Top Crypto News – 19/07/2018

How Coinmarketcap Incentivizes Exchanges to Report Fake Volume


Bitforex, Coinmarketcap and the Case of the Fake Volume

How Coinmarketcap Incentivizes Exchanges to Report Fake Volume
Everything about Bitforex looks off – including its logo

Fake trading volume, defined as buy and sell orders designed to artificially create the impression of demand, are a running motif in the cryptocurrency world. For as long as anyone can remember, various exchanges have been accused of wash trading and inflating their volume. It’s the equivalent of a half-empty airliner placing its passengers in window seats to give the impression that the plane is full. Creating fake volume may sound like a relatively minor transgression, but it can have major ramifications for traders.

“Cooking the books” by falsifying activity lures traders into signing up for an exchange that may be untrustworthy, insecure, and far less liquid than it looks. Any exchange that is willing to create false volume may have few qualms about committing more egregious crimes against its users. Until recently, Bitforex was a little-known exchange, languishing around 70th in the world by trade volume. It now stands at 12th according to data provided by Coinmarketcap, with 24-hour volume of $227 million.

How Coinmarketcap Incentivizes Exchanges to Report Fake Volume

Crypto Exchange Ranks calls out Bitforex

In a detailed and compelling blog post, Crypto Exchange Ranks outlines its case for Bitforex having generated fake volume. Aside from the fact that Bitforex’ trade volume has multiplied by almost 100x in recent weeks, and now stands at more than 10x that of established exchanges like Kraken and Kucoin, there’s its modest social media presence that includes less than 2,000 Twitter followers. The Singapore-based exchange does have 65,000 Telegram followers, but much of this can be attributed to the usual spate of bots coupled with airdrop token chasers.

How Coinmarketcap Incentivizes Exchanges to Report Fake Volume
Bitforex’ claimed trade volume according to its website

Bitforex claims in its Twitter bio to be licensed in the EU, but there is no evidence to support this; in fact its website states that the platform is licensed in the Seychelles and Philippines. The site also includes such bold claims as having 1.8 million users, to be attracting 15,000 new users a day, and to have amassed $1.5 billion of trade volume, taking it as high as number five on Coinmarketcap’s exchange rankings.

Bit Who?

Crypto Exchange Ranks isn’t buying Bitforex’ claims, writing “We see that the number of UU [unique users] of BitForex is 29K. In turn, Kucoin has 889K unique users. Kraken has 666K unique users. KuCoin’s number of UU is 30 times higher than that of BitForex, Kraken’s number of UU is higher by 23 times.” It concludes:

As we have already discovered through SimilarWeb, the exchange receives the bulk of the new traffic through the referral source — CoinMarketCap; thus, the platform immediately attracts attention. Here’s the explanation: creating and implementing marketing and communication strategies and building a community in an organic way is more expensive than forging trade volumes.

While CMC is unlikely to be abetting Bitforex, in publishing the exchange’s figures without question, it is unwittingly complicit in the deception. Other crypto comparison sites have been less eager to report the sort of inflated figures produced by the likes of Bitforex, regardless of what the data pulled by API might say. With its shoddy web design, poor English, and almost certain fake volume, Bitforex does not inspire confidence. But until Coinmarketcap makes a stand against blatantly falsified volume, exchanges will be incentivized to cheat the system and lure in gullible traders eager to try out the next big platform.

Written by


These Digital Monsters Live on Ethereum, But They’ll Fight on Zilliqa


Before my one and only “mon” reached level 4, I was out of ether.

Such was the end result of my first experience with Etheremon, a game inspired by Pokemon and built on the world’s second-largest blockchain, ethereum. I had around $15 worth of ether to spare, so I decided to try it out, eventually arming myself with a cute, fire-themed creature called Kyari.

But I quickly ran into an issue with the blockchain game. Namely, with $15, I never got a chance to move on to more interesting gameplay: battling other users’ mons, “evolving” my mon into more powerful forms, laying eggs or making trades.

Every action, from “catching” the mon (in reality a non-fungible ERC-721 token) to “training” it in gym sessions with other mons (i.e., altering the data associated with that token), had cost the equivalent of a dollar or two.

The reason is that every update to Etheremon’s smart contracts calls for “gas,” part of a complex fee mechanism that incentivizes the miners who maintain the ethereum blockchain. Making matters worse, these transactions often took several minutes to complete.

Such problems – transactions that cost too much and take too long – are known by the shorthand “scalability” in the blockchain world, and they’ve caused severe headaches for game designers who want to use a decentralized platform like ethereum.

Poor user experience – which also involves having to buy ether and install a browser extension that can connect to the blockchain – has stunted adoption. Etheremon is the second-most popular ethereum-based game, but that’s not saying much. At the time of writing, it’s had just 209 users over the previous 24 hours, according to DappRadar.

At one point, gas costs rose so much that Etheremon’s developers had to take drastic action.

“It became super, super expensive, and we saw our daily active user drop a lot,” co-founder and business development director Nedrick Ngo told CoinDesk.

As a result, the team moved “battles” – in which users pit their mons against others’ for experience points and bragging rights – off the ethereum chain and onto centralized servers.

Partially re-centralizing a decentralized game seems like it’s missing the point, however, so Etheremon announced earlier this month that it is planning to move much of the gameplay to a new, soon-to-be-launched blockchain protocol called Zilliqa (both Zilliqa’s and Etheremon’s teams are based in Singapore).

But in a decision that may reflect an emerging trend in the development of decentralized applications (dapps) such as Etheremon, the designers don’t plan to move the game’s assets. The tokenized “mons” that encode data such as level, experience points and evolutionary form – data that gamers have earned through many slow and costly actions – will stay on ethereum for the time being.

In other words, Etheremon will be one game on two blockchains: a zippier, more scalable chain on top, allowing users to play the game quickly and cheaply; and an (arguably) more secure chain below, providing users with the reassurance that their hard-won assets are safe from attack.

As Ngo put it:

“Zilliqa would work as a side-chain for us.”

Zilliqa: sharding from launch

Ethereum’s developers have a number of scalability projects in the works. But according to Ngo, Etheremon’s team and its users can’t wait around for those to be implemented.

“They have to commit Casper and then proof-of-stake and then sharding, so it will take a long time,” he told CoinDesk.

Zilliqa, by contrast, is rare if not unique in the world of blockchain protocols, in that it is integrating sharding, a technique that’s been used to manage more traditional databases for decades, from the get-go.

Amrit Kumar, Zilliqa’s  co-founder and head of research, said the technique has allowed the network to process 2,488 transactions per second in tests, whereas ethereum, right now, can manage perhaps a couple dozen.

Kumar explained how sharding works in a blockchain network using an example.

Given a network of 10,000 computers (known as “nodes”), he said, a sharding protocol would split those up into 10 smaller networks (or “shards”) of 1,000 nodes each. Each shard would then process a subset of the total transactions. Every time Alice sent some cryptocurrency tokens, for example, shard A would process the transaction. Every time Bob sent some, the transaction would go to shard B.

This technique is relatively new territory for blockchains, but Zilliqa’s team brings serious academic credentials to bear on the problem.

Two authors of an early paper laying out a blockchain sharding protocol are involved: Zilliqa chief scientific advisor Prateek Saxena, and Kyber Network CEO Loi Luu, who advises the project.

Kumar said Zilliqa, which is expected to launch before the end of the third quarter, aims to be “the go-to platform for applications which require high throughput and high scalability.”

Bedrock ethereum

Scalability and throughput are not the only considerations for Etheremon’s developers, however.

Users want gameplay to be fast, but they want to be sure there’s no risk of losing their lovingly bred, trained and evolved monsters. The mons represent a good deal of accumulated time and expense for some users, and therefore there are currently no plans to migrate these tokens over to a new chain.

Instead, the data from gameplay on Zilliqa will periodically be synced over to these tokens.

“We actually feel that keeping all the in-game assets on the ethereum network is very secure,” said Ngo.

Kumar said he understood why Etheremon would keep in-game assets where they were:

“Ethereum is certainly an established network and we do understand that there’s still some benefit of using ethereum.”

He argued, however, that in certain ways Zilliqa offers more security than ethereum, because Zilliqa’s non-Turing complete language, Scilla, means “you won’t be able to write a buggy contract like [the] DAO,” the ethereum-based victim of an infamous 2016 hack. According to Kumar, because Scilla is not as complex as ethereum’s language, Solidity, it is easier to test for vulnerabilities.

On the other hand, Zilliqa’s method of reaching network consensus, practical Byzantine fault tolerance (PBFT), is potentially more vulnerable to certain kinds of attacks than ethereum’s proof-of-work method. Unlike bitcoin or ethereum, which are theoretically secure so long as the majority of the nodes follows the rules, PBFT presents a potential limitation, in that it requires two-thirds of nodes to be “honest.”

In other words, PBFT runs the risk not just of 51 percent attacks, but 34 percent attacks. Although, Kumar argued that the situation is actually more complicated, since it’s possible to attack a proof-of-work blockchain without controlling a majority of nodes.

Whatever the actual security advantages of keeping Etheremon assets on ethereum versus moving them to Zilliqa, this sort of architecture – in which a slower, battle-tested chain is used to store assets while a top layer processes transactions – may be catching on.

Loom Network offers tools to build dedicated sidechains for decentralized games that are anchored to ethereum, and has begun exploring shared sidechains that host multiple games.

“It’s really important to have that decentralized base layer of ethereum,” Loom Network co-founder James Duffy told CoinDesk in May, “because then you can use it like the high court.”

At the moment, Etheremon and Zilliqa have yet to figure out how exactly to juggle two chains, but Ngo was optimistic, telling CoinDesk this is “just the first stage of the collaboration.”

