Building for Bulls, Bears and the Crypto Revolution

December 28, 2018 Harry DeVries 0 Comments

It seems fitting to start my review this year with the same statement and observe how its meaning kaleidoscopes in the new light of 2018.

For context, in December 2017, the price of bitcoin had just hit its all-time high of $19,783.06. The price of ether was about to hit its all-time high of $1,417.38. CryptoKitties were running rampant all over the ethereum network, thousands of ICOs had launched in 2017 and hundreds of dedicated crypto funds opened their doors.

Today, the environment is a bit different. Those crypto funds are starting to shut down. ICOs that raised capital in crypto in 2017 have seen their runways halved and halved again. The price of bitcoin hovers around $3,500 and the price of ether plummeted below $100. CryptoKitties has a meager 378 daily active users, down from over 15,000 daily active users this time last year. Ouch.

What I failed to mention with last year's statement is that the runway isn't always smooth and it isn't going to be at a constant incline.

As Meltem Demirors so gracefully put it, "Tech that changes industries and markets doesn't get built overnight. There are fits, starts, and failures." Obviously, this market is throwing a fit. Furthermore, us builders should talk about it.

But Builders Don't Talk About Price
For as long as I can remember, it's been a significant taboo for builders in the space to talk about price. The market conditions shouldn't affect our attitudes or how we build. We actively avoid getting caught in the hype on the way up and avoid falling into depression on the way down.

We transformed "HODL" into "BUIDL," and there was also short-lived talk of "SHIPL."

However, refusing to engage in "price talk" doesn't mean we can, or should, ignore the swings of the market. This ecosystem is highly speculative and our roadmaps, runways and design choices are affected by larger macroeconomic conditions. Denying that the market conditions affect your work, company, financials, and culture is willful ignorance and is dangerous in the short and long term.

2017: Unprecedented Hype
As we saw in 2017, the bull market garnered previously-unseen hype, which led to new, inexperienced users entering the space en masse. Coinbase was adding hundreds of thousands of new users per day. Companies were hiring support teams by the dozens in an attempt to tread overflowing inboxes.

The things we did in 2017 were reactionary. Building for the short term was prioritized over the long term.

We didn't have refined processes or roadmaps — we had fires that needed to be put out yesterday. We hired those who were willing to wear many hats and didn't require much sleep. We put band-aids on the most glaring user experience issues as they cropped up, and we promised to iterate later. The market's ambitious upswing wasn't tied to the technology and experience being delivered.

2018: The Downward Spiral
2018 was a whole new world. The number of support tickets dropped as fewer new users entered the space. The types of questions we fielded about ICOs plummeted and more technical questions emerged once again.

The members of my team who were solely fueled by the adrenaline of 2017 had to evolve or move on to different projects. Some even left the crypto-space entirely. Our hiring and recruiting practices evolved, and the skills and personality traits we looked for became more refined.

The actions users are taking in 2018 have changed as well.

Whether it was taxes, the SEC, a more bearish market or the realization that the scope of blockchain use cases is still limited, people aren't doing much these days. Even when we look beyond the trading and investment activity via DappRadar and Dapp.com, we can see just how little activity is happening.

The market is questioning how "decentralized" applies to a world beyond us cypherpunks and early adopters. It's a valid question that us builders should ask too.

2019: Blood in the Streets?
To steal from Anthony Pompliano (who likely stole it from someone else), there is no "blood in the streets" yet. The blood is coming, but it isn't only from the individuals who have portfolios that are down more than 100 percent.

It is from anyone and everyone who failed to anticipate just how long this revolution would take. It is from people who didn't believe in the possibility of a market crash or a long winter. It is the ICOs that had all their holdings in crypto. It's from those who measure growth and value in terms of months, not years or decades.

More robust companies can reduce the sizes of their teams and cease throwing extravagant parties to lengthen their runways.

Less seasoned companies will have no choice but to shut down. And the most important companies are likely the ones you haven't yet heard of or are yet to be created.

2019 & Beyond
The coming years have the potential for people to create real, revolutionary value. This will not be the short-term capital creation that ICOs brought in 2017. It will be significantly deeper, take significantly longer and it will spawn from unlikely sources.

Reacting to new users and irrational exuberance is a different ball game than building products that break down the barriers of cryptocurrencies. In order to be relevant and stay relevant, you have to do more.

Those that will have a lasting impact and create the most value will be those who can build for both the bull market, the bear market and beyond the market. They will have the foresight to expect the unexpected, the hindsight to learn from the past and the insight to solve problems in unprecedented ways.

They will use their teams, tools, knowledge and communities to not only build for the next wave of users, but also help bring in the next wave of users. They will not build "on the blockchain" or "for the blockchain." They will build better solutions that happen to utilize the blockchain.

It's easier to build products for your existing environment and existing users, but it is shortsighted and will leave you straggling in the long term. Look outside this space for inspiration. Learn from traditional companies who have been around for decades or even centuries. Take the time to understand the motivations and needs of people around the globe. Don't make product decisions based on the graveyard of activity today. Don't create personas based on a Twitter poll you spun up yesterday.

Look to the future and anticipate. Your job is no longer to react to the current conditions. It's to be a fortune teller of tomorrow's landscape.

Sparking the Revolution
Many point to the dot-com bubble when analyzing the cryptocurrency markets in 2017.

Both saw 1,000 percent returns, rampant day-trading, fraud, capital flowing to any company with ".com" or "blockchain" in its name, and the creation of overnight millionaires even when those millionaires had neither delivered products nor profits. It's an easy comparison. But it's only one slice of history.

The repetition of history won't manifest as a carbon copy of itself, so it's hard to know exactly how this decentralized revolution will play out in totality. The revolution will be simultaneously subtle and profound. What we are building cannot be measured in months or judged by the hype cycles. We are aiming to transform nearly every industry that exists, starting with the financial industry.

The blockchain has come a long way since Satoshi's white paper and it will take at least that long to disrupt life in a meaningful way.

We have to keep zooming out to keep our perspective wide. The dot-com bubble isn't what transformed the internet, nor will the last two years be what transforms the blockchain. We need to look at the entire history of the internet and watch how it evolved over time. We need to examine how the Industrial Revolution managed to touch almost every aspect of daily life. We need to remember The Renaissance's lasting influence on intellectual inquiry.

And, as we do, we should be intimidated by what we have yet to accomplish and inspired by the opportunity to forge the runway ahead. Remember, the real lift off has yet to occur.

WSJ: Over 15% of crypto projects ‘highly questionable’

December 28, 2018 Harry DeVries 0 Comments



Some 16% of all cryptocurrency projects are 'highly questionable', presenting obvious red flags for investor security, according to a report published early this week.

In an expose by the Wall Street Journal, at least 15% of all initial coin offerings (ICOs) studied were found wanting, with at least 513 of a sample of 3,300 found to be overpromising, misrepresenting elements of the offering or the personnel involved, or plagiarised from other ICO prospectuses.

In the report, WSJ journalists took a sample of ICO and crypto projects from listings on ICOBench.com, Tokendata.io and ICORating.com. The researchers compared the text of whitepaper documents against the total sample and uncovered as many as 10,000 sentences in ICO whitepapers that had been directly plagiarised, which most knowledgeable investors would consider a clear sign something is amiss.

Reverse image searches were carried out on founder and sponsor profiles, uncovering a number of fake and stock identities being used throughout investor documentation, while others were found to have no information about those involved in the project.

The team then scoured the whitepapers for claims of "high returns", before manually reviewing the promises made in the documents to determine which were making unrealistic claims to entice investors to part with their cash.

Offering the chance to respond to the allegations to the 513 identified as potentially suspect, the Wall Street Journal received little in the way of response—250 project websites were already unavailable, while at least 30 projects were already under active investigation by the authorities.

The findings coincide with increasing efforts from financial regulators worldwide, like the U.S. Securities and Exchange Commission (SEC), in clamping down on fraudulent activity around ICOs.

While some have criticised the SEC in particular for their hardline stance, the regulator remains committed to cleaning up the sector to protect investors from falling victim to these scams.

One of the most comprehensive investigations of its kind to date, the findings confirm what many in the cryptocurrency sector have long suspected—that a significant portion of ICOs are downright fraudulent.

