needed funding, technical support and the opportunity to interact and collaborate with the banking system. This synergy could prove to be extremely valuable, as one of the major hurdles facing entrepreneurs in the field is developing products and solutions that could be adapted for, and used by, the highly conservative, heavily regulated environment such as that in which the banking system operates.

 

In addition, more investors are being drawn into the industry, incentivizing promising ventures and adding fuel to the growing excitement and expectations surrounding the field. Recently, we're also seeing increased involvement of lawyers and accountants in the sphere, discussing implications and working with their clients on some of the challenges associated with blockchain.

 

Regulation driven

One cannot ignore the resemblance between the current growth in the industry and the evolution of the Israeli cyber industry roughly a decade ago. What began as a small group of cyber startups soon became a deluge of hundreds of companies, providing innovative technology and multi-tier services around the globe. Similar, but not the same. Unlike the cyber industry, the blockchain industry is lacking crucial tail-wind from the regulator.

Almost two decades ago, the Israeli regulator came to the understanding that cyber was becoming a major new front. The main driver was the concern surrounding cyber-attacks on critical national infrastructure and security installations. The sharpest minds from the Israeli defense industry convened to discuss a national realignment to ensure Israel's ability to confront future challenges.

 

Eventually the government adapted a combined approach, emphasizing the development of human talent, investment in technology, building institutions, allocating funding and providing a regulatory environment that allowed the industry to thrive. All together this has led to an unprecedented boost to the Israeli cyber industry, a push that Israel is still reaping benefits from to this day.

This is not yet the case with blockchain. Regulators worldwide remain skeptical of virtual coins that circumvent banks and government authorities, and seem prone to criminal exploitations. We've seen that SilkRoad, Mt Gox and the recent Bitfinex scandal has not done anything to defuse this stereotype.

 

But resistance may be more deeply rooted than mere concerns over criminal misuse and consumer protection: a decentralized alternative to centuries-old systems of centralized governance and control is not something any regulator will be able to swallow too easily. Likewise, Israeli regulators are still 'sitting on the fence'. Given that both future uses, and implications of blockchain, are unpredictable, this is to be expected.

 

However, the regulator provides an indispensable support system, including supervision mechanisms and an appropriate legal framework. Such regulatory backing can bolster consumer awareness, understanding and confidence in the new technology and accommodate the move of blockchain from fringe to mainstream. But who will lead the charge?

 

Meeting of worlds

Various businesses worldwide are already beginning to take note of the potential economic value in using blockchain technology in myriad applications. And as competition grows, an even larger circle is beginning to feel the pressure to follow suit. Although the movement is certainly expanding, this grassroots growth may not suffice to live up to the disruptive potential of blockchain. This is where the big banks come in.

 

Looking back at the major developments over the past year, there is no doubt that the ripest industry for blockchain is the financial system. The big financial institutions would have the most to gain – or lose.

 

It is, however, the most highly regulated industry. Therefore, authorities need to deepen their engagement with the various applications of the technology with the aim of creating an appropriate regulatory framework applicable for the technology, whilst increasing consumer confidence, but without undermining the economic model of the financial system.

And who is best qualified for that role if not the financial system itself? It has both the knowledge and capacity to conduct meaningful dialogue with the regulator on the one hand, and the economic incentive to cut down costs by using blockchain on the other. If that happens, we could soon find ourselves in an era of institutionalized blockchain, where cutting-edge technology meets conservative infrastructure to generate a wholly new and fascinating system.

Smart contracts for bitcoin

October 26, 2016 Harry DeVries 0 Comments

 

As we approach the release date for the SEGWIT (Segregated Witness) update to the blockchain, we were pleased to see a complete update from the BitcoinCore team about how this update will affect the network, what will change and where are we going to proceed in the future.

 

For those of you who don’t know what SEGWIT is software that is used to produce transactions for which it separates the TxID transaction signatures from the rest of the data, thus Segregated Witness. This allows miners to place the transaction signatures outside of the block-chain.

 

Pros and cons

There are benefits that we will immediately be able to enjoy once the update has been complete. The first benefit is that malleability will be ultimately eliminated, and third-parties won’t be able to interfere with the transaction process, and transaction ID’s will be hidden from everyone, while at the same time allowing the transaction software to calculate the transaction without reference to the witness. This update will open up development paths for Bitcoin, by eliminating security holes and lowering the complexity of smart contracts for Bitcoin.