Etheremon gameplay image courtesy of Etheremon
Written by


No Matter How You Slice It — Token Assets Are Coming to Bitcoin Cash


Bitcoin Cash Community Greeted by Two More Token Creation Systems

No Matter How You Slice It — Token Assets Are Coming to Bitcoin CashThe Bitcoin Cash (BCH) network has seen a lot of development since the last hard fork which debuted the reenabled Satoshi OP_Codes and the upgraded default data-carrier-size. The BCH community and developers have been bolstering the idea of tokenization on the BCH chain. There’s been a bunch of ideas so far with Andrew Stone’s GROUP proposal and Joannes Vermorel’s Tokeda paper. Then this week Bitmain developers revealed the Wormhole project that utilizes a fork of the Omni Layer. Then on Wednesday, two more token ideas have been introduced for the BCH chain — One concept from the developers, and another proposal written by a group of six developers including Jonald Fyookball, James Cramer, Unwriter, Mark B. Lundeberg, Calin Culianu, and Ryan X. Charles.

Colored Coins & Cryptonized Cash

No Matter How You Slice It — Token Assets Are Coming to Bitcoin CashThe creators of the platforms and the Cashpay wallet explained that they are bringing the Colored Coins protocol to the BCH network. The Colored Coins (CC) protocol debuted for the BTC back in 2013 network by adding specific metadata to the blockchain. This in turn created ‘representative tokens’ or ‘colored coins’ that can represent any physical or digital item like stocks, bonds, gold and silver backed coins. The Colored Coin protocol will allow the ability to create a currency called Cryptonized Cash (CC) that can be used with Cashpay for discounts and exclusive products.

“Further utility will be added as grows — There will be a total of 1 billion CC, without the ability to add more in the future,” the developers emphasized on the social media platform “The tokens are always redeemable on — One of the most important questions to answer when proposing adoption of a certain framework is what are the use-cases?

Luckily with colored coins, the answer is endless. Colored coins can represent vouchers, coupons, tokens, altcoins or other assets. You can tokenize whatever you want. The first real-world use-case is Cryptonized Cash (CC), an incentive program on which is live right now.

The Simple Ledger Protocol

Following the Colored Coins concept, another paper was revealed to the public written by Ryan X. Charles, Mark B. Lundeberg, Calin Culianu, Jonald Fyookball, James Cramer, and the developer Unwriter. The paper called, “Simple Ledger Protocol: A token system for Bitcoin Cash,” details a proposal for the BCH network that handles tradeable redeemable tokens without a consensus upgrade. Enhancement proposals such as GROUP have not been able to obtain consensus needed to change the base protocol, explains the group of developers. Simple Ledger Protocol (SLP) utilizes metadata in OP_Return transactions and the SLP creators believe consensus can be achieved by “token users and market participants adhering to a prescribed set of simple rules.”

No Matter How You Slice It — Token Assets Are Coming to Bitcoin Cash
A diagram from the SLP paper.

“Because SLP builds on the transaction chain of the existing Bitcoin framework, users can easily verify transactions with SPV/lite wallets within practical boundaries,” the paper explains.

Full validation of a transaction back to its token genesis is possible by supplementing existing transaction-retrieval infrastructure with the integration of SLP consensus rules.

The developers say that the SLP system will be permissionless, simple, robust, non-invasive, extensible, and an implementation plan for rapid ecosystem support. The 26-page paper is extremely detailed and it observes multiple subjects that need attention such as wallet implementations, token address format, proxies, utilizing the Bitdb network, economic implications, and more. The group of six developers revealed they were motivated to present their own token solution and the key to its success will be simplicity. “But will also depend on our taking action to foster the support of the ecosystem,” the SLP programmers add.

No Matter How You Look at It, Token Assets Are Coming to the Bitcoin Cash Network

Of course, the Bitcoin Cash community was pretty thrilled about two more tokenization projects using the BCH chain. One user on the Reddit forum r/btc who enjoyed the SLP paper notes that there has been quite a lot of these proposals lately, “I believe we’re hitting some ‘tokenization proposal fatigue.” Nevertheless, enthusiasts dig the competition and the amount of development dedicated to bringing tokenized assets to the Bitcoin Cash network. The community may end up using a bunch of different color coin methods down the line or perhaps they may just use the superior tokenized system. Whatever the case may be, the race is on to get a system that creates representative tokens using the security of the BCH protocol.

Written by




Top Crypto News – 18/07/2018

Civic Is Turning Into a Crypto-Powered Personal Data Market


“I never thought we’d get it.”

That’s Vinny Lingham, co-founder and CEO of the blockchain identity startup Civic, talking about the company’s acquisition of “” – a fitting web domain for a company built around the idea of putting personally identifiable data in the control of its owners.

To that point, Lingham said he had always thought would be an ideal address from which to promote the platform he is building.

Civic raised $33 million in a token sale last year as part of an effort build a decentralized infrastructure for third parties to make attestations about individuals.

Even with those resources, the domain was valuable internet real estate. It was previously controlled by a company named Inflection, which dates back to 2006, according to Crunchbase.

At first, the domain seemed out of reach, given that it was controlled by an established business. But all that changed when Civic learned that the firm had made the decision to call it quits on that line of business.

“It was very opportunistic and we lucked out for sure,” Lingham said.

As a condition of the sale, Lingham couldn’t reveal any more about the negotiations or the amount Civic paid to acquire the address – Civic’s tokens currently have a market capitalization of $65.9 million according to CoinMarketCap – but, as he put it:

“It wasn’t pocket change.”

Consumer-led identity

At its heart, the Civic protocol is built around the idea that users control their own data: – “your information sits on your device, not on our servers,” as Lingham explains it. will serve as a hub for businesses that have information and those that need it. So, rather than one company selling data about its users directly to another firm, the first company that can verify data would share that attestation with the user, who would then share it with the second firm that needs the information.

The blockchain allows the company receiving the information to verify that the attestation held by the consumer is legitimate.

Many different companies might be able to, for example, verify that a specific user has a valid driver’s license, but other companies might have different levels of trust in each other.

So, will be a place for companies to set up relationships and have a means to tell consumers whose attestations they will trust.

“The key thing here is it will run on CVC tokens,” Lingham said.

The token will be the method by which requesting companies pay for validation from companies that have the information. Smart contracts are used to protect everyone during the transaction, ensuring that validators only get paid once requesting companies have received adequate information.

Many vendors, one market is expected to start directing traffic to a Civic-controlled website as of 22:00 UTC.

According to Lingham, the domain will play host to a business-to-business marketplace for companies looking to sell attestations about individuals and the companies seeking to verify information about their customers.

Citing the acquisition of a domain that will give their venture a higher profile, Civic has also decided to delay the launch of this marketplace to the fourth quarter of this year instead of the third quarter, as CoinDesk previously reported.

Civic will also make the software behind the marketplace open-source by the end of this year, in keeping with the industry-wide ethos of decentralization.

“We don’t want to be the ones behind it,” Lingham explained. “Initially we start off being a bit more stewards, but, over the long term — hopefully, we don’t need to be.”

Civic will be one of the companies in the marketplace – but it hopes to be one of many.

“Civic will be like Stripe for identity,” Lingham said, meaning it will be easy for sites that want to use its network to verify people to integrate it with an easy API call.

But the new site is bigger than Civic’s part of it. Lingham positioned the domain acquisition as a major step for not just his company but the development of a “Web 3.0”

He told CoinDesk:

“It’s a big move for the industry, getting that domain secured and establish that as a rallying point.”

Vinny Lingham image via Shutterstock
Written by


Coinsmart Launches Cryptocurrency Exchange for Canadian Tax Payers


RSK Labs Launches Decentralized App Service

RSK Labs Launches Decentralized App Infrastructure ServiceThe Rootstock (RSK) project is a Turing-complete smart contract sidechain that is pegged 1-1 to BTC. Additionally, the RSK platform’s virtual machine (VM) is backward compatible with the Ethereum VM which adds even more depth to the system. Back in February, reported on RSK mining its genesis block which initiated the launch of the RSK ecosystem. This past spring, at the Consensus event in New York, RSK Labs co-founder Gabriel Kurman revealed that the sidechain was now secured by 1 in 10 BTC miners. Furthermore, there’s been a few walkthroughs and step-by-step guides on how developers can build smart contracts using the RSK network.

Now RSK Labs has launched a public infrastructure service that enables decentralized application (Dapp) creations without the infrastructure installation process. Essentially programmers won’t need to install specific infrastructure components so they build Dapps on the RSK network on-demand.

“We are excited to avail this service to let the Dapp developers focus on their solutions while we have their back on a reliable and scalable infrastructure that they do not need to install anymore,” Adrian Eidelman, RSK’s CTO details during the Dapp service announcement.

RSK Labs Launches Decentralized App Infrastructure Service

Dapp Infrastructure Without Tedious Installation, Jaxx Integration, and Bamboo Version 0.4.4

The full implementation of the RSK Dapp infrastructure is available on Github and there are two public nodes for testing — Testnet and mainnet. The nodes support 26 JSON remote procedure call (RPC) methods. If a programmer doesn’t want to use the public developer service they can still install, compile and run their own RSK node.

RSK Labs Launches Decentralized App Infrastructure Service
Jaxx wallet users can store, send and receive RSK network smart bitcoins (SBTC).

There’s been a lot of development happening with RSK Labs and the sidechain seems to be moving along after a long three-year wait prior to the initial launch. Further, the RSK token called ‘smart bitcoin (SBTC)’ also has wallet framework from a third party through a partnership with Jaxx users can store, send, and receive the RSK network’s SBTC using the light client.