When combined with those that were offered in good faith, but with flawed business models, this underlines the serious risks faced by those investing in initial coin offerings.

Waves Platform Raises $120 Million for Private Blockchain

December 19, 2018 Harry DeVries 0 Comments


Waves Platform, a public blockchain network that has helped digital startups create tokens, said it raised $120 million for itself to roll out a private version of its Vostok system for corporations and governments.

Private investors were tapped in the fundraising round led by London-based financial services group Dolfin, Waves said in a statement Wednesday. The company's own cryptocurrency, known as Waves, jumped almost 50 percent to $3.80 in the past 24 hours, according to CoinmarketCap.com prices at 9:40 a.m. in London.

Founded in Switzerland by Russian engineer Sasha Ivanov, Waves Platform has benefited from a recent boom of initial coin offerings that let firms create and sell tokens via its distributed-ledger technology, which it describes as a fast and easy-to-use blockchain.

The Waves token has a market value of about $383 million, down from as much as $1.7 billion in December 2017, close to the speculative peak for cryptocurrencies, according to CoinMarketMap.com.

"The cryptocurrency rush is over now, while the idea of using a decentralized network to store data and cut costs is still relevant," Ivanov said in an interview in his Moscow office.

Large firms and state entities often find the speed and security level of public blockchains to be insufficient, he said. So-called private blockchains, which have limited numbers of users, protect data better, according to Ivanov.

Vostok, similar to the International Business Machines Corp.-led Hyperledger in the U.S., will focus on Europe, Asia and the former USSR, expecting its first projects in the beginning of 2019, Ivanov said.

Chatter Report: Schiff Accuses Kelly of Pump and Dump, Lingham Calls for ‘Real Adoption’

December 19, 2018 Harry DeVries 0 Comments



In our latest roundup of crypto chatter, tensions run high as Peter Schiff accuses Brian Kelly of dumping bitcoin on retail investors. The accusation surfaced after Kelly recently revealed that he is net short on BTC. Also, Vinny Lingham gives great advice to the crypto community on building for the future.

CNBC Regular Accused of P&D
Longtime gold proponent and bitcoin skeptic Peter Schiff has accused Brian Kelly Capital Management founder Brian Kelly of using his position as a CNBC regular to "pump and dump" bitcoin. In a recent video released by CNBC, Kelly casually mentions that he is net short on bitcoin.

Under normal circumstances, Kelly shorting bitcoin would not raise eyebrows in this bear market. However, Kelly's recent comments seem to be entirely incongruent with almost every other clip of him on CNBC.

A Trip Down Memory Lane
Just watch this video of Kelly released by CNBC last August, where he heavily shills bitcoin. While referencing a BTC price that was around $7,400, Kelly boldly proclaims, "If you're looking for an entry point in bitcoin this might just be the place".

There is a huge disconnect between Kelly recommending the "completely under-appreciated" cryptocurrency markets in August and the same man sheepishly mentioning that we are "getting closer to the bottom" in the recent CNBC video.

Even more disturbing are the implications of Kelly's actions, as he may have been shorting and dumping cryptocurrency bags on retail investors who listened to him on CNBC, which would be a massive conflict of interest. Alternatively, Kelly could have only recently taken short positions some time after he was shilling cryptocurrencies throughout most of 2018. That would imply that Kelly is unqualified to talk about cryptocurrency price movements, however, as he has been completely wrong on his predictions thus far.

Vinny Lingham on Building for the Future
In other news, Civic CEO Vinny Lingham has been tweeting advice for the cryptocurrency community to build for the future.

Lingham explains that traders and speculators feed off volatility and do not care about creating value in the cryptocurrency ecosystem. He describes this profit-seeking behavior with no value creation as a skill gap for traders. Traders will trade and influence prices in the short term, but in the long run, the market will reveal the value of good cryptocurrency projects.

Quoting Jeff Bezos, Lingham explains that builders are "misunderstood for long periods of time." Their hard work doesn't seem to be reflected in the prices of the cryptocurrency projects that they are a part of. However, by keeping their heads down and focusing on real world adoption, builders will see the value of their work reflected in future prices.

Crypto Price Watch: Waves, Tezos and Maker See Green Despite Dwindling Market Prices

December 12, 2018 Harry DeVries 0 Comments



Even as a majority of the top 10 altcoins within today's crypto market continue to see red, there are digital currencies like Waves, Maker, and Tezos that have witnessed an upward surge of 9%, 3%, and 2.5% respectively over the course of the past 24 hours.
Waves Continues Its Strong Performance

As can be seen from the chart below, around a week back the price of a single Waves token jumped by over 50% to touch an impressive price point of $2.32. In terms of what could have sparked this massive uptrend, many experts believe that the recent Waves Mobile app update could have had something to do with the increase.

For those not aware, the Waves dev team recently announced the launch of their much-awaited 'operational protocol upgrade' which allows customers to seamlessly "deposit, store and withdraw their altcoins" in a safe and secure manner. Not only that, but users can now also trade and lease out their assets on the Waves DEX with the touch of a button.
#WavesPlatform has had a great November with the release of our new mobile app and several other developments! We're continuing to build some outstanding tech to bring #blockchain to the mainstream. Here's what we've been up to in the past month: https://t.co/OcrvMyvkwn$WAVES

— Waves Platform (@wavesplatform) December 11, 2018

Additionally, it is also worth noting that the latest iteration of the Waves app will introduce several new exchange listings as well as provide users with full integration support with the Ledger Nano S hardware wallet.
Tezos (XTZ) Surprises Everyone With its Strong Performance

While many had relegated Tezos (XTZ) to the peripheral fringes of the crypto world recently, it now appears as though the project is making a steady comeback (especially since the currency has been showcasing a lot positive financial momentum over the course of the past week or so).

For those who may not remember, Tezos is probably most famous (or infamous) for having raised a whopping $232 million during its ICO phase as well as the scandal that rocked the project straight after.

Lastly, it is also worth pointing out that the XTZ token is currently trading below its original ICO price of $0.51 for around $0.375 (at press time). However, this drop is not as significant as the one witnessed by Ethereum as well as some of the other premier cryptos like BTC, BCH.

In this regard, a market analyst for iBuyTezos.com pointed out that Tezos was not even listed on a single exchange at the start of the year. The reason given for this delay was that the project's native blockchain network had not gone live till like mid-2018.

Tezos wasn't even on an exchange in Jan of 2018.
— Jovan Smith (@JvdollaJovan) December 6, 2018

Final Take
While many of the top crypto coins in the market have struggled to stay afloat throughout the year, there are some lesser-known assets that have continued their strong performance recently. It now remains to be seen how the future of smaller tokens such as Maker, DEX, Revain, Tezos plays out in the coming few weeks.

Bitwala Begins Offering Bank Accounts With Bitcoin Wallet and Debit Card

December 12, 2018 Harry DeVries 0 Comments



Cryptocurrency banking provider Bitwala has started offering its banking service to cryptocurrency users in Germany, starting with 40,000 pre-registered customers. A spokesperson for the company has shared details with news.Bitcoin.com about this new service which will soon add support for additional countries and cryptocurrencies.

New Banking Service for Crypto Users
Bitwala announced on Wednesday, Dec. 12, that it has started offering banking service to cryptocurrency users. "New users along with the 40,000 pre-registered customers will be onboarded one after the other based on their waitlist place," the announcement read.

The bank accounts are hosted by Berlin-based Solarisbank. This Bitwala partner has a banking license, so it is supervised by Bafin and Bundesbank, Germany's banking authorities.

Roman Kessler, a spokesperson for Bitwala, told news.Bitcoin.com:

For now, only German residents can go through the KYC [know-your-customer] process. Very soon, hopefully already in January, this will be extended to other jurisdictions inside of the EU.

Account opening takes a few minutes, the company noted, adding that customers need an ID to open an account. They must also complete the KYC process which includes video verification. The company also explained that "As with any bank account in Germany, all euro deposits up to €100,000 [~$113,274] are protected by the German Deposit Guarantee Scheme (DGS)."

Bank Account With Crypto Support
With the new Bitwala bank accounts, users will receive an Iban and a contactless debit card which will allow them to buy and sell BTC and manage expenses. The Bitwala account comes with a bitcoin wallet. Users can manage both their BTC and euro deposits in one place, the announcement describes.

