Top Crypto News – 20/04/2018

Square Cash Stock Spikes Due to Analyst’s Bitcoin Trading Optimism

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Square Inc (NYSE:SQ), the developer of the mobile payment app Square Cash, has seen its stock price jump up by about 5% on Wednesday. The spike was largely credited to a note by Nomura Instinet analyst Dan Dolev, who offered clients a very optimistic prediction for the effect of adding bitcoin trading by the company ahead of its May 2nd first quarter earnings report.

The ability to buy and sell bitcoin directly on the mobile payments platform has been added to the Square app earlier this year. The analyst said that the additional revenue per user from this could amount to $125 every year. He raised his SQ’s price target to $65, implying a 30% upswing, after the company already saw its stock raise almost 50% year to date.

“Either way, SQ’s fundamentals should keep improving,” Dolev said. “We expect fundamentals to continue to improve helped by SQ’s accelerating share gains and mix shift to large sellers. We continue to expect net yield to expand (from 1.05% in 1Q17 to 1.09%) helped by growing penetration of higher priced products more than offsetting mix shift to larger sellers.”

Bullish CEO

Square Cash Stock Spikes Due to Analyst’s Bitcoin Trading OptimismSquare is headed by Jack Dorsey, who is CEO of both Twitter and the payments platform. Last month he took a very bullish long term stand on bitcoin, predicting it can the world’s single currency in the next ten years.

Explaining how bitcoin could drive Square earnings, Dolev commented: “Will Bitcoin reshape the future of payments as CEO Dorsey often argues, or is it a passing fad? In reality, SQ’s correlation with Bitcoin has been on a downward trend. Plus, the stock is now less correlated with Bitcoin than PYPL, the payment networks or GOOG. Regardless, we estimate that opening Square Cash for Bitcoin trading earlier this year could drive a sizable boost to revenue and profits, driving up to 10% potential upside to adj. EBITDA guidance. This can help offset rising investment costs required to broaden Square’s international presence.”

Written by Bitcoin.com

Bad Checks: Twitter’s Identity Crisis Is Costing Users More Than Bitcoin

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Trust, but verify.

Borrowed from a Russian writer, it’s one of crypto’s most widely embraced slogans, though one that’s becoming even more relevant on social media, where battling factions bent on promoting the next great high-tech investment are now turning the very symbols meant to protect users against them.

Whether it’s an account impersonating the world’s largest exchange or its most widely known tech visionaries, no company or individual is too sacred for a simple takedown that’s spreading like wildfire, propelled by lax verification practices at name-brand social media giants.

Still, it’s perhaps “crypto Twitter” that’s bearing the brunt of the criticism.

Armed with a photo ID, scammers are successfully duping Twitter into giving them a “blue check mark” of authenticity so they can impersonate real individuals and entities, all in an effort to bilk users out of money.

Take “seifsbei,” a verified account associated with freelance film producer and director Seif Elsbei, which was hacked and then posed as the official account of the verge cryptocurrency. The hacker didn’t stop there, later posting messages as crypto exchange Bitfinex and ethereum creator Vitalik Buterin.

The verified account “Protafield” displayed similar bad behavior in early April, briefly changing its name and account details to impersonate crypto exchanges to specifically stage fake ether giveaways.

And these incidents display how crypto Twitter’s current mess isn’t likely to be saved merely by the blue check mark, or any other simple verification process.

“People at home see this as a stamp that Twitter sees this as a good account, which can be very subjective,” said Tim Pastoor, founder of the Netherlands-based digital identity startup 2way.io.

By vetting merely the identity behind the account, and not the intent, when issuing blue check marks, Twitter inadvertently makes scams even more dangerous, he continued.

Speaking to the overall cat-and-mouse game many crypto companies are having to play on Twitter, a Bitfinex representative described curbing such efforts as almost a full-time job.

A spokesperson told CoinDesk:

“We dedicate a lot of resources towards combating illegitimate Twitter accounts and educating our users on how to spot them. However, our impact on certain sites is limited.”

Fickle reputations

There are several patterns that complicate the trouble with crypto Twitter.

For one, scammers have quickly learned to use highly technical language to cloak misinformation in trusted terminology, said Nick Lucas, founder of the Los Angeles-based social media analysis startup CoinTrend. This means simple vocabulary lists and language analysis, processes Twitter and other social media sites use, won’t be enough to weed out scams, he said.

Yet, Pastoor pointed out that bots and spam accounts often promote tokens in packs, swarming to give each other good reputations and boost visibility, which could make it easier to spot systematic scams.

However, it remains a tricky endeavour, and so Pastoor recommends that Twitter take a page from traditional psychology to help combat the problem.

Most people trust their close friends more than acquaintances, so a layered approach to trust could offer some tools for filtering the noise. For example, a user may trust a coworker’s friend more than a complete stranger, but less than a family member. Just as Facebook lets people control which people they see posts from – friends only, select groups or the public – Twitter could give users more control over who shows up in their feeds.

“There are definitely going to have to be iterations,” Pastoor said. “I would probably recommend starting with allowing people to filter based on people that they already trust, and to maybe make more use of your second or third-degree networks.”

Twitter declined to comment on any topic related to these events or policy changes in general, but Twitter CEO Jack Dorsey recently admitted that the platform’s verification system is broken.

Changing hands

The issue is made even more confusing by the fact that accounts can change hands among owners, not only through hacks, but also simple handovers, and those new owners may have different motives.

For instance, what started much of the debates around Twitter’s policies was the suspension of the “@bitcoin” Twitter handle.

Before the bitcoin scaling debate came to a head last fall, with a significant contingent of enthusiasts splitting off the core bitcoin network to create bitcoin cash, the @bitcoin Twitter handle tweeted information in support of bitcoin. The account has been operated by many owners over the years, and the latest is an anonymous bitcoin cash fan.

As such, the account became highly controversial, tweeting out incendiary comments aimed at Bitcoin Core developers and several other leading figures in the cryptocurrency community who were on their side. Many Core developers saw this as misleading, since the handle was tweeting out things Bitcoin Core, which a majority of users and businesses still see as the “true” bitcoin, didn’t stand behind.

Because of the outrage, Twitter briefly suspended the account and then stripped it of its blue check mark (the account is active again but no longer verified).

Speaking to the debates that have plagued the leaderless tech community for some time, Sterlin Lujan, a bitcoin cash supporter and communications ambassador for Bitcoin.com, told CoinDesk:

“These social media networks should not allow handles to be censored or shut down arbitrarily, just because a bunch of people do not like it.”

And while Twitter has said the blue check mark does not imply its approval or endorsement, Lujan contends, “A person with a check mark has a stronger likelihood of appearing at the top of searches and feeds. What it boils down to is that Twitter verification processes need to be made more clear.”

Market influencers

While Twitter’s verification process is still uncertain, what remains clear is Twitter’s impact on the cryptocurrency markets.

Not only can scammers have a dire impact on user’s crypto holdings, but even those earnestly voicing their interest in a certain crypto project can cause price swings. For instance, Lucas has seen a clear correlation between tweets from influential Twitter accounts and market volatility.

“There’s basically a lot of influence on Twitter when John McAfee or someone mentions a specific coin,” Lucas said.

As an example, when McAfee tweeted about “burst,” a crypto token project focused on creating a “greener” mining process, on December 22, the price of the cryptocurrency quickly doubled.

A similar, albeit temporary, spike happened the previous week when McAfee tweeted about another crypto token project, Safe Exchange Coins. The day before McAfee’s tweet, the cryptocurrency was selling for roughly a penny each, but within 24 hours of the tweet, the price doubled and by the following week, the coin briefly sold for more than $0.06.

Some argue that when McAfee charges $105,000 per tweet, he’s basically advertising for companies for a fee. However, he told CoinDesk it’s not really advertising because he only promotes projects he truly believes in.

Twitter chatter doesn’t only drive prices up for new cryptocurrencies and crypto tokens, though. It can also have negative impacts as well.

For example, Lucas has noticed that a lot of Twitter feuds about bitcoin code changes and technical updates correlate to price dips.

“If everyone is talking negatively about something that is getting pushed into a core repo coin, that can also have an impact. If someone with a big following tweets something, it can cause a scare,” Lucas said, adding:

“There’s a lot more influence coming from specific accounts, unlike, say, Reddit, which pushes more topics to be talked about rather than creating influence.”

Twitter account on computer screen image via Shutterstock
Written by CoinDesk

Insurance Giant Allianz Is Testing a Token to Move Money Internally

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Insurance giant Allianz has been testing an internal token to move money around between its global affiliates without having to deal with currency conversions and other costs and inefficiencies.

Development of the so-called “Allianz token” is being helped along by blockchain startup Adjoint, which created a proprietary blockchain for the project, CoinDesk has learned. Adjoint declined to comment on the project.

But Oliver Volk, a blockchain expert at Allianz’s reinsurance unit and representative to the B3i insurance blockchain consortium, confirmed that the token was in the works.

“Yes, we are thinking about a kind of Allianz token whereby money coming in will be converted to a token,” he told CoinDesk, adding:

“But it’s a very big animal and we don’t know what kind of regulatory constraints there are.”

