BlackRock CEO Larry Fink Is a ‘Big Believer’ in Cryptocurrency
The CEO of the world’s largest asset manager sees “huge opportunities” for cryptocurrencies – but argues that work needs to be done before they become more widely accepted.
In a new interview with Bloomberg TV, BlackRock chief Larry Fink said that he’s a “big believer”, but that the current market today is primarily focused on speculation. His comments come months after the firm’s chief strategist said that, to him, the cryptocurrency market charts at the time looked “pretty scary.”
Fink said in the interview:
“Related to cryptocurrencies, I’m a big believer in the potential of what a cryptocurrency can do. You see huge opportunities, but what we’re talking about today, it’s much more of a speculative platform, people are speculating on it.”
Fink added that, thus far, his firm hasn’t seen much interest from clients beyond “some speculative stuff” – a notable comment given that firms like Goldman Sachs are reportedly eyeing new trading services around cryptocurrencies.
“We’re being asked that question but it’s more of a venture capital type of interchange, but we’re not hearing clients say ‘we want to use this as an asset class’,” he said.
And while cryptocurrencies’ speculative nature is an issue for him, Fink argued their most important problem is that they are being utilized to launder money.
“As I said, it’s much more of a speculative platform for Asia, and it’s heavily used for money laundering,” Fink told Bloomberg.
Image via Bloomberg/YouTube
Written by coindesk
Analyst Predicts $6,000 Bitcoin Price Within Reach by End of Year
Industry analysts predict the bitcoin price could surpass $6,000 by the end of the year, depending on whether the SegWit2x hard fork is implemented and, if so, how contentious and disruptive the fork is.
Bitcoin Price May Reach $6,000 by December
The bitcoin price rose nearly 75% during Q3 and has mostly recovered from the early-September contraction that was initiated by China’s blanket ban on initial coin offerings (ICOs) and bitcoin exchanges. On Monday, the bitcoin price rose as high as $4,470, although it has since dipped to a present value of $4,259.
Now that bitcoin has demonstrated consistent support for the $4,000 level, many analysts believe the bitcoin price will begin extending toward its record near $5,000, eventually reaching past it to a new all-time high.
“Throughout the year we’ve been predicting the bitcoin price will surpass $5,000 and creep closer to $6,000 by year’s end. That prediction is looking more in line with market sentiment these days,” Thomas Glucksmann, head of APAC business development at bitcoin exchange Gatecoin, told CNBC in an interview.
CryptoCompare CEO Charles Hayter is not certain bitcoin will be able to rise quite that far by the end of the year, but he agrees with many other analysts who believe $5,000 is within sight. He believes that this uptrend has been and will continue to be spurred on by increased regulatory clarity in major sectors of the crypto economy.
“Bitcoin’s biggest price catalyst is regulation. Japan has breathed life into the price and as the fog of uncertainty clears in other jurisdictions, clarity on regulation will release a break on the price,” he added.
…Depending on What Happens With SegWit2x
Of course, any number of hurdles could trip up bitcoin’s bull run before the end of the year, and there is one clear obstacle bitcoin faces during its march to $6,000: the contentious SegWit2x hard fork that is scheduled for November. SegWit2x was designed as an “upgrade” to the Bitcoin protocol, and though it has support from many mining operations and bitcoin firms, a large segment of the community — including all of the Bitcoin Core developers — opposes it.
Despite months of fierce debate, SegWit2x supporters and opponents remain entrenched in their positions. Unless one side concedes to the other or a compromise is reached, the network will split into two competing blockchains, each vying for the bitcoin moniker. As it currently stands, it is likely that the free market will decide which chain survives. But though this process may be fair, it will not be painless, and it is not known what short- and long-term ramifications it will have on bitcoin.
Featured image from Shutterstock.
Written by CryptoNewsCoin
The new age of ICOs is here, and it’s not based on Ethereum
ICOs are said to be the new way to raise money. We’ve seen companies raising $100 million, $156 million, $185 million and even $232 million by selling tokens that will be used in the protocol that these companies have promised to build using this money.
Against the money raised, the tokens they gave were created and sold on the Ethereum blockchain — meaning that all the trade that took place happened on the Ethereum blockchain and the tokens created are tracked on the Ethereum blockchain. But that is changing.
Ethereum’s mission of making blockchain more than a calculator has allowed them to invent the concept of smart contracts. You can think of smart contracts as a set of rules governing something, which cannot be modified ever in the future. They allow a developer to write anything in the form of a smart contract that gets executed by the network. Consider the example:
If A and B place a bet about the next day’s weather, the bet can be carried out in a trustless manner using a smart contract. Both of them can submit their betting amounts to the smart contract. At a predefined time on the next day, the contract will make an API call to the Open Weather API to see if the weather is sunny or rainy. Depending on the weather, the total amount will be sent to either of the two.