A Bitwala debit card.
"The new bank account offers users SEPA transactions, easy management of recurring payments, and comes with a debit card for on-the-go payments and ATM cash withdrawals," Christoph Iwaniez, the company's chief financial officer, commented. "For instance, customers will be able to use their Bitwala account to receive salary payments and pay their rent. And if you want to trade bitcoin, you can draw liquidity from the same current account."

Kessler further shared with news.Bitcoin.com:

Only bitcoin [is supported] at the moment. You can access them through a multi-sig wallet to which only you have the private key. Other cryptocurrencies to follow shortly.

He also emphasized that "The online bank account and the [debit] card are free," but trading between BTC and EUR costs 1 percent. "According to our market research that is 5 percentage points below market average."

Waves revamps mobile wallet

December 05, 2018 Harry DeVries 0 Comments



The Waves Platform, a decentralized blockchain ecosystem, has announced a comprehensive update of the Waves Wallet mobile app which is now available for download on the App Store and Google Play.

Launched over a year ago, the Waves mobile app was up to the task of enabling users to connect to the network and make transactions. However, as Waves' blockchain developed, the mobile team saw opportunities for improving the app by adding new features.

The result of many months of the mobile development team's effort is a comprehensive, all-in-one app for mobile devices with an absolutely unique feature set, including a crypto wallet, the Waves DEX and fiat gateway.

"We believe our app provides a step forward for crypto and blockchain community, a better experience for iOS and Android users than they can get elsewhere," says Sasha Ivanov, Founder and CEO of Waves Platform. "The new mobile app incorporates the most popular features of the desktop Waves Client going far beyond the functionality of the wallet. At the moment no other platform offers anything like that."

In the new app all traffic is encrypted, which is important for privacy and security. Private keys are encrypted and never leave user's smartphone and are never exposed to the web. A range of further security measures is added, including Face ID, Touch ID and Fingerprint scanning.

Users can trade on DEX, with the great tools and charts they've come to expect, but with the convenience of mobile. There's also access to fiat and crypto gateways, so users can deposit, store, trade and withdraw other assets.

The most popular digital asset management tools from the Waves Platform are also available. Users can send tokens to their address book contacts, lease WAVES, receive warnings about suspicious tokens and burn any spam assets. 

Binance Releases Demo of Planned Decentralized Crypto Exchange

December 05, 2018 Harry DeVries 0 Comments



Binance, the world's largest cryptocurrency exchange by adjusted trading volume, has released a new video demo of its decentralized exchange, dubbed Binance DEX, ahead of its launch in early 2019.

Released Wednesday, the video demonstrates the trading interface of Binance DEX, along with a web crypto wallet and the explorer for Binance's native public blockchain, Binance Chain, which the firm says will be made available on a testnet soon.

Based on the video, Binance DEX will have a very similar interface to its existing centralized exchange, with some additional features. For example, it includes an option to generate a 24-word mnemonic seed phrase for users' private keys, a "balances tab" to inform users of the status of their accounts and a "user icon" in the navigation bar that shows individual wallet addresses.

With the blockchain explorer, users can search for an individual block and view transactions included in a particular block, the demo explains.

"User funds on the DEX will be secured with decentralized wallet applications like Trust Wallet, which has a server-free infrastructure that stores private keys only on the user's device, meaning only users have access to their funds," Binance said in a statement on Wednesday.

Binance DEX is built on its own Binance Chain, which was first unveiled in March of this year and is aimed to offer "low latency, high throughput trading, as well as decentralized custody of funds."

With the DEX, traders will be able to send and receive Binance's own BNB tokens and other coins via trading pairs, Binance said, adding that while BNB is currently an ERC-20 token, it will soon be migrated to Binance Chain upon its mainnet launch.

The first video demo of Binance DEX was released in August, which outlined via a command line interface the basics of issuing, listing and trading crypto assets.

In June, Singapore-based cryptocurrency exchange Huobi also announced a plan to evolve into a standalone decentralized exchange, offering funding for developer assistance in creating an open-sourced blockchain protocol.

The US Government Is Powerless to Block Bitcoin Addresses

November 29, 2018 Harry DeVries 0 Comments


It has been widely reported this week that the U.S. government has blacklisted two BTC addresses linked to cyber crime. These particular addresses were singled out because their owners are believed to be Iranians, whose country is currently facing heavy economic sanctions from the U.S. While the BTC addresses are clearly connected to ransomware, mainstream media has gotten one crucial element of the story wrong: You can't blacklist a bitcoin address.

The Office of Foreign Assets Control (OFAC) is the financial intelligence wing of the U.S. Treasury Department. It enforces economic sanctions against foreign entities the American government has taken exception to. Right now, it has Iran in its sights. By OFAC's own admission, however, trying to blacklist bitcoin addresses is a first. "While OFAC routinely provides identifiers for designated persons, today's action marks the first time OFAC is publicly attributing digital currency addresses to designated individuals," explained the agency, adding:

Like traditional identifiers, these digital currency addresses should assist those in the compliance and digital currency communities in identifying transactions and funds that must be blocked and investigating any connections to these addresses.  As a result of today's action, persons that engage in transactions with [these addresses] could be subject to secondary sanctions.

You Can't Blacklist a Bitcoin Address
The addresses in question, 149w62rY42aZBox8fGcmqNsXUzSStKeq8C and 1AjZPMsnmpdK2Rv9KQNfMurTXinscVro9V, have been involved in over 7,000 transactions since 2013 and received close to 6,000 BTC. As of Nov. 28, anyone interacting with these addresses could technically be held liable by the U.S. government and punished in some way. In reality, though, these threats are little more than empty words. No one — not even the U.S. government, with its army of apparatchiks and enforcers — can prevent a specific address from sending or receiving bitcoin. With cryptocurrencies such as EOS or ripple, OFAC would likely have more success, but decentralized assets such as BTC and BCH are uncensorable.

To demonstrate the pointlessness of the blacklisting, both BTC addresses have received transactions in the past 24 hours. In one instance, vanity addresses were used to troll OFAC and to reiterate the futility of its digital currency sanctions. While cryptocurrency exchanges can and do block accounts linked to certain addresses, the Bitcoin protocol remains immune from such interference. Permissionless and stateless, bitcoin can't be blacklisted. That's why it's so valuable.

Korean Lawmaker Introduces Bill to Promote Crypto Trading

November 29, 2018 Harry DeVries 0 Comments



A South Korean lawmaker has reportedly introduced a bill to promote cryptocurrency trading and the development of crypto exchanges. In addition to requirements such as capital, manpower, and internal systems, the bill proposes establishing a committee to promote and support crypto trading.

Promoting Crypto Trading
Korean lawmaker Kim Sun-dong, a member of the National Assembly's Political Committee, announced last week that he has initiated the Digital Asset Trading Promotion Act, local media reported. Seoul Finance elaborated:
"The Digital Asset Trading Promotion Act' includes a comprehensive plan for establishing a guideline for promoting the development of virtual currency exchanges and blockchain technology, tax reduction and exemption, measures against hacking damage, and prevention of market disturbances."

Kim emphasized the need for a law dedicated to promoting crypto businesses to avoid companies leaving Korea, citing Bithumb as an example. He pointed out that even though crypto transactions in Korea accounted for a large percentage of the domestic stock market transactions at the beginning of this year, one of the largest crypto exchanges, Bithumb, was recently sold to a Singapore-based consortium.

He also noted that Japan has already completed legislative procedures to institutionalize crypto transactions and the U.S. has allowed the trading of cryptocurrency derivatives.

About the New Crypto Bill
The bill first defines "virtual content with an apparent value such as online money, points, game items and virtual currencies as digital assets," the publication detailed. It also defines the operators dealing with them as digital asset trading companies. The news outlet added:
"Those who want to operate a digital asset trading business should have more than 3 billion won [~$2.66 million] in capital, enough manpower, computerized systems, and physical equipment to be approved by the Financial Services Commission [FSC]."

If an exchange is hacked and its customers suffer losses of crypto assets, the bill submits that the exchange must assume the liability for damage to the traders.

