Bermuda Reveals Draft Crypto Regulations, Plans to Embrace ICOs
Bermuda Reveals Regulatory Proposals for Crypto Industry
The minister of national security, Wayne Caines, described the proposed regulations a “landmark legislation for Bermuda,” adding that “The emergence of new financial products and services created through the use of technology has opened new and exciting opportunities for entrepreneurs and businesses.”
On Thursday, Mr. Caines presented “Bermuda’s fintech strategy” to “more than 150 of Bermuda’s key business partners.” Mr. Caines stated that the government “recognize[s] that there’s significant interest in virtual currencies and blockchain technology,” emphasizing Bermuda’s desire to “become a global leader in the fintech space.”
Crypto Sector to be Encouraged Despite Virtual Currency Not Recognized as Legal Tender
The consultation paper defines “virtual currency [as] a digital representation of value that can be digitally traded,” adding that “such does not have legal tender status […] in any jurisdiction,” however, fulfills monetary “functions only by agreement within the community of users of the virtual currency.”
Whilst the document notes that “The virtual currency sector is varied in business types,” the major participants are described as being comprised of “ICO issuers,” “virtual currency exchange providers and traders,” “custodial wallet providers,” and “virtual currency miners.”
The proposed framework will require that businesses facilitating the sale of or providing services relating to cryptocurrencies collect and retain key information pertaining to customers, noting that the cryptocurrency sector “presents tremendous risk that requires robust […] Anti-Money Laundering/Anti-Terrorism Financing (AML/ATF) regulation.”
ICOs Subject of Particular Focus
Under the proposed legislation, “an initial coin offering will be treated as a restricted business activity that will require consent from the minister of finance.” As such, ICO issuers will be required to adhere to specific regulations -the “Companies and Limited Liability Company (Initial Coin Offering) Act – in addition to applying for consent from the finance minister.” Companies applying for consent to conduct an ICO will be required to provide information regarding:
“The company conducting the ICO and the underlying digital asset offered for sale; The development and implementation of any product, service or other project related to the ICO, including timelines for completion; The target amount to be raised through the ICO; Rights, features, functionality and intended transferability of the digital asset offered for sale; The technology to be used and confirmation of the ability of the technical platform to enable the collection, confirmation and storage of purchaser identity information; and compliance and auditing of ICO transactions.”
Mr. Caines stated “By being one of the few countries in the world to specifically regulate ICOs, we believe that the proposed regulatory framework will provide legal certainty to companies looking to conduct ICOs in Bermuda […] Embracing this new world with responsible regulation could lead to the attraction of new companies and capital investment to Bermuda, additional government revenues, new career, employment and training opportunities for Bermudians and the laying of a foundation for a prosperous future for our next generation of Bermudians.”
Written by Bitcoin.com
HODL On: In Defense of Bitcoin’s Best Investment Strategy
In 1987’s Black Monday stock market crash, Sam Walton, the world’s richest man, lost more than half a billion dollars in a few hours.
When reached for comment, Walton said, “It’s paper anyway. As far as I’m concerned we’re focusing totally on the company doing well and taking care of our customers.”
He didn’t care about dollars; he cared about his asset Wal-Mart, and he still owned that.
History of the #HODL
In bitcoin’s volatile and roller coaster past, “HODL” was the meme that bound the cryptocurrency community together. It stood for the proposition that we all believe in the future of bitcoin. It’s both funny and insightful.
Here is the original post by GameKyuubi on a Bitcoin Talk forum (spelling errors and profanity included):
I AM HODLING
I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e. GF’s out at a lesbian bar, BTC crashing WHY AM I HOLDING? I’LL TELL YOU WHY. It’s because I’m a bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro. Likewise the weak hands are like OH NO IT’S GOING DOWN I’M GONNA SELL he he he and then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING buy back in but you know what? I’m not part of that group. When the traders buy back in I’m already part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~! Those taunt threads saying “OHH YOU SHOULD HAVE SOLD” YEAH NO SHIT. NO SHIT I SHOULD HAVE SOLD. I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL AND BOUGHT MOMENTS BEFORE EVERY BUY BUT YOU KNOW WHAT NOT EVERYBODY IS AS COOL AS YOU. You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell.
so i’ve had some whiskey
actually on the bottle it’s spelled whisky
(But only if it’s payable in BTC)
It was not about bitcoin versus bitcoin cash or 1,000 other cryptocurrencies. It was bitcoin vs. the world and we ALL embraced it.
