SVK CRYPTO PODCAST 083 – 16/02/2018 – Vitalik to advise new Ethereum community fund?

Welcome to the SVK Crypto, 15 Minutes of Crypto Fame, brought to you by your host, Charles Storry. We provide daily cryptocurrency content and analysis on topics such as Bitcoin, Ethereum, Altcoins and ICO’s.

We not only produce our daily content we feature CEO’s of all exciting ICO’s! Stay tuned to find out more!

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Top Crypto News – 16/02/2018

No, ‘Litecoin Cash’ Isn’t Bitcoin Cash All Over Again


“Be careful out there!”

So tweeted litecoin creator Charlie Lee in response to the launch of litecoin cash, a cryptocurrency that’s expected to spin off from his project, the fifth largest cryptocurrency by total value, next weekend, taking its code and transaction history with it. Always outspoken, Lee went on to call the project a “scam,” warning users: “Don’t fall for it.”

His harsh comments might come as a surprise since litecoin cash’s developers admit they have no ties to the official litecoin project and don’t particularly see it as a competitor.

Much the same as other projects “forking” to create a new cryptocurrency, litecoin cash’s developers claim they simply want to use an existing codebase to create a newer and better form of online exchange. Also, by changing litecoin’s underlying mining algorithm to the one bitcoin uses, they argue litecoin cash will bring new life to old, abandoned mining equipment in a kind of strange recycling attempt.

But while developers claim that’s the motivation, users seem mostly interested in the “free” money.

Already, an influx of buyers on more consumer-friendly exchanges is driving the price of litecoin to notable highs, in part because, due to the mechanics of the fork, any user who owns litecoin at the time of the fork will immediately have a portion of litecoin cash.

Bolstering this view is the name “litecoin cash,” an obvious reference to the successful fork bitcoin cash, the profitable project that sparked the wave of forks carrying into 2018.

And litecoin cash’s lead developer Tanner, who did not give his full name, admits the project named it as such to draw more attention.

He told CoinDesk:

“Community engagement is the key to success for any coin. I think that, ‘Hey, you already own this, why not check out what we’re doing?’ is a good jumping off point for people.”

By doing so, Tanner told CoinDesk litecoin cash hopes to use the free coin giveaway as a springboard to create a network faster than bitcoin, with lower transaction times.

And in this way, the two “cash” projects are different. While bitcoin cash rallied support from those who had a competing technical vision, litecoin cash doesn’t appear to have the same strong ideological roots.

No debate

To start, bitcoin cash arguably had more on the line since it was created as the culmination of years of debate in the bitcoin community.

Last summer, bitcoin cash users and miners were effectively pioneers in the forking world – they didn’t know if they would create a coin that people would actually want to use. While they didn’t replace bitcoin, as their developers hoped, they rallied together a community, and today they’re the fourth most valuable cryptocurrency by market cap, appealing to users who support their unique technical roadmap.

Litecoin cash doesn’t have a similar history and traction leading up to it. So, litecoiners like Lee doubt litecoin cash serves the same purpose as bitcoin cash as a way of settling an argument.

Litecoin cash hasn’t made any such claims either, but Lee worries that even though litecoin cash doesn’t claim to be associated with litecoin, it will confuse users anyway.

Lee told CoinDesk:

“It confuses people into thinking litecoin is splitting. The litecoin community has no interest in splitting. It’s just some people trying to make a quick buck. And calling it litecoin gives them some legitimacy.”

Lee said he’s witnessed no debate in the litecoin community, not over litecoin’s mining algorithm, sha256, the feature litecoin cash plans to implement. “No one wants to fork litecoin to sha256. That’s pretty stupid,” he said.

“Yes, I can understand that confusion. I can also understand people who are yelling ‘scam,'” Tanner said. “I think [Lee]’s absolutely right to stick to his guns and protect his project and community. I don’t expect him to change his mind about us but hope that if anything he’ll eventually recognize that we’re trying to teach people to be safe.”

Meanwhile, most users seem interested in it for the free money.

As one user put it in the litecoin cash Telegram chat group: “We want the fork for free coins which potentially may be real or scam.”

Forking obsession

But Lee’s comments are part of a larger pushback against forks.

One big reason, as he alluded to, is brand confusion. Bitcoin forks are already taking the name “bitcoin” along with them, despite not having any association with the “real” or most widely-known bitcoin project.

One developer recently even suggested suing any project that takes the bitcoin name to “mitigate confusion” for new users. This idea proved very unpopular, but it shows the general skepticism in forks, and how developers have zero control over the situation due to the nature of open-source.

Litecoin cash argues they’re using the litecoin prefix simply because it’s just become common practice of late. “Anyone who’s paid attention through the bitcoin forking period hears ‘litecoin cash’ and instantly understands that it’s a fork of litecoin,” Tanner said.

“I can’t deny it also appealed to our sense of humor to poke the wasp’s nest with our naming choice,” he added.

And it’s perhaps working since litecoin cash has been able to draw a lot of recent media attention.

That said, Tanner argues the project seeks to stand out from litecoin forks that he thinks will inevitable follow: “There will be forks that follow us, who do seek to confuse you, and do seek to scam you.”