The publication added that some examples of industry promotion mentioned in the bill include the establishment of a digital asset trading committee, the promotion of research and development projects, financial support, professional training, and tax reduction. According to Metro Seoul newspaper, the committee will be tasked with resolving issues requested by the FSC such as setting standards and policies relating to crypto assets, as well as coordinating between relevant administrative agencies.

Kim was further quoted as saying:
"The government is focusing only on the risk of virtual currency and concentrating only on the crackdown of illegal activities … In order to lead the global trend of blockchain technology development, it is necessary to prepare laws and regulations as soon as possible."

KPMG: Institutional Investment Key to Cryptoassets Growth

November 21, 2018 Harry DeVries 0 Comments



Auditors KPMG have published a report stressing the need for institutional investors to join the cryptocurrency industry. The report outlines the importance of cryptoassets as an investment alternative and how institutional investors can take part in the process.

Digital Assets Have Potential, Institutionalization Needed to Scale'
In the report, released Nov. 18, the Netherlands-based firm said a new world of finance is emerging in which transacting in digital assets may become standard operation. "Cryptoassets have potential," KPMG wrote, in the report titled 'Institutionalization of Cryptoassets."

"But for them to realize this potential, institutionalization is needed. Institutionalization is the at-scale participation in the crypto market of banks, broker dealers, exchanges, payment providers, fintechs, and other entities in the global financial services ecosystem," it said.

The study comes at a time the use of digital currencies is gaining worldwide adoption, both as a unit in financial transactions and as a store of value.

Christine Lagarde, the managing director of the International Monetary Fund, last week said central banks throughout the world should consider issuing digital currency to make transactions more secure. Lagarde argued that state-backed cryptocurrencies could satisfy public policy goals related to financial inclusion, consumer protection, privacy and fraud prevention.

Although observers point to the risks of central banks' involvement in cryptocurrency, such as the potential to slow down transactions and raise costs through over-regulation, KPMG views the coming on board of financial institutions as crucial to boosting public confidence in digital assets.

"Institutionalization is the necessary next step for crypto and is required to build trust, facilitate scale, increase accessibility, and drive growth," the auditors asserted, adding that it would be prudent for countries in hyperinflation, like Argentina, to adopt cryptocurrencies to preserve value.

KPMG said: "A globally accessible, decentralized store of value could have a significantly stabilizing impact on the country's economy. Bitcoin could potentially represent such a store of value in the future.

"Interestingly, even though there are large price fluctuations with Bitcoin, it is not inherently volatile. The supply is in fact fixed and algorithmically secured. It is the demand that is fluctuating and this could eventually stabilize as the market matures," it added.

Truly Open Global Financial System
Writing in the same report, Coinbase chief compliance officer, Jeff Horowitz, said cryptoassets are an opportunity to transform the financial industry into a truly open global financial system.

"Regulatory agencies are also beginning to seriously discuss cryptoassets, which could help drive institutional participation, encouraging the marketplace to think about how engagement with these assets fits into both existing rules and regulations and new frameworks that may be needed for crypto," he said.

However, Horowitz noted that the focus on cryptocurrency innovation must not come at the expense of security, compliance, and consumer protection.

"Leaders in the crypto space, including crypto entities and industry partners, have a responsibility to help influence and educate key legislators and regulators to advance the overall governance and enforcement framework," Horowitz detailed.

"In many ways, leading crypto companies should aspire to meet the standards and leading practices established by traditional financial services companies. We believe this will help promote trust and accelerate the adoption of crypto by investors and institutional clients," he added.



SEC Investigates Salt Lending’s ICO

November 21, 2018 Harry DeVries 0 Comments



In recent regulatory news, the U.S. Securities and Exchange Commission (SEC) has reportedly launched an investigation into Salt Lending's 2017 initial coin offering. Separately, the SEC revealed that it has stopped accepting public comments on nine bitcoin exchange-traded funds that it rejected in August, and digital asset exchange Huobi has announced that it is providing cryptocurrency consulting services to a Russian state-owned bank.

Cryptocurrency loan platform Salt Lending and former board member Erik Voorhees are under investigation by the SEC, according to The Wall Street Journal, which cited "people familiar with the probe." Voorhees has responded by publishing a separate article that describes the newspaper's claims as "inaccurate and misleading."

Salt Lending was reportedly subpoenaed by the SEC in February, with the regulator seeking information regarding the $50 million ICO it held in 2017. The report states that the SEC aims to determine whether the ICO constituted an unlicensed securities offering, while also investigating how the proceeds were spent.

Public Comment Closes on Nine Rejected ETFs
Separately, the SEC has revealed that it recently stopped accepting feedback on nine proposed bitcoin ETFs that it rejected on Aug. 22. It said in October that it would review public comments on the proposed funds through early November.

Two of the ETFs in question were filed by Proshares, in partnership with the NYSE Arca exchange. Two others were proposed by Graniteshares, while another five of the rejected ETFs were brought forward by Direxion.

The day after the regulator rejected the ETFs, SEC Commissioner Hester Peirce took to Twitter to clarify that it had delegated the assessment of the proposed funds to its staff. She added that the commission would review the decisions made by its staff on the matter. At the time of writing, the SEC had not yet provided any further comment regarding the ETFs, nor had it set a deadline for its deliberations.

Huobi Provides DLT Consulting Services to VEB
Huobi has agreed to provide consulting services to Russia's Vnesheconombank (VEB) relating to distributed ledger technology (DLT), according to Vladimir Demin, the head of VEB's Center of Digital Transformations. He claimed the state-owned bank had started working on DLT projects that do not involve cryptocurrencies or tokens.

"Using [DLT] only in a non-token way is like jumping halfway over the abyss," Demin said, adding that VEB has also been talking to the Bank of Russia and State Duma about cryptocurrency regulations. "Huobi came out as the most suitable partner as they are already working with the governments of Australia, Singapore, [and] China."

Huobi is also reportedly finalizing a contract that will see the company provide training for a DLT program at the Plekhanov University of Economics. Reports about its partnerships in Russia follow the exchange's launch of a office staffed by 30 people in Moscow earlier this month.

Chinese Mining Farms Undergo Tax Inspection, Michigan Bans Campaign Donations in Cryptocurrency

November 14, 2018 Harry DeVries 0 Comments



 In recent regulatory news, we report on an authorized mining company in China that has had its operations temporarily halted for tax inspection and implementation of real-name registration processes. We also look at the Michigan Secretary of State's ban on crypto-based political donations, as well as the recent certification of X8's stablecoin for Shariah compliance. In addition, we focus on the operator of a fraudulent cryptocurrency scheme who has been punished for misappropriating $601,000 in BTC and LTC from his employer.

Chinese Mining Farms Suspended
According to a statement published by an unidentified cryptocurrency mining company, Chinese state agencies have ordered the suspension of its mining farms in southwestern Guizhou Province and the Xinjiang Uyghur Autonomous Region for tax inspections and to implement real-name registration processes.

"According to the needs of the public security department's network information security work, in the future, our company will implement higher standards for the company's business real-name system according to the work needs of the public security department," the anonymous company said. "For customers with the latest standard real-name systems, the data center will have to suspend reloading, restarting, moving in and out, etc."

Michigan Secretary of State Says 'No' to Crypto
In a letter addressed to William Baker, a recent candidate for the Michigan state legislature, the office of the Michigan Secretary of State has formally barred cryptocurrency donations to political campaigns.

Baker, who lost his bid in the state's Nov. 6 election, had previously sought clarification on how the value of donations in the form of cryptocurrencies should be recorded. He also asked whether virtual currency exchanges would qualify as valid secondary depositories for the storage of crypto assets.

Baker asserted that "it is self-evident that digital currency is a valid way to receive political contributions." However, the state secretary's office responded by stating that "the law does not authorize such a vehicle, and the department has never determined that digital currencies are a valid way to receive political contributions."

The letter also highlighted concerns pertaining to the price volatility of cryptocurrencies. "As with stocks and commodities, bitcoin's worth fluctuates daily," the office said. "There is no way to ascertain the precise monetary value of one bitcoin on any particular day."

The Michigan Secretary of State raised additional objections to the use of cryptocurrencies as donations. In the letter, the office added that state legislation also "requires that committees deposit funds in an account in a financial institution, which is not an option for cryptocurrency."