It only took 11 minutes for this post to become a meme that became the rallying cry for the entire crypto world. We were all on the same rollercoaster ride and GameKyuubi, in the depths of his frustration, had (sort of) elegantly articulated both what it feels like and the best trading strategy for an asset this volatile.
Buy and HODL.
The good traders
GameKyuubi was wrong about only one thing: There aren’t any good traders.
There are lots of us who believe we are good traders. But we aren’t. Of course, some of the loudest voices on Reddit regularly remind us about how well they time the market. Except when they don’t time the market well.
A paper published last October by the Haas School of Business at UC Berkeley entitled “Do Day Traders Rationally Learn About Their Ability?” used nearly 15 years of stock market day trading data to conclude that all day traders are irrational, the vast majority of day traders lose money, and even when day traders are successful, they “irrationally attribute success disproportionately to their ability rather than luck.”
This sounds exactly like the crypto trader. Any post you see mocking HODL is likely someone who thinks they are really smart because they made money by trading crypto last year.
Of course, their success was due to their unique trading ability and not the fact that the entire market rose like a rocket.
Still, empirically, even in volatile assets like bitcoin, carefully choosing an asset and holding long-term positions has proven to offer the best return.
Warren Buffett, the most successful investor of modern times, has often said that he only invests in what he knows. His preferred holding period: forever. With that model, his company, Berkshire Hathaway, has averaged a 19 percent annual return since 1965 which means it has risen more than 1 million percent.
Theoretical models that assume participants know when markets will move against them can offer better returns but, in practice, market movements cannot be reliably predicted so even when people like Bernie Madoff try to make us think that they’ve figured it out, they haven’t.
Long-term investment in quality assets remains the only reliable investment strategy.
Simply put, HODLing works.
For those not interested in limiting their activity to HODLing, there are two new and useful ideas that have begun bouncing around that really do advance cryptocurrencies: #BUIDL and #SPEDN.
BUIDL has been used to help remind us that, in the words of a CypherPunk’s Manifesto, “Cypherpunks write code.” In order for the blockchain to really be useful and valuable, we need to build stuff on it. Watching the price go up and down either as a trader or a HODLer does nothing to make bitcoin work better.
We need to create some of the promised applications that can really change the world. To date, the blockchain community has fallen short in this regard outside of the areas of payments but there are some real wins.
Just this weekend, Voatz, a Medici Ventures portfolio company is running party county convention voting in Utah, state convention voting in Michigan and state primary voting for overseas and military voters in West Virginia, all on a blockchain platform.
Blockchain voting is a simple application, but it is one that can bring a much-needed security and transparency to elections. And we are doing it now.
SPEDN is a nod to the many of us who realize that, for bitcoin to be useful, we need to be able to spend it to buy things. And I mean everything. It really doesn’t matter whether it is through second-layer solutions like lightning or forks like bitcoin cash; we need more ways to use cryptocurrencies in real-world transactions.
A focus here, rather than complaining about HODLers would be helpful. We need many more merchants to accept cryptocurrency before it becomes useful. Options to spend bitcoin remain severely limited in most areas and this will ultimately limit bitcoin’s value.
As for me, I will HODL until I can buy useful stuff and SPEDN.
This year has seen intense regulatory pressure on cryptocurrencies and its time we stop pretending that HODL was stupid. It isn’t and it wasn’t. Anyone who doesn’t like the HODL mentality needs to give HODLers something else they can do with their bitcoins.
Trading is no solution for intelligent people. What we need are new ways to use cryptocurrency.
We need BUIDLers and merchants who will let us be SPEDNers.
Hard hats via Shutterstock
Written by Bitcoin.com
Samsung Electronics Turns to Blockchain to Track its Global Supply Chains
Electronics manufacturing giant Samsung is considering a blockchain platform to manage and keep track of shipments of its vast global supply chain network.
In a significant endorsement of blockchain technology, Samsung Electronics – the world’s biggest chipmaker and smartphones manufacturer – is considering a broad implementation of a blockchain ledger platform to track its global shipments.