Still, Lee remains unconvinced litecoin cash has any merits, concluding:

“In my mind, it’s just a scam and it hurts litecoin.”

Litecoin bitcoin image via Shutterstock
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Five Siberian Power Plants Attracting Crypto Miners With Surplus Electricity


Five Power Plant Sites

Five Siberian Power Plants Attracting Cryptocurrency Miners With Surplus ElectricityRussian energy company En+ Group is actively preparing to offer electricity to cryptocurrency miners at some of its power plants, Vedomosti reported on Wednesday.

En+ CEO Maxim Sokov was quoted saying, “We are talking about five sites.” They are in the Irkutsk Oblast, a federal subject of Russia, located in southeastern Siberia. Two sites are near the town of Ust-Ilimskin, one is near the city of Bratsk, and the other two are near the city of Irkutsk.

Five Siberian Power Plants Attracting Cryptocurrency Miners With Surplus Electricity
En+ CEO Maxim Sokov.

Near Ust-Ilimsk, on the Angara River, En+ has a hydropower power plant (HPP) with a capacity of 3,840 MW and a coal-fired combined heat and power plant (CHP) with a capacity of 525 MW.

Near Bratsk, “En + has a hydroelectric power plant with a capacity of 4,500 MW,” the publication noted.

Near Irkutsk, which is also the administrative center of Irkutsk Oblast, “there are two sites: a hydroelectric power plant with a capacity of 662 MW and a [coal-fired] combined heat and power plant with a capacity of 655 MW,” the news outlet detailed.

En+ said the cold climate of the region around the three areas and the availability of cheap electricity make the condition attractive for cryptocurrency mining.

Attracting Crypto Miners

Sokov revealed that En+ is currently negotiating with several investors, “including international ones – Chinese and American,” for “the construction of mining farms that will act as consumers of electricity,” Ria Novosti described, adding:

En+ will offer miners to build farms to produce cryptocurrencies next to En+ power plants in Irkutsk, Bratsk, and Ust-Ilimsk.

Five Siberian Power Plants Attracting Cryptocurrency Miners With Surplus ElectricityThe CEO emphasized that his company will benefit from attracting miners from China, where strict prohibitive regulation is now in force.

According to Vedomosti, the total demand for power supplies from cryptocurrency miners could reach 100 MW for En+ Group in 2018, and the group could earn about 980 million rubles (~USD$17.2 million). Natalia Porokhova, Head of Research and Forecasting Group at ACRA estimates that each “100 MW can bring En+ from 10 to 15 million dollars,” the news outlet added.

While Russian aluminum producer Rusal, which En+ has a controlling stake in, is currently the main user of the company’s hydropower, En+ believes that it could use up excess capacity and diversify its customer base by offering electricity supplies to crypto miners.

Cryptocurrency mining is currently unregulated in Russia. However, the regulators are drafting a bill for its regulation. Earlier this month, the Bank of Russia said that it will allow crypto mining in the country but proposes that miners sell their coins overseas.

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As Bitcoin Soars, So Do Coinbase Customer Complaints


It was around midnight, January 31, when K. received an email from Coinbase containing a 1099 tax form. That was strange enough – K. certainly didn’t expect a cryptocurrency exchange to be a conduit for government documents.

Then K. looked at how much Coinbase said he owed money on: $2.4 million.

“I initially freaked out, considering I’ve probably put in a max of $8,000 into Coinbase and somehow I may be liable for millions?” K. said in an online chat with CoinDesk.

The next business day, K. called Coinbase customer support, only to have a representative tell him he couldn’t answer the details on the phone, and to email the company instead.

Which he did, only to get a formulaic response showing the IRS guidance to Coinbase.

To this day, K says he has no idea where the $2.4 million figure came from. He says he is too busy to jump through more hoops with the largest exchange in the U.S., and that he feels safe in the knowledge that he doesn’t have to pay taxes on $2.4 million in earnings, since they don’t exist.

More users, more problems

K. is far from alone in wrestling with an apparent misfire from Coinbase.

In recent weeks, complaints have been piling up on a Reddit page dedicated to the company. The issues mentioned are wide-ranging: missing wires, unreleased bitcoin, disabled accounts.

The top posts on the page over the past month look like this:

A representative for Coinbase, Stephanie Kendall, said the company was unable to comment on the complaints.

Stepping back, as crypto values spiked during the recent run-up, several major exchanges heaved under the weight of new demand. Kraken, the third-largest exchange in the world, suffered an outage earlier this year that was supposed to take two hours but ended up lasting two days as it upgraded its system.

Bitfinex also suffered a malfunction late last year due to a denial-of-service attack.

But perhaps above all others, user growth at Coinbase has gone gangbusters. The userbase has more than doubled since 2016 to more than 10 million customers today, according to spokeswoman Kendall. The company now employs about 200 people, she said.

Service at the exchange had already begun showing signs of strain when the company announced in August it had raised $100 million, and said some of the new funding would go toward alleviating customer service pressure. Late last month, it hired a new vice president of operations and technology, Tina Bhatnager, to oversee customer support. It also appointed Dan Romero with the title of general manager of Coinbase, in a blog with the headline: “Customer support: failure is not an option.”

But the complaints are still coming in fast and furious.