 

The second benefit is that capacity of transactions will modestly increase. New-style blocks can hold more data than current versions, which means that the amount of transaction data will increase per block. That doesn’t mean that witness data is stored off-chain, but rather following this soft-fork, the data will start being signed on the new-style blocks (which include the old-style block and extra space).

Overall this update will simplify things for developers to produce new features for Bitcoin use and it improves the efficacy of running full nodes. We are happy to see that long-term benefits will come out of this update.

 

According to the blog post that the BitcoinCore team released on June 24th, 2016, SEGWIT has been extensively tested by Bitcoin developers, and this was necessary because of the way SEGWIT changes parts of the Bitcoin system. One of the most important change happens to the consensus rules that full nodes use to agree on the current state of the ledger. That shift is the primary reason for such tests to be performed, because if we come to a position where the network stops agreement on the current state, Bitcoin transactions become dangerous.

 

Other notable changes happened to the peer-to-peer code that’s used by the network to distribute blocks and transactions. (This was all included in the 0.13.0 BitcoinCore Update, but it’s not going to happen be accepted on the main network until at least ver. 0.13.01) SEGWIT blocks and transactions are different from previous versions, so it’s important that the network is capable of distributing both SEGWIT and old-style data.

The complete update added about 7800 lines of code to the proprietary software, with the majority of lines relating to the SEGWIT capabilities. A large part of the code update related to the automated testing system, which enabled Bitcoin developers to test out the features on a separate network extensively, promptly called “testnet”.

SEGWIT was initially implemented by the Elements Project, led by Pieter Wuille. This initial implementation was happening in April through June of 2015. It was never intended for the main blockchain but is actually considered a side-chain. A few months later in October 2015, Luke Dashjr describes a method that allows SEGWIT to be implemented by using a soft-fork and they team up with Wuille to work on the implementation that is going to be completely compatible with the main blockchain.

 

The first version of this new code comes out in December 2015, close to the end of the year. (New year, new updates!) It’s implemented and tested extensively for the whole duration, ranging from the beginning of the year to August 23rd, 2016, when the BitcoinCore team launched the update.

 

Within this update, SEGWIT is completely implemented, but it’s sitting there in a passive state, only used for testing purposes. Like I mentioned before, it will become operational with the next update! The Bitcoin Core developers are finally convinced that implementation of SEGWIT will not cause any adverse effects and it won’t negatively influence Bitcoin, it’s value and reliability.

 

SEGWIT won’t change a lot about how you perceive Bitcoin transactions happening, well… There is one pretty perceptive change, but I’m sure you’re not going to mind it.

 

Transaction fees are going to get a little bit cheaper.

I’m sure we all can appreciate spending a little bit less on our transactions. But wait, what about Bitcoin smart contracts?

Yes, I’ve mentioned them. Well SEGWIT will not introduce any smart contracts, but it’s the first step allowing the development of the capability to support these.

 

It solves a crucial problem that currently is affecting the creation of smart contacts and script functioning. It opens up the doors to new development paths and creates new opportunities that were previously inaccessible due to security loopholes and visibility of transaction identifiers. In the future, smart contracts and scripts will use MAST, an acronym for Merkalized Abstract Syntax Trees.

 

A short description of MAST is that it allows the creation of conditional Bitcoin scripts to be utilized. For now, it’s being reserved for the extremely tech-savvy people, the developers to use these tools and potentially make them available to Bitcoin users. MAST is going to be available for use following the SEGWIT update in the future.

OKLINK MAKES US$100 MILLION OF CROSS-BORDER TRANSFERS FREE FOR GLOBAL REMITTANCE COMPANIES

October 20, 2016 Harry DeVries 0 Comments



Hong Kong, 12 October 2016 – OKLink, the global blockchain money transfer network, announced today that it will subsidize all fees on the first US$100,000 of cross-border transfers for every partner on the OKLink network, up to a total of US$100 million. The initiative incentivizes money transfer companies to offer their customers the cheapest, fastest, and most transparent global remittance services.