Because this contract is no more than a software program and gets executed on a stranger’s computer, it had to be made sure that the programmer cannot exploit the stranger’s computer or the whole network. To fix the problem, Ethereum came up with its native programming language — Solidity. Although the language is Turing-complete, which means any program can be written in it, there’s still a steep learning curve — and the developer community is in its infancy.
These two limitations have made Ethereum be perceived as merely an ICO platform, rather than a world computer.
Besides these Ethereum-specific disadvantages, it also faces the problems of the blockchain in general — slow speed and no native identity on the blockchain. But blockchains are evolving — we are living in the first few years when the internet was invented. It’s slow, expensive, clunky; but hey, it’s the future!
Is the future anywhere near?
As a huge advocate of blockchain in general, I am quite excited by the research and development happening in the space. With recent developments, we are seeing new blockchains coming up in the industry that offer so much more: They make developers move to using these newer blockchains for building their decentralized apps and ICOs.
I am particularly excited by development in the blockchains that allow general computations to happen in a decentralized manner. The newer generation of such blockchains offers much more than the ability to write smart contracts.
Support for programming language
Tezos blockchain decided to go with a functional programming language for the smart contracts. Most developers are alien to functional programming and might find the learning curve steeper than Ethereum’s Solidity.
Another blockchain, NEO, promises to offer support for .Net and Java to begin with, and eventually will allow programs written in Python and Go on its platform. With these four languages supported by NEO, it will already serve about 90 percent of the developer community from the get-go.
Qtum is another blockchain that allows developers to write Ethereum-like smart contracts, but using Bitcoin’s UTXO format. In bitcoin, there’s no concept of an account and balance. Instead of tracking every account’s balance, the unspent transactions are tracked (the transactions that were sent to your wallet and are not spent yet). The sum of those transactions make up your balance. It is very efficient and lightweight to maintain these records as compared to accounts on an Ethereum-based model. Qtum thus allows for very lightweight smart contracts.
It’s interesting to see how different blockchains are adopting various programming paradigms for their blockchains. Some are targeted toward consumers and some toward large enterprises.
Native blockchain identity
On the Ethereum blockchain, your identity is the public key whose private key you own. Every smart contract you deploy gets its own public address (identity).
Unlike the pseudonymous model of Ethereum, blockchains like NEO offer users a native identity that can be used across the apps on the blockchain. Imagine if the internet had allowed every user to have a native identity, then you’d have never been required to create a separate one for every service you use on the internet.
Some say blockchain is the new internet. There are several mental models in which to fit blockchain, and I, too, believe considering it as the new internet is not a bad analogy. A native identity on the blockchain will have a native identity that can be used to access anything that gets built on the blockchain.
There are several teams working to solve the identity problem on blockchains. For instance, on Ethereum, Civic allows a user to record his/her identity that he/she can later use for other apps on the blockchain.
I find blockchain-level native identity a worthy proposition because if there’s no native identity, the teams that are solving the identity problem will make the ecosystem fragmented.
The current generation of blockchains gets criticized for how much energy it consumes to power the network. The costs are high because of the consensus method Bitcoin or Ethereum blockchain uses.
In any blockchain, periodically all the nodes in the network will have to agree to the updated state of the system. Because the nodes are geographically distributed and are not always keeping track of every other node in the network, they would be required to sync themselves and agree upon the new state of the network.
Currently, the most popular consensus method is proof of work, where every node tries to claim the updated state of the network by solving a cryptographic puzzle. Whoever solves it first gets to tell the network what the updated state is. Everyone agrees to it and proceeds ahead.
The disadvantages of this method are that it is slow and expensive. There are several solutions to this problem, with their own pros and cons. While Ethereum is on its way to move consensus to proof of work, Qtum and Tezos launched with a version of a proof of stake consensus protocol from the start. Interesting is that Tezos goes a step ahead and offers a decentralized way of governance to adopt any major upgrades to the protocol. Every major upgrade is proposed and voted upon, making the hard forks theoretically rare.
On the other hand, NEO uses a delegated Byzantine Fault Tolerance (dBFT) consensus mechanism that makes it possible to sync up the network a lot quicker without spending a lot of energy. It supports up to 10,000 transactions per second as compared to Ethereum’s 15 transactions per second.
Blockchain is the future — but how does the future look?
Google wasn’t the first search engine, and Facebook wasn’t the first social network — they were the best ones. We might see a similar trend when it comes to the blockchain world. Bitcoin and Ethereum have shown us something that we considered impossible before. But they are far from being perfect.