Volk said an Allianz token would be “very helpful to get rid of FX constraints and other stuff we have to optimize, especially if you talk to certain currencies which we do not accept at our headquarters and have to be reconverted.”

He said it would make sense to rely less on the banking system, as this would result in numerous savings on commissions and could be used by Allianz all over the world (the Fortune 500 company has operations in 100 countries).

The internal digital token is a project of Allianz Global Corporate & Specialty (ACGS), the business-to-business part of the insurer. It grew out of an Allianz captive insurance blockchain project to disburse payments using Citigroup’s CitiConnect API.

Alan Cabello, the innovation program manager for central and eastern Europe at Allianz AGCS, said the token idea cropped up from his previous prototype built for captives and retrocessions, the practice of one reinsurance company providing services to another.

“It’s essentially about the legal way of moving money from one side of the world to the other,” Cabello said. “Because of regulation and governance, etc., you need to move it from one entity to the next to the next – and that takes time.”

And that goes beyond the two or three days for a bank transfer to go through, he said. “It takes time to get every entity to book it, bind it; everybody at their own desk; it takes a lot of effort.”

The problem is widespread, Cabello added. “Every single major industry and every major company has issues getting money from one side of the world to the other.”

According to Volk, the corporate team at Allianz counted the emails one entity fielded regarding the transfer of a certain amount of money and it came to over 2,000.

Clients regularly ask where their money is, which is another reason Allianz thought of an internal token, Cabello said. “It’s what we have been playing with for the past few months.”

Cabello stressed that the token, while running on a blockchain, was nothing to do with cryptocurrency.

“It’s pegged to the dollar,” he said.

Allianz image via Shutterstock.
Written by CoinDesk.com

 

Wall Street Veteran Likens Cryptocurrencies to Candy Crush Game Currency

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Richard Bernstein isn’t building any bridges with the cryptocurrency community.

The head of the Wall Street research firm that bears his name said in a note to clients today that there’s little difference between cryptocurrencies and the virtual currencies you earn with internet games like Candy Crush, according to a report on Bloomberg. CryptoKitties might not be the smash hit it was cracked up to be, but it might have been a more viable comparison considering it’s built on the Ethereum network.

As Ethereum co-founder Joseph Lubin recently explained to CNBC, the value, at least for ETH, can be compared to commodities like oil, which trades for a price and “is a fuel that powers the global commerce platform. He said: “The ether token is used to pay for computational steps and storage operations on the decentralized application platform that is Ethereum.”

Meanwhile, according to Bernstein, the difference between Candy Crush’s in-game currency and the cryptocurrencies that bitcoin miners create and earn in exchange for solving complicated puzzles comes down to the fact that digital currencies can be traded. The speculative nature of trading cryptocurrencies qualifies the market for a bubble, says Bernstein, pointing to the following features of digital currencies as proof –

  • rising liquidity
  • rising leverage
  • new coins
  • high turnover
  • “democratization”

Bubble Economics

Bernstein wouldn’t be the first person to call cryptocurrencies a bubble, with some cryptocurrency market veterans having said in the past that not all of them will survive. And according to Bernstein’s note, trading in a bubble doesn’t discredit the economic and business case of cryptocurrencies, though it “suggests that the return-on-investment could be considerably lower than investors currently expect.”

Bernstein is a Wall Street veteran, having previously served as Merrill Lynch’s chief investment strategist, and he’s weighed in on bitcoin before. He can analyze equity market analysts under the table, but when it comes to cryptocurrencies, he’s skeptical. Bernstein said in a note to clients in December:

“It is ironic that [investors] fear traditional equities, but they do not fear cryptocurrencies. One must remember that risk typically lies in what you’re invested in, and not in what you fearfully avoid.”

Bitcoin’s worth is derived from the value that people place on it, as it’s not backed by any asset. But bitcoin is moving more into the mainstream for payments with the Lightning Network and altcoins like Bitcoin Cash have accelerated transaction times. As for bitcoin’s other use case as a store of value, cryptocurrency trader Brian Kelly recently suggested that losing 25% from cryptocurrencies is “better than losing 100% … by a “rogue government.” Kelly is also of the opinion that the bitcoin price will attain a new high in 2018.

Featured image from Shutterstock.

Written by CCN.com

Top Crypto News – 19/04/2018

NASA Researches Ethereum Blockchain Tech for Deep Space Exploration

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A research project funded and co-run by NASA is looking to leverage the Ethereum blockchain’s smart contracts technology to automate spacecraft maneuvering while avoiding space debris.

In developments that could potentially have significant implications for deep space probes, NASA is putting resources behind a research project that fundamentally envisions the use of blockchain technology to enhance and make space communications and navigation more efficient and safer.

The research project, named the ‘Resilient Networking and Computing Paradigm’, will be lead by Dr. Jin Wei Kocsis, assistant professor of electrical and computer engineering at the University of Akron (UA).

The recipient of a three-year $330,000 grant, Kocsis will look to develop a cognitive architecture wherein spacecraft will no longer need to rely on crucial information from scientists on earth.

Instead, Ethereum-based smart contracts will help spacecraft ‘think on their own’ to detect and evade floating space debris that could prove significantly damaging in the event of a collision, an announcement from UA explains.

Dr. Kocsis added:

In this project, the Ethereum blockchain technology will be exploited to develop a decentralized, secure, and cognitive networking and computing infrastructure for deep space exploration. The blockchain consensus protocols will be further explored to improve the resilience of the infrastructure.

Kocsis hopes to see the decentralized architecture help the spacecraft also automate data gathering alongside other tasks, freeing up scientists back on earth to analyze the data rather than spending time poring over calculations of flight paths of deep space probes to anticipate environmental hazards.

“I hope to develop technology that can recognize environmental threats and avoid them, as well as complete a number of tasks automatically,” she added.

Details remain slim on the kind of Ethereum blockchain – public or private- being considered for the research project.

Still, the application of decentralized technology could lead to “next generation space networks”, according to NASA’s advanced communications program manager Thomas Kacpura at the Glenn Research Center. The research project could lead to “decentralized processing among NASA’s space network nodes in a secure fashion”, meaning a more responsive and resilient network that’s scalable which can also integrate today’s networks, the NASA official added.

Featured image from Shutterstock.
Written by CCN.com

Bitcoin in Brief Thursday: Another ICO Ghosts with $50 Million – Sends Thanx from Beer Beachs.jpg

Savedroid Ghosts With Investors’ Money

This can’t be real, right? This must be a publicity gimmick. Well, in any event, German online news source Wirtschafts Woche documents how Savedroid has apparently taken the money and run. The company website was replaced with a meme picture, “Aannnd it’s gone.” Founder and CEO Yassin Hankir tweeted a picture of himself on a beach, long gone. All this after having raised $50 million in an ICO.

Bitcoin in Brief Thursday: Another ICO Ghosts with $50 Million - Sends Thanx from Beer Beach
Savedroid webpage

Promises of artificial intelligence, curated portfolios, and a native credit card proved too much for investors, and they poured in money. Stranger than fiction.

Bitcoin in Brief Thursday: Savedroid Scams Investors for $50 Million

Reads Like a Movie Script

A suspect involved in an Icelandic heist involving a dozen perpetrators, 600 missing bitcoin mining rigs, was able to evade authorities after they’d managed to arrest him. “Sindri Thor Stefansson” the BBC reported, “escaped the low-security prison through a window and fled to Sweden on a passenger plane that was also carrying Iceland’s prime minister, local media report. The ticket had another man’s name and he was identified through CCTV video. The stolen computers, which are still missing, are worth $2m (£1.45m).” It appears Mrs. Stefansson was also arrested, but he didn’t have time to circle back evidently.

Bitcoin in Brief Thursday: Savedroid Scams Investors for $50 Million
Sindri Thor Stefansson

Hell Hath No Fury

Speaking of angry women, the broader ecosystem has been accused as being too male. Well, here’s Tina Jones breaking through the digital glass ceiling. According to WGN, Ms. Jones was  “charged after allegedly paying thousands of dollars via bitcoin to a company on the dark web to murder the wife of a man she had an affair with, according to officials. Tina Jones, 31, appeared at bond court Wednesday morning where a judge set bond at $250,000. She was charged with one felony count of solicitation of murder-for-hire.”

Bitcoin in Brief Thursday: Savedroid Scams Investors for $50 Million
Tina Jones

Bearly Escaped with Bitcoin ATM

The Irving Patch, a Texas local online news source, are attempting to help police find two men. Police claim they “entered a store […]  and sprayed a clerk with bear spray before making off with cash from a Bitcoin machine …. They can be seen in security footage spraying the store clerk with bear spray, a powerful form of pepper spray, before heading to the back of the store where the Bitcoin machine was located ….The clerk was taken to a hospital for treatment after being sprayed but was later released.”

Well, He Warned Him

Government crackdown on legitimate cryptocurrency exchanges usually receive very positive media coverage. What both government and mainstream media often miss is how less online exchanges necessarily means more face-to-face encounters, which can be dangerous for reasons bitcoin traders are well familiar. Case in point: a Miami man wished to turn $30,000 cash into more than that in bitcoin. He met supposed crypto dealers at a public place, a local Whole Foods parking lot. The fellow with the cash brought a gun just in case something went wrong. Turned out to be a pretty good idea. He was jumped for the money, and as he was attacked, yelled to his attacker, “Back off, I have a weapon,” the Miami Herald details. The attacker didn’t listen, and was shot. He was later arrested after being taken to a local hospital.