Hong Kong-based OKLink empowers transfer and delivery companies to provide senders and recipients a superior experience on low-value transfers in their local currency. OKLink’s platform is built on the trust of the blockchain, using digital assets to settle among participants in an instant, secure, and transparent manner. It eliminates the need for pre-funding by settling every transaction in real-time using stable and native digital assets.

OKLink currently offers payouts in fifteen countries across Asia, the Americas and Africa.

Jack C. Liu, Chief Strategy Officer at OKLink, said, “The world's financial transfers run on antiquated technology built nearly half a century ago. Slow, costly, and favoring large sized transactions, these qualities are in contrast to the emerging payment needs of today’s ever-connected global economy. OKLink believes in a future where small-value cross-border transfers will be as simple, fast, and cheap as a text message. “We are thrilled with the reception OKLink has received from industry leading companies and we hope to support their growth further with this incentive promotion.”

Starting from today, participating companies on OKLink will be able to service individual payouts at the mid-market exchange rate for the first US$100,000 of transactions. Transactions under US$500 will qualify for the subsidy. Eligible companies must sign up by December 31, 2016 and have until March 31, 2017 to complete the free transfers.

Coinsecure, Coins.ph, Rebit, MOIN.Inc, Coinone, Coinplug, Coincheck, Bitoex and BitPesa, are among the early companies to join the OKLink network and take advantage of this initiative.

A selection of quotes from OKLink partner companies is provided below.

Mohit Kalra, CEO of Coinsecure in India, said, “India holds the largest share of remittances around the globe with over US$70 billion of inward remittance in 2015 at an average fee of 6 percent.  What Coinsecure and OKLink plan to do - is going to be phenomenal.”

Ron Hose, CEO of Coins.ph in the Philippines, said, “We are very excited to allow our existing user base of over 500,000 customers in South East Asia to remit funds to Japan, China and South Korea using OKLink's platform, supporting our joint vision of providing cheaper cross-border payments and remittances across the region."

John Bailon, CEO of Rebit in the Philippines, said, “Rebit first pioneered using Bitcoin for remittances. We’re very excited to join the OKLink network, whose resources and influence will create a strong alliance of companies committed to making Blockchain remittances work for any customer, anywhere in the world.”

Ian Suh, CEO of MOIN.Inc in Korea, said, "OKLink has developed a new and revolutionary way to solve problems in the traditional money transfer system. MOIN is very proud to be a partner of OKLink. The partnership will enable Korean people to send money abroad cheaper, faster, and more conveniently. OKLink is going to become the future of global remittance, connecting the world much closer."

Wonhee Shin, CTO at Coinone in Korea, said, “This is a very meaningful milestone for blockchain technology, which is closely watched by regulators and practitioners from all over the world. Finally the technology has moved away from the concept phase and into the real usage phase.”

Joon Sun Uhr, CEO of Coinplug in Korea, said “Coinplug is very excited to work with OKLink in building the next generation global settlement network. We expect the market to grow significantly in micro-sized overseas remittances and we are preparing to be a dominant early mover with this partnership with OKLink.”

Koichiro Wada, co-founder of Coincheck in Japan, said, “We are excited to partner with OKLink. We believe blockchain based remittance will have a huge impact on the finance industry especially for people who do small transactions on a regular basis.”

Titan Cheng, CEO of Bitoex in Taiwan, said, “OKLink is an important partner for money transfer companies in Asia. Bitoex has more than 5000 locations in Taiwan. Our partnership with OKLink will help us expand the scope of our global remittance offerings and bring an unparalleled customer experience for the 600,000 expatriates in Taiwan."

For any questions about the program, please contact partner@oklink.com.

- Ends -

About OKLink
OKLink is a Hong Kong-based global blockchain money transfer network that gives every remittance and payment company the same cost advantage, global reach, and speed that took Western Union many decades to build. The company leverages the trust of the blockchain to connect and enable transactions between transfer and delivery companies worldwide using blockchain anchored digital assets and multi-signature technology.

Launched in August 2016, OKLink is growing rapidly with a payout network that is currently available in fifteen countries across Asia, Africa and the Americas. OKLink is a part of the OKCoin family of companies.  OKCoin is the largest digital asset exchange in China. The company raised US$10 million in its Series A round. For more information, please visit oklink.com or follow the company on Twitter @OKLink.