While blockchain is the future, I do not believe the future is what we are living today. We are living among the experiments. What we see around us might be in ruins tomorrow. What we get as our future might not have been invented yet.
With hopes still high and a sharp eye on the industry, I am waiting for the ultimate blockchain. Will it be Ethereum? Or NEO? Or Qtum? Or Tezos? Or something else? I don’t know. For now, I am excited to witness one of the largest shifts a human life can live through. Even if the future does not appear to be near, the future is not far either.
FEATURED IMAGE: BRYCE DURBIN/TECHCRUNCH
Written by TechCrunch
Disney Built a Blockchain — Can It Compete With Ethereum?
From animatronics to digital animation, the Walt Disney Company has long been a pioneer in emerging technology. And blockchain technology is no exception.
In 2014, Disney’s tech-focused Seattle office started building what’s now known as Dragonchain, a blockchain protocol designed to allow for more data privacy than is possible on other enterprise-oriented blockchains like Ethereum. The idea was to develop a secure asset management system to be used internally.
However, Disney dropped the project in 2016 and decided to make it open source. Soon after, a group of former Disney employees founded the Dragonchain Foundation, a non-profit which manages upkeep of the protocol.
Now, they’re looking to build a commercial business — called Dragonchain Inc. — on top of the platform to help other companies quickly and easily start using blockchain.
But first they need to raise money to do so.
Gap in the Market
It’s commonly believed in blockchain circles that the technology could some day make up an entirely new infrastructural layer of the internet, replacing traditional contracts and payment systems used in industries like law and real estate, because the design of the technology makes it difficult to commit fraud.
Dragonchain Inc. chief business officer George Sarhanis (left) and CEO Joe Roets. Image Source: Dragonchain
This promise has drawn in research and development funds from industry powerhouses including IBM and Cisco, which have joined various unifying organizations such as Hyperledger and the Enterprise Ethereum Alliance to better understand how this new technology can be leveraged commercially.
But many large corporations, such as Disney, have been hesitant to put their own data on public blockchains because the design would leave much of their proprietary and sensitive data open to prying eyes. The hope for Dragonchain is that other companies feel the same way.
Joe Roets, now CEO of Dragonchain Inc., was one of the engineers behind the original project at Disney.
“Disney was very forward thinking and wanted to know how people use different tech,” Roets said. “We started building things. It took two years to build out the platform, give or take.”
Roets described Dragonchain Inc’s platform as a “turn key” product, which makes it easier for companies to build what they want on top of the Dragonchain blockchain protocol, without investing in expensive and hard-to-find technological expertise.
Roets said that while it is possible to build security and encryption on top of a public blockchain, it’s a costly and time-consuming project. With Dragonchain, the encryption and obfuscation is built in.
“We realized some of the real world problems are that companies have access to traditional engineers, but they don’t necessarily have a crypto background,” Roets said . “If you go even further into blockchain, you need an economist or a game theory expert.”
More Private Than Ethereum
Like the technology behind the cryptocurrencies bitcoin and ethereum, Dragonchain is a digital ledger that uses complex algorithms to document transactions in a way that cannot be easily modified. Every blockchain contains a complete history of everything that has happened on it, which makes it harder for fraud to occur in financial transactions. Unlike the public bitcoin and ethereum protocols, however, Dragonchain is a hybrid. This means some information is private, and some is public.
“The main difference would be that with ethereum or any public blockchains, your data is out there,” Roets said. “You can do certain things to obfuscate your data. You could encrypt it. But it won’t matter in 10 years or 20 years.”
While Disney originally built the project as a private blockchain, this method doesn’t have the same authenticity benefits as a public or hybrid protocol. Having some of the data public is vital to making the technology effective in protecting fraud. That’s because the ability to spread data across a decentralized network is a key component of authenticating the validity of transactions. The blockchain usually requires consensus from multiple companies and computers in order to make a change to the blockchain’s history. Theoretically, this makes it difficult for solo actors to delete receipts for their own benefit.
Initial Coin Offering
Whether or not Dragonchain Inc. is able to move forward with its commercial ambitions depends a lot on how things go over the next month.
From October 2 to November 2, Dragonchain Inc. will hold an initial coin offering (ICO), also known as a token sale, to raise money for the company. Around 238 million tokens, which the team calls “dragons,” will be available for sale to the public.
Artwork, such as Mimmo Rotella’s “Palinsesto,” is for sale by auction on Look Lateral’s website. The company is working with Dragonchain to build a secure way to authenticate and pay for art. Image Source: Look Lateral
“Disney has no involvement in Dragonchain’s initial coin offering,” a Disney spokesperson said.