Perhaps most distressingly, a number of Coinbase users recently reported unauthorized charges to their linked bank accounts. In some cases, these charges, which duplicated previous legitimate withdrawals, completely drained customers’ funds and left them owing their banks hefty overdraft fees.

And now, perhaps sensing a weakness, formidable new competitors are encroaching on Coinbase’s retail turf: the stock brokerage platform Robinhood, which now has 1 million crypto users; and Square, which now allows buying and selling bitcoin through the Square Cash app.

Squeaky wheels

For now, though, there remains the question of what to do if you’re impacted.

Coinbase user Suzepo, who lives in Italy, says it took him three tries over the course of a month for his verification deposits to go through. It was apparently only after he added the name of his bank that it went through; there were apparently no instructions on Coinbase’s part that this was necessary.

He said that in his attempts to reach Coinbase, he didn’t get a single response until the very end of his ordeal. While he appreciates that there was no delayed purchases, and immediate fund input, he ultimately felt frustrated by the support assistance, or lack thereof.

“No response from the support team, customers left alone to deal with their own issues and that big [verification] transfer burden,” he says.

Reddit user crypt_iss complained about a botched transaction in a post that was heavily upvoted on Coinbase’s subreddit. As of last week, he said he has “technically withdrawn” the amount but it is still not in his Coinbase vault. Yet Coinbase shows the transaction as completed in one location and pending in another, he says.

“No one from help desk has called, it is only email messages. If this post would not had risen to top here, even this would not had happened. I really cannot believe they have such poor handling of so many parts. Move fast and break things culture I guess,” he said.

Sergej Kotliar, the CEO of crypto mobile phone card provider Bitrefill, told CoinDesk he had no reason to believe the users’ complaints weren’t legitimate.

Making a stink on social media “is a good way to get helped, and people who are missing tens of thousands of dollars can get pretty upset,” he said.

Kotliar also said he doubted the complaints were being astroturfed, i.e. orchestrated by competitors to sow doubts about Coinbase.

“Who would be their rivals? This is growing pains,” he said. “They really grew very big.”

Coinbase image via Shutterstock
Written By CoinDesk


Spanish Government Eyes Tax Benefits for Crypto Companies


Spain’s ruling political party is reportedly drafting legislation that it hopes will help woo cryptocurrency and blockchain companies to the country.

According to Bloomberg, the People’s Party of Spain is eyeing the move as part of a package that would be focused on firms working with new technologies like 3-D printers.

Yet according to lawmaker Teodoro Garcia Egea, who spoke to the news service, the bill could ultimately include provisions that aim to attract companies that are looking to sell tokens via initial coin offerings. The bill may also specify a threshold below which cryptocurrency investments would not have to be reported for tax purposes.

“We hope to get the legislation ready this year,” Garcia Ega commented.

The People’s Party is also encouraging lawmakers to hear testimony from blockchain experts on the matter, and it intends to review regulatory measures that other countries such as Switzerland are developing or have already implemented. Egea told Bloomberg Politics that the technology is good for Spain because it spurs work in other sectors like education, finance and health.

The legislation may also be focused in part on encouraging investment in token sales, according to Garcia Egea.

“We want to set up Europe’s safest framework to invest in ICOs,” he was quoted as saying.

Spain is far from alone in drafting blockchain-related legislation. Gibraltar, a U.K. overseas territory, intends to solidify its position on ICOs this month.

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SVK CRYPTO PODCAST 082 – 15/02/2018 – A deeper look at HybridBlock!

Welcome to the SVK Crypto, 15 Minutes of Crypto Fame, brought to you by your host, Charles Storry. We provide daily cryptocurrency content and analysis on topics such as Bitcoin, Ethereum, Altcoins and ICO’s.

We not only produce our daily content we feature CEO’s of all exciting ICO’s! Stay tuned to find out more!

If you’d like to stay in touch or get more info from me, please SUBSCRIBE to the channel and spread the good word!

Follow us on Twitter:

Visit our website:

Email us:

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Top Crypto News – 15/02/2018

Bitfury’s North American Mining Proxy Hut 8 to List on TSX This Month






Bitfury IPO

Bitfury’s North American Mining Proxy Hut 8 to List on TSX This MonthVancouver-based Hut 8 Mining Corp., a part of the Bitfury Group, is scheduled to list on the TSX Venture Exchange in Toronto, Canada this month. After its debut, Hut 8 will be 49 percent owned by the parent group, and the remaining stock in the hands of insiders and private placement investors.

It is planned that by mid of the year, Hut 8 will acquired 60 megawatts of Bitfury’s mining power in Canada and have an exclusive agreement with the parent company to develop new farms in all of North America, according to its investor presentation. Hedge fund mogul Mike Novogratz is also said to be financing the deal.

Bitfury reportedly has 172 megawatts of hashing power, mined over a million coins, and its yearly revenue was an estimated $350 million. And Chief Executive Officer Valery Vavilov puts the company’s market share at about 10 to 12 percent.

The Canadian Connection

Bitfury’s North American Mining Proxy Hut 8 to List on TSX This MonthCanada has been able to leverage its cold weather and cheap hydro-electric power to attract cryptocurrency miners, but in this case the came for another reason. The TSX allows firms to easily raise public funds, a critical point for Bitfury who needs to compete with the much larger Bitmain. “This industry’s dependency on highly efficient silicon can determine who wins and loses,” explained venture capital investor Bill Tai. “Part of this equation is access to capital. It’s very much like oil rigs, the more you can put up, the more output you’re going to get.”