Bitcoin in Brief Thursday: Savedroid Scams Investors for $50 Million

Bitcoiners Wanted at Citi

A recent now hiring Linkedin post detailed how Citi is looking for a  “Senior Vice President, Senior AML Compliance Officer —Emerging Risk,” in Tampa, Florida. “Knowledge of cryptocurrency and bitcoin monitoring” and “Certified Bitcoin Professional Certification a plus,” are among the job qualifications and requirements.

More Spring Cleaning

Clearing off some smaller stories, Riot Blockchain has been subpoenaed.  The Securities and Exchange Commission of the Philippines issued a rather blunt warning about what it terms bitcoin “schemes” to defraud investors. It lists more than a dozen companies by name, and proceeds to go through steps to identify future scams. Josh Ellithorpe tweeted how he “Just released my first open source project at Coinbase. If you need Cashaddr support for your Ruby app then you should check it out!”

Written by Bitcoin.com

Kraken CEO: Crypto Exchange Won’t Answer New York AG’s Inquiry

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San Francisco-based cryptocurrency exchange Kraken isn’t planning to respond to the New York Attorney General’s newly unveiled inquiry into the ecosystem.

Kraken was one of 13 exchanges that received a letter from New York Attorney General Eric Schneiderman on Tuesday as part of his new inquiry into cryptocurrency exchanges, as previously reported. While most exchanges generally welcomed the inquiry and said they would fill out the attached questionnaire, Kraken took a different tack when reached for comment.

“Kraken’s BitLicense-prompted exit from New York in 2015 pays another dividend today,” CEO Jesse Powell said via email early Wednesday morning.

Powell made it clear that Kraken does not intend to answer the questionnaire, saying:

“I realized that we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet.”

Kraken announced that it would leave the state in 2015 due to the BitLicense, New York’s cryptocurrency regulatory framework. In a blog post at the time, the exchange called the law “a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.”

Powell wrote Wednesday that Kraken is generally happy to engage with government bodies but criticized the AG’s approach, adding: “Why don’t you try extracting this information from those businesses actually operating in your state?”

A spokesperson for the Attorney General’s office, who saw Powell’s remarks, told CoinDesk via email:

“Legitimate entities generally like to demonstrate to their investors that their money will be protected. This is basic information that credible platforms should all have on hand.”

While Kraken is not alone in having left New York due to the BitLicense, some state authorities continue to praise the regulations.

“The regulatory structure that we created for virtual currency has helped our licensed companies attract greater interest from customers, investors, and potential financial services partners,” New York Department of Financial Services superintendent Maria Vullo said last week.

Yet lawmakers in the state are looking at the question of revising the framework – or doing away with it entirely. Indeed, during a roundtable discussion in February, industry stakeholders blasted the BitLicense, prompting a pledge from the state senators that hosted it to look at how it may be reworked in light of those concerns.

Image Credit: lev radin / Shutterstock.com
Written by CoinDesk.com

 

Brazil’s Biggest Investment Firm XP Investimentos to Launch Cryptocurrency Exchange

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Brazilian investment giant XP Investimentos, a financial services firm managing over $35 billion for over 500,000 clients, is reportedly going to launch a cryptocurrency exchange. According to the country’s Department of Federal Revenue, XP Investimentos has recently registered XDEX INTERMEDIACAO LTDA, whose registered capital is of about $7.3 million.

Available data shows the new company was initially registered as XP COIN INTERMEDIACAO in August 2017. In November, when most cryptocurrencies started surging, the exchange received capital and turned to XDEX. Earlier this year, it received about 80 percent of its $7.3 million.

According to local news outlet Portal do Bitcoin, data from the Department of Federal Revenue shows the company is related to XP Investimentos. Its website, Xdex.com.br, is at press time unavailable.

While not much is known about the new cryptocurrency exchange, the local news outlet claims an unnamed source revealed it’ll focus on over-the-counter trading. Its report reads (roughly translated):

“It is not yet known what services the new exchange will provide. A source, who did not want to be identified, said that the action will be in the so-called over-the-counter market. That is: focused on movements of large volumes of capital and BTC.”

XP Investimentos has seemingly been researching the crypto space for a while, as back in October 2017 it was revealed it registered the “XP Bitcoin” brand. At the time, a local news outlet queried the company, which then revealed it was studying cryptocurrency markets. One month later, the investment giant hired Fernando Ulrich, a Brazilian cryptocurrency expert

This comes at a time in which Brazil’s cryptocurrency exchanges and businesses created “rival” cryptocurrency associations. The two “rival” associations aren’t yet certain on how cryptocurrencies should be regulated in the country. Fernando Furlan, president of one of these associations, stated:

“There is legal uncertainty. Depending on the purpose, it may be considered a means of payment or a financial asset. “ .

The investment giant’s move may come at the right time. As covered by CCN, Brazil’s largest cryptocurrency exchange Foxbit recently went down for over 72 hours, as some users were able to take advantage of the company’s withdrawal system to duplicate 130 withdrawals. Foxbit later recovered and started processing withdrawals during its downtime, before coming back online.

Written by CCN.com

 

Top Crypto News – 18/04/2018

The New Last-Ditch Effort to Unfreeze a $260 Million Ethereum Fortune

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“The least evil.”

That’s how one ethereum user described the latest effort to recover $264 million in cryptocurrency lost due to a code fault in a popular ethereum wallet. But while the recovery efforts that have proliferated since the November incident have been so far shunned, a new effort, now documented in code, aims for a simpler and less invasive way to implement the fix.

Stepping back, in November, the code library associated with U.K. startup Parity’s multi-sig wallet was deleted by a pseudonymous hacker who “accidentally” exploited a function called “self-destruct.” In the fallout, Parity proposed a modification to the ethereum software whereby the self-destruct mechanism would lose its functionality, but the proposal was found to contain significant security risks.

This new proposal, published on April 15 by Parity Technologies communications officer Afri Schoeden, suggests simply restoring the lost wallet library with a version of the code that does not contain a self-destruct function.

Users would be able to regain access to their funds, and on top of that, the new code would protect Parity from similar exploits going forward. As such, the new proposal sends a clear message – when it comes to fund recovery, some developers have no intention of giving up the fight.

“I think simply recovering funds is both more technically sound and more honest than the original proposal to modify the self-destruct opcode,” ethereum core developer Nick Johnson told CoinDesk.

And a number of others agree.

Co-founder of ethereum prediction protocol Augur, Joey Krug, told CoinDesk:

“I do believe it doesn’t make sense to just have all this capital senselessly locked up.”

Case-specific recovery

What seems to be different about this proposal is its limited reach.

Not only is it focused on the Parity software client only, but it’s also targeted specifically at only the 513,774.16 ether lost in the November hack. (This provides a contrast to past proposals, which have aimed at fund recovery broadly).

“Speaking personally, I’m in favor of helping people recover lost funds if the cost to do so is low relative to the funds being recovered, the owner is unambiguous, and the funds are definitively locked up,” Johnson said. “I think the case with the Parity multi-sig bug fits all three criteria.”

The other thing EIP-999 seems to have going for it is that it’s simple to execute. Instead of trying to rework the whole ethereum virtual machine, the proposal would be released to Parity software clients only by way of hard fork upgrade.

Schoeden emphasized this ease to implement, pointing to the pull-request he already submitted to Parity’s code base.

And Krug, like others, believe this request might actually see enough community support to finally put an end to the Parity fund recovery debate.

Although for some, including Krug, the balance between protecting ethereum users and encouraging good security practices should be taken into account when deciding whether recoveries should happen.

“In my opinion, proposals like these should be accepted provided the code was actually audited,” Krug said, adding:

“If it wasn’t, the community should be less forgiving.”

Debate continues

But with the broader debate over the recovery of funds due to code vulnerabilities splitting the community for years, some aren’t so sure even EIP-999 will settle the mess.

“Allowing case-by-case proposals for mistake reversals is a terrible idea and opens up all kinds of concerns. This would set a terrible and dangerous precedent,” one user wrote on an ethereum forum.

This sentiment seems to be the current majority on social media and GitHub, where many are worried about future corruption and bribery.

Indeed, a Reddit user warned, “Some unknown amount of developer mindshare will leave ethereum if this happens.”

Wrapping up what he sees as the sentiment among the community, Johnson told CoinDesk, “It seems plain to me based on an informal survey that a large proportion of the community is opposed to the idea. I think it’s unlikely this proposal will be implemented.”

Yet, the debates have brought about some sort of silver lining.

After EIP editor Yoichi Hirai stepped down from his role as a result of an eruption of criticism over the frozen fund recovery efforts, the EIP process was streamlined.

Still, Schoeden is aggravated by the opposition, telling CoinDesk:

“Even though I hear the feedback and apply changes to the new proposal, I get the feeling we’re running in circles here.”