ICOs are an increasing common fundraising technique in the blockchain world. Companies like Dragonchain Inc. offer up a select number of tokens that can be purchased with cryptocurrencies like bitcoin and ethereum. The tokens can be exchanged for goods and services within the blockchain platform. On its website, Dragonchain describes dragons as “tokenized micro-license for interaction with Dragonchain commercial platform services.”
While tokens are not currencies, they can be traded on token exchanges for higher or lower cash value than they were purchased for. Not every investor necessarily wants to use services within Dragonchain. Some may see it as an investment that could generate gains in the longterm.
Those that do want to use the service will have access to three different commercial products. The first is a developer-friendly platform for building new projects on top of Dragonchain. There’s also a marketplace that has a library of pre-built smart contracts and features to make the building process faster. The company will also fund an incubator for teams that want to develop projects on top of the protocol.
Several companies are already working on Dragonchain to develop new tools and businesses.
Look Lateral is an Italian fine art site which is using Dragonchain to create proof of authenticity for the art that it sells on its platform. Some pieces of art on the site cost over $100,000, so the blockchain will function as a way of paying for art, as well as a record of ownership. In the art world, this is referred to as “provenance.”
Another company called LifeID is working to build a secure identity platform on the blockchain. This would allow users to verify that they are who they say they are in digital and physical spaces, without relying on state-issued IDs, or corporately-owned social media, like Facebook profiles.
Dragonchain Inc’s ICO begins October 2.
Written by Futurism
China banned new cryptocurrency sales, but a Macau company still aims to raise $500 million in an ICO
Macau gaming company Dragon Corp. is looking to raise half a billion dollars through an initial coin offering (ICO), in an effort to integrate blockchain technology into the world’s largest gambling market.
The tokens issued in the ICO would be utilized by VIP junket operators, which are middlemen who act as facilitators for the multi-billion dollar casinos, by offering credit on behalf of casino operators.
“This is the first time anybody has allowed the public to invest in a public junket or become a shareholder of a casino,” said Chakrit Ahmad, CEO of Wi Holding, the Thai-based company behind the blockchain technology. “You’re basically becoming a shareholder in a junket, utilizing blockchain technology, getting revenues from that, and plugging that back into the token.”
The offering comes as Beijing begins a crackdown on so-called cryptocurrencies.
Among those backing the coin offering, according to a Tuesday report in the South China Morning Post, is Wan Kuok-koi, a 61-year-old who served 14 years in jail for “an array of gangland crimes.”
That alleged connection, which CNBC was unable to confirm independently, could increase regulatory interest in the deal. Ahmad of Wi Holding was not immediately available to comment on the South China Morning Post report.
Ahmad said the money raised from the sale of digital tokens would go in part, to fund construction of the Dragon Pearl Casino Hotel, an ambitious 16,000 square meter, floating structure, scheduled to be deployed from Norway, where it is currently being built, to Macau by 2019.
The group also plans to develop a debit card or “social wallet” that holds the digital currency, so players can withdraw fiat currency from an ATM, Ahmad said.
“We basically provide liquidity via our own exchange, and also major exchanges in the world for the digital currency, so that token will be listed in multiple exchanges,” he said. “You can have a digital exchange in Hong Kong or in Thailand or elsewhere, and you can cash out.”
While the digital tokens won’t be issued until October 27, Ahmad said the group has already secured $265 million.
The use of cryptocurrencies in the gaming sector has largely been limited to online gambling until now. Dragon Corp. and Wi Holding are looking to bring the technology to casino floors, with junkets contributing more than half of Macau’s total casino revenues.
ICOs have become a primary means of raising funds for projects built on blockchain technology, but they have faced increasing scrutiny from regulators amid concerns of fraudulent fundraising and speculative investment.
Earlier this month, the People’s Bank of Chinabanned the practice of creating and selling new digital currencies, and ordered the country’s major cryptocurrency exchanges be shut down. ICOs have raised at least 2.62 billion yuan (about $400 million) in China so far this year, according to a Reuters report, citing local media.
Ahmad said Dragon’s ICO is not subject to the crackdown, because the tokens will be issued in Hong Kong, but he added the digital nature of the transactions would allow Chinese authorities to track illegal outflows through the casinos, which has been a key concern.
Digital tokens issued in ICOS are largely characterized as “a virtual commodity” under Hong Kong’s Securities and Futures Commission and aren’t subject to regulation. But tokens that offer buyers an equity stake are regarded as “shares” and subject to securities rules.
“(ICOs) should make a clear disclosure to the buyers out there, that they don’t represent any equities in the companies themselves,” said Henry Yu, partner at L & Y Law Office, who has worked with authorities on behalf of the Bitcoin community.
“I think that’s the sort of clarity that the Hong Kong community, particularly the crypto or blockchain community requires.”