Sean Clark, chief executive officer of Hut 8, commented: “This is about access to capital and scale. We found a perfect vehicle to capitalize incredibly quickly. Bitfury now is going to rebalance the global network.” He added that: “If the capital markets react as we expect them to, there’s the opportunity to vend in other parts of Bitfury. Potentially all of Bitfury – piece by piece.”

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Seven UK Companies Form Cryptocurrency Trade Body


Leading Cryptocurrency Companies form Crypto UK Trade Body

Seven Companies Form UK Cryptocurrency Trade BodySeven leading cryptocurrency companies operating the UK have formed an independent trade body tasked with developing self-regulatory standards for the cryptocurrency industry, in addition to “engag[ing] policymakers.”

The members of Crypto UK are Coinbase, Etoro,, Blockex, Commerceblock, Coinshares, and Cryptocompare – comprising trading platforms, exchanges, asset managers, merchants, comparison websites, and intermediaries from the cryptocurrency sector.

“Regulation is Imminent”

Seven Companies Form UK Cryptocurrency Trade BodyThe Crypto UK chairman and managing director of Etoro, Iqbal Gandham, described the trade body’s mission as “promot[ing] best practice and to work with government and regulators,” emphasizing his hope that the group can develop “the blueprint for what a future regulatory framework will look like.”

The CEO of Coinbase UK, Zeeshan Feroz, stated that the “fundamental” goal of Crypto UK is to “engag[e] as a single industry with the government,” adding that “Regulation is imminent and that’s a good thing.”

Crypto UK has issued a code of conduct outlining the principles by which its members are expected to adhere. The code of conduct emphasizes the need for members to operate with transparency and in full adherence to UK regulatory requirements, in addition to making practical propositions with regards to the management of customer funds.

Cryptocurrency Sector “Severely Misunderstood” by Regulators

Seven Companies Form UK Cryptocurrency Trade BodyCrypto UK has stated that it seeks to “raise understanding of the sector at a time of significant growth in popularity,” emphasizing the need for pressure to be placed on government “to introduce appropriate regulation to protect consumers and business certainty, [whilst] allowing the sector to flourish in the UK.”

Mr. Gandham described the cryptocurrency industry as being “severely misunderstood” by mainstream institutions. “That’s why Crypto UK has been established,” Mr. Dandham said, “to promote best practice and to work with government and regulators to ensure that the UK benefits from the exciting potential of this international technology.”

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Crypto All Stars Brings Your Favorite Twitter Traders to the Blockchain


Pyramid Scheme Meets Proof of Ego

Crypto All Stars Brings Your Favorite Twitter Traders to the BlockchainThis week’s must-have blockchain game is next week’s relic, so the odds of Crypto All Stars standing the test of time seem remote. In the here and now though it’s a shameless but amusing take on the meme birthed by Crypto Kitties back in December. The project of Twitter trader Crypto Randy Marsh (who naturally includes himself as one of the cards), the game features many of the cryptoverse’s loudest luminaries including Crypto Cobain, Bitfinexed, and Ari Paul. Thanks to their desire not to be usurped by their peers, many of the “celebs” have already bought their own cards several times over.

Crypto All Stars Brings Your Favorite Twitter Traders to the Blockchain

There are many ways to make money in the cryptosphere, and appealing to traders’ natural vanity is a clever ploy. For the proles who don’t possess these “legendary” shitposters’ follower count or portfolio, there’s the satisfaction of at least getting to own one of the Crypto All Stars’ unique contracts…until the next sucker buys it off you at least. The prospect of witnessing crypto OGs slapping down $10,000 of ETH at a time to prove they’re the whales they purport to be is strangely satisfying.

Crypto All Stars Brings Your Favorite Twitter Traders to the BlockchainFor “players” who feel that 5 ETH for The Crypto Dog(avatar: a dog wearing sunglasses) is a tad pricey, there are cheaper bargains to be had in Ether Tulips, Crypto Kitties, Crypto Titties, Tron Dogs, and many more blockchain trading games. Open Sea marketplace has thousands of the virtual cards for sale. Ether Tulips is about to launch player battles, while strategic card based MMO Neon District is launching soon. Given the amount of ether wasted weekly in ICO exit scams and pyramid schemes, games like Crypto All Stars are arguably one of the better uses for the ethereum network.

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Ethereum’s Magic Solution? ‘Fellowship’ of Coders Embark on Governance Quest


Ethereum’s world computer is in need of a magic touch.

As developers continue to clash over yet another controversial software update, some of ethereum’s top minds are working together to conjure up a solution for what has been a troubling absence of late — community consensus.

Recent discussions concerning the return of lost funds — and a type of code fix that necessitates an “irregular state change,” or platform-wide software revision — has led to internal conflict, with developers questioning their authority to make contentious changes while appealing to the public for opinions on the matter.

Strung up in the aftermath of the Parity fund freeze, a new developer collective is seeking to better organize such debates to achieve the kind of global consensus they believe the project requires to move forward.