X8 Stablecoin Certified as Shariah Compliant
X8C, the stablecoin issued by Swiss fintech company X8 AG, has obtained a certificate showing that its stablecoin is compliant with Shariah law. It received the certification from the Shariyah Review Bureau, an Islamic advisory firm licensed by the Central Bank of Bahrain.

Francesca Greco, director and co-founder of X8, announced that the company will soon establish a regional office in the Middle East. Greco also indicated that X8 plans to launch a Shariah-compliant virtual currency exchange, adding that the company has already met with representatives of exchanges based in Abu Dhabi, Dubai and Bahrain.

"The Gulf region is a really good place for financial technology companies, because they all want to become hubs for fintech," Greco said.

CFTC Fines Crypto Scheme Operator Over $1.14M
The U.S. Commodity Futures Trading Commission (CFTC) has ordered Joseph Kim, a resident of Phoenix, to pay more than $1.14 million for operating a fraudulent cryptocurrency scheme. Kim was also sentenced to 15 months in prison on "related criminal charges" filed in the U.S. District Court for the Northern District of Illinois. According to the court order, Kim pleaded guilty to "orchestrating a fraudulent Bitcoin and Litecoin scheme that led to more than $1 million in losses."

Kim was found to have misappropriated $601,000 worth of BTC and LTC from his employer — described as "a Chicago-based proprietary trading firm" — before attempting to fabricate security-related issues to obfuscate the misappropriation of funds. Despite this, the company fired Kim in November 2017 after the theft of the cryptocurrency was discovered.

Between December 2017 and March 2018, Kim then sought to repay his former employer through profits that he had generated through the operation of a cryptocurrency trading scheme. According to the CFTC, he "falsely told customers that he would invest their funds in a low-risk virtual currency arbitrage strategy, when, in fact, Kim made high-risk, directional bets on the movement of virtual currencies that resulted in Kim losing all $545,000 of his customers' funds."

The Growth of Security Tokens in 2018

November 14, 2018 Harry DeVries 0 Comments



2018 was meant to be the year of security tokens. The number of projects seeking to launch security token offerings (STOs) would mushroom, we were told, and a string of accredited trading venues would emerge where these instruments could be exchanged. The release of two new reports into the STO market provides an opportunity to reflect on whether security tokens have lived up to the hype.

The Quest to Securitize the World
When the utility token craze took off in 2017, raising billions of dollars through initial coin offerings (ICOs), skeptics predicted that the mania couldn't last. Many of these so-called utility tokens, it was claimed, were actually securities, and it was only a matter of time until a lettered agency such as the U.S. Securities and Exchange Commission stepped in to call a halt to proceedings. In the event, the demise of the utility token has had less to do with enforcement, and more to do with market conditions that have made it virtually impossible for ICOs to raise funds. A string of underperforming ICOs, including several that were outright scams and others that simply failed to deliver, have blunted public appetite for this fundraising mechanism.

STOs have the potential to overcome several of the drawbacks to ICOs, including the regulatory uncertainty. Because security tokens represent a claim to an asset, such as equity, investors have a degree of reassurance that, in the event of the project faltering, they will have legal redress. This contrasts with utility tokens, which are sold on the understanding that they may be worth nothing and that holders have zero claim to any sort of assets. Two new reports from Hashgard and ICOrating.com provide an insight into the health of the nascent security token market.

STOs See Modest Growth in Q3
ICOrating.com reports that STOs saw a steady increase in interest during Q2 and Q3 of 2018. The share of projects offering a security token increased by a slender 1.66 percent in Q3 over the previous quarter, while the number of projects offering utility tokens decreased by 10 percent. One impediment to projects seeking to launch an STO is a shortage of platforms that are capable of listing their token. Until traditional cryptocurrency exchanges, including a number of Malta-based entities, receive approval to sell securities to accredited investors, a handful of platforms will hold sway.

Leading security trading platforms and frameworks include Tzero, Polymath, Swarm, Harbor, Securitize and Securrency. Different exchanges often use different token standards to facilitate the trading of security tokens. In the case of Polymath, for instance, it's the ST20 protocol for Ethereum-based tokens. Startengine, meanwhile, has introduced its own ERC1450 standard for digital stock certificates. "To date, we have issued ERC1450 tokens to all 3,500 Startengine shareholders, and there are 165 more eligible companies that use Startengine Secure and are expected to be listed on the ERC1450 smart contract," explained CEO Howard Marks.

2019 — the Real Year of Security Tokens?
Significant progress has been made over the last 10 months in developing security token standards, trading platforms, and obtaining regulatory approval. In terms of capital raised, however, STOs have yet to make any major headway. Singapore's Blockchain Capital raised $10 million via STO, while other security token projects include high-tech investment fund Spice VC and incubator fund Science Blockchain. Many other aspiring STO projects are still waiting patiently for the SEC to approve their Reg A+ application that will enable them to sell security tokens to the public.

As demand for utility tokens continues to decrease, expect to see security tokens outstrip them and become the preferred fundraising method for tokenized projects. From a building perspective, this year has recorded plenty of headway in the security token market. Predictions of 2018 being the year of the security token look to have been overstated however. It seems likelier that accolade will go to 2019 instead.


BCH Professional Stress Test scheduled for November 17

November 07, 2018 Harry DeVries 0 Comments



After the success of the first Bitcoin BCH stress test on the first of September, the group behind that test have decided to ramp up their efforts to showcase the robustness and reliability of the of the BCH Network.

The group plans a more extensive, more professional stress test on November 17, two days after the scheduled protocol upgrade.

Rather than I tell you about the upcoming stress test, Brenden Lee of https://stresstestbitcoin.cash has put some words on the page to give some insight into their group, their processes and what everyone can expect come November 17.

The Professional Stress Test

"Our team came together to bring the first stress test to life, and while the test itself was something of a success, the 2.2 million transactions were a far cry from the target we had set for ourselves of 5 million transactions.

The reasons were wide-ranging and included a lack of automated systems for re-starting tests that failed, issues with the way some nodes were managing transaction buffers, and a lack of people to run the testing and manage the system.

After the test, a small group of us came together to look at forming a professional testing group, and the idea of the professional stress test was born.

Dale Dickins is an early Bitcoin activist and the maker of a documentary called "The Bitcoin Doco." She works tirelessly to build networks of people who use Bitcoin, creating small social worlds to achieve great things. She has recently been part of the group who brought the Bitcoin Cash Jeepney to the streets of Manila and is working on forming long-term business relationships in Bitcoin.

Esthon Medeiros is the wizard behind the curtain, building and managing the test machinery, currently being referred to as the 'Satoshi Shotgun,' which has significantly evolved since the first test. We now can create many geographically dispersed nodes using multiple Bitcoin clients (we currently support Bitcoin Unlimited, Bitcoin SV and Bitcoin ABC) and can easily regather funds and send large numbers of transactions for a sustained period. The machine's power will be on display during the upcoming pre-test which we hope will achieve at least one 32MB block.

Brendan Lee is the author of BUIP086 which extends the functionality of Bitcoin QR codes and developed and now sells the patented Safewords system through his company Coin storage Guru, while more recently has been fortunate enough to be part of the team at Tokenized, recently awarded the Coingeek Token prize. His role has been planning the strategy for ensuring money and resources are available on the day as well as acting as a technical interface for customers.

John Goldberg is the creator of the innovative Pixel Wallet (an Android BCH wallet that uses pictures to send cash) and was a significant contributor to the original stress test and one of the core members of the BCH Jeepney team, who were the first to implement Handcash's POP Retail system in a real-world application.

We also have Spark who created some fantastic data visualizations for the first stress test and is working on ways to capture the essence of what happens during this stress test.

And finally, Yobits who was the originator of the Stress Test idea and as webpage master has done a great job putting together a beautiful website.

As for the stress test itself, we want it known that we are not here to break things. We, as a team, are aligned with Satoshi Vision, however, have decided to run the test in such a way that a network supporting current rules, or the ABC ruleset would face minimal disruption.