Speaking to Bloomberg, Song Kwang-woo, blockchain chief at Samsung SDS – the IT subsidiary of the Samsung – revealed that a blockchain system could slash shipping costs by 20 percent.
Notably, the executive also confirmed that SDS is working on developing the blockchain platform for Samsung Electronics, placing it among the earliest global manufacturers to seriously explore the applicability of blockchain technology at such a scale.
SDS has proven experience in implementing blockchain technology for the logistics and shipping industry, successfully concluding a 7-month pilot project to record and track shipping logistics of imports and exports in Korea’s massive shipping industry in December 2017.
Samsung SDS’ Song added:
It will have an enormous impact on the supply chains of manufacturing industries. Blockchain is a core platform to fuel our digital transformation.
The report suggests SDS ‘expects to handle 488,000 tons of air cargo and 1 million 20-foot-equivalent (TEU) shipping units” in 2018. The shipments include everything from flagship Samsung devices like the Galaxy S9 and the upcoming Note 9, as well as OLED displays used by Apple’s iPhoneX, to home electronics and more.
Beyond tracking shipments, a blockchain platform could even reduce the time and ramp up efficiency between product launches and their shipments to end users.
Delivering Blockchain Tech
While details of Samsung Electronics’ foray into using the decentralised technology remain slim for now, Samsung SDS developed and deployed ‘Nexledger’, its own blockchain platform for enterprises and businesses over a year ago.
In May 2017, SDS launched a blockchain pilot for Korea’s shipping industry to track imports and exports of cargo shipments in real-time by leading a consortium that included Korea’s Ministry of Oceans and Fisheries, the Korea Customs Service, technology giant IBM and major freight operator Hyundai Merchant Marine, among others.
Samsung SDS, which is also a member of the Enterprise Ethereum Alliance (EEA), successfully completed its first trial run of a shipment that saw the entire process of a shipment, including booking and delivery, from Korea to China. As mentioned above, SDS concluded its pilot in late 2017 that ultimately aims to process “all exports and imports” in Korea using blockchain.
In November 2017, the metropolitan government of Seoul, South Korea’s capital city, chose Samsung SDS to develop a roadmap and deploy blockchain technology to the city’s entire administration as a means to improve transparency and enhance citizen convenience. Seoul city’s government has previously announced its intention to apply blockchain technology across “the entire municipal administration’ by 2022.
Featured image from Shutterstock.
Written by CCN.com
Why Leading Crypto Devs Don’t Work In Silicon Valley
“If you or your engineer friend is bored at BigTechCo, get in touch.”
The tweet, sent out by Coinbase vice president and general manager Dan Romero, represented a rare request from the San Francisco-based exchange. Despite building on various cryptocurrency protocols for years, it was perhaps the first time the company had signaled it would offer financial support to someone working directly on open-source code.
As such, the tweet drew its fair share of confusion among bitcoin and ethereum’s largely volunteer developers.
That’s not to say that they aren’t interested in taking sponsorships from companies in an effort to make money from their passions – they are. But the trouble is many developers see larger industry startups like Coinbase, which made more than $1 billion in revenue last year, as a prime example of the “big tech companies” that Romero positioned as antagonists.
In fact, some would go so far as to say there’s a quiet struggle being waged in the blockchain industry between the coders who develop these open-source protocols and those who mainly sell related products or services for commercial interest from their corner offices in Silicon Valley.
This was on full display when Bitcoin Core developer Luke Dashjr tweeted a disgruntled reply to Romero after private conversations clarified that the role wouldn’t focus exclusively bitcoin or ethereum, nor would it give developers autonomy to focus on projects they see as beneficial.
Instead, Coinbase executives would be directing the work, potentially requiring the developers work on cryptocurrencies that might run afoul of their own personal tastes. (As an example, in the case of Dashjr, the long-time bitcoin coder, was loathe to devote time to rival bitcoin cash).
Coinbase acknowledges a kind of disconnect, yet thinks the lines between industry and open-source will continue to blur.
“At a high level, we want to invest in supporting open-source communities, because we believe that the future of this industry will be defined more by open source than by enterprises,” Jori Lallo, a software engineer at Coinbase told CoinDesk. “That said, as a fast-growing company we’ve had a lot of things to split our time between, and admittedly we didn’t spend a lot of time on supporting open source in the early days.”