Led by developer Greg Colvin and the Ethereum Foundation’s Jamie Pitts, the Fellowship of Ethereum Magicians hopes to provide a structured working group where ethereum coders can coordinate in line with existing best practices for open-source development.

“We’re talking about, ‘Gee, you know, there’s many, many millions of dollars just stranded out there for no good reason that we technically could fix, and should we?’ And again, we don’t have the forums to come to community consensus on these things,” Colvin told CoinDesk.

Often occurring as a result of faulty code, some developers see the return of lost funds as an obligation, while others feel that such actions could be potentially criminal — a polarization that has led to bitter infighting.

“I think having that level of collegiality among the researchers and developers makes it easier for those conversations to take place and stay civil,” Colvin said.

Worsening the state of the situation is that, in the case of decentralized protocols, any disagreement could lead to competing versions of the software – as occurred following the DAO hack of 2016, which led to the creation of a rivaling cryptocurrency code base called ethereum classic.

“I think the DAO is an example of making a big move without an adequate consensus,” Colvin said, adding:

“The fellowship would be the community standing up and saying well, let’s get ourselves organized to form consensus around these things.”

Scaling governance

To Colvin’s point, the recent dispute has revealed fault lines in the platform’s development process overall.

Originally proposed to simplify the process for implementing fund returns, EIP 867 was criticized by some, with EIP editor Yoichi Hirai flatly refusing to even merge the proposal at first. Hirai’s decision, along with the proposal itself, has pushed the community to rethink how much changes should be implemented — with some arguing that the process is too centralized.

“I don’t want to be part of the ethereum community anymore if only one entity can singlehandedly block any proposal,” Parity’s Afri Schoedon wrote on Twitter.

According to Colvin, such struggles hinge on how quickly the community has grown.

“The core developers initially were a pretty small group who all knew each other,” Colvin said. While in these early stages, technical decisions could occur more easily, at this point he said, “It’s a much larger group, it’s spread all around the world.”

Having first publicized the call for participation on reddit, the fellowship is set to begin with a workshop at the upcoming ethereum community conference, EthCC, next month in Paris. From there, Colvin hopes this will expand into a dedicated council by July.

And Colvin maintains that these in-person meetings can do a lot for resolving technical conflicts that can persist online for years.

“Sometimes you need to sit down in person and actually get to know somebody and establish a level of communication that wasn’t there before,” Colvin said.

Rough consensus

In this way, the fellowship models its structure off the Internet Engineering Task Force, or IETF, an international collective of technicians devoted to the upkeep of the internet.

“I saw the IETF is probably the most relevant example of a success in that domain,” Colvin said. Having “kept the internet running for many years,” according to Colvin, the IEFT is built to cope with large numbers and does this by combining larger assemblies with smaller, more specialized groups.

“Each group does its thing, and it would be a rare nerd who would be interested in lots of these groups,” Colvin continued.

Like the IEFT, the fellowship’s governance process advocates what is called “rough consensus and running code,” meaning that the dominant majority within a given discussion will be given precedence, dependent of course on its technical proficiency – the key criteria of judgement for any position held within the group.

Crucially for Colvin, the IEFT achieves this without any kind of corporate funding or any other sponsorship body that could in some way influence the activity of the collective.

Colvin summarized:

“We don’t want it to be any sort of top-down imposition on the community. It has to be a forum, a consensus building forum for the community.”

Bigger questions

By combining an open process, an informal membership structure and an emphasis on technical responsibility, Colvin hopes that the fellowship can finally provide an adequate platform for the community to resolve its more sensitive topics.

Indeed, the question of lost funds isn’t the only technical crossroads ethereum is facing today — and arguably, it’s a trivial discussion compared to the changes that are due to be implemented down the line.

“We’re talking about moving from proof-of-work to proof-of-stake, when we’re still designing proof-of-stake, when it’s still not totally clear it will work. We’re talking about moving into sharding, with two or three different designs in flux. We’re talking really big changes to the protocol,” Colvin said.

According to him, it’s crucial that the wider development community, and not just the core developers, have a voice in these fundamental changes.

“Do we move to proof-of-stake? There’s more than a small number of people who care about that and who know about that and have something to contribute,” Colvin continued, concluding:

“So, that’s the idea, it’s just an offer to the community.”

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SVK CRYPTO PODCAST 081 – 14/02/2018 – Coinbase is to self regulate in the UK? ft.special guest Shane Kehoe!

Welcome to the SVK Crypto, 15 Minutes of Crypto Fame, brought to you by your host, Charles Storry. We provide daily cryptocurrency content and analysis on topics such as Bitcoin, Ethereum, Altcoins and ICO’s.

We not only produce our daily content we feature CEO’s of all exciting ICO’s! Stay tuned to find out more!

If you’d like to stay in touch or get more info from me, please SUBSCRIBE to the channel and spread the good word!

Follow us on Twitter:

Visit our website:

Email us:

Telegram: @SVKCROWD

Top Crypto News – 14/02/2018

Canadian Securities Exchange Taps Blockchain for New Clearinghouse


The Canadian Securities Exchange (CSE) plans to launch a blockchain-based clearing and settlement platform for token sales, it announced today.