Frozen ether coin image via Shutterstock
Written by CoinDesk.com

 

Data Firm at Center of Facebook Controversy Planned $30 Million ICO: Report

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Cambridge Analytica, a British data analytics firm, was planning to raise as much as $30 million by issuing a new cryptocurrency through an ICO before it got swept up in a scandal surrounding the misuse of Facebook Inc. personal data, sources familiar with the matter told Reuters on Tuesday.

Cambridge Analytica had approached a company that advises companies on how structuring ICOs, the sources said.

Current Plans Uncertain

Cambridge Analytica’s current plans are unknown. An unnamed spokesman said the company is considering using blockchain to help secure its online data, but did not comment on the ICO.

The company was creating technologies to allow people to reclaim personal data and gain complete transparency over how their data is used before the Facebook controversy erupted, the spokesperson said in an email to Reuters.

Cambridge Analytica worked for U.S. President Donald Trump’s 2016 election campaign and has faced scrutiny over the past month after the Observer and the New York Times reported that the firm improperly gained access to personal data on millions of Facebook users. Facebook earlier this month acknowledged data from more than 87 million users could have been compromised.

Cambridge Analytica has said it properly licensed data on a much smaller number of users from a research firm.

Chief Executive Left Company

The company’s effort to provide personal data protection was overseen by its chief executive, Alexander Nix, who left in March after being tape recorded boasting about the company’s use of shell companies and strategies to help politicians entrap opponents, The New York Times reported.

The New York Times also reported Cambridge Analytica attempted to promote the Dragon Coin, a coin associated with a Macau gangster known as Broken Tooth. Dragon coin was to be used by gamblers and make it easier for people to get money to Macau casinos.

Facebook, meanwhile, is curtailing misleading and deceptive ad practices, including ICOs, cryptocurrencies and binary options, banning ads that “promote financial products and services that are frequently associated with misleading or deceptive promotional practices.”

Featured image from Shutterstock.
Written by CCN.com

 

Significant Trade Volume Triggers Localbitcoins KYC Requirement

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Localbitcoins ‘Error’ Involves Know-Your-Customer Verification

Significant Trade Volume Triggers Localbitcoins KYC RequirementBitcoin users are frantically searching other exchanges today that don’t require Know-Your-Customer (KYC) verification. A post on the Reddit forum /r/bitcoin on April 17 showed a picture that stated a Localbitcoins user’s trade volume was “significant” this past year, and the trader had to verify their identity in order to keep trading. The picture reads:

Error! Your trade volume has been significant in the last twelve months. Please verify your identity to continue trading.

Localbitcoins does use a verification process but it’s never really been enforced, although some believe more traders will trade with you if you are verified. Much like the rest of the exchanges out there that do require immediate verification, Localbitcoins uses an ID service called ‘Netverify,’ created by a company called Jumio. Basically, the user uploads a picture of both sides of their license or state ID and in a few minutes, the platform reveals if the identification is a legitimate or not.

Significant Trade Volume Triggers Localbitcoins KYC RequirementThe Long-Lasting Bastion of Freedom Fell

The post on Reddit submitted on Tuesday is not the first time this news has spread among the cryptocurrency campfire. Back in January of 2018, there are posts on Reddit and Bitcointalk that show another trader required to use their ID to trade on Localbitcoins. Immediately the discussion among bitcoiners turned to decentralized exchanges like Bisq, Hodl Hodl, and Barterdex. The Reddit user /u/yellowcuda who created the post has an account that is three years old, and further down the thread he states:

To clarify: me and many of my peers who use Localbitcoins started getting this notification upon signing in, requiring them to submit their ID. Without it, you cannot continue trading. This is it, folks — The long-lasting bastion of freedom fell.

Many of the decentralized exchanges (DEX) today do have operational platforms, but liquidity on exchanges like Hodl Hodl, Bisq, Openledger, Bartdex, Idex, and Waves is not that much compared to centralized exchanges (CEX). Further, some of the platforms are in the very early stages and don’t have the functionality and features found on large VC-funded trading platforms.

Significant Trade Volume Triggers Localbitcoins KYC Requirement

Lastly, a few decentralized exchanges do offer fiat pairs, but a lot of them don’t have access to fiat and most platforms offer cryptocurrency-to-cryptocurrency swaps. It’s safe to say that much of the issues tethered to Localbitcoins users being arrested and the company itself requiring verification is likely because people are swapping for fiat and nation-states like the U.S. don’t appreciate that kind of business without permission. There have been no statements made by the owners of Localbitcoins yet about this issue and there are no official updates on the main page.

Written by Bitcoin.com

 

IMF Chief Envisages Large-Scale Shift Towards Cryptocurrencies

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2 Blog Posts Dedicated to Crypto

IMF Chief Envisages Large-Scale Shift Away From Government Fiat Towards CryptocurrencyThe managing director of the International Monetary Fund (IMF), Christine Lagarde, dedicated a blog post on the IMF website to the benefits of cryptocurrencies on Tuesday. This positive post follows her other post last month which she outlined the drawbacks from her viewpoint. Citing that she previously “looked at the dark side of crypto-assets, including their potential use for money laundering and the financing of terrorism,” Lagarde proceeded to say:

Here, I want to examine the promise they [cryptocurrencies] offer. A judicious look at crypto-assets should lead us to neither crypto-condemnation nor crypto-euphoria.

IMF Chief Envisages Large-Scale Shift Away From Government Fiat Towards CryptocurrencyShe acknowledged the many cryptocurrencies in circulation and said, “it seems inevitable that many will not survive the process of creative destruction.” According to Coinmarketcap, there are currently 1,568 cryptocurrencies.

“The crypto-assets that survive could have a significant impact on how we save, invest and pay our bills,” the IMF chief believes. “That is why policymakers should keep an open mind and work toward ­­an even-handed regulatory framework that minimizes risks while allowing the creative process to bear fruit.”

Lagarde Explores Benefits of Crypto

The first benefit Lagarde pointed out was:

Crypto-assets enable fast and inexpensive financial transactions, while offering some of the convenience of cash.

IMF Chief Envisages Large-Scale Shift Away From Government Fiat Towards CryptocurrencyShe emphasized that “Some payment services now make overseas transfers in a matter of hours, not days,” adding that “If privately issued crypto-assets remain risky and unstable, there may be demand for central banks to provide digital forms of money.”

The next point Lagarde discussed was a potential balance in the financial landscape brought about by cryptocurrencies. While emphasizing her belief that “the fintech revolution will not eliminate the need for trusted intermediaries, such as brokers and bankers,” she detailed:

There is hope, however, that decentralized applications spurred by crypto-assets will lead to a diversification of the financial landscape, a better balance between centralized and decentralized service providers, and a financial ecosystem that is more efficient and potentially more robust in resisting threats.

No Immediate Danger

Regarding financial stability, Lagarde revealed, “Our preliminary assessment is that, given their still-small footprint and limited links to the rest of the financial system, crypto-assets do not pose an immediate danger.” Nonetheless, the IMF chief calls for regulators to remain vigilant of the potential of cryptocurrencies “to magnify the risks of highly leveraged trading, and to increase the transmission of economic shocks should they become more integrated into mainstream financial products.” She further described:

Moreover, banks and other financial institutions will face challenges to their business models, should there be a large-scale shift away from government-issued currencies toward crypto-assets. Regulators might find it harder to ensure the stability of a more diffuse and decentralized financial system. Central banks might have more trouble acting as the lender of last resort in case of a crisis.

Written by Bitcoin.com

Top Crypto News – 17/04/2018

Tax Time is Here and Lots of Cryptocurrency Holders Don’t Care

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Cryptocurrency Taxes: Not Many People Pay Them

If you’re a cryptocurrency enthusiast then over the past few weeks you’ve probably seen a lot of articles on paying cryptocurrency taxes, how to pay them, and the horror stories involved with those who have to pay taxes on every transaction because — every single one is a taxable event in the U.S. Even though lots of people believe the Internal Revenue Service’s (IRS) classification is unjust by defining cryptocurrencies as a property rather than a currency, people still are forced to pay for their cryptocurrency gains. Just recently there’s been a multitude of reports on cryptocurrency taxation, and some of them explain that a lot of cryptocurrency proponents don’t seem to care about paying their digital asset taxes.

Tax Time is Here and Lots of Cryptocurrency Holders Don't Care
Tomorrow, taxes are due for American citizens, and there’s a good portion of cryptocurrency holders not willing to pay digital currency capital gains.

Jagjit Chawla, the general manager of Credit Karma Tax explained this week that out of 250,000 individuals who claim to hold cryptocurrencies like bitcoin; less than 100 people (0.0004%) reported their gains to the IRS.

“There’s a good chance that the perceived complexities of reporting cryptocurrency gains are pushing filers to wait until the very last minute,” explained Chawla.

Further a recent Pollfish conducted Lendedu survey of 1,000 U.S. residents who own cryptocurrencies revealed that 35.87 percent of respondents answered, “No, I do not plan on reporting gains or losses on my tax return” The news also follows the recent IRS Coinbase investigation that reported on how there are millions of Coinbase customers, but less than 900 individuals per year reported their taxes over the past few years.