“It speaks volumes that RSK has chosen the Jaxx platform as the first to integrate with — Proponents of the RSK vision believe this is a key step towards keeping the world’s biggest cryptocurrency competitive with the platform that pioneered smart contracts, or self-executing code,” explains Anthony Diiorio, the founder of

With the latest Dapp infrastructure service launch, RSK developers can now use those SBTCs to help with their platform builds. The service also follows the RSK Bamboo release v0.4.4 which adds improvements like reduced block processing and blockchain synchronization times.

Written by


Democracy of Two: NEO and the Crypto ‘Election’ That Wasn’t


What constitutes an election?

According those backing ethereum competitor neo, just one candidate and two voters.

The public blockchain project, whose tokens are valued at over $2 billion by crypto investors, went so far as to claim in a July 4 blog post that it had entered a “new era” in which its token holders will have a say in how decisions on the network are made, but even insiders are skeptical such assertions are little more than rhetoric.

Case in point, the NEO Foundation, which develops software for neo, announced this month that it had elected the first node to its network, a foundation-funded collective of NEO developers calling themselves City of Zion. Less publicized at the time, however, was that token holders were not allowed to participate in that vote.

As such, even those running the newly elected node aren’t exactly convinced that neo is fully committed to running its blockchain with broad participation from users, at least at this time.

“I would personally disagree with calling it an election,” Ethan Fast, a member of the City of Zion team, told CoinDesk in an interview. “That’s not a word I would choose.”

More broadly, such a conclusion is instructive in that neo is one of a growing number of public blockchains seeking to implement a more centralized model for how blockchains can be managed. Called delegated byzantine fault tolerance (dBFT), neo’s specific idea is that by consolidating decision-making to a small group of nodes, the software can become faster and more useful.

Its a break from bitcoin’s mining model in which any node operator who abides by the rules can compete to approve transactions, and one that has seen a handful of projects including EOS and Tron raise billions with big promises that it can prove viable.

In this way, neo, which has close ties to blockchain solutions company Onchain and the public Ontology project, has adopted technology it believes will address scalability issues — specifically, slow transaction speeds and controversial network upgrades.

“[The] NEO Council values efficiency (quick response and protocol upgrade) over decentralization (sometimes a crypto-political correctness) at this early stage,” the project’s governing body, now called the NEO Foundation, explained in a May post.

However, neo is perhaps unique in that it hasn’t provided much in the way of details on how it aims to do this in a way that will add up to the democratic process its touts.

Neo’s white paper and website do not provide a detailed description of its governance model, and further, the foundation has said in blog posts that it plans to maintain “decision-making power” until the “core protocol stabilizes,” though it has not defined what criteria constitute stability.

Once the foundation is confident in the strength of the network, it says it “expect[s] to see one to a few dozens of consensus nodes to be elected by NEO holders.” But before token holders are able to vote for candidates, the foundation plans to “elect” several private nodes, of which City of Zion is one.

A ‘benevolent oligarchy’

That might be one reason why other supporting language issued by the foundation has positioned the election as the first step in a long process to relinquish some of its power to token holders.

Still, the NEO Foundation’s use of the term “election” to describe the process by which City of Zion became a node at all has triggered some skepticism.

While “election” would arguably imply that a multiplicity of votes were cast, blog posts suggest that the NEO Foundation is currently the only voting entity in the ecosystem. City of Zion’s Fast confirmed that “there was no one from the public that voted in this election besides the NEO Foundation.” Likewise, of the foundation, only project co-founders Da Hongfei and Erik Zhang have the authority to make decisions, according to another blog post.

As such, Fast instead described NEO as “a kind of benevolent oligarchy,” and said that the community has been frustrated that the foundation has been slow to surrender some of its decision-making power.

“Just a small amount of decentralization in the short term is something CoZ has been pushing for for some time,” he said, adding that it “may not be happening as fast as [the community] want[s].”

Dean Eigenmann, founder of blockchain governance startup Harbour, was more critical of the foundation’s “election.”

“Libya had elections under Gaddafi, too,” he said, explaining further of the project:

“It just seems so uninteresting because it’s like they aren’t even trying to decentralize their governance. They were like, hmm this seems too hard. Let’s just keep it centralized.”

Degrees of democracy

NEO is not the only project to be criticized for how it is going about the election of nodes.

Ethereum founder Vitalik Buterin warned in March that blockchains that use “coin voting” seem “to lead to a high risk of economic or political failure of some kind.” Likewise, Kyle Samani, managing partner at crypto fund Multicoin Capital, wrote on Twitter in June that EOS and Tezos, two other project seeking to compete on governance, are both “plutocracies.”

However, Richard Lee, founding partner at crypto fund Global Blockchain Innovative Capital took a more flexible position in an interview with CoinDesk, arguing that “there’s different levels of decentralization.”

“I think the different consensus protocols, at least right now, there’s trade offs in between. Sometimes you have to sacrifice decentralization for speed and efficiency or security,” he said, adding:

“Neo’s trying to address scalability in a different way than ethereum is… Neo has a more centralized approach for that.”

Lee said he interpreted the foundation’s use of “election,” “as more of, the NEO Foundation does not run all the nodes now,” and added, “I don’t see anything malicious or deceitful about that.”

Some participants in neo community forums were nonetheless skeptical of the election, with one reddit user posting, “Decentralization goes way beyond the amount of nodes. It has to do with governance and decision making. If you still have a central entity deciding new features, etc you cannot become fully decentralized.”

However, other comments reflected Lee’s conclusion about the election, with many participants greeting the announcement of the election with enthusiasm.

Whether neo will follow through on its promise to empower token holders remains to be seen.

According to a timeline published in a blog post, the foundation plans to elect Dutch telecommunications company and neo partner KPN and Chinese venture capital firm Fenbushi Capital to operate the next privately held nodes in the network by the end of 2018. It intends to allow token holders to both vote for and campaign to become nodes in 2019.

The NEO Foundation did not respond to requests for comment. 
Image via Neo Community Facebook
Written by



Top Crypto News – 17/07/2018

A Crypto Exchange Is Buying Back $24 Million-Worth of Its Own Tokens


FCoin, a new cryptocurrency exchange that saw spiking trading volume recently due to its controversial revenue model, has revealed a plan to buy back millions of its own tokens to provide capital for a new fund of funds.

The exchange announced last Friday that the new fund will be backing a group of selected token funds to further invest in blockchain and cryptocurrency projects. The funds selected will all be accredited sponsors, it added.

During an initial phase, it will allocate 100 million of its own FT tokens – worth around $24 million at press time – to fund the project. However, instead of providing the amount from its own reserves, FCoin said the the capital will come from a buyback of tokens on the secondary market.

The move accompanies FCoin’s addition of a new “FT trading zone,” also announced on Friday, which includes trading pairs between FT and other tokens.

FCoin stated that only projects that have raised over 3 million FT through the fund of funds and have been recommended by at least two sponsors will be eligible for listing in the new trading section.

As previously reported by CoinDesk, FCoin saw soaring trading volumes after launch due to the adoption of a new business model called “trans-fee mining,” which reimburses users’ transaction fees with the exchange’s FT tokens.

While the model has drawn industry criticism over its long-term sustainability, CoinMarketCap data shows the platform recorded some $3.8 billion in trading volume over the last 24 hours.

That said, FCoin’s plan to buy back its tokens from the secondary market also follows a continuous decline in the price of the FT token, which has plunged by around 80 percent over a month, from $1.25 on June 13 to around $0.24 at press time.

Coins image via Shutterstock
 Written by


G20 Watchdog Unveils Framework to Monitor Crypto


G20’s Crypto Monitoring Framework

The Financial Stability Board (FSB) announced Monday that it “has developed a framework and identified metrics to monitor the financial stability implications of crypto-assets markets.” The framework was developed in collaboration with the Committee on Payments and Market Infrastructures (CPMI).

G20 Watchdog Unveils Framework to Monitor CryptoThe board also published and submitted a report detailing its work on crypto-assets to the G20 as requested by finance ministers and central bankers at the G20 meeting on March 19 and 20 in Buenos Aires.

The FSB is an international body that monitors and makes recommendations about the global financial system to G20, an international forum for governments and central bank governors. The CPMI supports financial stability by promoting the safety and efficiency of payment, clearing, settlement and related arrangements.

G20 Watchdog Unveils Framework to Monitor Crypto

“The objective of the framework is to identify any emerging financial stability concerns in a timely manner,” the report states, adding:

The framework discusses the primary risks within crypto-assets and potential transmission channels to financial stability risks. The framework identifies which metrics the FSB might usefully monitor in the short-to-medium term.

The report also notes that “in general, monitoring the size and rate of growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should a decline in valuations occur.” Furthermore, “the use of crypto-assets for payment or settlement is another transmission channel to be monitored.”

FSB’s Proposed Metrics

Citing that the crypto market and its public data sources, which the proposed monitoring metrics are based on, are “rapidly evolving,” the FSB warned that “the quality of the underlying data can vary, and might not always be satisfactory.” The report explains:

Market-related figures, such as metrics on prices, trading volumes, and volatility may be manipulated by generally prohibited practices such as ‘wash trading,’ ‘spoofing,’ and ‘pump and dump,’ the existence of which cannot be ruled out at this stage.

G20 Watchdog Unveils Framework to Monitor CryptoThe FSB also pointed out that “the proposed metrics may not fit all types of crypto-assets equally.” Nonetheless, it believes that they “provide a useful picture of crypto-asset markets and the financial stability risks they may present.” Over time, the FSB and the CPMI will consider improvements to the metrics as well as add new ones at a later stage.