The initiative will see the CSE move to list so-called “Security Token Offerings,” through which blockchain-based assets which are explicitly securities would be offered and sold. The blockchain-powered platform represents a new service area for the exchange, which has been operating since 2003.

Companies will be able to use the platform to issue traditional equity and debt through tokenized securities, which would then be offered to investors through fully regulated offerings, which stand in contrast to initial coin offerings (ICOs) that more often than not operate in a regulatory gray area.

“Our platform represents an intersection between blockchain and the capital markets that delivers on blockchain’s promise to disrupt conventional transaction and record-keeping mechanisms, thereby providing tangible benefits for market stakeholders,” Richard Carleton, chief executive officer of the CSE, said in a statement.

“By harnessing this technology, the potential exists to extend corporate finance beyond the limits of traditional equity and debt offerings,” Carleton added.

The CSE has licensed the platform’s technology from Fundamental Interactions Inc., a New York-based firm that designs “multi-asset trading appliance products.”

In the meantime, the exchange operator has also signed a “memorandum of understanding” with Kabuni, a 3-D printing company in British Columbia that plans to file with the British Columbia Securities Commission (BCSC) to issue tokens to investors via a security token offering. If successful, Kabuni will become the first company to list a tokenized security on the existing CSE platform.

Trading image via Shutterstock
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How to Send A Lightning Transaction (Even If You May Not Want To)


It’s like the early days of bitcoin all over again.

Comprised of invite-only chat channels, alien terminology and warning signs at every turn, the nascent ecosystem springing up around Lightning Network, the scaling technology that could end up having the greatest impact yet on bitcoin’s capacity, is to date, hopelessly difficult to operate.

“Going to be blunt,” one developer wrote, “if you don’t know how to compile something, you probably will have a lot more struggles and a lot less coins.”

Simply put, Lightning in its current state is dangerous to interact with today. But given the network’s big promises – instant transactions and fees that are next to nothing – risk isn’t diminishing the appeal.

Companies like Blockstream are already launching Lightning-powered stores that send stickers to bitcoin users who successfully pass funds across the network, while so-called “early Lightning adopters” are being celebrated online for their “bravery” on the blockchain.

“Show the world that you were one the first people to use Lightning on mainnet for a legitimate purchase, if it works,” Blockstream’s website reads.

It’s a sentiment that, given the risks, has garnered criticism by some who feel it mistakenly encourages users to risk real money. That said, there are ways to contribute to the early network without putting your own funds at risk.

This includes hanging out in the testing environment (where the majority of Lightning developers are today) or venturing onto the mainnet (where there’s a budding set of best practices, even if pitfalls remain).

Below, we offer our guide for early adopters who want to get their hands on the bleeding-edge tech before it’s recommended.

Testnet trials

Of the available options, connecting to the testnet isn’t exactly intuitive, but it’s easier to access than the alternative, with clients that are built to run on most operating systems.

It also has the added benefit of not requiring the use of real bitcoin. Instead, you’ll be using test bitcoin, which you can find for free at an online faucet and send to your Lightning wallet.

In total, using the testnet takes about five or so steps to navigate:

  1. To start, there’s a number of wallets that you can download, Zap, Lightning Labs for desktop, an Eclair wallet for android, and one option that doesn’t require a download at all. If you chose to download a desktop wallet, remember that it will need to sync the bitcoin testnet, which can take several hours.
  2. Having sent the test bitcoin to a wallet address of your choice, you’ll need to set up a channel, which is where testing gets slightly unfamiliar. Select a testnet store that you’d like to make a purchase on. There’s a variety of these, including a blogging site named yalls, developed by Lightning Lab’s Alex Bosworth, a Starbucks-inspired cafe run by Lightning development team ECLAIR and an ice cream parlor.
  3. Next, navigate to the website of your choice and seek out a payment address. Notice that two addresses are given, a payment address and a “peer address.” (You need to add the store as a peer before you can send it payment.)
  4. Copy the peer address, navigate to your wallet and add the address as a contact. You’ll need to send a small fee in order to open this channel, which on the testnet is something like 0.1 test bitcoin.
  5. Once you’ve successfully opened a channel, you can then paste the payment address in to your wallet along with the desired amount, and send your test bitcoin (instantly).

Using the above process, CoinDesk was able to send a transaction, only running into trouble at times when a majority of test nodes were offline.

Risking it on the mainnet

To restate, this is ill-advised – if you try to send bitcoin, you can lose it.

Not only will this hurt your wallet, but it will upset Lightning’s developers, because the more people active on the mainnet the more complicated it becomes to administer updates.