Salty Tax Paying Bitcoiners Get Mad at ‘Tax Cheats’

The articles reporting on people not paying their cryptocurrency tax obligations has got a bunch of bitcoin users ‘salty’ this past week. One individual on the Reddit forum /r/bitcoin says that “tax cheats” are smearing the good name of bitcoin owners.

“This is just another way to try and defeat Bitcoin. Nobody likes a tax cheat. Convince the country that BTC holders don’t pay their taxes, and before you know it, you have large numbers of people against them,” explains the post on April 16 the day before tax obligations are due in the U.S.

I personally pay my taxes on BTC. It’s not an anonymous currency, and one day, (the IRS can look back seven years) you may get caught. If regulation forces exchanges to hand over all of their customer data, everyone who didn’t pay will be in for a wild ride.

‘Without Projects That Express Principles, You Have Nothing of What You Want With a Revolution’

However, the individual who wrote that post didn’t get the support he was looking for as many of the comments declared that “taxation is theft.” One person who specifically disliked the phrase ‘tax cheats’ in the post writes:

Even the term ‘tax cheating’ is a fallacy itself, implying people voluntarily agreed being taxed and are backing out of their agreement or smt. If I live in a county where politicians can raise taxes without consulting the parliament or making a referendum who is cheating who? Because I FEEL it’s us the people who are being cheated into paying more taxes.

Another person details their issue with the post, “The financial system now is the problem — My government is a warmongering fascist state — F#&$ paying taxes in this shit hole!

Tax Time is Here and Lots of Cryptocurrency Holders Don't Care
Many cryptocurrency advocates follow Libertarian philosophies which believe that ‘taxation is theft.’

It’s safe to say that cryptocurrencies and taxes are very topical conversations, and the subjects often gets people upset. A large majority of the comments on the ‘tax cheat’ post disagreed with the person who wrote his opinion that tax cheats smeared the reputation of tax-paying citizens. There are a lot of cryptocurrency proponents who are also adamantly against paying taxes, and many of them are vocal about spreading the message that ‘taxation is theft’ over the years.

“Without a big expression of intentionality to what is considered not the ‘polite things to do with bitcoin’ — specifically money laundering, specifically private access to your coin, holding your own keys — without projects that express these principles, you have nothing of what you want with a revolution — This leaves me to proclaim that most people involved with bitcoin were not serious about that in the first place,” Defense Distributed founder Cody Wilson explains in a 2015 interview.

Coinbase Just Bought One of Bitcoin’s Best-Funded Startups

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Cryptocurrency startup Coinbase has announced the acquisition of Earn.com, one of the industry’s best-funded startups.

A statement released on Monday confirms a previous CoinDesk report in which sources said that Coinbase and other potential buyers were in talks to acquire Earn.com, formerly known as 21 Inc.

21 Inc previously ran a bitcoin mining operation, powered by technology from Intel, and later launched its eponymous, developer-focused 21 Bitcoin Computer in 2015. The company was backed by major Silicon Valley investors to the tune of $116 million raised over multiple funding rounds.

The firm rebranded to Earn.com last October in a pivot that saw it launch a social network aimed at incentivizing users to complete tasks in exchange for cryptocurrency rewards.

While Coinbase did not publicly disclose the terms of the deal, a source directly involved in the discussions told CoinDesk previously that the total amount in cash, crypto-assets, stocks and earn-out being pursued at the time could exceed $120 million.

According to a new report from Recode, the Coinbase deal “was slightly more than $100 million. The publication also reported that some of Earn’s existing investors initially balked at the offer.

As part of the acquisition, Balaji Srinivasan, co-founder and CEO of Earn.com, will become Coinbase’s first chief technology officer. The Earn.com team will be integrated with Coinbase’s operations and its existing business will continue, Coinbase said.

The startup said:

“Earn has built a paid email product that is arguably one of the earliest practical blockchain applications to achieve meaningful traction. We will keep Earn’s business running because it’s showing a lot of promise and potential.”

In his new capacity, Srinivasan will help lead the development of the Coinbase platform, and also recruit new cryptocurrency talent.

The news comes just days after another acquisition deal, announced last Friday, which saw Coinbase snap up mobile ethereum wallet Cipher Browser.

Dollars image via Shutterstock
This article has been updated with additional information. 

 

Chilean Cryptocurrency Exchanges Take Banking Blockade to Appeals Court

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Chile’s largest cryptocurrency exchanges, Buda, CryptoMarket (Crypto MKT), and Orionx recently applied to an appeals court to confront a banking blockade they’re currently facing.

As covered by CCN, the cryptocurrency exchanges recently saw Itau Corpbanca, Bank of Nova Scotia, and the state-owned bank Banco del Estado de Chile shutdown their accounts with no proper explanation. At the time, Banco Estado revealed it decided “not operate with companies that are dedicated to the issuance or creation, brokerage, intermediation or serve as a platform for the so-called cryptocurrencies.”

The appeals court agreed to hear the cryptocurrency exchanges, although their bank accounts remain closed. Per Bloomberg, Chile’s financial institutions are seemingly implementing a blanket ban on the cryptocurrency industry, a move that’s worrying crypto enthusiasts.

Guillermo Torrealba, Buda’s chief executive officer, was quoted as saying:

“They’re killing an entire industry. It won’t be possible to buy and sell crypto in a safe business in Chile. We’ll have to go back five years and trade in person. It seems very arbitrary.”

While cryptocurrencies weren’t yet huge in Chile, the market was growing. Buda, Torrealba’s company, traded about $1 million per day before the banks decided to shut down its accounts. According to its CEO, the exchange is self-regulated and uses the same standards the financial industry uses to know its customers. This, he revealed, includes running checks with local and international authorities.

Chilean news outlets are now speculating the blanket ban comes from the government, as Chile’s Financial Stability Council, an organization with representatives from the Finance Ministry, the country’s central bank, and the securities, banks and pension funds regulator, issued a warning on cryptocurrencies on April 5.

While most financial institutions didn’t reply when reached out to, Itau Corpbanca’s chief executive Milton Maluhv stated on March 27 that the bank supports startups and new technologies, but argued the cryptocurrency industry needs more regulation, adding that the “bank is following internal norms to decide on closing individual accounts.”

Torrealba noted that the appeals court may help the cryptocurrency exchanges. As covered, Crypto MKT’s co-founder, Martin Jofré, has stated that with Banco Estado turning its back on the company, it was left with no banking.

Orionx, on the other hand, revealed that users’ funds are “fully backed” and that there is “no risk of insolvency.” It added that it believes the bank’s moves are “incorrect and anti-competitive.”

Featured image from Shutterstock.
Written by CCN.com

Lightning + NFC? The New Plan to Bring Bitcoin to Retail

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Imagine a way to expand bitcoin payments to millions per second. Now, imagine a clunky, command-line interface.

That’s the extent of the divide between the vision enabled by bitcoin’s best-yet scaling solution, the lightning network, and the current state of its design. But while that’s daunting, developers are moving ahead on designs to make the payment system easier to use, with one recently submitting a proposal for connecting lightning with a payment technology that could make it feel as futuristic as it’s touted.

That payment technology, near-field communication, or NFC, would allow a user to pay for an item just by holding their smartphone an inch away from the device it’s paying.

Not a new idea in bitcoin or the payments world at large, NFC-based payments have caught on throughout Asia and Europe – not only on smartphones, but also through chips embedded in payment cards. And while the U.S. might be lagging behind in NFC adoption, bitcoin’s early adopters might just be the right target audience.

As such, the proposal, submitted by developer Igor Cota, looks to standardize a way to connect lightning with NFC.

Invoking the name of his lightning wallet that uses NFC, Presto, Cota told CoinDesk:

“I want the payments to be instant just like with the contactless cards we have here in Europe. A user would simply tap on the payment terminal and presto!”

Further, Cota imagines turning any computer into a lightning point-of-sale terminal through the use of a $29 USB attachment, a route that has proven successful in his early tests.

Replacing QR codes

Given the success, Cota’s proposal is about standardizing what he’s created, adding it to the many other standard rules that describe how each lightning software implementation should operate.

Many bitcoin payments implementations tend to use QR codes – those pixelated-looking black-and-white squares that encode data that can then be scanned and consumed by smartphones. And while Presto supports QR codes alongside NFC, he believes the latter provides a much better experience.

QR codes not only can be a bit finicky, but they also can become “unwieldy,” Cota said, especially when more information is added to them. In this way, merchants won’t be able to add much information such as itemized receipts and coupons to QR codes, he said.

NFC, though, doesn’t have this hurdle.

“I’d like to see a system where the payment terminal sends a nice HTML receipt for the customer – that receipt has, say, a table list of your grocery shopping with subtotal, taxes, grand-total, perhaps a shop logo, some loyalty code or a coupon for future use,” he said.

In Cota’s mind, this would give consumers a more detailed record of their spending habits, empowering them to take even more control of their finances.

“Imagine a wallet that can tell you how much you’ve spent on broccoli last month?” Cota said, adding:

“With crypto you’re always in control, but with these digital receipts you are even more so.”

A bolt of lightning

But first, Cota is trying to get his NFC implementation added to the standards that lightning network developers have established in an effort to make sure all implementations are compatible with each other.