HitBTC Cryptocurrency Exchange Intensifies EUR & USD Depositing

October 11, 2016 Harry DeVries 0 Comments


EE, October 11, 2016 at 13:57 BST

October 11, 2016 a well-established cryptocurrency exchange, HitBTC, publicly increases support for EUR and USD depositing. From now on, all new registered users can easily pass the verification process, deposit fiats on their accounts, and proceed to cryptocurrency trading.

While there’s a number of cryptocurrencies, paired directly with USD or EUR, including most popular Bitcoin, Litecoin, and Ethereum, a whole set of more peculiar digital currencies can also be traded. Altogether, the exchange provides more than 20 trading markets, continuously listing new, promising digital assets.

By enhancing support for fiat currencies, HitBTC is aiming to attract professionals, engaged with conventional types of trading, like stock markets, forex trading, commodities, etc. Here are the words of Paul Clarkson, product manager at HitBTC: “After three years of hard work, we’re finally ready to bring mainstream traders to cryptocurrencies, and vice versa. Сryptocurrency trading is a young, sharp, and fluctuating, yet quite established field. Like any other markets, cryptocurrencies are influenced by a plenty of factors, and follow certain patterns that can be analyzed and used professionally for making profit. Therefore, we’re making steps towards traders, so that they can capitalize their knowledge in a relatively new, promising niche.”

Despite the fact that blockchain technologies and assets arise and gain traction on an annoyingly regular basis, digital currencies still haven’t crossed the gap between the tech-savvy community that plays around with blockchain technologies, and the real business world that needs cryptocurrencies to fulfill its specific needs. This is especially the case in sphere of trading, where most exchanges prefer to remain a niche playground for cyberpunk enthusiasts, rather than build a solid trading platform, which requires investments, legalization, and support for traditional financial instruments.

Conversely, HitBTC aims to reach the mainstream financial market, by growing into a gateway between cryptocurrencies and traditional finance. The most important components of this process are:
●     Transparency. HitBTC is a registered trademark, owned and operated by Beta Business Solutions Inc. The exchange platform and business providing tools are leased under a platform as a service (PaaS) model.
●     Due diligence. HitBTC implements KYC to identify and verify its clients. KYC allows to build bridges between virtual currencies and real fiat trading. Every registered user can verify their account to start depositing EUR/USD, and trade virtual coins for traditional currencies.
●     Dependable API. The API provides the most functional access to HitBTC facilities. It gives access to the market data, allows performing trading operations, provides funds management, and more. The API is robot-friendly and can be used for algorithmic trading.
●     Support for the FIX protocol. Unlike any other crypto exchange, HitBTC provides support for the Financial Information eXchange protocol. While FIX is a de-facto standard for trade communication in the global equity market, it hasn’t been implemented for cryptocurrency trading before now.
●     Special offers for market makers. HitBTC provides special contracts for both individual market makers, and companies that know how to rule the markets. Market making is also possible through the HitBTC’s APIs.
●     Advanced reporting. The exchange team is focused on creating useful trading tools, hence, all traditional reports like profit and loss report and trade analysis are featured on HitBTC, and can be used by every user.

Paul Clarkson continues, “Besides having a professional team of developers, we have a well-organized team of financiers, and outsourced trading experts. The massive financial expertise allows us to make our product mature for penetrating the traditional financial market. As for development, we are especially proud of our support for FIX, which is unprecedented for bitcoin exchanges.”

As HitBTC is already finished with core development, it is now ready to engage newcomers with 0% depositing fees that can be requested by all new verified users from October 6 to October 20, 2016.

About HitBTC
HitBTC is one of the leading cryptocurrency exchanges, providing trading services for individual traders since 2013. The HitBTC trading platform is known for its advanced matching engine, multi-currency support and friendly customer service. Besides trading between cryptocurrencies, HitBTC provides proper markets for exchanging cryptocurrencies for fiat currencies, namely USD and EUR.


The innovative and technological nature of HitBTC is expressed in a stable dependable API, which satisfies the needs of algorithmic traders. Moreover, HitBTC provides support for FIX protocol through FIX trading and FIX Market data end-points.