No Material Risk to Financial Stability

The FSB report refers to decentralized, unbacked cryptocurrencies and crypto-assets as “first generation private digital tokens,” which are dismissed as “unsafe money.” However, it notes that “safer central bank issued cash may be less convenient in an era of electronic payments.” The report continues:

Crypto-assets do not pose a material risk to global financial stability at this time…At present, like crypto-assets in general, crypto-asset platforms do not pose global financial stability risks. Nevertheless, they raise other significant concerns, including consumer and investor protection, market integrity and money laundering/terrorism financing, among others.

The FSB further revealed that the Basel Committee on Banking Supervision is currently “conducting an initial stocktake on the materiality of banks’ direct and indirect exposures to crypto-assets.”

While the FSB does not believe crypto-assets pose a material risk to global financial stability, it supports “vigilant monitoring in light of the speed of developments and data gaps,” the report details.

Written by


Institutional money is growing the crypto space, says Coinbase vice president


Institutional investments in cryptocurrency are helping to grow the industry, Coinbase Vice President and General Manager Adam White told CNBC.

“What’s so unique about cryptocurrencies, and in many ways this asset class, [is that it] was driven by retail investors — not institutions,” White said on “Fast Money” Monday.

So it was surprising that his firm, a San Francisco-based digital currency exchange, has had “unprecedented” interest from institutional investors throughout 2017, he said.

The “institutional conversations have become more and more profound,” White said. In response, his firm has opened a New Yorkoffice and launched new products and services.

Last Friday, Coinbase, which is also the largest cryptocurrency exchange in the U.S., announced it was considering adding five coins to its platform, including cardano, basic attention token, stellar lumens, Zcash and 0x. All five assets moved higher after the announcement.

“The idea of adding new assets is very simply: our customers want it,” White said.

But so far, none of the coins have been approved, and it’s not yet been determined if they are securities. The company said in a blog post on Friday that some of the assets may have limited functions, and may only be available in some countries.

The firm has previously been cautious about the addition of new tokens despite user demand, as the cryptocurrency universe endured increased regulatory scrutiny. Up until now, Coinbase has only listed four coins on its platform.

“We have a long-term vision for the space,” White said. “And we are focused on building the exchange, the wallet, the custodian, that allows capital to move into the space.”

“You do not want to give Jeff Bezos a seven-year head start.”
Hear what else Buffett has to say
People pass by a Bitcoin exchange shop.

Omar Marques | SOPA Images | LightRocket | Getty Images
People pass by a Bitcoin exchange shop.

Not everyone is as bullish on digital currency though. Investor and author Kevin O’Leary is bearish on cryptocurrency — especially bitcoin, which was priced around $6,655 Monday at 5:30 p.m. ET.

“But until you know with certainty if you’re an asset allocator and you’re running a sovereign fund or you’re doing a pension plan for some state. You’re not going to put a dime into this stuff,” O’Leary said on “Fast Money” Monday.

In order for cryptocurrency to be a lucrative investment, O’Leary said, investors need to know “it’s transparent; it’s compliant; and the regulators are on board.” “And then you’ll see real money. Right now it’s fringe.”

But White pointed out that those things don’t happen overnight.

“Those are the exact three things Coinbase is working on,” he said. “What we’re seeing though, with institutions, is that they want absolutely the right regulatory structure around it.”

“People are valuing these assets very differently,” White said. “Whether they’re crypto hedge funds or the retail investor. The core metrics that people look at though, are: What are the daily transactions? How much volume’s moving through it? How many people are building on top of it?”

“The end of the day these are open protocols that facilitate the kind of value, creation and movement,” he said.


Written by

Top Crypto News – 16/07/2018

Schnorr Is Looking Poised to Become Bitcoin’s Biggest Change Since SegWit


Schnorr is coming…

In fact, the bitcoin upgrade arguably took its most significant step yet toward implementation last week when influential developer Pieter Wuilleunveiled a draft outlining its technical makeup. With the release, the idea, one that’s been in the works by bitcoin developers for years, is one step closer to improving the scaling and privacy of the world’s most valuable cryptocurrency.

Effectively, this sets up Schnorr as the next big change to bitcoin, meaning it will be the largest code change since Segregated Witness (SegWit), a pivotal bug fix that prompted a drawn-out battle in the bitcoin community last year before ultimately being adopted.

At a technical level, adding support for Schnorr, a digital signature scheme, would give bitcoin users a new way to generate the cryptographic keys they need to used to store and send bitcoin. By doing so, it also paves the way for a number of exciting benefits, including tackling privacy and scalability, arguably two of bitcoin’s most worrisome problems.

“It is a building block for a variety of improvements,” Wuille told CoinDesk, adding there are even some further-out improvements that haven’t gotten a lot of attention quite yet. And while Wuille hopes the change will ultimately be adopted, he added it’s “ultimately up to the users” if they want to adopt it – as was the case with SegWit.

Co-authored by several top bitcoin developers, including the likes of Bitcoin Core contributor Johnson Lau and Gregory Maxwell, the technical, math-ridden proposal outlines the exact signature scheme that could be coded in bitcoin.

And while it’s far from that final goal, it’s a necessary piece.

Blockstream engineer and co-author Jonas Nick told CoinDesk:

“Standardizing Schnorr for bitcoin is a big step towards using it in bitcoin.”

A way forward

For one, the BIP draft helps to avoid future confusion by proposing a standard that ensures that all developers and merchants eventually implement the Schnorr signature code in the same way.

Though the full description can be read in the highly-technical BIP, the main idea is it describes the math necessary to produce Schnorr signatures, offering an alternative to Elliptic Curve Digital Signature Algorithm (ECDSA), the sole algorithm used to produce keys and verify transactions in bitcoin today.

Schnorr will have one thing in common with the signature scheme it seeks to crowd out, though. If plan is accepted, it will use the same mathematical “curve” that ECDSA uses to produce the keys, called “secp256k1.”

It’s a lot of tricky math, so it’s no surprise the release sparked technical discussion on the bitcoin developer mailing list.

But nothing major has come up so far and developers are optimistic, especially since one of Schnorr’s key benefits is that, unlike ECDSA, Schnorr’s security can actually be proved mathematically.

While Schnorr offers a number of improvements on its own, developers are also excited that it will also pave the way for a range of changes that can be built on top of it, such new privacy techniques.

Right now, it’s obvious when users send so-called “multi-sig transactions,” which are a more advanced type of transaction where more than one person is required to sign off on a transaction, because of bitcoin’s public ledger. But Schnorr pave the way for a technique that will make these transactions look the same as every other transaction.

Nick noted Schnorr will also lead these advanced transactions will be cheaper as well, an important improvement since transactions can grow very expensive in times of congestion.

And it seems like new tech built on top of Schnorr are being proposed on a regular basis.

“Due to the wealth of new discoveries lately I believe these technologies should be developed in a step-by-step basis, and my focus for a first step is just Schnorr and Taproot,” Wuille said, referring to the bitcoin improvement “Taproot” proposed earlier this year by another influential bitcoin developer Greg Maxwell to further improve bitcoin’s privacy.

Less detractors?

That said, there’s still a ways to go – Schnorr’s a massive project with many moving pieces.

While this BIP proposes a standard for developers to chime in on, Nick noted there’s also a code implementation that’s been in the works for ages, putting much of what’s in the BIP draft into practice.

Plus, once developers fight it out until they decide there are no longer any outstanding problems, developers need to come up with a way to actually add it to bitcoin, among other things.

“The specifics for how to deploy it in bitcoin are still being actively discussed,” Nick said.

Having been through a few so-called “consensus” changes in his years as a bitcoin developer, Wuille gave a particularly long list of things to do.

“Like any consensus change, it will be a long process involving fully fleshing out a draft for integration, publishing it, gathering comments from the technical community and ecosystem, writing implementations of both consensus rules and integration in wallet software, proposing a deployment plan, and if all goes well, get it activated,” he said.

In the email where he introduced the BIP, he added that if the BIP is “accepted” by the broader bitcoin community “we’ll work on more production-ready reference implementations and tests.”

Not to mention, there’s another potential stumbling block on everyone’s minds.

Schnorr is a particularly big upgrade. Although changes are being made to bitcoin every day, with code contributions coming from a diverse group of contributors stationed around the world, Schnorr is a rarer type of change, since it affects the most important rules in bitcoin.

SegWit was the last code change “consensus” change made to bitcoin, sparking a debate so big, those who disagreed with the change split off and created their own cryptocurrency with SegWit removed.

The most enthusiastic SegWit supporters even made hats to express their support for the code change. Blockchain consultant Francis Pouliot joked that similar advocacy hats should be made in advance of Schnorr, in case a similar vicious debate breaks out.

He’s not the only developer mulling this possibility.

“It looks for now there are less detractors than there was for SegWit,” developer Riccardo Casatta said, though adding he’s not taking any chances:

“You cannot say how things​ will go and as always, it is better to be patient.”

Welding laser image via Shutterstock
Written by


Major Korean Exchange Bithumb Expanding into Japan and Thailand


Expanding into Thailand

Major Korean Exchange Bithumb Expanding into Japan and ThailandBithumb is currently working on obtaining regulatory approval from the Thai Securities and Exchange Commission (SEC), local media reported Friday. The exchange is the second largest in South Korea at the time of this writing, with a 24-hour trading volume of about $358 million, behind only the Kakao-backed Upbit with a $582 million trading volume during the same time period.

The exchange has already established a Thai subsidiary, Bithumb (Thailand) Company Limited, with registered capital of 3 million baht (~US$90,000). Zdnet quoted the company explaining the reason for its expansion into the Thai market:

Thailand is active in e-commerce and the fintech industry, and the government is showing great interest in digital currency as it promotes smart city business.