The test will challenge mempools, and users may have to pay slightly higher fees than usual (test transactions will carry a fee of just 1sat/byte, so transactions with two satoshis/byte should usually be mined in the next block regardless of the state of the mempool) for reliable transaction confirmations. However, we believe that if a network wants to call itself Bitcoin, it must be able to show the world that it is anti-fragile, and this includes withstanding attacks that I would consider relatively cheap (we will spend about 70BCH over the course of the day) for a well-funded state based actor to execute.

We are very strong proponents of scaling Bitcoin and believe that a successful demonstration of a public network processing over a million transactions per hour will send a huge signal to businesses and the broader public that Bitcoin Cash is serious about adoption, and serious about becoming a global cash network. We hope that we can generate enough hype through this test that companies looking at implementing cryptocurrency-based payments will put Bitcoin Cash first, as it forges a path towards being the best money possible.

Following the stress test, the team is working on a business plan to create value-added services around generating large volumes of transactions on the blockchain for things such as advertising, corporate testing, stress testing and more. The team is very much looking forward to announcing these efforts soon. – Brendan Lee

ECB Shuts Down Maltese Bank Over Schemes to Launder Money and Evade US Sanctions

November 07, 2018 Harry DeVries 0 Comments



Malta's Pilatus Bank has been shut down by the European Central Bank (ECB). Its banking license was revoked after its chairman was charged in the U.S. with money laundering and organizing a scheme to evade U.S. sanctions. The bank had also been accused by a murdered journalist of processing corrupt payments. EU authorities now want new powers to crack down on money laundering.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Pilatus Bank's License Revoked
Malta Financial Services Authority (MFSA) announced on Monday that the ECB has withdrawn the banking license of Pilatus Bank which has been operating in Malta for four years.

The Financial Times elaborated:
The move comes several months after U.S. authorities charged the bank's Iranian-born owner and former chairman Seyed Ali Sadr Hasheminejad with organising a scheme to evade U.S. sanctions against Iran by illegally funnelling more than $115 million from Venezuela to Iranian-controlled companies.

The bank was charged in the United States over money laundering and bank fraud," Reuters added.

Although Seyed Ali Sadr Hasheminejad pleaded not guilty and has been released on bail, MFSA removed him from his roles at the bank and froze the bank's assets. In June, the regulator recommended revoking the bank's license but faced numerous legal hurdles. On Monday, MFSA said that "the ECB had acted on its request to close the bank," the Guardian wrote.

Pilatus Bank, which caters to wealthy clients, reported 308 million euros ($351.64 million) of assets in 2016, according to the bank's annual report. Last year, it opened a branch in London after obtaining a U.K. banking license. The bank "was known to have held accounts for a senior official in the government of the Maltese prime minister, Joseph Muscat, and members of Azerbaijan's ruling family," the Financial Times detailed.

Murdered Journalist's Case
ECB Shuts Down Maltese Bank Over Schemes to Launder Money and Evade US Sanctions
Daphne Caruana Galizia.
Pilatus Bank had also been accused of "processing corrupt payments for senior Azeri and Maltese figures" by Maltese investigative journalist Daphne Caruana Galizia, Reuters described.

Caruana Galizia was killed by a car bomb in Malta a year ago. However, there has been no proven link between her murder and her story about the bank, the publication conveyed. Nonetheless, the event prompted the EU to begin investigating the bank in October last year.

"Three men suspected of killing her – brothers George and Alfred Degiorgio and their friend Vince Muscat – were arrested during a police operation in December 2017," the BBC added.

Maltese Authorities Investigated
ECB Shuts Down Maltese Bank Over Schemes to Launder Money and Evade US SanctionsThe ECB launched two investigations of how Malta dealt with Pilatus Bank last year, Reuters detailed. The first focused on MFSA but the case was closed in September "in part due to the vagueness of EU regulation," European Banking Authority Chairman Andrea Enria told EU lawmakers.

The second investigation focused on the Maltese Financial Intelligence Analysis Unit (FIAU), the country's anti-money laundering agency. Enria emphasized that this investigation has uncovered "serious shortcomings that the body did not remedy," the publication noted. A senior EU official explained:

The European Commission reached preliminary agreement on Monday on new actions against the FIAU over its handling of the Pilatus case, which will force Malta to improve the way its anti-money laundering body operates.

Citing that U.S. authorities played a big role in uncovering alleged illicit banking activities in several European cases, the Guardian reported that "EU authorities want new powers to crack down on money laundering after a string of scandals in Estonia, Latvia and Malta."

UK mulls ban on crypto derivatives

October 30, 2018 Harry DeVries 0 Comments



The UK's Financial Conduct Authority (FCA) will be holding consultations on a "potential prohibition" of cryptocurrency-based derivatives, in order to protect consumers from risks posed by digital assets.

"[T]he FCA will consult on a prohibition of the sale to retail consumers of all derivatives referencing exchange tokens such as Bitcoin, including CFDs, futures, options and transferable securities," read the policy paper by the Cryptoassets Taskforce, which is composed of the FCA, HM Treasury, and the Bank of England. Not included under the proposed ban are cryptocurrencies classified as securities, which are then to be regulated by the European Securities and Markets Authority (ESMA).

The paper noted that the FCA has already supported ESMA's restrictions on contracts for difference (CFDs) that reference cryptocurrencies, a measure that took effect last August 1.

The report added that the FCA "will not authorize or approve the listing of a transferable security or a fund that references exchange tokens (for example, exchange-traded funds) unless it has confidence in the integrity of the underlying market and that other regulatory criteria for funds authorization are met."

The consultations have been scheduled for some time before the end of the year.

The task force also called for further clarification of general regulations for the cryptocurrency market, expressing similar concerns as the UK Treasury committee in its report released in September, such as price volatility of many virtual currencies.

While acknowledging the benefits of the use of cryptocurrencies, such as increased efficiency of financial transfers and the capacity to raise funds, the task force said, "Evidence of the current generation of cryptoassets delivering any of these benefits is limited and many use cases are unproven at a large scale," leading it to conclude that "in many cases, the risks posed by the current generation of cryptoassets outweigh any potential benefits."

The task force noted that the UK government itself is exploring the use of blockchain technology apart from financial services, having invested more than £10 million for various distributed ledger projects, and creating a £20-million GovTech Catalyst Fund to study applications of the technology for the public sector.

Last year, the FCA had already warned of the risks in investing in CFDs, but without suggesting a prohibition. It also issued guidelines last April affirming its authority over the trade of derivatives.

60% of Americans okay with crypto donations for elections

October 30, 2018 Harry DeVries 0 Comments



60% of Americans believe that it should be legal to donate cryptocurrencies for election campaigns, under the same rules that apply to U.S. dollar donations.

Research company Clovr, surveying 1,023 eligible voters in the country, also found that only 21% disagreed that cryptocurrency donations should be allowed.

At present, cryptocurrency donations are treated as in-kind contributions limited to $100 worth at the time of donating. This is based on a 2014 ruling, when the price of BTC was around $440.

54% of respondents said that cryptocurrencies were secure enough to be used for political purposes, while 73% of those who claimed to be knowledgeable about digital currencies said that security was not a problematic issue.

Only 42% saw cryptocurrencies as financially stable enough for political purposes. 52% of self-identified Republicans answered in the affirmative, whereas only 40% of Democrats and 35% independents did so.

Only about 25% said they would be more willing to donate to campaigns if cryptocurrencies were an option like fiat currencies. "[M]ost contributors still prefer to donate with U.S. dollars, but a growing number said they would prefer to either give exclusively with digital currencies or a combination of both dollars and cryptocurrency," Clovr noted.

Even though more than half of respondents supported legality of cryptocurrency donations, 62% said cryptocurrencies were more likely to be used illegally in the U.S. political system, compared to the U.S. dollar. "Even a slight majority of people who were incredibly familiar with cryptocurrency believed illegal campaign activity would increase," Clovr said.

The firm added, "State governments haven't yet jumped on the cryptocurrency bandwagon, but if the FEC [Federal Election Commission] and other federal agencies expand its use, then history indicates many will follow."

Already, several politicians have made use of cryptocurrency donations in their campaigns, including Brian Forde, running for California's 45th Congressional District, who received the support of, among other investors, the Winklevoss twins, founders of the Gemini cryptocurrency exchange.