While a bit more complicated (the process described below can take a few days), the seven steps below approximate a rough guide to getting started:

  1. The easiest way to access the mainnet is using Blockstream’s c-lightning. Blockstream have published a useful guide that breaks down the various command lines necessary to purchase a sticker in their store, and for a more detailed breakdown of the following steps, visit their website. Other development teams, Lightning Labs and ECLAIR, have yet to publish mainnet clients, however, developers have assured that it is still possible with a little tweaking to the code.
  2. C-lightning requires ubuntu operating system and a variety of code toolkits that will need to be downloaded before you can begin. Lightning also requires you to sync the bitcoin blockchain in its entirety, a process which can take several days, and needs about 170 gigabytes in storage.
  3. Once those steps are out of the way, install the necessary tools, as listed on Blockstream’s breakdown.
  4. Next, download bitcoind, a bitcoin full node software that’s perhaps the easiest to download – offers a list of steps in order to do this securely. Remember that it takes a really long time to sync the bitcoin blockchain, so leave it syncing overnight – though depending on your connection it could a number of days.
  5. Once you’re happily synced up with the chain, you’re then ready to clone the c-lightning code from its GitHub repository. Once that’s successfully installed, you can use the command line to connect to Blockstream’s peer and sync the channel graph. You’ll also need some bitcoin to work with, so use lightning-cli, the internal lightning client, to generate a bitcoin address that you can send some funds to from your normal wallet.
  6. Once you’ve done this (and confirmed that the payment occurred successfully), you can then open a payment channel with Blockstream’s peer. First, use the command line to locate Blockstream’s public key to open the channel. Just like on testnet, this will require a small fee, around 500 satoshis.You’ll then need to confirm the transaction has gone ahead by monitoring the logs. Wait for three in total to occur before you can open a channel.
  7. Once the three confirmations have passed, you can use lightning-cli to list a new payment channel, which you can then you to make payments to the Blockstream store.

Next steps

If the laundry list of actions above shocks you, that’s okay, developers are working on methods to make the network easier to interact with. Remember, Lightning is still in alpha phase, and as development progresses, a wide variety of simplified interfaces are expected to be released.

Easy to use wallets are also likely to be released for mainnet access, so there will be less of a requirement for lightning users to be familiar with the command line. Similarly, other interfaces that make the micropayments easier to integrate by providing a third-party processing service.

Eclair have released an early version of their lightning API. Rather than businesses opening their own channels, Eclair will handle the back-end, process payments and send on-chain bitcoin.

Developers such as Alex Bosworth are also working on ways for users to send Lightning payments without setting up a channel at al, by creating methods for bitcoin and other cryptocurrencies to interact with the Lightning network.

Ultimately, while the network is now difficult and dangerous for the average user, ongoing development work hints that soon, Lightning could be as simple to use as existing payment interfaces.

Welding sparks via Shutterstock
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U.S. Corporate Customers Barred From Bitfinex’s Margin Markets


Bitfinex Restricts U.S. Corporate Account Holders From Accessing Margin Markets

U.S. Corporate Customers Barred From Bitfinex’s Margin Markets?In recent days, several Redditors claiming to be U.S.-based corporate customers of Bitfinex have complained that they have suddenly found themselves unable to access the exchange’s margin services.

Last year, Bitfinex announced that it would terminate its services to U.S. retail customers in November. However, the company assured corporate customers that “the restriction affects individuals accounts only” – as currently stated by the FAQ section of Bitfinex’s support portal.

Margin Traders Left Unable to Close Positions

U.S. Corporate Customers Barred From Bitfinex’s Margin Markets?One Redditor posted “We’ve had a corporate account with Bitfinex since early 2017 and [are] approved for both exchange, margin, and funding. […] We’ve been making 6-figure trades on margin and currently have 2 margin positions open. On Feb 7th, […] we were locked out of margin trading. No explanation or warning of why our account can’t trade on margin. Worst yet, we can’t manage our margin positions. Not good in this very volatile market. We’ve received a couple of liquidation warning emails as the market dived down yesterday. We sent a support ticket […] and probably over 7 emails. No response from Bitfinex. It appears that they haven’t even opened any of the emails.”

Later that day, a Bitfinex representative called “bill_bfx” contacted the Redditor, stating that the issue had been “forwarded to the team to resolve for you.” Bill_bfx stated that “a US corporate customer […] should not be using margin trading,” however, noted that “if you have open positions it is not acceptable to block you from closing them.”

The Redditor acknowledged the response and stated he would update the thread if his issue was resolved. As of this writing, no indication has been made that the situation has been resolved, despite bill_bfx responding to the Redditor four days ago.

Corporate Customers Seemingly Caught Unaware

U.S. Corporate Customers Barred From Bitfinex’s Margin Markets?Another Redditor posted “I’ve been lending on Bitfinex for a while. Earlier today, the API responded that US users are no longer allowed to take or lend any currency denomination […] I understand that US retail customers cannot use it but I believe the policy did not apply to corporate customers. Has there been a recent change in policy? Will it be permanent or is this a temporary measure?”

As of this writing, the second Redditor has not received a response from Bitfinex, despite directly questioning bill_bfx about the matter on a different thread. Though Bill_bfx did not respond to the Redditor’s query, however, a day later, Bill_bfx did find time to post a sarcastic response to a trollish comment on the same thread.

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Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year


Bitgrail Gets Railed for Dodgy Code

Last week, reported on the demise of Bitgrail, which contrived to lose $170 million of nano cryptocurrency. While the precise sequence of events that caused the catastrophic collapse of the exchange with the assets of thousands of customers is still being confirmed, poor code is being blamed. As reported at the time:

There are rumors that Bitgrail became insolvent following a withdrawal bug that was discovered by some users and then shared in Discord and other chat groups, causing the wallet balance to gradually diminish. One user explained: “There was a bug on Bitgrail where if you placed two orders you got double balance added to your account. You could then withdraw while the orders were up and steal the coins. You had negative balance in the end but you could just make a new account.”