Thailand has recently finalized its regulatory framework for cryptocurrencies and initial coin offerings (ICOs). Bithumb has been building its Thai website, the publication added, noting that it plans to start service in Thailand at the end of October.

Major Korean Exchange Bithumb Expanding into Japan and Thailand
Bithumb Thailand’s website. Photo: Zdnet.

Expansion into Japan

Major Korean Exchange Bithumb Expanding into Japan and Thailand
Bithumb Japan’s website. Photo: Zdnet.

Japan legalized cryptocurrency as a means of payment in April of last year. All companies seeking to operate an exchange in the country must obtain approval from the country’s top financial regulator, the Financial Services Agency (FSA). However, with the hack of Coincheck in January, the FSA has been strengthening its oversight of crypto exchanges and imposing a stricter exchange approval process.

Nonetheless, Bithumb is seeking approval from the FSA with a plan to open an exchange in Japan in February next year, the news outlet conveyed. The exchange also revealed that “it plans to set up an exchange that supports the largest number of coins in Japan,” the publication noted.

Global Expansion Plan

Major Korean Exchange Bithumb Expanding into Japan and ThailandEarlier this year, Bithumb announced that it is looking for partners for its global expansion. The exchange says it will work closely with overseas partners to launch platforms that are faster and more efficient for traders worldwide.

Projects which Bithumb will collaborate with potential partners include “cash (deposit/remittance/debit) management processing, the operation of an exchange platform, [and] marketing & promotion and customer service,” the exchange detailed. According to the announcement:

Bithumb is preparing exchange platforms for countries under the global expansion plan and we are looking for great and potential partners (corporation, entity or group) worldwide…The exchange platforms under final development stages are USD / JYP / EUR / CNY / INR / GBP / AUD / CAD / PHP / RUB and [there] will be more soon when there are any service demands.

According to Money Today, Bithumb has also established a subsidiary in Singapore and Britain. “We are considering establishing overseas subsidiaries in various countries such as the U.S. and Europe, but the time has not yet been determined,” the exchange clarified.

In April, the third largest crypto exchange in South Korea, Coinone, announced its expansion into Indonesia.

Written by


American Express Thinks Blockchains Could Help Prove Payments


American Express is on the hunt for better ways of proving when transactions occur and a new patent filing suggests the financial services giant may be looking at blockchain as part of a possible solution.

In a patent application released by the U.S. Patent and Trademark Office last week, American Express Travel Related Services describes using a “blockchain-based system” in order to receive “payment confirmation including a transaction amount and a merchant identifier.”

The concept is aimed at adding to what AmEx calls the “limited” number of options for generating quality evidence that payments happen between merchants and their customers “beyond a receipt or ticket.

AmEx’s patent highlights the tech’s role in retaining “transaction data, contract data, proof-of-payment data, identification data, and/or other information as desired,” with the idea being that a blockchain network – possibly a public one – would serve as an extra layer of proof for transactions that take place on AmEx’s network.

As a result, the potential applications of such a system are quite varied, the company contends.

American Express says that data can be used to “unlock a hotel, rental or shared economy property door using the card (e.g., that was used for the payment) to look up proof of payment on a blockchain.” Moreover, “the system may be leveraged to provide ticketless access to venues (e.g., movie theater, sports event, concert, etc.) to a customer,” and so forth.

While the decision on whether this blockchain system will be hosted on a private, public or consortium network is up for grabs, the application does highlight how “public networks may leverage the cumulative computing power of the network to improve security.”

This patent application by American Express is the latest in a series that have been launched as early as October of last year when the same branch of the company filed for a different patent related to customer rewards.

Fast forward to today and the company has indeed begun initial trials with a custom Membership Rewards program for cardholders, leveraging Hyperledger’s blockchain technology, which it partnered with last January.

Payment terminal image via Shutterstock
Written by



Top Crypto News – 11/07/2018

Regulators Are Slowly Starting to Get It: Utility Tokens Are Real


“I want to quash this false narrative that’s been going around for the past two years that you can separate blockchain from crypto. You can’t.”

No, that’s not a bitcoin maximalist, a HODLer or a crypto-anarchist talking. It’s a regulator.

And Sopnendu Mohanty, the chief fintech officer of the Monetary Authority of Singapore, wasn’t preaching to the crypto-converted, either, when he issued this reminder that native tokens are integral to a decentralized blockchain.

Rather, he was addressing a room full of curious but wary central bankers and international development officials, all of whom were attending a G20 forum in Riyadh, Saudi Arabia on technology and financial inclusion.

It was refreshing to hear someone in the official sector take issue with the simplistic “blockchain without bitcoin” refrain that gets sold to corporate and government leaders who don’t always realize that their problems might be better solved with a less cumbersome distributed database.

That wasn’t only because it’s important for people to understand how native digital tokens are an integral part of the incentive and security models upon which open, permissionless and censorship-resistant transaction-recording systems are built. It was also because Mohanty’s intent was to help shape sensible crypto regulation.

He was urging regulators to adopt nuanced policies that recognize certain crypto-tokens belong to a new type of technology for improving economic coordination, one that can’t be jammed into a decades-old securities law framework. And it’s also encouraging to see evidence that he’s not alone in thinking this way.

Various regulatory authorities around the world are opening up to the idea that, when tokens have a clearly functional role within a blockchain network, it’s better to manage them with existing consumer protection and anti-money-laundering laws than with burdensome securities regulation.

To be sure, they’re doing so somewhat nervously; many are understandably concerned about investors being duped by scammy ICOs in Wild West token markets.

Nonetheless, their gradual yet earnest attempts to define these concepts open the door to blockchain technology’s more meaningful integration into the global economy.

Forward-thinking states

Here, Singapore’s central bank is leading the way. In a March speech, MAS Managing Director Ravi Menon laid out a clear rationale for distinguishing “good” tokens from “the bad and the ugly.”

The Swiss Financial Market Supervisory Authority, or FINMA, has also been proactive. It came up with a useful taxonomy that divides tokens into three categories: payment tokens(bitcoin, litecoin and co.), utility tokens (ether and, in theory at least, various kinds of ERC-20 tokens) and asset tokens, with only the latter being subject to securities laws.

Other developed-country jurisdictions are also wading in. Both Malta and the U.K. dependency Gibraltar have shown an open regulatory posture toward ICOs and token exchanges. Meanwhile, Caribbean countries such as Bermuda  are developing regulatory frameworks for tokens that would promote blockchain innovation while preserving their status as trusted domiciles for foreign financial institutions.

Governments are also taking action at the provincial level. Wyoming’s state legislature passed legislation defining utility tokens as a new asset class and exempting them from securities regulations.

Until last month, it appeared that the U.S. Securities and Exchange Commission was taking the exact opposite approach. In February, Chairman Jay Clayton, speaking before the Senate, said, “I believe every ICO I’ve seen is a security.” The implication was clear: most, if not all, of the hundreds of tokens already sold in this manner should have registered with the SEC and complied with related disclosure and compliance requirements.

In stoking fears of a dragnet approach from the SEC against all tokens, this statement prompted ICO issuers to ring-fence themselves from the U.S. markets. It also gave a boost to purveyors of “security tokens,” who don’t pretend to be inventing anything more than a more efficient means of selling securities to investors.

But since then, the SEC has also softened its stance. Clayton later told CNBC that bitcoin would not be classified as a security. And, then, in a landmark speech last month, William Hinman, the SEC’s director of the Division of Corporate Finance, answered a question that had been nagging the ethereum community. Hinman said that although ether was a security at the time of the ethereum proto-ICO in 2014, it no longer met that definition because of how it now functions within the ethereum network.

This was not as proactive as other jurisdictions’ moves to explicitly carve out the concept of a utility token. Hinman was merely defining what ether was not. But by coming to that conclusion, he had recognized the unique qualities of this particular token: how ether is a kind of “crypto fuel,” used to pay for the decentralized computation by which smart contracts are executed on the ethereum platform.

What’s important is that regulators are doing their homework and starting to recognize there’s at least potentially something different going on here from what they’re used to seeing. There’s a lot of learning still to come, but light bulbs are quietly going off in different corners of the regulatory world.

Whether you’re in the camp that welcomes regulatory clarity to foster public confidence in this technology or among those in the crypto community who see government engagement as anathema to a system of money originally designed to bypass the state, this emerging regulatory awareness represents a seminal moment.

The race is on

Clearly, many countries taking these steps have their eyes on the potential economic gains generated by the freewheeling ICO market, one that has raised $20 billion so far and which, with $275 billion in (admittedly poorly measured) market capitalization, has come to constitute a significant parallel capital market. There are tax windfalls to be had and there’s the real prize of attracting innovation to their shores.

They need to be careful, though, as this is an exceptionally fleet-footed form of capital. They risk encouraging global “regulatory arbitrage.” When a technology is as geography-agnostic as this, its users will often choose their home base depending on where regulation is lightest, stoking competition among jurisdictions. Given the inordinate number of scammers in the ICO business, the danger is that the worst players gain too much freedom and, by extension, too much influence over how this industry is broadly perceived.

In times past, U.S. regulators could rise above such problems. The sheer amount of money raised in the U.S. left global actors with no option but to comply with their rules just to ensure access to it. But with foreign capital markets deeper in the age of globalization, globally distributed blockchain development teams are deciding that the U.S. just might not be worth it. We are already seeing ICO issuers deciding that they can comfortably raise all they need from Asian investors.

Where this is all pointing, I hope, is to a coordinated international effort to better harmonize the regulatory approach.

Mohanty told me he sees six or so of the world’s more important regulators coming to a broad agreement on utility tokens and on what distinguishes them from payment and security vehicles. There’s a need, for example, to define pressing questions about what level of platform functionality, and when, a token must have to earn exempt utility status. And, beyond the securities laws exemptions, regulators should agree on strategies to apply existing consumer protection laws to ensure that ICO issuers are still held to account for the promises they make to people who put money into their token pre-sales.