HTC’s New Blockchain Smartphone Can Be Bought With Bitcoin

October 24, 2018 Harry DeVries 0 Comments




HTC, the struggling Taiwanese phone-maker, has launched a smartphone that can be bought only with BTC or ETH. Called the Exodus 1, the smartphone is blockchain-integrated and features a cryptocurrency wallet built into a secure enclave of the device.

HTC Sells Its New Cryptocurrency Wallet-Enabled Phone for 0.15 BTC
Initially announced in May, the Exodus 1 phone was unveiled in Berlin, Germany on Oct. 22. The handset will retail for 0.15 BTC or 4.78 ETH in early access deals, which is equivalent to $960. First shipments are expected in December, the company said.

"Exodus 1 is a foundational element of the crypto internet," Phil Chen, HTC's 'decentralized chief officer', said in a statement on the company's website. "For digital assets and decentralized apps to reach their potential, we believe mobile will need to be the main point of distribution."

Built into the Exodus 1 is a cryptocurrency wallet called Zion, which was developed by HTC to serve as a hardware virtual currency wallet. Chen said the wallet runs from a secure enclave on the phone's chip, separate from the Android operating system, to safeguard digital coins. He underscored the importance of keeping this area of the phone separated from Android because Google's operating system was "fundamentally insecure with a centralized system," exposing users' funds to theft by attackers.

"Think of [the enclave] as a micro OS that runs in parallel with Android," CNBC quoted Chen as saying. "It basically is a wallet, but the wallet, what it does is hold your private keys." Chen added: "The reason why you do a blockchain phone is … for everybody just to own their own keys. Everything starts there. When you start owning your own keys, then you can start owning your own digital identity, then you can start to own data."

Cryptocurrency-Only Pricing to Bring Device to Its Core Audience
HTC's new phone will run decentralized applications (dapps). It also features a Social Key Recovery function that helps users "regain access to their funds if they lose their private key via a select number of trusted contacts."

"Selling [the phone] in crypto only and being the first to do so means we are bringing this directly to the core audience and those who will want this device – the blockchain community," Chen told the South China Morning Post. He added:

It reflects our belief in cryptocurrencies – in fact we had to recreate and overcome many processes internally, as well as find new distributors, so that we can achieve the goal of only accepting cryptocurrencies as the form of payment.

Exodus 1 will be available in 34 countries including Hong Kong, Singapore, the United States, the United Kingdom and other European countries. However, the phone will not be available in China, which has taken a strict approach to bitcoin and cryptocurrencies.

More Companies Looking to Enter Blockchain Smartphone Market
HTC, which at one time was among the top manufacturers of smartphones in the world, is not the only company to try and offer a blockchain-focused phone.

Switzerland-based start-up Sirin Labs is currently accepting orders for its $999 smartphone, whose shipping has been delayed from October. Chinese information communication technologies firms such as Lenovo Group and Sichuan Changhong Electric have previously announced plans for a blockchain phone, but provided no details.

Earlier this month, Indonesia-based startup Pundi X unveiled its blockchain-powered handset called Xphone which, unlike HTC and Sirin Labs' devices, can operate on its own blockchain-based transmission protocol, independently of mobile carriers.

Aside from running dapps, Exodus 1 also comes with numerous features found on regular flagship smartphones such as dual rear cameras and a six-inch Quad HD+ display.

CoinGeek-sponsored Bitcoin BCH Miners Choice Summit happens in Hong Kong on November 2

October 24, 2018 Harry DeVries 0 Comments



When the August 2017 Bitcoin Cash hard fork took place, it did not really create a new coin. Instead, Bitcoin Cash (BCH) was the rebirth of the original Bitcoin, designed to stay to true to the Satoshi Vision (SV).

With Bitcoin BCH, the roadmap is for massive on-chain scaling by significantly increasing the block size, enabling fast transaction processing, and keeping transaction fees very low. The key BCH developer groups have had some differences about how quickly BCH should scale, and the dangers of developer groups constantly trying to experiment with proposed technical changes to the Bitcoin protocol.

CoinGeek-sponsored Bitcoin BCH Miners Choice Summit happening in Hong Kong

Now we have Bitcoin SV, the new full node implementation for Bitcoin BCH that will restore the original Satoshi protocol, keep it stable, enable it to massively scale, and allow major businesses to confidently build on top of BCH. By trusting the original design of Bitcoin rather than constantly changing it, Bitcoin SV will support global adoption, enterprise-level usage of BCH, and allow miners to earn more longer-term revenue.

To gain more insight about Satoshi Vision, as well as Bitcoin SV and SVPool, miners are invited to attend the CoinGeek-sponsored Bitcoin BCH Miners Choice Summit, taking place at The Harbour Grand Hotel in Hong Kong on November 2.

The dynamic half-day conference will feature the industry's most exclusive guest speakers, including nChain Chief Scientist Dr. Craig S. Wright and nChain Group CEO Jimmy Nguyen, along with CoinGeek Mining's Bob Yuan, one of the most respected mining professionals in China. More speakers will be announced soon.

Recently, Dr. Wright launched his personal initiative—the public Bitcoin BCH mining pool SVPool—to all public miners on the Bitcoin BCH network. SVPool represents BCH miners who support the Satoshi Vision and want to generate more long-term revenue. BTC miners who believe in Bitcoin's original vision are also invited to begin mining BCH with SVPool.

Wright explained: "If you believe in Bitcoin's original vision, you believe in Bitcoin SV and SVPool. For too long, developer groups have repeatedly tried changing Bitcoin. The original Satoshi protocol for Bitcoin does not need to be fixed. It has everything BCH needs to massively scale, support tokenization, smart contracts and other advanced features, and become the only global public blockchain. Just like the Internet has a stable protocol, Bitcoin needs a stable protocol so businesses can build upon a rock solid foundation rather than constantly moving sand."

The CoinGeek-sponsored Bitcoin BCH Miners Choice Summit is an event not to be missed. Seats are limited, so best to RSVP now to RSVP@svpool.com to confirm your attendance at this iconic event.

Miners are also invited to take part in the CoinGeek Week Miners Day, happening during the CoinGeek Week Conference in London this November. The SVPool and CoinGeek Mining team will be on-hand to discuss how you can do your part in making Bitcoin BCH realize its full potential. Secure your seat today via Eventbrite for the three-day conference that's shaping up to be the essential Bitcoin BCH conference this fall.

The Bitcoin SV project was created at the request of and sponsored by Antiguan-based CoinGeek Mining, with development work initiated by nChain. The project is also owned by the Antiguan-based bComm Association on behalf of the global BCH community, and the Bitcoin SV code is made available under the open source MIT license.

Security Giant G4S Offers Protected Offline Cryptocurrency Storage

October 18, 2018 Harry DeVries 0 Comments



G4S (LSE: GFS), a security services provider with operations in more than 90 countries, guards everything from cash transfers to nuclear power plants and prisons. The London-headquartered company has now started to offer cryptocurrency protection, according to a recent report.

Secure Vault Storage
The company, which has more than 560,000 employees throughout the world, announced on Wednesday that it has developed a new service providing high-security offline cryptocurrency storage, to help to protect assets from criminals and hackers. And the company is already providing the service to an unnamed European exchange, according to the Financial Times. It charges clients based on the number of different offline storage devices they want to use to store their private keys, and reportedly uses its own existing vaults for the service, rather than newly built facilities.

The company's press statement confirmed that cryptocurrency exchanges are already turning to them for help. Dominic MacIver, senior risk analyst at G4S Risk Consulting, commented: "Our clients approach us to discuss solutions to their requirements because of G4S Cash Solutions' experience in protecting high-value items and G4S Risk Consulting's experience in developing bespoke solutions to complex challenges. Working with our clients, we are continuously applying their expert knowledge of crypto-assets and our best practice in physical security to a sector at the cutting edge of financial technology."

Heavily Restricted Access
The service is said to be more secure then other methods because G4S takes the keys offline, breaks them up and stores them in high-security vaults. Moreover, access to the sites in which they are held is said to be heavily restricted, with multiple layers of security. Clients can only gain access when all of the pieces are combined with specific technology.

"Offline storage has become a more established and secure way of storing crypto-assets," MacIver said. "At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of 'vault storage.' We not only take the assets offline, but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike."