These standards are called “BOLTS,” and Cota believes NFC should be added to BOLT 11, which explains how “invoices” – describing how much a person owes – should be encoded and presented to a user. It’s a similar process to that of the credit card reader at Starbucks showing you that you owe $4.50 for a mocha latte.

For now, BOLT 11 only describes a standard for QR codes.

Already, Cota has come up with a rough standard, putting together a Multipurpose Internet Mail Extensions (MIME) type, which is a format for sending data; an NFC application ID, which indicates the payment method is lightning; and a “very simple protocol to forward socket data.”

Though these pieces weren’t so hard to come up with, Cota said he thinks it’s important to write up a standard, whereby all NFC-enabled point-of-sale devices can accept any NFC-based lightning payment, now to be ahead of the game should NFC-based lightning payments take off.

“For the sake of interoperability, it would be great if we agreed on some standards,” he explained.

And already, most of the public technical feedback has been positive, with Lightning developers ZmnSCPxj and Corné Plooy responding favorably to the proposal on the mailing list.

However, Bitrefill lightning developer Justin Camarena was a bit wishy-washy, telling CoinDesk:

“It’s an obvious way to pay in the future but it seems we’re a bit too early as there are no hardware point-of-sales offering lightning support.”

Still, Cota is plugging away on the next steps to move the project forward.

“As you can see the [Presto user-interface] is not really there yet but I’m working on it,” he said, adding, “What I’m working on at the moment is a protocol that makes sure the NFC payment goes through even in case the paying device is offline.”

Cota plans to submit another pull request for developers to review once this mechanism is finished.

NFC image via Igor Cota
Written by CoinDesk.com

Top Crypto News – 16/04/2018

Bermuda Reveals Draft Crypto Regulations, Plans to Embrace ICOs

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Bermuda Reveals Regulatory Proposals for Crypto Industry

Bermuda Reveals Draft Crypto Regulations, Plans to Embrace ICOsThe 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

Bermuda Reveals Draft Crypto Regulations, Plans to Embrace ICOsThe 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

Bermuda Reveals Draft Crypto Regulations, Plans to Embrace ICOsUnder 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

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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

w/e

sue me

(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.

HODLing works

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.

More possibilities

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.

HODL on

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

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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

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“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.”

Not enough?

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.”

Golden Gate Bridge image via Shutterstock

Top Crypto News – 13/04/2018

Kindred Spirits: Why Hardcore Early Adopters Are Dead-Set on Kik’s ICO

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“I’m long-term bullish and short term I have no idea.”

That’s how Fred Wilson, a partner at Union Square Ventures and one of the most widely respected VCs working today, answered a question about the crypto market in general and specifically his outlook for Kin, the soon-to-be launched token created by the messaging app, Kik.

Wilson made the comment in a small event space on Prince Street in Manhattan, sitting in front of 28 people that Kik had flown in from 13 countries (including Japan, India and Australia), and all of whom seemed to be holders of Kik’s ethereum and stellar token.

Kik had brought them together to serve as the first wave of ambassadors for the new token, serving on Reddit, Telegram, Kik groups and anywhere people might want to talk about it.

So, when Wilson expressed that mix of confidence and uncertainty, he wasn’t just giving the latest market’s hot take; he aligned himself with a prevailing sentiment in the room, hope mixed with some confusion. A part of his role there seemed to be to induct Kik’s guests into an ever-widening circle of the true believers backing the new model for monetizing digital experiences enabled by kin.

“I wouldn’t say it was my idea, but I would way I was one of a group of people who collaborated on coming up with it,” Wilson told the room. “Obviously, I think it’s a great idea.”

Wilson spoke during the last fireside chat of the day, in conversation with CoinFund CEO Jake Brukhman.

CoinDesk had been invited to the event to interview Kik CEO Ted Livingston as the the two day event opened. During that conversation, Livingston described himself as a wreck two years ago, as the company lost marketshare to Facebook-owned products.

In Wilson’s telling, he helped bring his fellow investors in the company around to a crypto-led strategy, so that now Livingston could say:

“Our investors are very supportive, but it took us a while to get there.”

Faced with what he saw as the impossibility of monetizing a messaging app with ads amidst the Facebook-Google advertising duopoly, Livingston elaborated, “Our new plan was to develop a new economy around a new currency.”

An economy is, of course, one form a community takes, which helps to explain why Kik has invested in forging bonds between its early advocates, expanding the cadre from that early circle that sold the Kik board to a larger one that can sell lots of people using services online.

Here’s the funny thing about it’s early advocates, though: by and large, they don’t use Kik. During our interview with Livingston, we asked the crowd whether or not they were big Kik users before Kin came along. Only five or six raised their hand.

It’s remarkable because when Kik first unveiled this idea, many people viewed its existing audience as its unfair advantage over potential social crypto competitors.

Livingston volunteered, “Our users of Kik are largely unaware.”

Crypto Summer Camp

Arriving at the gathering on Prince Street felt a little like coming back to summer camp, with lots of people chatting with that peculiar spirit of reunion. Only it wasn’t a reunion – these people hadn’t met face-to-face before, they had spent a lot of time talking online.

And it was clear that certain levels of rapport had been established. This particular hit home during the (not really necessary) ice-breaking round when one community member in particular introduced himself. “Hi, I’m Dillon,” Baltimore’s Dillon King said. Everyone broke into applause. “And I don’t actually look like Yoda.”

Later we would learn that King is one of the most active voices on kin’s Telegram and Reddit channels. “I kind of play the role of the educator,” he told CoinDesk.

King was dressed like a lot of the guys at the gathering (it was very nearly all men), in a purple t-shirt and a black-zippered hoodie, apparently in tribute to Livingston, who wears those two things nearly every day. He said was glad to finally get to meet people from the Kik staff in a setting where they didn’t have to constantly speak as if cameras were rolling he said.

“In general I just wanted to meet everybody,” he explained.

We have known for a long time that people can build real bonds and relationships online as well as offline, but there’s other ways in which online life is not as much like the real world as it could be. And that’s the impetus behind kin: deepening digital reality.

“We want mainstream consumers to use cryptocurrency and we think the hardest problem with that is setting up a system, setting up an economy, in a place where they would actually use it,” Livingston told the room. That place is the internet, buying and selling for purely digital goods and services.

Livingston said they had focused on picking ambassadors who understood that there was a real opportunity in creating entirely digital markets. In fact, he took it so far that he said he hopes to see such robust digital markets that people quit thinking in kin-dollar or kin-yen terms, and instead thinking fiat terms in real life and kin terms online.

Just like people don’t think about exchange rates when they buy lunch from the corner burrito place.

As we spoke to ambassadors on the floor, it was clear that they still had questions about how a stable economy could rest on unstable crypto. “There’s things I don’t understand,” Australia’s Will Gikandi told CoinDesk.

Gikandi took advantage of every Q&A to pepper each speaker with questions. It was clear that he wants to believe it could all work, but he still doesn’t quite see how.

The money

Probably the biggest applause line of the whole day came when Livingston said:

“I’m not in this for a money, though I do think kin is going to be very valuable.”

It helps here to step back and revisit what Livingston believes is so big about the kin idea. He saw himself surrounded by peer companies that had successfully built communities but couldn’t make money. The idea of kin is to create a way for all those companies to monetize without ads or user fees.

Livingston describes that economy as having two pieces: a cryptocurrency and a software platform that can reward developers for creating active markets for that cryptocurrency.

The strangest part of this whole kin idea is that second part, called the Kin Rewards Engine (KRE), controlled by the non-profit Kin Foundation. The idea is that developers will try to build apps that encourage users to exchange kin with each other.

“We don’t want developers to charge consumers,” Livingston said. “We want to set up is what we call a consumer-to-consumer economy.”

So, someone might build an app where users send artists photos and pay them in kin to make drawings of them. The artist would keep all her earnings, but the KRE (which holds 60 percent of the kin that will ever be created) would pay the app’s developer every day relative to the amount of economic activity it created within the whole kin economy.

Wilson said that there’s lots of companies in his portfolio who would probably benefit from jumping on the KRE once its built, but he thinks there’s more opportunity with developers just having their first glimmer of an app idea now.

That said, USV is so convinced that in the future tech companies will earn so much in tokens that its begun negotiating what it calls “token exchange agreements” with the companies it backs. In these agreements, it would have the option to exchange its equity for tokens a company has earned from doing business (not what they generated by issuing them in an ICO).

One member of the audience wanted to know when developers could begin building business models around the KRE?

Livingston wouldn’t commit, but he did give his interlocutor a standard by which to hold him accountable. There’s three ways Kik has to lead, he argued. It has to have a blockchain that can support a million users, it has to have lots of regular consumers actually earning and spending in crypto and it has to have a functional incentives system (like the KRE).

If any other company starts to show traction in any of those three areas, that’s when kin backers should start getting angry.

“Who’s in first place. We have no idea. Nobody knows,” Livingston said, concluding:

“The race hasn’t even started yet.”