Some have forcefully argued that carving out explicit legislative definitions of a utility token – a la Wyoming – overly constrains innovators to those definitions and creates contradictions across jurisdictions. Better to rely on existing laws than to add to the body of legislation, they say. But such concerns should not prevent regulators from creating clearly signaled guidelines to participants in the blockchain development community about how they will apply existing law to different scenarios.

There’s a still a lot of work needed to improve and scale blockchain technology and to foster broad confidence among future buyers of crypto tokens. Best practices among issuers, exchanges and investors/buyers need to be developed. But encouraging the expansion of utility token models is a worthy goal, one that’s much harder to achieve if the burdens of securities laws were to be imposed on all those who create them.

To understand this, one need look no further than the financial inclusion objectives of the Riyadh-based conference that Mohanty spoke at. Organized by the Global Partnership for Financial Inclusion under the leadership of Argentina, which holds the G20’s current presidency, the event explored, among other goals, how to encourage entrepreneurship in low-income, developing countries.

If we want the whole world, include enterprising people in such countries, to have access to the powerful economic advantages of decentralized, peer-to-peer applications and business models, regulatory barriers to entry must be softened.

This is, in other words, a cause for humanity.

Sunrise at Lincoln Monument via Shutterstock.
Written by


Less Than Half of ICOs Survive Four Months After Sale, Study Finds


Majority of ICOs Live Less Than 120 Days

Less Than Half of ICOs Survive Four Months After Sale, Study FindsDespite data from two recent studies suggesting that investors are still bullish on ICOs (Initial Coin Offerings), a research conducted by Boston College academics reveals that most crypto startups relying on crowdfunding have a pretty short lifespan. According to the authors – Hugo Benedetti, assistant professor at the Carroll School of Management and finance PhD student Leonard Kostovetsky – less than half of all new ICOs survive more than four months after launch.

The two researchers based their study on analysis of the Twitter accounts maintained by the projects, taking into account the intensity of tweets after the coin offering. They estimated that the survival rate of the startups, 120 days after the end of the sale, was only 44.2%. The assumption is that companies that are inactive on social media in the fifth month most probably did not survive. The report covers almost 2,400 ICOs completed before May this year, and examines over 1,000 Twitter accounts.

The survival rate has been calculated as an average figure for three categories of ICOs, Business Insider reports. The first group consists of projects that have not reported raising any money and are not listed on exchanges. Startups that reported raising capital but didn’t list fell in the second category. And the third includes the ICOs that list their coins on trading platforms. The statistics show the following survival rates – 17%, 48%, and 83% for these groups, respectively. The share of the projects that become inactive right after their token sales, or the potential scams, is about 11%.

Listing Increases Chances of Survival

Based on these findings, the study concludes that the sustainability of an ICO depends on whether the company behind it is able to list its coin on a crypto exchange. Investors who have supported a project during the coin offering enjoy greatest returns when the coin is listed. The researchers gathered data for over 4,000 ICOs, which raised $12 billion since January, 2017, and found that the projects generated an average return of 179%, accrued over an average holding period of 16 days from the last day of the ICO.

Less Than Half of ICOs Survive Four Months After Sale, Study FindsAccording to Kostovetsky, selling the acquired coins on the first day of trading is the safest investment strategy, when it comes to ICOs. In any case, investors should sell their holdings within six months, he added. “What we find is that once you go beyond three months, at most six months, they don’t outperform other cryptocurrencies,” Kostovetsky told Bloomberg. “The strongest return is actually in the first month,” he emphasized.

Benedetti and Kostovetsky explain the spike in the prices of many tokens after their listing with the underpricing during the ICO, as often they are sold to investors at significantly discounted prices compared to the open market rates. Despite that, the researchers also found that the returns are declining over time as companies have started analyzing prior sales by similar platforms to better determine the expected demand and the price of their coins.

Written by


UK Financial Regulators Are Preparing for a World of Crypto Assets


Blockchain crowdfunding ideas may be ten-a-penny these days, but seeing the concept tested out by a financial regulator and a major stock exchange is pretty unique.

Still, that’s what’s happening now in the U.K. where the London Stock Exchange Group (LSEG) and U.K. financial regulator, the Financial Conduct Authority (FCA), are working with distributed ledger technology startup Nivaura and 20|30, a UK company building a blockchain platform for corporate equity issuance.

One of the more exciting projects within the fourth cohort of the FCA’s regulatory sandbox (some 40 percent of the cohort use distributed ledgers), the project will target institutional as well as accredited investors using the LSEG’s Turquoise, the hybrid exchange platform for European equities that allows trading both on and off traditional exchanges.

The aim is to demonstrate for the first time in a live deal that equity in a U.K. company can be tokenized and issued within a fully compliant custody, clearing and settlement system.

As such, the first company to test out a primary issuance of tokenized stock will be 20|30 itself in September of this year, a launch to be followed by a one year lock-in period according to Tomer Sofinzon, co-founder of 20|30.

20|30 says that as soon as the first testing phase is complete, there exists a pipeline of dozens of young companies looking to try the tokenizing process out. These include medical device makers, firms in the pharmaceutical space, agricultural companies, and software providers.

Since the equity tokens being issued will be built on ethereum, trading of these will presumably start to happen, at least on an OTC basis, once the lock-in period has passed.

“That’s absolutely possible,” said Sofinzon. “After the lock-in period, we can begin the next phase, to really test the tradeability.”

The test follows a number of similar efforts to make more liquid markets for equity crowdfunding using blockchain tech, including the Korea Exchange which launched the Korea Startup Market for trading tokens on an over-the-counter (OTC) basis back in 2016.

The London Stock Exchange said in a statement to CoinDesk it is exploring blockchain as a way to help SMEs and to “innovate the issuance and tokenization of securities enabled for execution and settlement within the LSEG Conduct of Business framework.”

“This project with Nivaura is exploring tools to help companies raise capital in a more efficient and streamlined way,” said the LSEG.

Equity tokens

But while a big step for incumbents, the project is also a boon for the startups involved.

Taking a gradual step-by-step approach Nivaura has shown that debt securities can be tokenized in a regulatory compliant manner and cleared and settled on a public blockchain such as ethereum. Nivaura has, in fact, executed three issuances in the FCA sandbox as a participant in two previous cohorts.

The ramifications of tokenized equity being distributed via an exchange are weighty, but the initial problem the project set out to solve is the inefficiency of equity crowdfunding, which essentially operates a bilateral relationship between the share issuer and the investor.

But, institutional investors don’t work like that. They require a trusted market infrastructure, supplied in this case by Nivaura, leveraged by the LSEG’s network and ability to generate sell orders and buy orders on a grand scale.

Speaking exclusively to CoinDesk about the project, Dr. Avtar Sehra, CEO and chief product architect at Nivaura, said: “Someone can use our technology to do all the legal documentation, tokenize these assets and execute them. LSEG has then been forward-thinking enough to help get these orders out to the existing market”

That said, tokenized equity is a tough nut to crack. Oftentimes, people talk about equity tokenization that’s just tokenized digital certificates which are not transferable, explained Sehra.

Debt is more straightforward, he said, because the token is the bond. “Equity is driven by legislation and the legislation makes it very hard for the token to be equity itself.”

Looking ahead

Designing the legal structure around the equity token meant creating a legal markup language and ensuring compliance with Central Securities Depositories Regulation (CSDR), which Nivaura has been working on with law firms like Allen & Overy and, as part of the latest FCA cohort, Latham & Watkins.

Once there is a certain legal structure around the token, that gives the holder of that token the right to the equity and the right to all the beneficial interest in that equity, said Sehra, permitting a forward glance at the next possible phase of the project.

“If we can guarantee this is the most commercially viable way to do this, it will not only allow efficient primary distribution but it’s also going to potentially allow very simple secondary trading as well.”

“There is a possibility that we are going to be launching that next year.”

It’s worth mentioning that since the settlement layer is the ethereum public blockchain it would be bounded by a throughput limit of about 15 transactions per second, for the time being at least until the technology improves.

Sehra acknowledged that throughput and latency are huge issues for public blockchains, but said that for the purpose of this project over the next two to three years it’s sufficient.

He concluded:

“The industry is going to become a world of tokenized assets – that’s inevitable. We don’t really care if it’s ethereum or bitcoin, the underlying infrastructure isn’t that important. But it is going to be a blockchain.”

Bitcoin image via Shutterstock
Written by



Top Crypto News – 10/07/2018

$42 Million In Crypto Is Now Being Airdropped to NEO Investors


Select Neo users are now receiving free crypto money.

Beginning this weekend, those who held tokens on the Neo blockchain, the 11th largest in the world, began to receive 10 million ONT tokens (worth $42,100,000 at press time) designed to power an entirely new crypto technology platform called Ontology. Recipients must have held Neo on March 1.

Part of the “ONT token distribution,” the move effectively rewards all users of the Neo blockchain for providing the technology necessary for the project’s fundraising.

If that sounds confusing, the move has been in the works for some time.

In February, the Neo Council, a body set up to oversee the Neo blockchain protocol, announced that it would freely distribute 20 million ONT tokens – the main assets on the Ontology blockchain network – to eligible NEO token holders through a two-stage “airdrop.” Ontology’s creators granted 100 million ONT, or 10 percent of the maximum supply, to the Neo Council “for relevant cooperation and to support NEO community feedback,” the Ontology team wrote in March.