October 18, 2018 ‘It’s time for Bitcoin BCH to grow up’: Jimmy Nguyen explains the importance of Bitcoin SV

October 18, 2018 Harry DeVries 0 Comments



October 15 marks an important event for the Bitcoin Cash (BCH) community. On that day, the release candidate of the Bitcoin SV client went live, one month ahead of the November Bitcoin Cash (BCH) network upgrade.

Bitcoin BCH miners and mining pools are encouraged to begin using Bitcoin SV, which is a new full-node implementation for Bitcoin BCH designed to fulfill the vision set out by Satoshi Nakamoto's original Bitcoin white paper. Currently, the Bitcoin BCH ecosystem has a number of full node implementations available, but what makes Bitcoin SV stand out?

The answer, according to nChain CEO Jimmy Nguyen, is straightforward: Like its initials, which stand for Satoshi Vision, Bitcoin SV better fulfills the original vision for Bitcoin.

"The goal of Bitcoin SV is to restore the original Bitcoin protocol, and then create an implementation that enables a protocol that is stable, scalable, and secure," Nguyen explained. "Those are our three main goals, and it's designed to really allow a protocol to enable what bitcoin was always meant to be but could not be once Bitcoin Core [BTC] took over the protocol, but now that it's been reclaimed in bitcoin cash, we want the software implementation to enable that vision to come to life."

With a stable protocol, businesses—especially the big businesses—will feel comfortable operating on it. Take the internet, for instance. Its evolution has been very slow, which, according to Nguyen, makes sense since businesses or those running websites or mobile applications don't want have to deal with time consuming, expensive protocol changes every six months. For BCH, some developers groups want to experiment by continually introducing new op_codes, changes and feature sets not found in the original Bitcoin protocol, which would lead to a continually shifting platform. In contrast, Bitcoin SV seeks to restore the original Satoshi client release 0.1 and then keep it stable and business-friendly.

"Do you want the big business of the world to build their house, their projects, on sand or on a rock foundation? We don't want the platform and the protocol to be moving quickly every six months. We want foundation to be rock solid," the nChain CEO noted.

Scalability is another key component of Bitcoin SV. While other implementations seek a gradual approach to scaling, nChain believes that the Bitcoin BCH network needs to scale bigger and quickly. With Bitcoin SV 0.1 version, the default maximum size of accepted blocks has also been increased from the 32MB soft limit to 128MB. The reason behind this comes down to one thing: economic reality. For Bitcoin BCH miners to remain profitable in two years, when the next block reward halving (from 12.5 to 6.25 coins) event is set to take place and even further halving after that, the network needs to start scaling now so miners earn more in transaction fees. 

For big businesses, scalability is also critical. Nguyen said, "They want to know that the network will be able to sustain the large capacity that's needed for their project and other companies' projects because otherwise they're going to be hesitant to say, 'Why would I commit millions of dollars of resources and time to build let's say my blockchain application on a network which may not be able to sustain that scalability issues?'"

Speaking of critical issues for cryptocurrencies like Bitcoin BCH, we have security. For the Bitcoin SV team, it means developing a world-class security system for Bitcoin SV's code.

"Security is definitely this key issue. We are going to work as hard as possible to implement the best practices possible and modeling some of the best practices from security systems and rigorous processes in some of the most mission-critical industries such as aerospace, national security, transportation. I think that will serve the bitcoin community well," Nguyen said.

In closing, the nChain CEO addressed the potential split that could happen in November, saying that it's natural in the Bitcoin ecosystem for groups to emerge with a different plan and vision—and it's up to the miners to choose.

Unlike other implementations, Bitcoin SV is born out of the desire to empower miners to direct the future of Bitcoin and also to ensure BCH miners remain profitable. Miners will have a choice and a voice to drive the process of restoring Bitcoin to its optimal state—that of unbounded blocks, original op_codes, and no artificial limits imposed on the protocol.

"We believe it's time for bitcoin to grow up. It's time for bitcoin to professionalize. We want a massively scaled network, we want worldwide adoption and enterprise-level usage. We want 5 billion people using Bitcoin Cash in the years to come. To get there, we need to demonstrate that its ecosystem is professionalized with world-class security, quality assurance practices with a scaled network, with big blocks to support big enterprise and global payments. And, going back to the first pillar, a stable protocol," Nguyen said.

A Bitcoin Rat Is Occupying Wall Street

October 11, 2018 Harry DeVries 0 Comments



Ten years after the financial crisis of 2008, an artist known as Nelson Saiers has placed his latest artwork across the street from the New York Federal Reserve building in the financial district. The piece is a giant sized and menacing-looking inflatable rat covered in Bitcoin code. The former Wall Street hedge fund manager and mathematician dedicates most of his time these days to his artisan loft where he produces visuals depicting the broken financial system.

A Visual Perspective of Finance and Art
Nelson Saiers giant-sized inflatable rat is covered in bitcoin code and is looking directly at the New York Federal Reserve.
There's some new street art located across the street from the New York Federal Reserve building that's been causing some attention. A tall balloon-like white rat covered in bitcoin code is tied to the ground looking like it's about to attack the structure. Nelson Saiers devotes his energy to artistic pieces that shine a light on the traditional finance system we deal with today. Saiers financial artwork has made headlines over the years after he left his trading position in 2014. 

The 8 ft white rat covered in Bitcoin code staged across the street from the central banker's lair represents an interesting time in history, because it is ten years after the 2008 financial crisis. Additionally, Oct. 31, 2018, marks the tenth anniversary of the Bitcoin white paper published by Satoshi Nakamoto. The inflatable white rat's creator, who is also known as the "Warhol of Wall Street," explained in an interview on Oct. 9 with Shreyas Chari his latest artwork does give a representation of these anniversary dates.  

"So this piece is slightly different from the inflatable rats you see around the city. It's loaded with Bitcoin code and a couple related equations," explained Saiers during the interview.

Saiers adds:  
About ten years ago, while TARP was bailing out the economy, Satoshi Nakamoto wrote this code along with the words; '03 Jan 2009 The Times, Chancellor on brink of second bailout for banks,' referencing the equivalent in England — Satoshi seemed pretty opposed to centralization and said it was doomed in the end. I wanted to be true to his views and reflect this in the artwork.

The Infestation of Sewer Rats
Over the last two decades, street art depicting the world's financial inequalities has become a significant movement globally. The prominent and controversial street artist Banksy has brought the art-form to a new height and the use of rats can be seen on lots of walls covered in graffiti throughout the past two decades.

The rat has been used in financial street art for two decades and has been popularized by the anonymous artist Banksy. Andreas Antonopoulos has also referred to Bitcoin as a "sewer rat." 
Banksy himself said the rat is something to look up to because these animals do whatever they want. "If you feel dirty, insignificant or unloved, then rats are a good role model. They exist without permission, they have no respect for the hierarchy of society," the artist explains in his writings. The innovation of cryptocurrency itself has been depicted as an uncaring 'honey badger of money' or anarchistic street rat many times over the years.  

In 2016 the computer scientist Andreas Antonopoulos referred to the Bitcoin protocol as a "sewer rat of currencies."       

"Bitcoin isn't living in a bubble — Bitcoin is a sewer rat," Antonopoulos detailed during his speech. "It's missing a leg. Its snout was badly mangled in an accident last year. It's not allergic to anything — In fact, it's probably got a couple of strains of bubonic plague on it which it treats like a common cold. You have a system that is antifragile and dynamic and robust."

Bitcoin Street Art Isn't Going Away Anytime Soon
Over the last two years or so Bitcoin and street art have melded together and many artists have been using the cryptocurrency for symbolism on walls. In Paris, France there's an artist named Pascal Boyart aka "Pboy," who leaves his cryptocurrency themed art and QR code on buildings throughout the city. The artist Cryptograffiti has made a name for himself as he spreads his Bitcoin-infused art across various cities within the US.

Bitcoin street art by Pascal Boyart aka 'Pboy.'
Saiers latest artwork and the many other artists located around the world shows there's a growing trend of mixing visually entertaining financial and political symbolism with cryptocurrencies. The artist's Bitcoin rat, however, is not permanent and Saiers has plans to remove the inflatable after the display.
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