Photo of Ted Livingston welcoming kin supporters courtesy of Kik.
Written by CoinDesk.com

Bitcoin in Brief Friday: That Green Candle (Fomonomics)

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Bitcoin Makes a Move

Cryptocurrency Has Already Made You Rich – You Just Didn’t NoticeAfter days of stagnation, bitcoin finally made a move on Thursday and it was a biggie. The largest green candle witnessed in a month, big enough to wipe out a slew of shorts in an instant. When bitcoin wants to it makes like the wind, treating hodlers to all the thrills of riding the world’s giddiest roller coaster. In a single hour, a record $1.2 billion of BTC was traded. Previous bitcoin breakouts have proven to be damp squibs, so while optimism remains, traders aren’t holding their breath.

Altcoin Roundup

Cryptographic researchers claim to have found vulnerabilities in a group of privacy coins that includes zerocoin and PIVX.

Coinsheets writer Dmitriy is tweeting 100 days of shitcoins in which he appraises a bunch of alts in a tweet apiece.

EOS has been one of this week’s big gainers, and is one of the few coins to be up in 2018. A number of reasons have been postulated for its sudden gains including an upcoming airdrop and imminent mainnet launch.

Bitcoin in Brief Friday: That Green Candle

One critic who’s not feeling those EOS vibes is Jackson Palmer, who complained: “People don’t seem to realize that there is no actual EOS “network” that the ERC-20 tokens can be redeemed on. They’re just releasing the code and there will be *multiple* networks/blockchains you can then hopefully redeem some sort of other token on. It won’t be “EOS” though.”

Crypto Scammers Are Getting Smarter

How’s this for an ingenious way to load up on gas?

Bitcoin in Brief Friday: That Green Candle

Bittrex Reopens Registrations

This week Bittrex reopened new user registrations. Then it closed them again after being swamped by demand. And now it’s opened them again, this time for good hopefully.

Finally, crypto has a new word: fomonomics, the art of studying Google search trends to identify when the masses are about to FOMO into bitcoin again.

Written by CoinDesk.com

 

Indian Exchange Coinsecure Claims Insider Job in $3 Million Bitcoin Theft

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Indian bitcoin exchange Coinsecure has disclosed a theft of 438 bitcoins, valued at approx. $3.4 million at press time, from its wallet in what is the country’s biggest cryptocurrency theft to date.

Delhi-based cryptocurrency exchange Coinsecure has accused its own CSO of stealing the coins from the company’s wallet in an FIR (First Information Report) filed with the police on Thursday. In an announcement on its homepage, the exchange said some of its bitcoin funds had “been exposed” and “seem to have been siphoned out to an address” that is beyond its own control.

Coinsecure insists its own systems haven’t been compromised nor hacked. Instead, the exchange points to the unconvincing claim of its CSO, Amitabh Saxena, who contends the theft occurred during a separate “exercise to extract BTG (Bitcoin Gold)” to distribute among its customers.

Coinsecure wrote:

Our CSO, Dr. Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of the private keys.

According to the police complaint (pinned below), Coinsecure CEO Mohit Kalra, who holds the private keys for the company’s wallets along with the CSO wrote: “On 9th April 2018, we were informed by our CSO, DR. Amitabh Saxena, that 438.318 bitcoins (worth INR 19 Crores – Approx.) were stolen from our company’s bitcoin wallet due to some attack.”

Notably, he added in the complaint:

As the private keys are kept with Dr. Amitabh Saxena, we feel that he is making a false story to divert our attention and he might have a role to play in this entire incident. The incident reported by Dr. Amitabh Saxena does not seem convincing to us.

In a separate statement to the Times of India, the chief executive revealed that the private keys were exported online. “It looks like a crime committed intentionally,” he added. “We have shared our suspicions with the Cyber Cell and contacted specialists to find out the source of the hack and trace the bitcoins.”

Coinsecure recruited Saxena as its Chief Scientific Officer in September 2017, citing credentials as a professor of Computer Science in Australia and previous tenures at Hewlett Packard (HP) and Accenture. “Doc comes with an extremely strong understanding of the crypto space and has a lot of ideas and implementations that he will be bringing to Coinsecure,” the exchange said at the time, pointing to his scientific research articles on the blockchain space.

In his complaint, chief executive Kalra also stressed that the CSO might be a flight-risk, asking the police to seize his passport to keep him from flying out of the country.

Meanwhile, Coinsecure insists it will recover and reimburse customers who have seen their funds stolen.

The exchange said:

Irrespective of funds being recovered, we re-assure all our customers that you will be indemnified from our personal funds.

Written by CCN.com

Beyond Banking: R3 Is Expanding Its Vision for Global Blockchain

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R3 may have started as a consortium of banks looking to use blockchain technology, but it’s broadening its ambitions.

Now a startup whose staff numbers in the hundreds, R3 is proposing its distributed ledger technology platform, known as Corda, be used to link together a wide range of businesses, not just financial ones. The core idea is similar to the one originally pitched: if companies share data and assets with each other on Corda, they can ax duplicative processes and trust that they are all on the same page about who did what.

In an example offered by R3 CTO Richard Gendal Brown, airlines, travel agents and hotels around the world could reach consensus on which plane seats and rooms have been booked, knowing that the data being shared is the same for everyone all the time.

Taking this idea further, R3’s platform lead Mike Hearn claims Corda would power a future “automatable economy” where bots help to run supply chains.

“When we stepped back and looked at what we had built, we saw something that was far more broadly applicable,” Brown told CoinDesk, adding:

“It’s the freedom and power that comes from knowing that what you are looking at either as a human or a business or even some sort of futuristic robot – is not only correct, but it’s current, and it is shared with your counterparts.”

While Brown said Corda has attracted interest from a variety of industries (“people in insurance, people in healthcare, people in government, energy – you name it”), the new positioning of the platform comes at a time when the dust appears to have settled after 2016’s hype about corporations exploring blockchain.

All eyes are now looking for delivery.

Meanwhile, rivals such as the Hyperledger consortium, with the help of IBM, are courting seemingly every sector and business line with some flavor of enterprise blockchain solution.

For R3, it’s a pivotal time, as the startup is finalizing the first commercial distribution of the open-source Corda platform, targeted for the end of the second quarter. This paid product will be widely available to businesses, beyond consortium members.

Open, but private

While R3, one of the first companies to promote the idea of members-only blockchains, is moving toward a more inclusive model, it’s not going whole hog.

Rather, Brown describes the vision as “an open shared network – but still private, secured and permissioned.”

The R3 Corda team were inspired by ethereum’s goal of participants all running the same business logic while getting rid of silos and friction between different applications, he said.

However, the global broadcast design of public blockchain networks, while perhaps necessary in a trustless system like bitcoin, is unpalatable to enterprises.

“My critique of some of the enterprise blockchain platforms is that being originally inspired by a full broadcast system, I would argue that often they share too much,” Brown said.

To address this problem, the governing Corda design sought to minimize the amount of data that has to be shared among participants, while convincing someone that something is true.

Corda will not show data up front, Brown said, but will send a piece of evidence to convince the other parties about a fact or set of facts, regardless of whether it’s to do with banking, hotels or airlines.

‘Demilitarized zone’

Aside from keeping data private within the Corda network, sharing it via the internet presents another, more immediate problem. Most companies have their own highly secured data centers, and run their existing applications on their own infrastructure behind lots of firewalls.

“The data that actually matters, the data that you want to bring into consensus, is hidden deep inside data centers of banks and large firms,” Brown said. “This necessarily involves the opening of connections between these firms and sharing data, over the public internet.”

Simply putting an enterprise blockchain node on the internet, as one would do with a bitcoin or ethereum node, is insufficient at best and possibly hazardous, he said.

“Firstly, it’s nowhere near the corporate data, and second what happens if it gets hacked? That’s a big attack surface.”

To reconcile this, the Corda node, which needs to be close to the systems of the bank or the manufacturer or the airline, runs there on existing servers or on cloud infrastructure owned by that firm, securely managed in a way that these firms know how to do, Brown said.

But a small part of the node that needs to be able to connect to the other firms and receive connections from them has to be visible on the internet.

“We take a tiny bit of the node – we call it the float – and allow it to float out away from the main node and just sit out in the demilitarized zone as they call it,” Brown said.

This piece of the node is “very small, very hardened, very protected,” Brown said, adding:

“That’s the bit that is exposed to the bracing winds of the internet,”

In this way, Corda nodes are connected yet stay protected.

“The main business logic runs where it matters inside the organization and a tiny highly secured piece floats out onto the internet and is responsible for all communication,” Brown said.

‘Working insanely hard’

Ahead of the commercial release of Corda expected this quarter, R3 has just shipped version 3.0 of the free open-source version, which features what Brown calls “wire stability.” This gives developers the same certainty about their data that API stability did for their code.

“One version of a Corda 3 node deployed to a network will be compatible with any future version of Corda, so that you don’t have to upgrade the whole network,” Brown said.

Asked if he has detected any loss of appetite in the enterprise blockchain space, Brown said: “No, not really. Of course you might expect me to say that. But here’s why – because what I see is developers working insanely hard” in response to demand.

“Regarding the commercial version of Corda we are offering, I am being asked every day when is that going to ship,” he added, concluding:

“Maybe this is not visible from the outside, but the people who are preparing to launch major initiatives and go live, they are so heads down on delivery and execution they are not making much noise yet externally.”