As well as the deadline for completing the Neo Council airdrop, Monday marks the beginning of Ontology’s token migration, in which holders of Neo-based ONT must move their tokens over to Ontology’s “mainnet” – its own, freestanding blockchain.

Ontology is one of several projects to embark on token migrations – also known as token swaps – in recent months. Some of the most prominent include EOS and Tron, both of which moved from ERC-20 tokens to native tokens on their own dedicated blockchains. (Ontology, as noted above, is moving from an NEP-5 token to its own blockchain.)

For users of certain exchanges, this process will be automatic, but others will need to manually complete the transfer. The Ontology team has posted an explainer, but the process will be more complicated for some users than others. Ledger wallet users will need to transfer their NEP-5 tokens to another wallet, for example.

Adding a layer of complexity, ONT tokens on Ontology’s mainnet are indivisible. In other words, users cannot migrate 1.2 NEP-5 tokens to mainnet – they have to top up to 2 ONT, sell down to 1 ONT, or accept that 0.2 ONT will simply disappear.

Fortunately, ONT investors have until October 1 to complete the migration.

More details

Stepping back, Ontology, which launched at the end of June, and Neo are public blockchain protocols with teams primarily based out of China. Both emerged from Onchain, a Shanghai-based technology firm.

While separate entities, Neo and Ontology are closely aligned and engage in “technical cooperation,” according to Ontology founder Li Jun.

The Neo Council’s ONT token distribution was divided into two equal halves. Anyone who held NEO at a certain point on March 1 is entitled to receive 0.2 ONT per NEO. The first half (0.1 ONT per NEO) was distributed to Neo addresses as an NEP-5 token – a Neo-based token standard similar to ethereum’s ERC-20.

The second half of the airdrop began over the weekend, except that this time, ONT tokens were distributed as native tokens on the newly launched Ontology blockchain, rather than as NEP-5 tokens. As the Ontology team explained in an announcement, recipients’ Ontology addresses, WIFs (wallet import formats), and private keys will be identical to their counterparts on Neo.

Social media posts indicate that at least some users have successfully received their ONT at the time of writing. The Ontology team’s announcement gave Monday, July 9 as a deadline for completing the airdrop.

The Ontology community has another airdrop of ONT to look forward to, according to Jun, but details have yet to be revealed.

The Ontology team previously gave away 1000 ONT to people who signed up for its newsletter and completed a know-your-customer (KYC) check; it also gave 500 ONT to attendees of a Neo developers’ conference who gave their email.

Madeline Meng Shi contributed reporting.

Skydiver image via Shutterstock.
Written by

Block.One Is Taking a Bigger Role With EOS


Block.One has decided to start voting with its hoard of EOS tokens.

Announced last week, the decision finds the startup that created the EOS software, now powered by the fifth most valuable cryptocurrency, breaking with precedent in a move that may have come as a surprise to those following the project’s decentralized launch.

That’s because since going live on June 14, the company has largely declined to exercise its influence over the code, preferring to encourage its users to unite, even in sometimes messy decision-making.

And there’s a good reason for that. For one, Block.One controls 10 percent of the 1 billion tokens set aside for developers prior to the network’s launch. Further, since decision-making on the platform corresponds to token holdings, the change could put the company in an extraordinarily powerful position, enabling them to decide who can determine truth on the ledger.

As of now, each wallet can vote to up to 30 candidates to serve as block producers, however, it’s worth noting that block producers with the most support on the network have less than 3 percent of the current token supply backing them.

This means that Block.One controls so many tokens, that the field of potential block producers could effectively narrow to the 30 it picked, if and when it decides to finally enter a vote.

It’s no surprise then, that the move has left some alarmed.

“I find it problematic that is now involved in selecting block producers, as it undermines their role as a neutral third party, and affords them a significant amount of influence over the network,” Arianna Simpson of Autonomous Partners told CoinDesk via email. (Simpson is not an investor in EOS.)

But others believe the decision is in line with necessity of innovation.

Christian Catalini of MIT’s Cryptoeconomics Lab argued that each new approach to crypto governance deserves a chance to be tested so the wider crypto world can benefit from its lessons, saying, “In general when you experiment you may land on solutions that may look appealing but don’t stand the test of time.”

That said, the EOS community has largely expressed excitement about the company taking an active role in governance.

On a Reddit thread about the news, this reaction was fairly representative:

“I have been waiting for this. I think this is a good thing, and will continue to align interests … If Block.One makes money, I will make money as well most likely.”

But intermixed with the positive reactions, there were also observations like this one:

“I think EOS will do great things, but this makes it Ripple 2.0. It’s essentially a blockchain that is owned and run by Block.One. I’m not even saying that’s a bad thing, but let’s not kid ourselves either.”

How voting works

By design, EOS only has 21 block producers. The small size allows them to come to consensus very quickly, which is why EOS supporters believe it can surpass the leading blockchains by overtaking it in transactions per second.

The EOS community elects these 21 block producers in a continuous election, which allows bad actors to be removed at any time. Each wallet can vote its tokens for up to 30 block producer candidates. The 21 organizations with the most votes get to do that work, for which they are rewarded with some of tokens emitted through inflation by the protocol.

One of the reasons it took EOS so long to finally activate was because the software wouldn’t go live until 15 percent of the total token supply had been staked for votes, but, as of this writing, roughly 30 percent of the tokens are staked for voting.

Block.One’s founder tokens gradually release over a 10-year period. Until then, all they can do is stake them for use of the network, including voting. They can only cast one ballot and since all their tokens are staked until they unlock, they have to vote all of them or none.

As one redditor who looked at the wallet balances in the genesis block reported, 99 percent of EOS token holders control less than 14 percent of the token supply. The top 1,000 wallets control 85 percent of the supply. So, it remains very much a network controlled by its richest users.

Block.One is the largest single holder. Joshua Kauffman, who leads governance and community efforts for one of the top block producers, EOS Canada, told CoinDesk that he believes Block.One, ironically, wants to exercise its vote to undermine other whales.

There’s a few block producers with very little support from small holders, he said, suggesting they are propped up by whale votes. Kauffman believes Block.One wants a chance to vote for the technically strongest candidates with the most community support in order to support the consensus of the most users.

“It’s in their best interest and the community’s best interest to insure the best possible producers are the ones running the network,” Kauffman said.

When it announced its intention to vote, Block.One also expressed support for a code change so that it can support 50 or more block producer candidates. That way, it’s more widely spreading around its big votes, allowing the community to make the final decision about who gets into the top 21.

It would take a minimum of two months for such a code change to go live, according to Kauffman, so if Block.One waits for that change to vote, it could still be a while

Big decisions ahead

Besides changing out block producers, EOS faces other big decisions going forward, and by taking part in block producer elections, Block.One could make its say over those decisions even more decisive.

First, EOS hasn’t yet passed a constitution to govern the protocol, so it doesn’t have official rules for how block producers should resolve conflicts, as we have previously reported.

To fix it, Block.One has proposed a completely new constitution. The new constitution is much more narrow in scope than the one developed by the community. The company is asking longtime supports to jettison all that work in favor of a narrow proposal.

Block.One cofounder and EOS creator Dan Larimer wrote in a Medium post:

“”I have seen that if you give people arbitrary power to resolve arbitrary disputes then everything becomes a dispute and the decisions made are arbitrary.”

Second, the worker proposal system is coming closer to fruition. That system will allow the community to vote on paying tokens generated by inflation to teams that want to build new products to make the whole protocol serve users better.

With time, decisions about these proposals could also be important in determining the direction the network takes.
Even if Block.One abstains from votes in both of these cases, block producers with its support are likely to follow its lead, and the supporters of those block producers are likely to follow them.

By expanding the number of block producer candidates it can vote for, it might also expand the number that feel inclined to follow the company’s lead.

“I agree that Block.One has an oversized voice,” Kauffman granted, but he also pointed out that the best way for Block.One to grow its wealth is by increasing token value. Disenfranchising rank-and-file users by controlling the process won’t achieve that, he argued.

“They want this to be the community chain,” he said.

EOS is experimenting in a space that blockchains haven’t adequately grappled with, Catalini said.

He and his collaborator Joshua Gans explained in a 2016 paper, this means that EOS has dramatically lowered the cost of verification, but it’s now facing another cost also described in that work, the cost of networking.

Blockchains don’t only need to come to consensus around the truth, they also need to find a way to coordinate economic activity around the world. That’s their networking cost, and “that’s the one that really changes market power and market structure,” Catalini said.

He added:

“That’s the one we don’t really have a governance structure for; that’s why you’re seeing so many false starts.”

Whale shark image via Shutterstock
Written by

CBOE Files Application for Bitcoin-Based ETF with SEC


CBOE Files for Bitcoin ETF With SEC

CBOE has filed an application for a bitcoin-based ETF that will list and trade BTC shares backed by the Vaneck Solidx Bitcoin Trust (“the Trust”). According to a release published by the SEC, the application was filed on the 20th of June.

The SEC is seeking public feedback regarding the application, with the release stating that “Interested persons are invited to submit written data, views, and arguments” concerning the proposed ETF.

Fund to “Invest in Bitcoin Only”

CBOE Files Application for Bitcoin-Based ETF with SECThe SEC release states that “The Exchange proposes to list and trade the Shares under BZX Rule 14.11(e)(4), which governs the listing and trading of Commodity-Based Trust Shares on the Exchange. Solidx Management LLC is the sponsor of the Trust (Sponsor). The Trust will be responsible for custody of the Trust’s bitcoin. Delaware Trust Company is the trustee (Trustee). The Bank of New York Mellon will be the administrator (Administrator), transfer agent (Transfer Agent) and the custodian, with respect to cash, (Cash Custodian) of the Trust. Foreside Fund Services, LLC will be the marketing agent (Marketing Agent) in connection with the creation and redemption of ‘Baskets’ of Shares.”