That initial neglect left a lasting impression that has been hard for Coinbase to shrug off.
According to Jeremy Rubin, a Bitcoin Core contributor, Silicon Valley’s culture in general remains at odds with open-source philosophy, in that the former doesn’t give enough credit and support to the broader ecosystem.
Rubin told CoinDesk:
“You see this at a couple different companies but I think they [Coinbase] are one of the most egregious. They’re trying to do better, but they got a ways to go.”
Still, Lallo detailed some of the exchange’s work in reaching out to the open-source developer community that has attempted to shift that perception.
For instance, in mid-March, Coinbase introduced the Coinbase Protocol Team, whose mission it is to contribute to community-led projects, naming payment channels, proof-of-stake blockchains and light clients as some areas of interest, and widely respected bitcoin programmer Jim Posen is a part of the team.
Around the same time, Coinbase announced its Open Source Fund, which donates roughly $25,000 a month to public blockchain projects.
Even Dashjr recognizes that Coinbase’s efforts aren’t “bad” and could even bring to the table some insights that open-source developers may miss, since they don’t interface with the business community quite as much. “It just isn’t the norm or ideal,” Dashjr said.
Others argue, though, that such programs, after years of inaction, aren’t enough, though Rubin said he sees the problem as bigger than any one company.
In Rubin’s view, lucrative blockchain companies could easily donate a few million dollars each in grants and sponsorships for open-source developers. It’s the same argumentopen-source developers have made regarding a whole slew of integral internet protocols that have allowed companies like Google, Facebook and Uber to grow into multi-billion-dollar companies.
“Not only do they not do that [provide generous patronage], but they don’t support a lot of conferences that are really critical to the space. They didn’t support the MIT Bitcoin Expo this year, even though they sent a bunch of recruiters,” Rubin said, adding:
“I don’t think Coinbase really gets open source.”
In addressing the criticisms, Lallo said, “As we grow, expect to see more investments – both in terms of time and money.”
Coinbase also announced in a blog post on Thursday that a new venture capital arm of the company will provide “financing to promising early-stage companies” that “move the space forward in a positive, meaningful way.”
Rethinking the culture
But it might take more than time and money.
According to Christopher Allen, the former principal architect at Blockstream, it’s more about adapting to the culture of open source.
For instance, Blockstream, which funds the work of several developers who solely work on the bitcoin protocol, goes a step further by offering employees individual patent rights for technologies they contribute to, in addition to roughly 20 percent paid leave to work on side projects.
“These types of very progressive attitudes towards open source were a large part of my consideration [in joining Blockstream] because I’ve been working on my own projects for a number of years,” Allen said. “I wanted to be able to continue to work on them without being constrained.”
Joe Lubin, founder of ethereum startup incubator ConsenSys, echoed the importance of this cultural shift toward independence. As such, ConsenSys strives to retain top talent by letting employees choose their own projects and work whenever and from wherever they want.
Tough to retain
Still, many leading blockchain companies struggle to retain talent.
For example, bitcoin security startup BitGo lost Alex Bosworth, a renowned developer who now works on lightning network implementations, in December.
According to Bosworth, the missions of large tech companies, and now large crypto companies, run counter to the ideals of the developers who started developing the protocols to begin with.
“The tech companies are building empires based on locking users into walled gardens and generally not thinking about what is best to progress the needs of the user,” he said. “That’s something that open source software addresses which is pretty inspiring and fulfilling to work on.”
As such, the community has rallied around several initiatives that fund developer work without strings attached.
For instance, several developers CoinDesk spoke to mentioned Chain Code Labs, which sponsors a handful of Bitcoin Core developers at a financial loss through the money the founders, Alex Morcos and Suhas Daftuar made from a previous Wall Street venture. And Allen recently launched the GitHub Blockchain Guild, which aims to create new opportunities to fund contributions to various blockchain projects.
The collaborative, autonomous nature of these initiatives is what makes open-source cryptocurrency developers so drawn to them.
Speaking to the need for the industry to adapt to the open-source culture, Lubin said:
“Nobody works on projects that they don’t care deeply about. An entrepreneur’s freedom to develop their own projects and operational style doesn’t need to change.”