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year

In the aftermath of the incident, this theory has been bolstered by allegations that a bug was indeed responsible, and not in nano’s code, but in Bitgrail’s. One source asserted: “There was a bug, on the withdraw page. But this check was only on java-script client side, you find the js which is sending the request, then you inspect element – console, and run the java-script manually, to send a request for withdrawal of a higher amount than in your balance. Bitgrail delivered this withdrawal. How many people did this? Who knows.”

There was another bug, you could request a withdrawal to your address – from another user-id, from another user-account. That would cause the other users balance to have “missing funds” or “negative balance”. Bitgrail bomber solved this bug by manually entering the “correct” numbers in his database. This is what you get for using a PHP website coded by same skill-level as CfB of IDIOTA.

Even the Best Cryptocurrencies Aren’t Immune to Poor Code

The cryptocurrency most commonly associated with catastrophic bugs is ethereum. That’s not due to its underlying code, but on account of the smart contracts that can be built on top of the ethereum framework. First there was the DAO, which led to ethereum being forked right out the gate, and then there was the Parity bug that caused 150,000 ETH to be stolen, followed by the other Parity bug that caused $168 million of ETH to be locked up.

In the past couple of weeks, ethereum bugs have surfaced once more, albeit on a smaller scale. Proof of Weak Hands (PoWH) was a joke scamcoin which turned into an actual scamcoin after a bug led to the loss of 900 ether worth $1 million that had been sent to the contract address. The developer then disappeared after receiving death threats from investors aggrieved to discover that the joke Ponzi they were buying into was even less legitimate than it had seemed.

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Dubai Issues License to Cryptocurrency Firm


Attracting Crypto Businesses

UAE’s Largest Free Economic Zone Issues License to Cryptocurrency FirmThe Dubai Multi Commodities Centre (DMCC) is a government entity established in 2002 to enhance commodity trade flows through Dubai. DMCC Free Zone is the largest and fastest growing free economic zone in the UAE.

“We perform a range of roles which continue to position Dubai as the preferred destination for global commodities trade and DMCC as the world’s No.1 Free Zone,” offering zero percent personal and corporate income tax, the center’s website states. Today, more than 14,100 multinational corporations and startups call DMCC home, with almost 90,000 people living and working there.

UAE’s Largest Free Economic Zone Issues License to Cryptocurrency FirmThe Centre has started issuing licenses to allow firms trading in cryptocurrencies to operate from its free zone, Thomson Reuters Zawya reported on Monday.

DMCC’s executive director for commodities, Sanjeev Dutta, told the publication that the Centre is “beginning to facilitate” a market in cryptocurrencies which, he acknowledged, is unregulated. Citing that firms looking to set up in the zone would be considered on a “case-by-case” basis, he elaborated:

To me, what is important is the fact that you are still evaluating it as part of your innovation strategy. You are not saying ‘no’ to something. You are not saying ‘yes’ either, but you are exploring, so you are clearly ahead of the others when the time to make a decision comes.

Cryptocurrencies as Commodities

DMCC is a member of the Global Blockchain Council, which began as a Dubai Smart City project and has 46 member organizations globally today. The Centre’s director of innovation hub, Franco Bosoni, said that a global consensus is emerging which favors classifying cryptocurrencies as commodities, the news outlet detailed and quoted him explaining:

DMCC’s view is that these [cryptocurrencies] meet the test of a commodity. They’re priced based on supply and demand, produced and sold globally at a uniform quality and (are) indistinguishable between products.

Wai Lum Kwok, head of capital markets for Abu Dhabi Global Markets Regulatory Authority, told the publication on Sunday that the regulator is “reviewing and considering the development of a robust, risk-appropriate regulatory framework” for crypto exchanges and intermediaries. Emphasizing that no timeframe has been set, he added:

As we develop our framework, we will also want to check in and have the conversations with, for example, US regulators, Japanese regulators and so on and so forth, so that there is some alignment of approach to avoid any regulatory arbitrage.

First License Issued

UAE’s Largest Free Economic Zone Issues License to Cryptocurrency FirmThe first license for the Free Zone reportedly went to Regal Assets, a gold trader and storage provider with offices in the US, Canada, and the UAE. The company added cryptocurrencies to its product line at the end of last year, offering brokerage services and an insured, high-security cold storage service for bitcoin, ether, bitcoin cash, ethereum classic, ripple, and dash.

According to Bloomberg, “Dubai gold trader Regal RA DMCC is the first company in the Middle East to get a license to trade cryptocurrencies.” The news outlet quoted DMCC acknowledging in a statement, “The company will offer storage of bitcoin, ethereum and other cryptocurrencies in a vault located in DMCC headquarters in Almas Tower in Dubai.”

DMCC Executive Chairman Ahmed Bin Sulayem was quoted by the publication, “At the heart of DMCC’s long-term strategic growth plan is the use of technology and innovation to disrupt and connect new markets, industries and customers,” adding that “the announcement today embodies this approach.”

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SVK CRYPTO PODCAST 080 – 13/02/2018 – Coincheck to be sued by traders for freezing funds??

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