R3 office image via CoinDesk.
Written by CoinDesk.com

Top Crypto News – 12/04/2018

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SVK CRYPTO WILL BE SPEAKING AT THE LONDON HUBOI EVENT

Date – 17/04/2018

Location – Landing Forty Two, The Leadenhall Building, London EC3V 4AB

Guest Speakers:

Ted Que – Founder of Huobi Labs

Dazhi Quo – Chief Research Fellow in Huobi Academy of Blockchain Application

Shane Kehoe – Co-Founder of SVK Crypto LDN

Sign Up Here – https://meet.huobilondon.com

The Winklevoss Brothers Just Won a Crypto Patent

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A company owned by Cameron and Tyler Winklevoss, founders of the Gemini cryptocurrency exchange, has been granted a patent for a system that seeks to improve the security of digital transactions.

The application was filed in November and granted on Tuesday by the U.S. Patent and Trademark Office (USPTO). It describes a “system, method, and program product for processing secure transactions within a cloud computing system,” with Andrew Laucius, Cem Paya and Eric Winer named as inventors (neither of the Winklevosses is included on the list).

This system uses a combination of common cryptographic techniques, including hash functions and digital signatures. Figures included in the application explain that the system is intended to provide security in a cloud-based digital asset exchange.

And while it doesn’t spell it out directly, the patent’s language suggests that the proposed system could be used within Gemini’s infrastructure.

“The present invention is an improvement to computer security technology. Computer systems to date have been susceptible to attack, whether the introduction of malicious code or the unauthorized access of information, over external data connections, such as the Internet,” the application explains, adding:

“As computing systems increasingly move to distributed computing architectures, such as cloud computing, external data connections are often necessary to the functioning of the computing system.”

Winklevoss IP, LLC, the legal entity that controls the patent, holds a number of trademarks and five patents, including this most recent one.

As CoinDesk has previously reported, the pace of blockchain and cryptocurrency-related patent filings has risen in recent months. One recent patent, awarded to a company belonging to automaker Ford, suggested that the firm is looking at using the technology to facilitate car-to-car transactions.

Lock image via Shutterstock.
Written by CoinDesk.com

Australia Sets Registration Deadline for Cryptocurrency Exchanges

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Newly implemented regulations from Australia’s financial intelligence agency, AUSTRAC, has mandated domestic cryptocurrency exchanges to register with the authority before mid-May 2018.

In an announcement on Wednesday, the Australian Transaction Reports and Analysis Centre (AUSTRAC) reminded cryptocurrency exchange operators of their obligation for compliance with the authority after new regulations effectively kicked in on April 3. The regulatory laws, the first for Australia’s cryptocurrency sector, were fast-tracked after the Australian Senate passed legislation to that effect in late 2017.

“Effective immediately, DCEs (digital currency exchanges) with a business operation located in Australia must now register with AUSTRAC and meet the Government’s AML/CTF compliance and reporting obligations,” the authority said yesterday.

Notably, it added:

There is a transition period until 14 May 2018 to allow current DCE businesses time to register.

The new rules, AUSTRAC says, will empower the agency’s compliance and intelligence capabilities help crypto-exchange operators to introduce systems that minimize money laundering and terrorism financing risks.

Under the terms of their compliance, crypto exchange operators – once registered – will be required to follow know-your-customer (KYC) norms to establish a customer’s identity, monitor transactions and flag suspicious transactions by reporting them to AUSTRAC. Further, all transactions involving cash over AUD$10,000 will also need to be reported.

“AUSTRAC now has increased opportunities to facilitate the sharing of financial intelligence and information relating to the use of digital currencies, such as bitcoin and other cryptocurrencies, with its industry and government partners,” AUSTRAC CEO Nicole Rose stated.

The new reforms have also been generally welcomed and accepted by the domestic cryptocurrency sector, she added, claiming that regulation “will also help strengthen public and consumer confidence in the sector”.

Australia moved to regulate cryptocurrency exchanges under existing AML and CTF laws in August 2017, following the likes of Japan which introduced its own guidelines for the sector last year.

The Asian nation is home to a thriving cryptocurrency ecosystem following the official recognition with a number of mainstream conglomerates and players in traditional finance confidently moving into the cryptocurrency sector. This is particularly evident with online brokerage Monex purchasing Tokyo-based crypto exchange Coincheck for ¥3.6 billion ($33.5 million) this month, despite the exchange suffering a monumental $530 million crypto theft in January.

Featured image from Shutterstock.
Written by CCN.com

 

BitFlyer Exchange Toughens User Verification Amid Watchdog Scrutiny

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BitFlyer, a major Japanese cryptocurrency exchange, announced Thursday that it will toughen its know-your-customer process after reported criticism from the country’s financial regulator.

According to a company announcement, starting from April 26, users registering online will not be able to send cryptocurrency assets or withdraw Japanese yen until their identity and address have been confirmed with the receipt of a postal letter from the exchange.

Similarly, paying for goods with bitcoin through bitFlyer will also be disabled until users have received a letter that confirms they have passed the firm’s verification process.

The revised rule comes as a response to a report by Japanese media outlet Nikkei earlier on Thursday, which indicated that Japan’s Financial Services Agency (FSA) has raised concerns over what it considers a loosely enforced ID verification process on the bitFlyer platform.

Based on Nikkei’s report, the regulator said the cryptocurrency exchange has made it possible for users to start trading immediately after submitting a photocopy of their ID cards, while the platform has yet to fully confirm and verify users’ information. As such, the financial watchdog is concerned that the platform could be used for money laundering activities.

Although it denies being careless in complying with know-your-customer rules, the exchange said it is cooperating with the FSA to strengthen its existing anti-money laundering measures.

The move comes at a time when the Japanese regulator has been scrutinizing domestic cryptocurrency exchanges regarding their anti-money laundering and business registration compliance.

Just yesterday, the FSA issued an administrative penalty that ordered Japanese trading platform Blue Dream, which is still in the application process for business registration with the FSA, to suspend its operations until June 10.

The FSA said the firm had violated customer protection measures by soliciting investors for its own token, “BD Coin,” while not making it known to investors how the price of the token is determined.

The order came just days after the watchdog issued two other administrative penalties last Friday, similarly barring two exchanges from operation for two months.

FSA image via Shutterstock
Written by CoinDesk.com

Philippines Regulator Issues Warning to Cloud Mining Participants
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Philippines Securities and Exchange Commission Issues Warning Against Cloud Mining Operations and Contracts

Philippines Regulator Issues Warning to Cloud Mining ParticipantsThe Philippines financial regulator has issued a warning to cloud mining operations promoting this business model without registering with the SEC. Cloud mining operations involve a contract of pre-purchased hashpower from a remote mining operation, and users buy the contracts for a lifetime or a limited amount of time. Cloud mining users then reap the benefits of the pool’s mining revenue if the operation is profitable and if it is not contracts can break even or suffer from losses. The SEC explains that an initial investigation has shown numerous local and foreign cloud mining companies are soliciting these contracts to citizens residing in the Philippines.

Cloud Mining Operators and Agents Can Face Up to 21 Years in Prison

According to the regulator these contracts promise to pay the investor daily or weekly mining proceeds and these unregistered firms also affiliate commissions for every recruit that registers. Due to this business practice, the SEC states that Under Rule 26.3.5 par. 4 of the 2015 Securities Regulation Code these sales are defined as investment contracts. Using the Howey Test the SEC explains the results confirm that these investments are securities.

“Since this scheme involves the sale of securities to the public, the SRC requires that the said securities offered are duly registered and that the appropriate license and/or permit to sell securities to the public are issued to the corporation and/or its agents, pursuant to the provisions of Section 8 of the SRC,” the Philippines SEC emphasizes.

The warning further states, “Likewise, those who act as salesmen, brokers, dealers or agents of these companies in selling or convincing people to invest in the investment scheme being offered by these cryptocurrency mining companies including solicitations and recruitment through the internet without the necessary license or authority from the Commission may likewise be prosecuted.”

[Offenders] will be held criminally liable under Section 28 of the Securities Regulation Code and penalized with a maximum penalty of twenty-one (21) years of imprisonment or both pursuant to Section 73 of the SRC.

Philippines Regulator Issues Warning to Cloud Mining Participants

The Philippines Regulator Says the General Public Should Stop Investing in These Investment Activities

The regulator implies operations that invite and recruit this type of activity without registration will be penalized in accordance with the Supreme Court decision mandated in 2014. Further, the SEC warns the public to “stop investing” in cloud mining contracts with a statement that highlights it’s warning in capitalized and bold lettering:

In view thereof, the public is hereby advised to STOP INVESTING in these kinds of unregistered investment activity and to take the necessary precautions in dealing with these cloud mining companies.

The Philippines government is not the only group of regulators looking to stop cloud mining operations due to securities laws. Last month news.Bitcoin.com reported on how the Attorney General of South Carolina served a cease and desist order to Genesis Mining. The state of South Carolina has also deemed mining contracts to be securities, and plans to prosecute unregistered entities as well.

Written by Bitcoin.com