Each of the fund’s shares “will represent a fractional undivided beneficial interest in the Trust’s net assets. The Trust’s assets will consist of bitcoin held […] utilizing a secure process […] The Trust will not normally hold cash or any other assets, but may hold a very limited amount of cash in connection with the creation and redemption of Baskets and to pay Trust expenses.” According to the registration statement, “the Trust will issue and redeem ‘Baskets’, each equal to a block of 5 Shares” to “Authorized Participants” exclusively. Each share “currently represents approximately 25 bitcoin.”

ETF to Track MVBTCO Index

CBOE Files Application for Bitcoin-Based ETF with SECThe investment objective of the Trust is for “the Shares to reflect the performance of the price of bitcoin, less the expenses of the Trust’s operations. The Trust intends to achieve this objective by investing substantially all of its assets in bitcoin traded primarily in the over-the-counter (OTC) markets, though the Trust may also invest in bitcoin traded on domestic and international bitcoin exchanges, depending on liquidity and otherwise at the Trust’s discretion.”

The fund will track the prices as determined by the MVBTCO index – which “calculates the intra-day price of bitcoin every 15 seconds, including the closing price as of 4:00 p.m. E.T.” The SEC release states that “The bitcoin OTC platforms included in the MVBTCO are U.S.-based entities. These platforms are well-established institutions that comply with AML and KYC regulatory requirements with respect to trading counterparties and include entities that are regulated by the SEC and FINRA as registered broker-dealers and affiliates of broker-dealers.”

When trading using exchanges, the Trust expects to do so using Bitstamp, Gdax, Gemini, Itbit, Bitflyer, and Kraken.

Storage and Security

CBOE Files Application for Bitcoin-Based ETF with SECAll bitcoins held by the Trust will be stored using “multi-signature cold storage wallets.” Additionally, “For backup and disaster recovery purposes, the Trust will maintain cold storage wallet backups in locations geographically distributed throughout the United States, including in the Northeast and Midwest.”

The Trust asserts that it will also “maintain comprehensive insurance coverage underwritten by various insurance carriers.” The insurance policy “will carry initial limits of $25 million in primary coverage and $100 million in excess coverage, with the ability to increase coverage depending on the value of the bitcoin held by the Trust. To the extent the value of the Trust’s bitcoin holdings exceeds the total $125,000,000 of insurance coverage, the Sponsor has made arrangements for additional insurance coverage with the goal of maintaining insurance coverage at a one-to-one ratio with the Trust’s bitcoin holdings valued in U.S. dollars such that for every dollar of bitcoin held by the Trust there is an equal amount of insurance coverage.”

Written by

Top Crypto News – 09/07/2018

German Bank Offers Special Accounts to Cryptocurrency Firms



This German Bank Plans to Provide Special Bank Accounts for Cryptocurrency and Blockchain Companies

German Bank Offers Special Accounts to Cryptocurrency FirmsOver the past few years as cryptocurrencies have gained in popularity a few companies like exchanges and brokerage services that deal with digital currencies have had issues with their banking providers. Banks and other financial management services have ceased their partnerships with cryptocurrency firms and have closed business accounts making it very difficult for blockchain companies to establish reliable banking partners. Now the German financial tech company, Solarisbank, plans to offer a service called the ‘Blockchain Factory.’ Companies who deal with cryptocurrencies will now have a solid banking colleague who understands the technology.

“The Blockchain Factory will be used by Solarisbank to offer banking services to companies whose business is directly or indirectly based on cryptocurrencies and blockchain technology — One example of these services is the ‘Blockchain Company Account’ for the banking business of blockchain companies,” Solarisbank explains.

Furthermore, services for global cryptocurrency marketplaces will be made available to make it easier to buy and sell fiat currencies; such as the Solarisbank ‘Automated Trust Account’, an automated escrow account for cryptocurrency marketplaces.

High Demand from the Blockchain World for a Licensed Banking Partner

Solarisbank has done well since the bank’s inception in March of 2016, and entered a strategic partnership with Mastercard the following October with plans to build new banking modules. Last March, Solarisbank raised $70Mn USD in a Series B funding round from firms such as ABN Amro, SBI Group, Visa, BBVA, and Lakestar.

“There is high demand from the blockchain world for a licensed partner that forms the technological and regulatory bridge to traditional banking — as a technology company with a banking license, we are the natural partner,” Roland Folz, the CEO of Solarisbank details.

German Bank Offers Special Accounts to Cryptocurrency Firms

A Hybrid Future

The financial tech company has started its first partnership with another firm called VPE Bank and the two have plans to provide cryptocurrencies to institutional traders. Moreover, the firm will establish partnerships with cryptocurrency companies that deal with banking and debit cards within their business model.

“The fiat world is not about to dissolve. We are moving towards a hybrid future, in which the blockchain world still has to prove itself,” the CTO of Solarisbank, Peter Grosskopf explains.

However, we see the disruptive power of these business models and we want to help shape the future of this industry. 

What do you think about Solarisbank’s new Blockchain Factory banking services? Do you think companies who deal with cryptocurrencies need better banking providers? Let us know your thoughts on this subject in the comment section below.

Images via Shutterstock, and Solarisbank. 
Written by


Filings Link Crypto Exchange Bitstamp to Game Maker Nexon


Public filings released in late May establish the strongest link yet between Bitstamp and Korean gaming firm Nexon, which was rumored to have bought the cryptocurrency exchange earlier this year.

Those rumors date back to the spring when sources indicated that Nexon would pay as much as $500 million for Bitstamp, one of the industry’s longest-running bitcoin exchanges. Word of the acquisition also came months after Nexon bought a majority stake in crypto exchange Korbit for roughly $80 million in September 2017.

Business Insider later reported in April that Nexon was in talks to acquire Bitstamp for $350 million. Lee Jungheon, CEO of Nexon Korea, said in the wake of that report that “Nexon Korea does not have anything to do with a Bitstamp acquisition” according to the Korea Herald.

But a corporate disclosure submitted by Nexon Group holding company NXC and obtained by CoinDesk suggests that some kind of deal took place. NXC, Nexon Group’s parent company, is 98.28 percent owned by Nexon founder Kim Jung-ju and his family.

According to the report, NXC owns 100 percent of a Belgian company called NXMH B.V.B.A., an investment and consulting firm. NXHM B.V.B.A., with 99 percent ownership, created Bitstamp Holdings N.V., also a Belgian company, on February 1 of this year.

The report states that Bitstamp Holdings N.V. acquired 100 percent of Bitstamp Japan Co., Ltd on April 25.

But while the documents establish a link to Bitstamp, it’s not clear whether they constitute an “acquisition” of Bitstamp given the lack of information regarding Bitstamp Japan Co., Ltd. The exchange is run by Bitstamp Limited, which is based in the United Kingdom and has offices in Luxembourg and New York.

A Nexon representative said that Bitstamp Holdings isn’t the operator of the exchange, and when asked about the relationship there, the rep said that they “cannot disclose any further information at this moment.” Bitstamp did not immediately respond to a request for comment.

Game maker push

If confirmed, the deal would represent the latest industry buy for the gaming company, which has released a number of titles for desktop and mobile platforms.

The purchase of Bitstamp Japan Co., Ltd also followed a record-setting year for Nexon. The company reported more than $2 billion in revenue for 2017, an increase roughly 28 percent over the prior year’s figures.

Nexon isn’t the only gaming company with its eyes on the crypto space, however.

Gumi, a mobile game maker based in Japan, launched a $30 million investment fund earlier this year focused on the tech. And major industry companies like Ubisoft and Unity have also made similar moves in recent months.

Nexon executives have remarked on the technology as well in the past. Back in March, Owen Mahoney, CEO of the Nexon’s U.S. arm, cited blockchain during an interview with CNBC as a tool for improving the gamer experience.

“People want to trust other people within new games, and blockchain technology can help bring that reputation across different sort of games,” he was quoted as saying.

Image via Glassdoor
Written by

Walmart Looks to Blockchain for Better Package Tracking


Walmart has yet another delivery-focused blockchain patent in the works.

The application published on July 5 is entitled “Delivery Reservation Apparatus and Method,” and as suggested, it outlines a way for managing package reservations in the context of the purchaser not being available to actually receive it.

It’s the latest “smart delivery” intellectual property play from the retail giant, which in the past year has submitted a number of U.S. patent applications in this area. Indeed, the company seems to be looking at the technology as a way to automate elements of the delivery process, but to date, much of the company’s public-facing work with blockchain has been focused on food supply chain tracking.

In the newly released filing, Walmart detail system of delivery lockers – located at a person’s home, transportation hub or other location – that can safeguard the delivered items until their recipients can come and actually sign for them. Blockchain fits into the conceived picture as a method of connecting those lockers in order to track which ones are occupied and which ones are free to be used.

“Each space on the docking station has a corresponding capacity unit for each location on the docking station. The transactions for the capacity units are tracked in a ledger, with available capacity units indicating an open location on the docking station or contracted out capacity units indicating that either the location has a locker secured thereto or that the location is reserved for a future delivery,” Walmart wrote, going on to add:

“In some embodiments, the docking stations utilize a blockchain reservation system. As such, each docking station can be a node within a blockchain network.”

The application makes frequent reference to a “public ledger,” suggesting that the proposed system would be openly accessible to some extent rather than closed off to certain participants. That leger, according to the filing, “contains a record of available and reserved capacity units for the plurality of locker docking stations.”

This perhaps suggests that Walmart wouldn’t necessarily be the only operator of these docking stations, and possibly is aimed at enabling a degree of participation by outside parties.

Image via Shutterstock
Written by